It takes a great economist

...to show you just what a village of idiots has been in charge of economic and financial policy. You don't have to read my rant but if you would like a panoramic and insightful review of the role of the wizards of the dismal science in our present state of world economic illness, do read this longish essay by Krugman.

Krugman has the vantage point and the level headed delivery I suppose one would expect of a Nobel laureate in economics. You usually have to pay Vanity Fair to hear what Stiglitz has to tell us but Prof. Krugman dishes out insight in the New York times more regularly and for a lot less. I'd pay the Times for this service if I had to.

He gave a good perspective on the health care impasse last week. I already was of the opinion we have too many crooks designing or sponsoring the legislation for any real reform to result but Krugman put a historical context around the picture that cements my disinterest in whatever they may do in Washington.

But even Paul Krugman could dig a little deeper in this week's appropriately critical filleting of how all but a two or three of the elites of economic forecasting missed all the signs of the world's, and particularly the US's looming financial fiasco's. He ends up saying the formerly cocksure enterprise of economic academics is in disarray and must learn humility. He says economists, now that the presumed wholeness of their lash-up of theories has been dashed to pieces, must learn to deal with "messiness" of irrational markets and investors that did not fit their tidy theories. Krugman's best theme in the piece is gently and massively poking holes in the neoclassical idea, beloved of our disgraced neofascistconservative pols, that markets are level playing fields populated with rational actors and can do no wrong.

Friedman is dead, so are his ideas. Krugman just touches the surface of the problem that I find with the academic economics that run the real world to ruin.

The birth of economics as a discipline is usually credited to Adam Smith, who published “The Wealth of Nations” in 1776. Over the next 160 years an extensive body of economic theory was developed, whose central message was: Trust the market. Yes, economists admitted that there were cases in which markets might fail, of which the most important was the case of “externalities” — costs that people impose on others without paying the price, like traffic congestion or pollution. But the basic presumption of “neoclassical” economics (named after the late-19th-century theorists who elaborated on the concepts of their “classical” predecessors) was that we should have faith in the market system.

Externalities indeed! The entire overworked surface of our planet is just an externality in the models of most economists, abstracted into a few productivity numbers if considered at all. That entire field rarely considers how much of the health of economies is stolen from the earth. It is like cash added to an account but not entered in the ledger: It allows all the leaks and pilfering and mismanagement which are also omitted from the record, to go on yet magically the statements show we still have money in the bank. Krugman is on the record as suspecting that economies are hurting because too many of us using too much of everything have shoved us dangerously close to pumping the last barrel of oil, digging up the last ingot of copper. Krugman suspects but I feel certain.

In the face of what should cause uncertainty and caution, how have our economists advised us? They have consulted the markets. On this, the old quotes are the best and Krugman has all the gems:

...Keynes considered it a very bad idea to let such markets, in which speculators spent their time chasing one another’s tails, dictate important business decisions: “When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.”

Good bye to a lot more than Teddy

This news, only a little earlier than anticipated, still shocks me and greatly saddens me.

Now and then I start to write posts in which I would grapple with and, mostly for my own sake, try to account for my own transformation from a rather uninformed conservative youth to a self identified liberal. I usually gave up and never posted.

Oh shit, I am actually sobbing as I read the obits.

But I can't say why I will miss Ted Kennedy without describing how my attitude toward his politics and his political skills changed over the years.

When I first moved to Massachusetts in the early 70's, fresh from Nevada and straight from a home of staunch paleolithic republican sentiments, my typical reactions to Kennedy's causes such as health care were un-researched quips. "Oh sure," I would think, "a guy that has never lacked a massive family trust fund thinks I should pay more taxes so everyone can go see a doctor when he wants". I am now in a position to set up our own family trust fund and I can't always see a doctor Its so much easier to be heartless when your ignorance enforces a distance from the realities of hardships and unjust distribution of rewards that Kennedy mustered us to battle. Find any wingnut who still vilifies Kennedy and I will show you an ignoramus.

In 1976, I worked for a consulting firm and had to travel to Washington DC just to be an extra in a show of resumes for a potential customer. On one shuttle flight down there, it happened that the the Senator had the seat next to me. He rode coach without any ceremony at all, just another passenger not hinting any expectation of deference. I was not even positive it was him when he first sat down. I did not speak to him. He was paying a lot of attention to a copy of NY Times Magazine with a cover story on some political upstart who was then the governor of Georgia. It was a crowded field that year.

It was the Viet Nam war that still repelled me from Republicans but Carter has always conjured up hope and decency and I voted for him in hope. Kennedy seemed to me at that time a man beaten by his own bad luck but he resolutely soldiered on. His wary dance with corporate powers while he introduced bill after bill to make life livable for what we used to call the working class simply never let up. He had the big ideas if not the charisma to turn our political hearts. But it takes so much more work and organization and granite-willed persistence to redirect a nation that in its private dreams sees itself as potentially wealthy and independent individualists. Those dreams were exploited easily and have given us the local and the presidential politics of the Reagan revolution. And all through that dark period, Ted strove on, cutting deals, compromising where compromise would at least gain the embattled middle class some small help.

I was so disgusted by the response a self-absorbed electorate and media handed the profoundly decent but unwily Carter that I voted for John Anderson in 80. The national political scene had become an ethical vacuum. Yet all that while Teddy beat the drums for better benefits and programs. Even as I withdrew from the fights over the wrong issues that could have no winners, I recall being impressed how Kennedy could so respectfully engage the barking and repugnantly narrow representatives of One Selfishness Under God. That capacity to remain engaged, to find a way to get any opponent to look you in the eye ...that is the gift of a great politician. I grew to know I was not such a creature and he, with few peers, was.

Not until MoveOn offered me what seemed like a real voice, did I reengage in politics. But after four years of hopeful changes and improvements, my own politics are now nearly ready to walk off the field again. If a Radical Greens party springs up, I might waste my vote on them in symbolic and futile protest. I see a nation that has lied to itself about how bad its economy was until its crooked and faked affluence nearly collapsed. I see a country that has lied to itself about how to live well until it is rife with life style and environmentally induced diseases and wants only a quick cheap fix. I see a country with a pathologically overgrown sense of its place among the economic and military forces that will shape history. Economic and political power will be wrenched from the hands of any nation that poisons itself and lets the mass of ill, poor and unrepresented only grow. I see a nation that has now lost one of its last lions for the little man, one of the unthanked giants who worked to give those dreaming individualists what they needed rather than what they wanted. Without that concern which Kennedy embodied for the welfare of the citizen above the welfare of corporate power, we will be too weak a country to address our real problems.

who gets health care?

I don't particularly support the outcry for health care. Its not entirely because I have had for decades what most consider a thorough and mostly employer paid health coverage. Are you 60 and can't get your HMO to do a full body MRI or anything beyond a PSA test just to have a baseline? Thats my situation.

We may waste huge amounts of money on administration and on PREDICTABLY futile treatments of terminal patients. Those expenses will be hard to back out of the system and they are snarling the present congressional debates.

But we are barking up the wrong tree. Removing from our health care burdens obesity and diet-induced diabetes and the long years of patching the living yet rotting bodies should not need a doctor's efforts but rather our own efforts. "First, do no harm", goes the doctors oath...why can't consumers be held to the same standard? If we locked the god damned cars in the garage and shuttered the fast food joints in favor of more locally produced and vegetarian diets, as you have all been hearing for most of your lives, we would mostly live longer and be healthier up until genetics pulled the plug on us. I would only really support more prevention, starting with less consumption and wiser more informed consumption. Michael Moore can easily say our health care system is sick ...but how healthy is the portly Mr. Moore? I love the depth of Moore's sympathy and courage in his long crusade for a little justice for victims of the corporate oligarchs but his thinking and arguments are at times as shallow as his sympathy is deep. When he took on GM, it was not to lambaste them for making and convincing us to drive environmentally disastrous cars for the sake of their higher markups. No, he just wanted to save jobs at buick plants. If they had made something more responsible than Buicks at those plants, we might still be buying from GM.

The fears and perceptions that power health care hysteria, made to seem so real by the bounty of pathetic poster child cases among uninsured are none the less an unbalanced view. Rather like our climate crisis, as long as the ultimate causes arising from our personal gratification and convenience are obscured by the final dire effects being so many years and stages of remove from those causes, we will only clamor for window dressing rather than solutions. There is no cure for death. But "living better" is not the consumer orgy you have been programmed to desire.

Does that sound wrong to you? Does this sound right?:

If the authorities "know" Bernie made-off does not have cancer then I know that
Bernie made-off does get better health screening that millions of Americans who did
not steal billions of dollars. What a country this is! Perhaps you too can get a good cancer screening if only you can defraud someone out of a few billions.

Cash for Cluelessness

I admit that I once owned an 8 cylinder Chevy Suburban, a true gas guzzler...that was 1985. Before then and since, I have driven much lighter cars and since around 1990, I have often left the car home and gotten to work on a bicycle.

That history divulged, I will chance being called a hypocrite to tell you what I have felt about the automobile since my high school days when tail fins and tyrannosaurs roamed the earth.

It is a cheap thrill for some apes, and perhaps a necessary evil for the hapless working class who can not find work where they live or live where they can find work. Buckminster Fuller was one of the more prominent but hardly the earliest voices to question the massive per capita use of petroleum, metals and other resources to which the automotive addiction [and the severely dysfunctional use of land that goes with the addiction] committed us. The vision of the conventional automobile and its usage patterns as arch nemesis of sustainability was not exactly his message. He also thought more technology could be applied to help us live as well on less resources. His book "Operating Manual for Spaceship Earth" was old news by the time I read it in the late 60's. Having been taken on as a kind of manifesto for the technically inclined hippie and tossed as kookie by most others, its influence is far less than it prescience about our resource-starved present would justify. That is not the only source of my revulsion at the clumsy dirty machines, the love of which we subsidize, but it was important intellectual support. I also have youthful associations of noisy cars with bullies and negligent scholarship. The car was, in my formative years, a cultural institution to rival the black holes of gambling and public drunkenness [the latter has been radically exacerbated in both opportunity and severity of consequences by the illusory freedom to escape that advertisers use to promote car ownership.]

That is not all I can say about my bad reaction to one of the pillars of both our economy and our culture but enough of that. Suffice it to say that since GM and Chrysler are sucking up billions of YOUR dollars on life support, you are owed a moment of sanity: the pillars of life in this allegedly great nation are rotting out from under you. I have not the time nor you the patience for me to explain to you that from a fundamentally economic perspective, the collapse was inevitable. That explanation would be one that puts the whole of our support system: the resources we acquire at severe political cost, the resources do we command: coal, air, water, iron, health and the costs to patch up bodies corroded by lives lived in cars...and the money that makes all those resources fungible... all counted on the ledger. Saying that collapse was inevitable and that any, ANY, reasonable extrapolation of consumption trends since the 60's amounts to a set of tracks ending at an ecological and economic cliff is unnecessary because we are at the cliff now. Plenty of smart and far sighted people already did that explaining...you didn't listen to them either. I am making plans to jump off the train since it won't even slow down.

Won't even slow down. The same psychology as ever quietly commands the body politic: "I don't want to know the ultimate costs of any ploy of government/industry as long as it minimizes my immediate discomfort or protects me from the scary, the unfamiliar effort or privation". The same corporations, oil companies, and automobile companies, that benefited from congressional dispensation will continue to benefit based on the excuse of the jobs they represent in spite of the now obvious fact that the future they represent is one of empty shelves, uprooted lives, dirt and want. The corporations still have vastly disproportionate representation via lobbies and representation that speaks far better for the largest blocks of share holders than for individual workers or families. We will always see congressional creativity in new forms of subsidies overt or subtle. In the past we have had tax funded highways, tariffs on imported cars, tax breaks on car loan interest...a long and varied list to which we now add "cash for clunkers". We seem bent on rewarding the very stupidest behavior. Now, I who can pay more taxes because I have spent far less of my family wealth on cars, will pay more in taxes now and later so that you morons who bought SUVs long after they became the laughing stock of the ecologically minded, can get a do-over. A do-over of the mistake of buying a car at my expense financially and at my expense environmentally...this program sucks.

And if you think you can tolerate the suckage because at least the dupes will be driving more fuel efficient and less polluting cars, please consider:

• They will have to buy a Japanese car or a [German owned] "Smart" car to get anywhere above 38 MPG average. American worker's benefit from this will be much less than advertised.
  
• Another ton of iron will be mined or refined and another ton of coal burnt to make the replacement car. A comprehensive analysis factoring in more than job-angst would have us just drive the clunkers more slowly and trade them in when they were really ready to trade.

Its a hoax, folks. The popularity is just a tip-off on how fatuous the fans of this "solution" are.

At one time or another, we have given Detroit and Dallas ^[1]every conceivable advantage using the general revenues of this nation. Now, populism provides a willing if blind alliance of the least conscientious consumers and the least conscientious industries to raid the coffers when they are already empty by the accounting standards that your bank would apply to you.

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Did you think XOM was an oil company? If they were an oil company they would need a headquarters in the oil patch but I doubt they drill much oil on K street yet profit spectacularly. Like almost any other corporation, the sole logic of their existence is profit...they are a profit company more than an oil company. Hence the nice HQ office by the beltway. Your government and your oil company are so very much in bed together you probably can't tell who is on top unless you rip off the covers.

UPDATE: I drove a car today. It was someone else's hybrid Honda Civic. It was starting to get less than 45 MPG and I got the chore to have it serviced. The owner has a light foot on the gas pedal but then the dash board of a hybrid is actually a highly effective biofeedback video game to reprogram your driving habits. On the way back from the tune up, I caught this piece on NPR...wha'd I tell you?.

Can I still be simple if the problems are not?

conservative and liberal as a binarization of all political discourse and category does not serve us well.

I understand having a bill or debt to pay. I do not understand economics. So when bond vigilantes were first brought to my attention by Numerian at Agonist, I responded in full blooded pessimism. I can't be a bond vigilante until I buy some bonds of course. And I do not wish to shear away all the debt my government has signed up for because I know how many are unready for any such change and cling to one precarious niche or another afforded by that debt. But seeing we and our progeny are in hawk to the tune of about $40,000 per person, my intuition is that our government is out of financial steam and our average standards of living must take a hit as the government's debt service marches toward [4% times 40000 = ] $1600 per person per year. The per taxpayer number would be higher. In the past, US administrations have drunkenly looked at these damning numbers and dreamed that an ever expanding economy would tip us toward a net inflow to the coffers. It may have been so briefly during the Clinton administration but it is on the whole still a dream scenario.


But when TPM points me to Daniel Gross's seemingly clear and not too unbalanced recap of the Krugman-Ferguson debates over the signifcance of the jump in rates which the US government is obliged to pay to lure investment in its long term bonds, my simplistic self labeling as a person with fiscally conservative leanings just falls apart. If the optimistic interpretaion of Krugman's, which Gross upholds, is the correct understanding of bond yield trends, then I expect them to level off toward more historically typical values. But if nothing is done in line with Bernanke's warning that the borrowing is getting out of hand, then the long term treasury bond rates ought to remain aloft. And the longer they stay up, the more crushing their effect and the less our taxes will be spent on any thing to benefit citizen's needs in health, education, housing or transportation. In fact, only the brave individuals who continue to hold bonds in the run-away-debt scenario will gain much of anything.

In short, the fundamentals that I understand do not support optimism. There must be other fundamentals.

I need to get a copy of Daniel Gross's new book. Kevin Phillips book Bad Money handily converted me to a view that our economy is so busted and our self deluding tolerance for debt so entrenched that our decline is nearly inevitable. I am wondering if there are any nominally conservative authors [Philips is a special case] who have a book with the same conclusions as Phillips: fiscal policy since Reagan has been a formula for collapse. Pete Peterson? I should look up Martin Hutchinson perhaps. He predicted the Fed's woes a year before freddie and fannie went on treasury life support. He presently thinks "Most government debt markets (including some but probably not all of those in euros) are thus likely to suffer an oversupply crisis over the next year or so. "

I wonder if, like global warming, the US economy is a bad situation we have caused and our better informed students of economics will eventually form some majority warning that its nearly too late and painful corrective action or even more painful consequences await. And I wonder if, like global warning, a coterie of intellectual weaklings will be given equal air time to push a line of denialism?

Who would Jesus shoot?

Its more sad than outrageous. Pastor Pagano's "deep-seeded belief in God and firearms" [his words!] should cram enough cognitive dissonance into the average Christian's mind to cause an instant migraine. Well, OK, the pastor used to be a Marine. Lots of ex-military have a psychologically unhealthy admiration for what a gun turns its owner into...but a pastor? Who let the dog-face in? Even saloons in the lawless American west of cowboy legend asked patrons to check their weapons at the door. Does he preach in fatigues? Does his Summer Bible School teach marksmanship?

This stupid episode is catching attention as far away as the UK, where they are most probably shaking their heads to learn there is even greater depth to our national sickness than commonly assumed. The Telegraph article is one of the few that emphasizes that expression and support of our liberty in the right to bear arms was the intended message of the stunt. Well, I guess that will have to do for an answer to the question most of us are asking: "What was he thinking?"

People do things to "send a message", you know. But how rare it is when the message intended is the same as the message taken. Here are some messages that are actually coming across as a result of the Pastor's ploy:

• I don't mean to comment on the Pastor's reading of his bible because for all I know Christianity does specify that one should go about armed.
  
• But his reading of the constitution is deficient. His job falls under the first, not the second amendment.
  
• Guns, and particularly the neurotic and in-your-face brandishing of guns on the paranoid pretext that your personal deadly weapon might be confiscated, are not about freedom...they are about security and borrowing a feeling of safety that your upbringing could not manage to instill in you. How many of the pastor's flock have been mugged or burglarized lately?
  
• The protection of your faith is inadequate, even in the very seat of its worship and observance...So carry a Glock instead!
  

If you want something less imaginary to feel insecure about, please consider how unfairly lone men with guns and publicly used middle names have tried to trash the course of history, undoing the hope and will of the people? Thank god Pastor Pagano did not ask his faithful to start using their full names!

I could go on. Others surely will.

Oh, Look! Here , as a formerly living media fossil would have said, is "the rest of the story": In neighboring Tennessee, you may legally go into a saloon packing a gun. I guess there is a little TN-KY rivalry here on who is the freest state. So now its a question of where would you rather have Jesus shoot you: in a church or in a bar?

Is there such a thing as ethics in high finance?

I would like to think that the general premise under which our government agreed to fork over tens of billions of your and my tax dollars to the insolvent AIG was to pay debts that AIG no longer had the money to honor.   Not only should the "financial products" operation of AIG be investigated for fraud, the entire company, and particularly those executives who showed up in congress and the offices of the treasury with their ransom notes and wheel barrows to be filled with money, should be questioned about taking our money under false or fraudulent pretenses since they are also using our money to pay millions in "contractually obligated" bonuses to the geniuses in their financial products operation.  Will AIG go under if they don't pay these so called bonuses?  We have been hit up for precious billions because the credit market consequences of AIG going into default are purported to be a further freeze-up of lending that hurts us little people.  AIG also insures legitimate loans that would not have presented much risk had the economy not gone in the toilet...a condition they did much to bring about.  

Bonuses must be the wrong word for these payments.  The term strongly implies conditional payment contingent on delivering a higher than standard level of performance.  Fucking the investors to the tune of a few hundred billion dollars does not strike me as better than standard performance of fiduciary responsibilities.   If the payments are not conditional,  they are not bonuses.  If they are not debts owed to creditor institutions, they have no claim on money borrowed by our government, money that you and I will toil decades to repay.

Here in the US, most of us are just now looking at our federal tax returns...how unfortunate for the thieves at AIG that they come asking for pork money for their associates at exactly the moment when the average person's notion of the government's money is least abstract and most in focus as OUR tax money.

I am just at working stiff who always had to pay his own bills and always did so.  I obviously know nothing about the ethics of high finance.

The robbers are still loose in the vault

By far the most effective way to rob a bank is to own one.

The banking industry, even after all of the demonstrations that they are as greedy and foolish with money as any yokel whose tax money they now extort, are still asking for more money.  The most important thing to be done is really do what Ben Bernanke has at least said should be done: establish regulatory oversight of these captains of cupidity.  As welcome as a chaperon at a teenager's drinking party perhaps but we really need adult supervision of the bankers.

Firedoglake has got a campaign going specifically targeted at countering the influence of the bankers on YOUR congress.  Those banks took billions from us already and quietly spent millions to influence congressional voting.  That would earn the bastards jail time if I ran this country.  Sign the petition to demand that congress end the era of blindly trusting a key actor in our well being who has uniformly demonstrated they cannot be trusted.  And better yet, instead of sending all your money to the dupes in the legislature, send $10 or $20 to FDL's counter-lobbying effort.  Not many seem able to stand up to an industry that has taken our deposits, then a trillion for bailouts and has designs on a trillion more...enough already!  I have put my money where my blog is.  Your turn.

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UPDATE: I find I am not the first to have realized how vulnerable the trusting depositors and investors are.  I hope Mr. Black will take it as a complement that strong agreement with his thesis is a natural reaction to the treachery of the intriguers of high finance who realized that vulnerability long before you and I, long before Mr. Black and long before the incompentents who cheered for deregulation of finance.  

Now it gets interesting

I miss blogging.  There is plenty to think about and aggitate for these days.    For all my complaining, it is simply delightful to finally have a grown up in the white house.  His revenue restoration proposals, which many will simply dismiss as tax-the-rich, are going to cost the greensmile household plenty.   Preservation of dividend exclusions is actually a significant softening of the blow because capital gains will be scarce for some time to come.  I wondered when the bills from the Bush/Reagan years would come due.  Sooner is better than later, trust me.   If there are enough grownups out here pulling down good salaries, maybe, just maybe, we will get through these hard times.  The gauntlet is down, the congress and the people now have to step up to the challenge that real leadership presents.   Now it gets interesting.   

BTW, its not much but still, it comforts me a little to see that people who should know what political stripes we the netroots wear, have in fact finally figured out that we are liberal. We have crept out of the shadow of four-letter word status that Gingrich, Rove, Limbaugh etc. tried to cast on that word.  

Republicans are...

...those people the founding fathers tried to warn you about when they tacked on the Bill of Rights.

And for my money, any Democrat who votes with these idiots might just as well be called a Republican because they join in whispering to you "Its OK, Big Brother is just trying to protect you!".

Betrayal you can believe in

I have been biting my tongue, thinking that Obama was being pragmatic in trying to forge a working majority because the work so urgently needs doing. But what is the point of all the compromises when they restore the failed priorities we just voted down in November?

All I can can say is that I hope more senators come around to Obama's message that we really do need to put aside ideology, that Republicans too must make concessions. The continuation of policies that make working people into poor people and poor people into poorer people are going to make the repair of our economy a much more painful and protracted affair than it needed to be. Obama should not have been stampeded. What grief may have come of delay, he could lay at the feet of the Republicans...he is not getting their selfish ignorant votes anyway.

If the economy is going to stay busted for a long time and yet repair bills in the form of sacrificed tax revenue are going to be amassed and left to the next generation to pay, then we are being screwed. Will some alternative economy spring up in the shadows of shuttered banks and brokerage houses after we tire of turning over money to the charlatans of Wall Street? How many of us can find a way to do work others really need done in exchange for food, fuel, shelter? Can individual consumers buy oil and gas by barter alone? Can any significant number of Americans yet get along without these fuels? If conventional jobs, by the millions or tens of millions just go away and cannot be coaxed back, how many of us have a subsistence back up plan?

You might find my pessimism a bit extreme. I hope it is but, as Josh Marshall tries to emphasize in his comments on a CNBC interview of Roubini and Taleb, the picture your press is trying to paint for you is worse than optimistic, it is completely blind. As long as our opinions are being fed by bozos bought into a bogus banking system, establishment of a sustainable [that word applies with a vengence to economics, as if you had not noticed] system... where credit is secured by properly valued real goods and no banker has the power to leverage other people's lives and livelihoods...could only come about by accident

If we won't invest in infrastructure or alternative energy with any vigor, enthusiasm or risk unless and except it is just a way to prop up our car-centric consumer culture, we probably won't make it to the end of this century as a first world economy, let alone as the last seat of anglophone empire. We are not only betrayed in Washington. We as a nation of consumers betray our children by wasting our precious dwindling capital and clout on ways of living, working and moving about that will, in a few decades, be rusted ruins that mock our short sightedness and inability to grasp that there were much bigger changes we needed to endure; changes we did not believe in.

UPDATE: Robert Reich blogs at TPM where he provides a plausible if reprehensible rationale for the Republican sabbotage of the recovery act: they are invested in regaining seats by preserving our misery until the midterms.

Here's to you dubya

I could never stand him. So long as we all remember that HE is what Republicans stand for, we may not vote so stupidly again. He's gone, a rain of shoes flying toward his vanishing back side. He was voted out only when the cumulative disruptions and damage of his egregiously incompetent and arrogant administration reached a level even Americans could connect to the vacuous ideological causes. But of all his harms, the last I shall forgive is the way he made us a worse natured country than we meant to be, the way he made our meanness, greed and fatuousness nakedly obvious to the world...we did vote for him when many already knew better. We behaved no better than countries we have been cheered for vanquishing.

Better than anything I will ever write

The text of Obama's inaugural speech:

Thank you, thank you.

My fellow citizens:

I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.

As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, our founding fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages. We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed - why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet it."

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.

Thank you, God bless you and God bless the United States of America.

Let me oversimplify this for you

Debt is just another kind of tax..but one for which we tax payers get nothing in return for our payments, one that is appealingly cameauflaged to those who are just too selfish to pay taxes directly out of their own pockets.

The republicans have no standing to mount any objections to debt: they took it on faster in the  last 30 years than any other faction ever did.  Debt of record breaking proportions is now held out to be our only short term remedy to the wrecked economy.  I hope so but I am stocking up on canned goods and generators just in case.  When trying to distinguish between the nearly indistinquishable economic consequences of Republican vs Democratic administrations, it may help to weigh how much of the monies raised and spent came back to you in any material and beneficial form.

Smell the fascism

If it comes to the point where some bush league toady in a uniform gives orders to reenact the massacre at Kent State, will we finally see how fascism is seeping upward into our most important institutions? That we have people who bother to think about the possibility of regular army units unleashed on their own civilians ought to make all of us a lot more watchful of our military.

My alarm at this bit of news is probably a bit greater than yours because the potential for army regulars to be shooting at citizens is a rumor that should have just blown away on account of its own ridiculous implications and impossibility. But seems it won't go away.

The finger pointing in the aftermath of Kent State shootings did not feel like justice to either the Viet Nam war protest movement or its opponents. The questions we have to ask at the mere hint that we are a nation yet again preparing to kill our own civilians ought to be in more minds...maybe that would lessen the likelihood of history repeating itself.

• Who gains from such unrest?
• Who gains if the military must be visibly present on our city streets, armed and leathal?
• Who wants this kind of control? Who thinks marshal law is good in any way or at any time?
• Do those who brought so much economic pain and dislocation on us face gun barrels and tear gas as potential rioters would? Do they even get an indictment?
• What will be the dividing lines between common soldiers and those that give the orders? Who are we if we are not all on the same side in this country?
• What will voting or economic reforms mean in an era of marshal law?
  

Boy!, that is Rich!

Frank Rich spares you from reading some insanely odious propaganda your tax money has paid for. He dispatches with one quick cut a huge pile of shit the desperate Bush crafted to promote his "legacy"...is Bush kidding us? If you collect Nazi memorabilia or Joe McCarthy campaign posters, you could download this document for posterity. I can't imagine Obama would be so deeply sarcastic as to leave it up at its present whitehouse.gov URL.

Rich gives us the gist of the matter in one paragraph:

This document is the literary correlative to “Mission Accomplished.” Bush kept America safe (provided his presidency began Sept. 12, 2001). He gave America record economic growth (provided his presidency ended December 2007). He vanquished all the leading Qaeda terrorists (if you don’t count the leaders bin Laden and al-Zawahri). He gave Afghanistan a thriving “market economy” (if you count its skyrocketing opium trade) and a “democratically elected president” (presiding over one of the world’s most corrupt governments). He supported elections in Pakistan (after propping up Pervez Musharraf past the point of no return). He “led the world in providing food aid and natural disaster relief” (if you leave out Brownie and Katrina).

There is more well deserved scorn in the rest of the Rich piece and I agree with every word of its tone and substance. The question it leaves in my mind and I am sure many others share this puzzlement: Given that he was so very damaging and slovenly a leader, why did we never impeach him?

Obama in "oh twelve"

I offer the president elect a campaign slogan for his next election campaign. If Palin is the best the Republicans can do on that occasion, Obama can just stay at his desk and continue sorting out our messes and calming our nerves. But just in case, a bumper sticker may be handy:

KEEP THE CHANGE

A little ambiguous for you? I frankly think the country's fascist hankering, in the form of its now permanent Military Industrial Complex, is resistant to even Barak Obama's persuasions. I fear stimulus only saves economies that are sound except for want of a rational level of confidence...but the US has deeper woes, having run on empty right to the edge of physical exhaustion of some mineral resources and selfdefeating policies involving its intellectual resources. Of only the latter can we even hope for reversal.

I am half way through Greenspan's mea non culpa, Age of Turbulence, and I feel less inclined to hate on the guy than before. He is so much less arrogant than the total pricks like Cheney, Rumsfeld and Dubya with/for whom he worked. The constant surprise to the geek's geek of economics is that anyone took his advice: he claims he never felt anywhere near as confident of macroeconomic forecasts as others who clearly hung on his words...after carefully picking the words they would hang on to. My point is that not even for the smartest of us, do the complexities of our economic world afford any useful transparency. Greenspan only grew more aware of psychology as a determinant of economic outcomes late in his career. Obama is smart and less of an ideologue than Bush league henchmen but the bus is already plunging down the embankment as Obama takes the wheel. Softer landing maybe but only on a lower road. More certainty is not available. I expect that unless someone works a miracle on the ruinous materialism and consumerism that now define American character more than our claimed piety, hard work or intellectual freedom, Obama's hands are tied. We will go on wanting to have more and pay less and history will only accelerate its punishments for our childishness. It is effective politics to work the extreme factions toward the center and to steer middle courses no one faction loves but in which each faction sees some benefit. But compromises between the wishfulness of the entire body politic and fundamental physical limitations of resources are not possible and their simulation by denying reality has been shown to fail painfully.

We hear a clamour, right and left, to borrow on top of our mountain of borrowings so as to fund stimulus programs...yet I hear little of cutting our offensive defense budget. My job would be one lost in such cuts and yet I beg fate to be so good to us. Obama will not stem that flow of money wasted on weapons and world bullying.

In my admittedly dim view, if Obama actually tries to spell out for us just how hard we will have to work and how insecure we are, he will be hated for his message and his reelection in ought-twelve will not be a foregone conclusion.

Econopause

Economics exhibits business cycles of some regularity or frequency. Stocks form small asset bubbles to the rhythm of these cycles. Other assets may participate to a greater or lesser degree. An engineer would observe that negative feedbacks or restoring forces must be at play some how, working against each other but out of phase so as to produce these oscillations which seem, primarily in hindsight, so predictable. The changing times and the technical resources and the speed of information conspire to change the frequency but one way or another excitements and depressions follow one another in our economies just as they do in some mental disorders of individuals.

What makes mighty sand dunes and the crashing ocean waves?   The steadyness of the wind, more than its strength, will find the harmonic of the medium, sand or water, and according to its steadiness, shape mountains in it to suit that harmonic.

Even without the blatant bias of tax law to help the rich and keep the poor in their place, we have always had rich getting richer [how old is that expression?]. It occurs to me that certain habits in commercial behavior or pecuniary personality traits, out of synch with the greed and fear of the mass of economic players, might be the more natural way of the wealthy than lobbying for tax loopholes.

If your habit was to not be caught up in euporias nor anxious to show off as much buying power as your neighbor, you might save liquid wealth while others use it to bid up inflating assets. Wealth defined as "having more money than you need for living expenses" is a definition that finds an alternately growing and shrinking population meeting its standards. What matters is what you do when you are thus "rich".

[btw, note in that Vaknin essay that he was calling "Ponzi scheme" on the whole of our vaporous financial market, well in advance of the collapses of the summer and fall and way ahead of the revelations that Madoff had made off with billions. He is, effectively, agreeing with Krugman that an unregulated market is an open invitation to and ultimately hard to distinquish morally from a Ponzi scheme. I particularly like the essay because it emphasizes the universal emotionalism and intellectual weakness of insecure humans that drunkens and finally unhinges our economy. Until our upbringings are founded on spiritually or psychologically healthy values , our markets will always be a way to stalk each other.  A basic econ lesson would suffice to show how irrational market bubbles are, but who thinks in terms of equations?]

If others become needy for liquidity while you have cash, if asset prices decline and by their very decline motivate the needy owners to dump their own goods driving prices lower "before it is too late" to cash in, then your savings can obtain a muliplied quantity of that asset so dearly bought at recent market peaks. It sounds too obvious: "buy low, sell high" but real people have too much herd animal and not enough selling discipline. Plan, on the very day you buy, exactly the condition in which you will sell AND a stop-loss. The wind is steady, the economies have had millenia of hungry people and middle men between the earth's bounty and the gaping mouths and bare shivering shoulders. With your discipline, now go surf those waves.

Is that cyclying behavior the natural consequence of capitalist systems  given the limitations of the humans who operate them?  The "obvious" superiority and appearant dominence of capitalism as the "end of history" has been pronounced by bullshitting Neocons. But conversion of the world to liberal democracy and capitalism is not a done deal.  This reality gap holds with an especially fierce irony for the economic and moral failures of the US, which for the last eight years has idiotically claimed to be the champion of those ideals even as it gutted them. My opinion FWIW, is that democracy is a fine idea and we should try it some time. Capitalism is not an idea so much as a label for the du jour mix of government support and proprietary rights that any given country uses to perpetuate the personhood of wealth...which is more or less the same as the personhood of personal power manifest in political terms. The basic flaw here is still the failure to see the psychological at work. The parties touting the political system do not realize how much they identify that system with themselves and its power with their power. They can promote liberal democracy so energetically because rather than the complex reality of culture change needed to make it work, they are merely promoting themselves.


The end of nature has also been pronounced.  Unlike the Fukayammering, that trend spotting has been amply confirmed.   With Obama's choice for the head of EPA, climate science has finally, pushed aside the oil-funded deniers. When too many mouths gape for food from a depleted nature, our steady winds become a cyclone, a vicious circle of unmet needs. That time is coming though it will not come all at once like $150/bbl oil. And when it comes, as intersecting trendlines dictate it will, then no amount of money is enough to buy food when one must grow it or yank it at gunpoint from the larder of a more prudent neighbor.   When the psychological value of money is no longer the quivelent of power and security, there will be and end to economic oscillating.