The People's History of the United States

...by Howard Zinn is about to be made into a documentary.  I have it but have never gotten around to reading it and now I don't have to...hahahaha.  Just kidding, I'll get around to it one of these days.

The Social Security Trust Fund

Arnold Kling describes the trouble with the social security trust fund pretty well in responding to Felix Salmon:

"Felix Salmon writes,

'the obligations of the [Social Security] trust fund aren't tangible obligations fungible with other government debt. But at the same time they are obligations: they oblige the government to issue debt in the future, insofar as its tax revenue won't be able to cover its pension promises.'

A trust fund = an obligation to borrow? If your uncle Louie told you he was setting up a trust fund for you, and its assets consisted of his obligation to borrow the money, how secure would you feel?

On the other hand, you may feel confident that Uncle Sam will always be able to borrow. Don't be so sure. A few months ago, one might have thought that Uncle Freddie and Aunt Fannie would always be able to borrow. That ended rather suddenly.

What do you like better about Sam? His balance sheet? His management team?"

This is one of the things I have never understood when those who claim that Social Security is not a problem or even has a strong financial position. The trust fund presently has $5 trillion dollars worth of obligations that we have pissed away. These are funds that will have to be paid out between 2018-2040. To state Social Security's finances are in sound shape presumes faith in the taxpayers willingness to accept higher marginal tax rates to redeem those bonds in the trust fund. I don't share that faith.

Earmarks and the Bridge to Nowhere

Sarah Palin's bit about saying "thanks but no thanks" to the "bridge to nowhere" is an outright lie. This is amazingly arrogant that the McCain team persists in using this line. However, what concerns me more about this is the fetish surrounding earmarks. Simply put, they aren't that big a deal. Earmarks are a miniscule part of the budget. The represent roughly $18 billion in outlays out of a budget of $3 TRILLION. In other words, 0.006 % of the federal budget. This is not to say that minimizing earmarks is not a worthy goal, we shouldn't make such a big deal about them. This was one of the things that drove me batshit crazy about Tim Russert. Russert, the great Daniel Patrick Moynihan's former chief of staff, who surely should have known better, always made earmarks one of his infamous gotcha!s, thereby raising their relative importance of earmark reform in our national discourse. But really, they are just a distraction.

DFL

The RNC says thank you.

What I'm Listening to

Jacqueline du Pre: The Early BBC Recordings 1961-1965. I am a huge fan of Yo-Yo Ma but as far as cellists go he does not come close to Jacqueline du Pre. Here is her wikipedia.

PeP Updates

I have added Greg Mankiw and Ta-Nehisi Coates to the blogroll. Professor Mankiw has one of the bigger econ blogs and is an Economics professor at Harvard. He was previously a chair of the CEA under Bush, he routinely writes economics columns for the NY Times, and writes the best selling economics textbook. He manages to write about complex issues in an accessible manner. I suppose this shouldn't be surpising given that he is a best selling text book author. Oh, and Professor Mankiw was kind enough to quote this very blog in one of his recent posts which has me positively tickled. Yes, I am a dork.

Ta-Nahisi Coates is a blogger for the Atlantic and blogs about anything and everything. I find him fascinating and he discusses race and culture extensively in a manner that is seldom found on the blog0sphere or elsewhere.

The Things Campaigns Do to You

"The most promising way to move forward in all three dimensions – coverage, cost, and
long-run fiscal situation – is to replace the employer exclusion with a tax credit, a step that has been proposed many times before (e.g., Butler 1991 and Pauly and Hoff 2002). Firms would still be allowed to deduct the cost of their contributions to employee premiums, just as they can deduct wages and other expenses today for the purpose of calculating taxable income. But workers would now have to include employer contributions to health insurance in their earnings for the purpose of calculating taxes (precisely which taxes is discussed below). In exchange for, workers who purchased qualifying insurance would get a refundable tax credit. Qualifying insurance would be along the lines proposed by the President in his standard deduction for health insurance, including limits on out-of-pocket payments, coverage of a general range of medical care, and guaranteed renewability by the provider (Treasury 2008)."

This is a pretty fair description of the McCain health care plan. The funny thing is, this is not be found in McCain campaign literature or on his senate website, but rather in a paper written by Jason Furman, Obama's Economic Policy Director, who now is arguing about the perils of this very plan. Now Furman would probably be right to respond that the McCain plan doesn't go far enough to facilitate risk pooling in the individual market and maybe that the tax credits are insufficient. But the general thrust of the McCain plan is one that he championed before he became an Obama staffer, now his job is to criticize that very plan.

Furman's counterpart in the McCain campaign, Douglas Holtz-Eakin, was a real deficit hawk and had a sterling reputation coming from the CEA and a stint as the CBO director. Now Holtz-Eakin's main task is defending the indefensible, McCain's tax policy. He surely knows that he will not bring the budget with the tax cuts McCain has proposed back into balance merely by curtailing earmarks. But that is the company line.

Both are incredibly intelligent men, highly accomplished in their fields, but their current job description is to say stupid and false things. That is politics.

Here is a video of the two going at it on CNBC and in Arnold Kling's words, "squandering their cognitive surplus."

hat tip: Greg Mankiw and Arnold Kling

random note: Mankiw was actually Furman's dissertation adviser.

More Thoughts on Palin

It appears that Palin will be quite capable as an attack dog. The problem for McCain is that this isn't a particular need. What McCain needs is policy credentials and a credible governing narrative. For all of his years in the senate McCain seems remarkably weak when it comes to actual policy. His narrative is summed up in one word: Honor. However, this doesn't really translate into what to do about rising health care costs, the looming entitlement disaster, a decaying public education system, and a safety net with gaping holes when it is needed most.

My Thoughts on Palin

I was initially rather excited by the Palin pick, though for somewhat unconventional reasons. I think her pick is a disaster and simply shows how impulsive McCain is and one would argue on that basis alone ill-suited for the presidency. That said, I view this election as a throwaway for the Republicans. I don't think there is a snowflake's chance in hell that McCain wins. The electoral math just doesn't add up for Republicans. The Republican brand is so tarnished that you could submit a ticket of Jesus and Mother Theresa and it would be walloped. McCain's pick of Palin gives an up and coming politician a chance to get some national exposure that she would not get merely as the governor of Alaska. If Palin's basic defect were that she were inexperienced than all would be peachy in my book, though it looks like she might be a bit loony and ethically challenged.

On the plus side, she is a stone cold fox. I think Michelle Obama is immensely attractive and so is Governor Palin and that makes this election much more palatable.

More Thoughts on Biden

The problem with Biden is not substantive. He seems intelligent, if not exceptionally so. He is quite affable, sensible in his policy prescriptions, and on paper complements Obama nicely. He brings foreign policy gravitas to the campaign, and in general, experience. His sins are his candor and verbosity. The former is refreshing and is actually consonant with the general "change" theme of the Obama campaign. The latter, his verbosity, or really a propensity towards verbal diarrhea, is what is potentially toxic in the modern campaign. In his own campaign for president, which unfortunately never gained traction, he seemed to tame his tendency to put his foot in his mouth.

I hasten to add, my observation and the core of my criticism is exceedingly shallow. But alas, so are presidential campaigns and their media coverage.

Biden as VP

This one surprised me. I like Biden, and on paper, he was the ideal pick. However, I think he is an awful, awful campaigner and this is the one time where I thought McCain has a chance.

Medicare's Efficiency

One of the points that single payer advocates make is the potential cost savings we could reap from low overhead costs, they then point to medicare. This, they conflate with efficiency. However, that Medicare has low administrative costs should not surprise us, all medicare does is process claims. Thus, if medicare were to process ten times the claims it does now while maintaining its staffing concerns, it would be even more efficient by such a metric. Never mind the fact that costs could as well grow ten fold without having a discernible impact on health outcomes. I don't point this out to indicate that private health insurance is the answer, just to note that administrative efficiency shouldn't be considered such a potent talking point.

The Enquirer Sacks John Edwards

I would guess at this point his potential VP nod or Attorney General post is off the table. For those of you who doubt the National Enquirer, I have six words for you: Jesse Jackson, Rush Limbaugh, Gary Hart.

More Fannie and Freddie

One of the other disturbing aspects of the housing bill is that on top of raising the cap for conforming loans that fannie and freddie can buy (essentially rewarding their insolvency), Congress seems to think it can wipe away all of Fannie and Freddie's ills with a new regulator. In the recent housing bill Congress abolished OFHEO (FM/FM's prior regulator) and created a new one with a new fancy name. I don't see what this will accomplish other than delaying eventual regulatory capture. If Congress was worried about systemic risk it would tide Fannie and Freddie over and then wipe out its shareholders, potentially nationalize the whole affordable housing part, and sell of the rest of Fannie and Freddie in pieces.

Housing Crisis

I think one of the elements missing in the discussion of the housing crisis is whether or not the government should be subsidizing home ownership to the extent it does or at all. Home ownership is generously subsidized through the tax code in the form of the mortgage interest deduction and additionally in the form of the implicit now made explicit guarentee of Freddie and Fannie's debts. Home ownership is something of a fetish in American political discourse and thus has long been untouchable. Maybe we can use this moment to move towards a more rational approach on home ownership rather than doubling down.

Fannie and Freddie

It appears that Fannie and Freddie are about to be rewarded for their failure. While it is understandable that the government would want to bail out the GSEs because they are "too big to fail", it is not understandable that Congress seeks to reward the GSEs by lifting the cap on conforming loans from $417k to an excess of $600k that Fannie and Freddie can buy. I think the discussion of what to do with Fannie and Freddie should focus on whether to nationalize or privatize (and by privatize, I mean no implicit nor explicit guarentee) Fannie and Freddie. And in either scenario the shareholders should be wiped out.

Brilliant Blog Post on GSE's by Larry Summers

Courtesy of Creative Capitalism:

Here is a really good creative capitalism idea. All Americans benefit from increases in home ownership because of the values like hard work, community, and respect for property that ownership instills. Families want desperately to own their own homes and accumulate equity. Yet it is very hard for conventional banks that borrow money over the short term to lend over the kind of 30-year horizons that best help families buy houses.

How can the objective of ownership be best supported and how can the most adequate financing be assured? Voila, creative capitalism! How about chartering private companies as government sponsored enterprises with the mission of promoting home ownership affordability? Give them boards with some private representatives and some public representatives. Make clear that government stands behind their capital market innovations so they can borrow more cheaply and pass the savings on. Exempt them from the state local taxes that others pay. Give them specific objectives on affordability that they must meet. Rely on a special government regulator to assure that they balance their social responsibility with their drive to profit. Harness the profit motive to meet a social objective.

This is roughly the rationale behind Fannie Mae and Freddie Mac. I would submit that it is about as good or as bad as most creative capitalism ideas involving joint profit making and social objectives. But one hopes that ee are now witnessing the end of this particular experiment in creative capitalism: the government is moving to pick up the pieces of the mess the GSEs have made and their shareholders are losing most of their money.

What went wrong? The illusion that the companies were doing virtuous work made it impossible to build a political case for serious regulation. When there were social failures the companies always blamed their need to perform for the shareholders. When there were business failures it was always the result of their social obligations. Government budget discipline was not appropriate because it was always emphasized that they were "private companies.” But market discipline was nearly nonexistent given the general perception -- now validated -- that their debt was government backed. Little wonder with gains privatized and losses socialized that the enterprises have gambled their way into financial catastrophe.

I wonder how general the lesson here might be. My fear is fairly general. Inherent in the multiple objectives urged for creative capitalists is a loss of accountability with respect to performance. The sense that the mission is virtuous is always a great club for beating down skeptics. When institutions have special responsibilities it is necessary that they be supported in competition to the detriment of market efficiency.

It is hard in this world to do well. It is hard to do good. When I hear a claim that an institution is going to do both, I reach for my wallet. You should too.

Twitter

What the hell is it?

Should We Stay or Should We Go?

That's the central question regarding our policy in Iraq and should be one of the main questions dominating the news cycle. In my view, the Iraqis have answered it for us, they have asked to sit down and establish a timeline for withdrawal. If in fact the objective is to establish a sovereign state, then we should respect that state's sovereignty. Time to go home.

Tyler Cowen on Climate Engineering

"I don't know much about the technologies but my worries are mainly political. Won't the Russians benefit greatly from a warming world, both because they are a bit cold and because they will access a warmer Arctic? Would the UN Security Council approve climate engineering? Probably not. If the United States did it on its own, could that be perceived as an act of war? If geo-engineering is cheap (which is part of its very promise), and unilateral action is acceptable, don't other countries also get to take their shot at influencing the environment and moving us toward an optimal climate? What does the resulting equilibrium look like? Who moves last? How would we feel if someone changed the U.S. climate to make many parts of the country colder?"

Good Riddance

Jesse Helms is dead and thank goodness for that. He was an insufferable bigot.

Throwing Wes Clark Under the Bus

If you distill Wes Clark's comment to its essence it was that McCain's service and sacrifice do not make him qualified to be the president. Clark's comment in now way discounted McCain's sacrifice, he simply said that which is both obvious and true. It's unfortunate that Obama felt he had to throw Clark under the bus. I understand why he did it, but it is unfortunate and distasteful nonetheless.

Thank God

Textbooks will start becoming available on the Kindle.

Heller Affirmed

Come join me in D.C. for a handgun party.

Democrats Prepare To Bend Over Yet Again

Today House Democrats are preparing to bend over and take an ass pounding that will extend to all Americans getting fucked.

Rep. Steny Hoyer and other house Democrats have supposedly reached a deal with the White House on a FISA bill that will extend retroactive immunity to telecommunication companies who assisted the government in illegally spying on Americans over the past 7 years.

This bill is complete and utter bullshit that tramples on all American’s civil liberties and protections. What the hell is the point of having a Democratic controlled House and Senate if they are just going to roll over and take it instead of standing up to the president concerning our most basic civil liberties?

I don’t know what’s worse having a Republican controlled Congress where they are straightforward about fucking the American people over or a Democratic controlled Congress who puts forward the facade of standing up to the president before fucking over the American people?

Clinton & Conceding

I don’t tend to listen to what the pundits have to say, but Jack Cafferty had a pretty good response to Hillary Clinton today. Here is some of what he had to say:

If Obama wants a hint what it will be like if she is the vice president, last night should give him a pretty good idea. Refusing to concede, she chose instead to try to steal the spotlight from him on one of the most historic nights in our history. Barely acknowledging his accomplishment, she went on in her speech at Baruch College like nothing had changed. It was pathetic...At a time when our country should be celebrating a quantum leap forward in healing our racial divisions, Hillary Clinton is ruining the party – a spoiled child who refuses to go when told, “It’s bedtime.”

Hillary

Well...She'll make no decisions tonight she informs us. Classy.

Obama Clinches Nomination

The Associated Press is reporting today that Obama has secured enough pledged super delegates to effectively clinch the Dem's nomination. I'm excited to see his victory speech at Xcel tonight.

The American Health Care System

Here is a brilliant description of it courtesy of Jim's Blog:

"The American health care system is socialism without a central plan, and capitalism without markets or prices."

Hillary as VP?

That's Krugman's suggestion. This suggestion puzzles me for a number of reasons. Krugman posits that Hillary's inclusion in the ticket will help Obama recapture jilted Hillary supporters and lower/lower-middle income white voters who Hillary has typically won over. On the former, I don't really think there are that many jilted Hillary supporters. I am guessing her conduct at this point has taken care of that. The few remaining people whose noses are bent out of shape over Hillary's failure to secure the nomination are those who had been promised a gig in a Clinton Administration (which makes me wonder if Krugman had been offered some position, say CEA chair, as he has been in the tank hardcore for Hillary on his blog and op-ed pages).

The real question is whether or not Hillary will be able to bring her blue collar white supporters. I doubt it. I think many of those who are supporting Hillary are not so much supporting Hillary but opposing a Black male. I think for many of those voters a Barack-Hillary ticket would be a diversity freak show. For Obama to appeal to these voters he will need a white male, plain and simple. Ideally this potential VIP would also bring other credentials than his whiteness (this rules out John Edwards), such as foreign policy experience or experience in general.

But the other reason Hillary would be an awful choice is that she more anything the Republicans can do themselves, will engergize the conservative base.

Recession

My sense is that we were in a recession before any economists or government agencies were talking about recessions and now that they are talking about us being in a recession we are probably emerging from the recession.

Gas Taxes in Other Countries

Some perspective for the next time you curse at the pump.

PeP Links and Random Thoughts

Bob Barr is running for president on the Libertarian Party ticket. However, Bob Barr is no libertarian. He is a small government conservative. So while he is a critic of the expansion of executive power and the war in Iraq there are areas he is where he significantly departs from libertarian priorities: he is a hardcore drug warrior, anti-immigration, and a social conservative. Actually, Barr represents basically what the conservative coalition candidates have been about until Bush: an unrealistic fiscal plan (heavy on tax cuts/heavy on spending cuts) as a sop to Grover Norquist and business conservatives, skepticism/hostility of government (and military intervention abroad) to entice libertarians, and an emphasis of hostility towards gays and a firm pro-life position to appeal to social conservatives. In a tight election, I think Barr's presence would be a significant problem for McCain, much more so than Nader was for Gore. He cannot be dismissed out of hand as fringe character (he was a significant player in the Republican party till not too long ago). Nevertheless, I think Obama (or in the off chance that Clinton snatches the nomination away) will trounce McCain, thus Barr's impact is likely to be irrelevant.

Go read Cato-Unbound's lead essay. The topic is the resource curse. The author, Leif Wenar, proposes approaching the resource curse as a property rights issue. His premise is that a given country's resource is the property not of the government but of the people. What he is getting at is that every country should have some sort of trust fund like in Alaska where people are reaping the dividends of extracted resources. I think that's a great idea, but his proposal for bringing a resource trust about are troubling on many dimensions and impractical. He presents the scenario of Sudan selling $3billion of oil to China and plowing the money into its civil war/ethnic cleansing. The US would create a trust for the Sudanese people and impose tariffs on Chinese imports till there was $3 billion in the fund. It's one of those ideas that strikes you as novel, sort of an aha moment, and then of a sudden you realize its massive flaws. For instance, how do you get the money to the Sudanese people? What if you actually get money into the hands of actual Sudanese as opposed to the government only to find that they use the money to arm themselves? Should Europe impose tariffs on US imports to fund a trust for Iraqis? What if the Sudanese use the monies received to invest in infrastructure or education? etc. Anyhow, it's an interesting if clumsy attempt to grapple with a very serious problem.

Anne Applebaum makes the case for intervening in Burma. I guess if we are invading Iraq for among other reasons to promote democracy, why not invade a country for strictly humanitarian reasons. This is the dangerous logic that Iraq has spawned. I don't know quite what one does. Do you fly over Burmese airspace and carpet bomb them with food, clothing and medicine? I do think these types of tragedies are situations where the US should be grabbing onto to try to improve our international reputation.

Over at Gristmill they have a good rundown on McCain's cap and trade plan. The takeaway is that it is nowhere near as serious as Obama's plan but does pass the laugh test. A low bar admittedly, but I have low expectations for McCain. For me a cap and trade is clearly inferior to a carbon tax, and a cap and trade that does not auction permits is piss poor. Though, sometimes piss poor is an improvement (which is possibly the case).

Local Governments Facing Pension Problems

WaPo has an article on the underfunding of state and local government pensions. Anyhow, read the article, this is just another data point in the larger argument as to why defined benefit pensions are such a bad idea.

Walking Away From the Mortgage

There has been some hysteria paired with some sober speculation (courtesy of esteemed minds like Marty Feldstein and Hal Varians) that what is driving home foreclosures, or what will drive the majority of home foreclosures is negative equity. I think this is both obviously correct and patently false. Where Feldstein and the like I think are wrong is they anticipate massive foreclosures brought on by negative equity for home owners who can afford their mortgage.

Background: Mortgages are Nonrecourse Loans
What makes a mortgage distinct from other loans is that it is non-recourse. What does this mean? Well, say I have a $500,000 mortgage and I default within six months of the loan's origination, the bank forecloses on my home and is only able to sell the home for $300,000. The bank can't come after me for the difference. They are stuck with the loss.

Two Scenarios:
Scenario One- the Foolish Speculator

A lot of folks got into mortgages that they couldn't reasonably afford but were banking on being able to take on a line of equity credit based on their home's appreciation. Thus, they're plan to pay for the mortgage was to take out more debt. This actually worked during the housing boom. However, when the bubble burst, homes ceased to appreciate, and thus there was no equity to tap. These folks went into to foreclosure and are going into foreclosure.

Scenario Two- the Solvent Homeowner who walks away

In Scenario two, the homeowner, while he can afford his mortgage, walks away from it because the bursting of the housing bubble has caused his mortgage to exceed the value of his house. I find this scenario unlikely for a number of reasons. The biggest reason, is if a homeowner simply walks away from his house which then goes into foreclosure, his credit will be wrecked. Your credit is vitally important. Landlords will look at your credit as a basis of whether or not to accept you as a tenant (an important consideration now that you don't hava a house). Banks look at your credit if you try to get a business loan from them. And the same applies to credit cards.

If the homeowner can afford the mortgage, he can ride out the housing downturn and wait till prices go up again, all the while, keeping his credit intact. There may be some regions where the downturn in real estate prices is more likely to be a permanent phenomenon (e.g. the rust belt) but for most areas prices are likely to rebound after awhile. Thus, it should come as no surprise that this second scenario, contra the emerging conventional wisdom, does not appear to be occuring.

Congratulation Piper!!!

I big congratulations to our very own PiedPiper who just graduated from law school today!!!!!

Classic Quote

“Everything reminds Milton Friedman of the money supply. Everything reminds me of sex, but I try to keep it out of my papers.” Robert Solow.

Enough With Hillary's “Gas Tax Holiday” Bullshit

I have had enough with Hillary Clinton’s bullshit rhetoric about some asinine “gas tax holiday” for the summer. Anyone who has the most basic understanding of how supply and demand functions realizes what complete crap this idea is.

Here is a quick run down:

1. During the summer gasoline demand is the highest and gasoline production at the refinery level is at its peak.


2. The current high gas prices work to lower demand by detering consumption, dropping the price of gas by 18 cents per gallon (the current Federal tax level) will lower prices thus encouraging people to buy more and raise demand.


3. Since production is already at capacity the increase in demand will not raise the quantity of gasoline available to consumers and will instead raise prices completely cancelling out any savings to consumers.


4. So now instead of using that 18 cents a gallon to build and maintain things such as roads we will just be sending that 18 cents to oil companies.

Summation – Hillary’s plan is complete bullshit political pandering.

On Sunday Hillary Clinton was asked if her plan was endorsed by any economist. She dodged the question but then responded "I'm not going to put my lot in with economists... this mind-set where somehow elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans."

What’s next? Maybe Hillary Clinton wants to start regulating the auto industry and requiring that all new cars receive 300 miles per gallon powered by Care Bear Stares?

But how would this work? Well that’s easy; the collected Care Bears stand together and radiate light from their respective tummy symbols (see above photo). These combine to form a ray of love and good cheer which could be harnessed to power all of our cars of course.

Who cares that those elitist engineers say that it won’t work. Care Bear power is more than capable of handling all of our energy needs, it is just one big elitist conspiracy that is keeping the technology down.

Blogging Hiatus

As you may have noticed, blogging has been light. It will continue to be so thru May. 6th as your humble blogger is preparing for law finals. Wish me luck.

Do Iowa's first-in-the-nation caucuses cause food riots in Mozambique?

So asks Will Wilkinson. I think they do.

McCain's Tax Returns

Or rather Cindy McCain's tax returns. Well, she hasn't disclosed them. Her tax records should be disclosed. I think the public has the right to know such financial information and if there are any potential conflicts of interest. Just as I think Bill Clinton should be releasing donor information with regards to the Clinton library and the Clinton Global Initiative. However, what makes the failure to disclose all the more galling in McCain's case is that he has over the years assumed the mantle of the reformer. He championed that goddawful legislation McCain-Feingold (BCRA) and mentions the elimination of earmarks as his proposed solution to every governance issue.

Obama's New Slogan

"If it ain't Obama, It's Yo Mama!"

That would be a friggin brilliant slogan at this juncture. It exploits the youth votes desire to distance themselves from their aged counterparts by making a slam on their mothers. The Yo Mama bit is highly urban, while the use of "ain't" is an effective sop to rural voters. Further, it manages to subtly convey everyone's greatest fear of a Hillary presidency: her smarmy Mother knows best Nanny Statism. Obama campaign, I will be looking for the check in the mail.

Michael Moore Endorses Obama

Love him or hate him Michael Moore does have a strong following in the liberal epsilon of American society. I would have to say one of the more interesting quotes is when Moore describes Hillary Clinton as sounding like "a bigot stoking the fires of stupidity." Here is what he wrote about his endorsement of Obama:

Friends,

I don't get to vote for President this primary season. I live in Michigan. The party leaders (both here and in D.C.) couldn't get their act together, and thus our votes will not be counted. So, if you live in Pennsylvania, can you do me a favor? Will you please cast my vote -- and yours -- on Tuesday for Senator Barack Obama?

I haven't spoken publicly 'til now as to who I would vote for, primarily for two reasons: 1) Who cares?; and 2) I (and most people I know) don't give a rat's ass whose name is on the ballot in November, as long as there's a picture of JFK and FDR riding a donkey at the top of the ballot, and the word "Democratic" next to the candidate's name.

Seriously, I know so many people who don't care if the name under the Big "D" is Dancer, Prancer, Clinton or Blitzen. It can be Mickey Mouse, Donald Duck, Barry Obama or the Dalai Lama.

Well, that sounded good last year, but over the past two months, the actions and words of Hillary Clinton have gone from being merely disappointing to downright disgusting. I guess the debate last week was the final straw. I've watched Senator Clinton and her husband play this game of appealing to the worst side of white people, but last Wednesday, when she hurled the name "Farrakhan" out of nowhere, well that's when the silly season came to an early end for me. She said the "F" word to scare white people, pure and simple. Of course, Obama has no connection to Farrakhan. But, according to Senator Clinton, Obama's pastor does -- AND the "church bulletin" once included a Los Angeles Times op-ed from some guy with Hamas! No, not the church bulletin!

This sleazy attempt to smear Obama was brilliantly explained the following night by Stephen Colbert. He pointed out that if Obama is supported by Ted Kennedy, who is Catholic, and the Catholic Church is led by a Pope who was in the Hitler Youth, that can mean only one thing: OBAMA LOVES HITLER!

Yes, Senator Clinton, that's how you sounded. Like you were nuts. Like you were a bigot stoking the fires of stupidity. How sad that I would ever have to write those words about you. You have devoted your life to good causes and good deeds. And now to throw it all away for an office you can't win unless you smear the black man so much that the superdelegates cry "Uncle (Tom)" and give it all to you.

But that can't happen. You cast your die when you voted to start this bloody war. When you did that you were like Moses who lost it for a moment and, because of that, was prohibited from entering the Promised Land.

How sad for a country that wanted to see the first woman elected to the White House. That day will come -- but it won't be you. We'll have to wait for the current Democratic governor of Kansas to run in 2016 (you read it here first!).

There are those who say Obama isn't ready, or he's voted wrong on this or that. But that's looking at the trees and not the forest. What we are witnessing is not just a candidate but a profound, massive public movement for change. My endorsement is more for Obama The Movement than it is for Obama the candidate.

That is not to take anything away from this exceptional man. But what's going on is bigger than him at this point, and that's a good thing for the country. Because, when he wins in November, that Obama Movement is going to have to stay alert and active. Corporate America is not going to give up their hold on our government just because we say so. President Obama is going to need a nation of millions to stand behind him.

I know some of you will say, 'Mike, what have the Democrats done to deserve our vote?' That's a damn good question. In November of '06, the country loudly sent a message that we wanted the war to end. Yet the Democrats have done nothing. So why should we be so eager to line up happily behind them?

I'll tell you why. Because I can't stand one more friggin' minute of this administration and the permanent, irreversible damage it has done to our people and to this world. I'm almost at the point where I don't care if the Democrats don't have a backbone or a kneebone or a thought in their dizzy little heads. Just as long as their name ain't "Bush" and the word "Republican" is not beside theirs on the ballot, then that's good enough for me.

I, like the majority of Americans, have been pummeled senseless for 8 long years. That's why I will join millions of citizens and stagger into the voting booth come November, like a boxer in the 12th round, all bloodied and bruised with one eye swollen shut, looking for the only thing that matters -- that big "D" on the ballot.

Don't get me wrong. I lost my rose-colored glasses a long time ago.

It's foolish to see the Democrats as anything but a nicer version of a party that exists to do the bidding of the corporate elite in this country. Any endorsement of a Democrat must be done with this acknowledgement and a hope that one day we will have a party that'll represent the people first, and laws that allow that party an equal voice.

Finally, I want to say a word about the basic decency I have seen in Mr. Obama. Mrs. Clinton continues to throw the Rev. Wright up in his face as part of her mission to keep stoking the fears of White America. Every time she does this I shout at the TV, "Say it, Obama! Say that when she and her husband were having marital difficulties regarding Monica Lewinsky, who did she and Bill bring to the White House for 'spiritual counseling?' THE REVEREND JEREMIAH WRIGHT!"

But no, Obama won't throw that at her. It wouldn't be right. It wouldn't be decent. She's been through enough hurt. And so he remains silent and takes the mud she throws in his face.

That's why the crowds who come to see him are so large. That's why he'll take us down a more decent path. That's why I would vote for him if Michigan were allowed to have an election.

But the question I keep hearing is... 'can he win? Can he win in November?' In the distance we hear the siren of the death train called the Straight Talk Express. We know it's possible to hear the words "President McCain" on January 20th. We know there are still many Americans who will never vote for a black man. Hillary knows it, too. She's counting on it.

Pennsylvania, the state that gave birth to this great country, has a chance to set things right. It has not had a moment to shine like this since 1787 when our Constitution was written there. In that Constitution, they wrote that a black man or woman was only "three fifths" human. On Tuesday, the good people of Pennsylvania have a chance for redemption.

Yours,
Michael Moore

Obama and Affirmative Action

I think one of the things that goes unremarked upon is the significant shift the Obama proposes for affirmative action. Granted, I may be imputing policies where none exists, but he seems to suggest an intermediate step away from race-based affirmative action and in the direction of a class based system. Naturally I would prefer neither and instead to try and remedy racial or class based disparities on the spending side. All that said, I find a program that discriminates on the basis of class as opposed to race more just.

The Credit Crunch is Nothing...

Compared with rising commodity prices. We will weather the housing crisis and the credit crunch, the same cannot be said for those of poor nations who are struggling with rising commodity prices. Worldwide we are seeing honest to goodness food riots. I think maybe we can scale back those ethanol subsidies now.

The University of St. Thomas...Really Good At Making Stupid Decisions, Final Round

Some of you might remember my series of rants back in October about the asinine decision that was made by UST administrators to not allow Archbishop Desmond Tutu to speak at a Peace Jam event scheduled to be held at UST and subsequent demotion of a department head because of the controversy.

Well the speech that was too controversial to be heard at UST was rescheduled and held at Minneapolis North High School instead. Tutu spent most of his speech praising the young people in attendance for being the ones who are going to change the world and discussed God’s dream for humanity and how he is excited for these young people to assist God in realizing that dream. He went on to say:

“God says ‘I have a dream that one day all of my children will know that they belong in one family. I have a dream that my children one day will know war no more. I have a dream that children everywhere will have clean water to drink, will have enough food to eat, will have a decent home. I have a dream, please help me to realize my dream’.”

I now understand why the University of St. Thomas would not want such controversial topics to be discussed on their campus, for a university who claims their mission is to educate “students to be morally responsible leaders who think critically, act wisely and work skillfully to advance the common good” this type of hateful speech should have no place on campus.

Kudos to Obama on Taxes

Every once an awhile you'll hear the ditty about how Warren Buffett pays has a lower effective tax rate than his secretary and what a travesty this is. I agree that it is a travesty but Democrats then use it as a rallying cry to raise income taxes. There is only one problem with this, it wouldn't do a blessed thing to Warren Buffet's effective tax rate as most of his income is derived from capital as opposed to labor (which are taxed at different rates: 18% v. 35% for the highest income tax bracket). Obama correctly noted this in conjunction with the Buffett story and argued that the story presented a rationale to raise capital gains taxes not income taxes.

Gas Tax Break?

McCain is proposing a gas tax holiday for the summer. McCain has confessed that he doesn't quite get the whole economics thing and this is further evidence thereof. This is a brain dead proposal. Tis the season for pandering, this is just an especially crass example.

Prostitutes for the Eldery

Bloomberg has a story about a silly but interesting public outrage in Denmark. Denmark legalized prostitution in 1999 and there is a minor practice of procuring escorts for nursing home patients upon request (I am making the assumption that in Denmark these nursing homes are publicly run). Anyhow, some complain that by tolerating the practice the state is condoning and even encouraging prostitution. I understand this point but it is after all legal, and it seems to me that one area where public assistance really is needed is to aid those whose agency is severely diminished. I think the elderly fit that description. That said, sexual fulfillment probably shouldn't be a budget priority.

Not All Protests Are Created Equal

I remember in college, this was back in 2001-02, encountering a picket at a local gas station. I noticed some of my friends were part of the picket and inquired why they were conducting this exercise. They responded that the gas station (It was a BP station if memory serves me correctly), was degrading the environment by drilling in ANWR. I pointed out that there was no drilling in ANWR at that point (still none to this date). Undeterred by facts, there rationale shifted, it was now a preemptive protest. The owner was actually really nice and polite (Minnesotans are, almost every last one of them with the exception of Garrison Keilor) to all of these idiotic protesters. He explained to them that he was an independent franchisee and that his gasoline actually came by way of Oklahoma as opposed to anywhere in Alaska. But the protest went on though, it seemed more than anything to piss off the town residents seeking to tank up and depriving the gas station owner of a morning's revenues.

Anyhow the moral of my story is that sometimes protesting a just cause is itself not enough, the manner of your protest is of great importance, too...which brings us to this story. Protesters in Paris attempted to take the olympic torch from a wheel chair bound amputee torch bearer. It almost sounds like an Onion headline. Amazingly enough, the torch bearer held on.

I sympathize with the protestors endgame, shining a light on China's harsh treatment of Tibet. I also recognize in light of recent Chinese actions combined with the fact that China is now at the forefront of the world stage by virtue of hosting the olympics, that now is an ideal time to highlight China's human rights abuses. That said, attacking a special olympian, a wheel chair bound amputee is probably counterproductive.

In Praise of the IRS

Slate has an article on the IRS and how it has transformed into a more customer centric organization. Also, Charles Rosotti, former IRS commissioner (97-02), wrote a very interesting book on the IRS's transformation. I have had little experience with the IRS but from time to time have called with a really random question about this or that credit and if I qualify (typically not). The customer service has always been unfailingly polite. The reason tax time is such a bear is the tax code itself, not the IRS which has done quite a bit to make tax season more bearable. Here is a link to an extended rant by Megan McArdle on the tax code and how to improve the tax code.

Minnesota Wild Playoff Hockey

Alright everyone I have to apologize for my absence from the blog as of late, I had knee surgery about two weeks ago and until late have been coasting through life on a head full of Vicadin.

With that said I feel that my first official post surgery blog post must pay homage to my beloved Minnesota Wild. Wednesday night’s game one OT loss was tough, but I have full confidence the Wild are going to bounce back tonight.

On Wednesday night while I was watching the pre-game coverage on TV I caught snippets of the Wild’s pre-game in arena intros. I just saw the video below and honestly what the Wild have done is nothing short of amazing (and it gives me goose bumps every time I watch it).

I will be at the game tonight so I hope they put on something similar.

GO WILD!!!!!

VW Rabbit

I drive a VW Rabbit which I knew to be a chick car. It wasn't so once upon a time when it was badged as a Golf. However, the subsuquent redesign of the boxy and quirky Golf rendered a more curved and graceful and ultimately feminine appearance (it is still known as the Golf in Europe). It is also a dead ringer that your car is a chick car when women of all ages declare it "cute". And I am alright with this and went into to the purchase eyes wide open- the only other consumer products I knew of named the rabbit were a wine opener and a vibrator. Enough said.

Now it appears that the Rabbit is not only a chick car but the gay econo car of choice. I am quite pleased with this news because I suspect it will help my resale value.

Time Killer

One of my favorite time killers is reading car reviews by Jeremy Clarkson (he hosts BBC's Top Gear). Here is an excerpt from his review of the Puegot 107:

"So what, exactly, is God’s most stupid creation? The pink flamingo, the avocado pear, Stephen Joseph from the pressure group Transport 2000? There are many choices even before you get to the koala bear.

It sleeps for 18 hours a day, only waking up to gorge on eucalyptus leaves, which make it stoned. So stoned in fact that whenever it sees anything that isn’t a eucalyptus tree or another koala, it becomes so frightened it gives itself chlamydia.

This can’t be much fun. Sitting around in a tree all day, in a big fur coat, in Australia, with a bent mind and a sexually transmitted disease that you caught without actually having sex."

Anyhow, he usually goes on in this manner for ten paragraphs and then crams in about two paragraphs of observations about the car that he is ostensibly reviewing. And I love the British terms. It took me several reviews just to figure out what he was talking about. A sedan is a saloon, a station wagon an estate car or alternatively a shooting brake, a hood a bonnet, and so on and so forth. So if you're looking for something to do other than what you are supposed to be doing or just have nothing to do generally, check out Jeremy Clarkson's car reviews.

Prison Rape

The Philadelphia Inquirer has a horrific story of a prison rape victim.

PeP Links: Education

Cato Unbound is having a discussion on Education. The Lead Essay is by Richard Rothstein of the Economic Policy Institute. The thrust of his essay was that "A Nation at Risk" got it wrong and we should approach education with the mindset that we could be doing better in contrast with a "the sky is falling mentality".

Slate has a ten part series called "Fixing It". The education component is written by UVA law professor Jim Ryan and he has some sensible recommendations: amend NCLB to have tests at less regular intervals but in more subject areas, nationalized standards, and use Teach for America or a similar vehicle to transform teaching into prestigious profession.

City Journal had a forum a while back amongst right-of-center education reform advocates as to whether school choice or institutional reform was the proper way forward.

Webb for VP

Alex Massie of the Debatable Land has a good post laying out the case for Webb as Obama's VP. Obama has a couple of electoral liabilities in my mind: 1) latinos; 2) asians; 3) blue collar whites; 4) lack of foreign policy credentials. Webb addresses two of these areas, namely the blue collar whites, the beer track in wanker, and foreign policy credentials.

Prison Rape

Ezra Klein has a good column on prison rape and perversely how we as a society accept and even are perversely satisfied with this phenomena.

A Day of Mourning

Two men, manly men, the type that build bridges and move mountains, passed: Herb Peterson and Al Copeland...or in this case the creator of the McMuffin and founder of Popeyes respectively. Is there another passing where two men, so great, of such significance and a linked significance at that, pass on the same day? The only other instance I can conjure up is of Thomas Jefferson and John Adams.

Note: For any naysayers out there that think the popeyes founder doesn't stand atop the same peak of fast food history as the creator, nay, inventor of the McMuffin, is a dolt. Popeyes chicken is the shit!

The Progressive Consumption Tax

The Democracy Journal is hosting an orgy of ideas. The one I found most interesting was Robert Frank's progressive consumption tax. In general, I think implementing some form of a consumption tax in conjunction with an income tax is a good idea. Such a hybrid system would to some degree mitigate the problem of taxing "goods" as opposed to taxing "bads". By incorporating both systems, though, you can also address concerns about progressivity. Well, Robert Frank doesn't want a stinking hybrid system, he goes big. I don't think relying excessively on either a consumption tax or an income tax is sensible. I tend to think you want to have a variety of different revenue sources so as to provide revenue stability.

What interested me about Frank's proposal was the underlying motivation. Frank seems less concerned with negative aspects of taxing work but rather consumed with deterring status or positional competition. He thinks that Americans suffer from an consumer arms race where we are all spending ourselves into debt just keep up with the joneses. I have heard this view advanced a decent amount in the liberal blogosphere (prominently by Ezra Klein) and I of two minds on the subject. My basic reaction is: so what? I am unsure why the government need intervene wielding its power to tax because some people are spiteful, envious, or have poor self esteem. Instead of taxing those that consume maybe we should tax those who envious of others' consumption. We could embed monitors on every soul and monitor envy emissions and wire this machine up to their bank account and conduct continuous withdraws as appropriate and transfer those moneys to people whose personal fulfillment is not fueled by spite. Though, this seems all a bit invasive. And I don't know if the technology exists (though we could do another Manhattan project). But, as much as I hate to admit it, I do think there is something to Frank's point of view. I can't accept it whole hog. Not gonna do it. BUT, I do think that in fact, sometimes people do consume purely to show that they can consume, and maybe there is some harm in this. And maybe in narrow instances, there is a way to harness certain folks prediliction for cupidity for the public good. In Virginia we have a car tax which is progressive. It could be made steeply progressive so that once you exceed $50 k for a non-business purchase the tax rate doubles.

In concluding this wet bag of shit post, I like Frank's idea, I am not a fan of his motivation.

Diddy Didn't Did It

A little while ago I posted on a LA Times story purporting to link associates of Diddy with Tupac Shakur's murder. Well, turns out that story was false.

Campaign Finance Proposal

I am not keen on the notion of full public finance of elections. Money, while it certainly encourages graft and some harm to the political process, is also the great equalizer against incumbents. But I digress, I happened across this awhile, it is a proposal by James Carville and Paul Begala (two professional hacks, though, arguably very good at what they do). Anywhoo, their proposal is that incumbents should be restricted from fundraising altogether and that those that seek to challenge them can raise funds. In the end, the incumbent would get a check courtesy of the government for 80% of the amount raised by their challenger. I actually think 80% is a bit generous as it probably underestimates the value of name recognition attached to incumbency and it doesn't consider that fundraising returns are well less then %100 (it takes money to raise money). Anyhow, I am sure there are a myriad of legal problems with such a proposal and maybe it is thoroughly nutty but it seems appealing to me.

Huckabee on Obama's Pastor

HUCKABEE: [Obama] made the point, and I think it's a valid one, that you can't hold the candidate responsible for everything that people around him may say or do. You just can't. Whether it's me, whether it's Obama...anybody else. But he did distance himself from the very vitriolic statements.
Now, the second story. It's interesting to me that there are some people on the left who are having to be very uncomfortable with what Louis Wright said, when they all were all over a Jerry Falwell, or anyone on the right who said things that they found very awkward and uncomfortable years ago. Many times those were statements lifted out of the context of a larger sermon. Sermons, after all, are rarely written word for word by pastors like Reverend Wright, who are delivering them extemporaneously, and caught up in the emotion of the moment. There are things that sometimes get said, that if you put them on paper and looked at them in print, you'd say "Well, I didn't mean to say it quite like that." JOE SCARBOROUGH: But, but, you never came close to saying five days after September 11th, that America deserved what it got. Or that the American government invented AIDS...
HUCKABEE: Not defending his statements.
JOE SCARBOROUGH: Oh, I know you're not. I know you're not. I'm just wondering though, for a lot of people...Would you not guess that there are a lot of Independent voters in Arkansas that vote for Democrats sometimes, and vote for Republicans sometimes, that are sitting here wondering how Barack Obama's spiritual mentor would call the United States the USKKK?
HUCKABEE: I mean, those were outrageous statements, and nobody can defend the content of them.
JOE SCARBOROUGH: But what's the impact on voters in Arkansas? Swing voters.
HUCKABEE: I don't think we know. If this were October, I think it would have a dramatic impact. But it's not October. It's March. And I don't believe that by the time we get to October, this is gonna be the defining issue of the campaign, and the reason that people vote.
And one other thing I think we've gotta remember. As easy as it is for those of us who are white, to look back and say "That's a terrible statement!"...I grew up in a very segregated south. And I think that you have to cut some slack -- and I'm gonna be probably the only Conservative in America who's gonna say something like this, but I'm just tellin' you -- we've gotta cut some slack to people who grew up being called names, being told "you have to sit in the balcony when you go to the movie. You have to go to the back door to go into the restaurant. And you can't sit out there with everyone else. There's a separate waiting room in the doctor's office. Here's where you sit on the bus..." And you know what? Sometimes people do have a chip on their shoulder and resentment. And you have to just say, I probably would too. I probably would too. In fact, I may have had more of a chip on my shoulder had it been me.
MIKA: I agree with that. I really do.
JOE SCARBOROUGH: It's the Atticus Finch line about walking a mile in somebody else's shoes. I remember when Ronald Reagan got shot in 1981. There were some black students in my school that started applauding and said they hoped that he died. And you just sat there and of course you were angry at first, and then you walked out and started scratching your head going "boy, there is some deep resentment there."

PeP Links

Anatol Lieven has a column over at the Financial Times (the world's best pink paper) detailing why we should be wary of a McCain presidency.

Spencer Ackerman has an article on Obama's likely foreign policy approach over at the American Prospect.

Julian Sanchez has a pair of interesting columns on wiretapping, one at the Los Angeles Times and one at the American Spectator.

Tyler Cowen has an interesting post on stagnant wages.

Inside Higher Ed has an interesting post on affirmative action at universities.

The Screwiest Campaign Season Ever

A year ago, I was telling anyone who would listen that McCain didn't have a shot in hell. He was a favorite of the media and independents, but not exactly beloved by the base and it is the base that you need in order to get nominated. I assumed Giuliani would run a competent campaign. When Fred Thompson entered the race, I assumed, well, that he would in fact enter the race as opposed to running an armchair campaign. Regardless, I assumed that whoever got nominated, would get trounced by the Democratic nominee, whether it be Obama, HRC, or Hubert Humphrey's corpse (I would have no problem voting for HHH's corpse by the way). I thought this because the Democratic base was amped up and the conservative base was completely deflated. Well, it looks like the internecine squabble between HRC and Obama is in fact taking its toll and is turning this election into a legitimate fight... an election that should have been a surefire win.

Hillary at this point has trotted out the race card, played the is Obama a muslim trick, and has essentially stated that McCain is better qualified to be a president than Obama. Democratic voters of the world, this should tell you something about the Clintons. Their concern is not to be able to strengthen the country at home or abroad, or to strengthen the Democratic party, it is to be in power.

McCain and the Financial Meltdown

McCain is utterly inept when it comes to domestic policy. By this, I don't mean that his proposals are entirely worthless, he has a group of advisors (some quacks like Kevin Hassett, and some quite good like Douglas Holtz-Eakin) to fill in the gaps. But it is clear that McCain himself has little interest or feel for domestic plicy. I think this comes across in his public persona. There are three personal narratives that McCain has cultivated: The Maverick, The Reformer, and the Veteran. None of these speak directly to kitchen table issues. However, it is this second narrative, as the reformer, as the Teddy Roosevelt follower, that I think will ultimately boost his electoral viability in the wake of the financial meltdown. He has oft seemed disdainful of business, as if it were a crude and lesser calling. This combined with the Clinton and Obama's dominance on fundraising from the finance industry (especially Clinton with Rubin hanging around) may very well give him the appearance as a credible reformer even though he has little or nothing substantive to say about capital markets and the regulation thereof.

Smoke Filled Rooms

Thomas Sowell offers one of the more plausible arguments in favor of convention hijinx like the superdelegates. I still very much disagree, but at least he is candid about the purpose of the superdelegates.

History Lesson: What Constitutes "Victory" in War

Can America "win" in Iraq? As Frank Rich points out in today's NYT, those who argue that we are on our way to "victory" in Iraq, such as John McCain, never quite tell us what victory will look like. And today, according to the NYT, "At Least 51 Die in Attacks Across Iraq," including attacks on America's Green Zone. In light of such events, it is difficult to believe that victory, under any meaningful description, is at hand or lies ahead.

Let me offer a clear criterion of victory: the end of violent struggles between foreign troops and Iraqis. And let me offer these words from Sallust - who was a Roman senator and military officer under Caesar - in support of this sensible definition of victory:

It is always easy to begin fighting, but the man who starts may find it exceedingly hard to stop; for while anyone - even a coward - can open hostilities, only the victor can decide when they shall cease. (Sallust, The Jugurthine War, VIII, 83)

On this view, America is fighting a war in Iraq that cannot be won. The sooner our nation faces up to the impossibility of "victory," the sooner we can put an end to our losses, both human and financial.

Interesting Speech from Bernanke

It's on the housing market.

The Social Security Trust Fund

Dean Baker, of the American Prospect and co-director of the Center for Economic and Policy Research, is outraged by a column by Allen Sloan. In the column, Sloan makes the sensible observation that there is no real trust fund and as a result Social Security will become problematic in 2017 not 2041. Baker contests this, he says, wait, the trust fund has treasury bonds, those are perfectly good instruments. Sloan, in his column, and Baker in his post, identify that in order for the bonds to be redeemed, the government (read taxpayer) has to shell out cash. Baker's outrage would be justified if all these years we had actually set aside funds or paid down debt commensurate with the social security surplus which is used to purchase the treasury bonds set aside in the trust fund. But we haven't (save a couple of years at the end of the Clinton administration where there was no war, an asset bubble, a congress that was elected on the basis of getting rid of government, and a president that himself was a fiscal hawk; in short, a situation not likely to repeat itself anytime soon). The result is that we have taxed people so as to prefund a portion of social security (the trust fund) but will need to tax folks again to provide the same benefits they have already paid for. As to Baker's broader point, he is technically correct that Social Security's finances are in good shape, if you look at Social Security in isolation. But if you look at Social Security in the context of Government as a whole, the situation looks piss poor.

Brilliant Political Commentary

DMX on Barack Obama:

"Are you following the presidential race?
Not at all.

You’re not? You know there’s a Black guy running, Barack Obama and then there’s Hillary Clinton.
His name is Barack?!

Barack Obama, yeah.
Barack?!
Barack.
What the fuck is a Barack?! Barack Obama. Where he from, Africa?

Yeah, his dad is from Kenya.
Barack Obama?

Yeah.
What the fuck?! That ain’t no fuckin’ name, yo. That ain’t that nigga’s name. You can’t be serious. Barack Obama. Get the fuck outta here.

You’re telling me you haven’t heard about him before.
I ain’t really paying much attention.

I mean, it’s pretty big if a Black…
Wow, Barack! The nigga’s name is Barack. Barack? Nigga named Barack Obama. What the fuck, man?! Is he serious? That ain’t his fuckin’ name. Ima tell this nigga when I see him, “Stop that bullshit. Stop that bullshit” [laughs] “That ain’t your fuckin’ name.” Your momma ain’t name you no damn Barack.

So you’re not following the race. You can’t vote right?
Nope."

Foreclosures

Anti has accused the Bush administration of doing nothing to help those facing foreclosures. I guess the question left unasked is whether the administration should be doing anything to prevent foreclosures, leaving aside the macroeconomic questions (also, the administration has been strongarming industry to renegotiate loan terms as part of the hope alliance, which i think is an awful idea, Barack Obama to his credit hasn't said a peep about preventing foreclosures). All of the discussion of preventing foreclosures boils down to one basic element: keeping people in homes they can't afford. Is this a desirable policy goal? I don't think so. It certainly does present a considerable moral hazard.

Over the last four years there have been those of us that have sat out the housing market because we have seen what looked like, and was in fact a bubble, but also, simply couldn't afford to buy. What's the responsible thing to do when you can't buy a place, well, not to buy the place. The responsible thing is not to get a no-document loan, or an interest only loan on the hopes on that appreciation will build equity for you. For a good many of the folks whose houses have gone into foreclosure they entered into mortgages with low teaser rates where they were paying interest only for a year and once the reset set in discovered that their house had depreciated and that they couldn't afford the new rate. Who is somebody that doesn't have any equity in a house, a renter. Why not just accept this reality rather than maintaining the fiction that these folks are actual homeowners.

If the administration were to put a moratorium on foreclosures it would essentially be taking money from fairminded folks who decided to live within their means for deciding not to enter into a mortgage that they couldn't afford and giving it to the profligate and stupid. At least with Bear Stearns what we are seeing is basically an orderly liquidation of the firm. JP Morgan is taking their good assets, though, along with the attendant litigation risk (they have purportedly set aside $6 billion for lawsuits) and the fed has become the speculator of last resort.

I think there is one other aspect though that needs to be fleshed out here. I think people are under the impression that foreclosures are good for the banks. They are awful, they truly are the last resort for the bank. The banks have every incentive to renegotiate the loan terms with the "homeowner". Mortgages are non-recourse loans. So if I default on my payments and can't negotiate new terms with my bank my home goes into foreclosure. Let's say the value of my loan was $500,000 but the bank can only get $350,000. As a mortgage is a non-recourse loan they can't pursue me for the $150,000 difference. They are stuck with the loss. So a foreclosure is a pretty shitty deal all around. I think the reason that you aren't seeing renegotiations en masse is that so many of these mortgages were so insanely stupid. The rule of thumb with a mortgage is that you want have a 1:4 ratio income to mortgage with 1:6 as the outerbound. You are seeing on a lot of the foreclosures, especially in Florida and California, trends where the ratio was closer to 1:9 or 1:10.

Bear Stearns

No matter how many times I see this clip it's still funny every time. Here is a clip of Jim Cramer on an episode of CNBC's Mad Money which aired Tuesday, March 11th.



Here is what I found interesting/very sad, for those of you not paying attention the Fed rushed to bail out Bear Stearns by helping to broker a deal between Bear Stearns and JP Morgan, as part of the deal, the Fed put up $30 billion to guarantee Bear Stearns riskiest investments. While at the same time the Fed and the Bush administration have done next to nothing to help out those facing foreclosures on their homes.

On Monday, reporters questioned White House Press Secretary Dana Perino about the bailout.

Reporter: “But people who are facing, say, foreclosures, individuals, the little guys who are facing their foreclosure, are looking at the big guys getting government, if not brokered, certainly they’re overseeing deals that are engineered to sort of keep the big picture financial community afloat, and they’re saying, well, where’s my boost of liquidity?”

Dana Perino: “They’re going to get that boost of liquidity in the form of a stimulus package and a tax rebate that’s coming to them the second week of May.”

Reporter: “But that’s not going to save their houses.”

RE: Obam Race Speech

I just got done listening to Obama's speech and I have to agree with Xtra's critique.

What I thought was the most profound aspect of his speech was that it wasn’t political, it wasn't a stump speech, it wasn't a speech pandering for votes, but instead a speech that was intrinsically aspirational in its nature. He basically laid out what could be described as his national vision statement in a direct, personal, honest and straightforward manner.

It was a brilliant and inspirational speech.

Here's a link if you want to look at the transcripts or view the video.

Obama Race Speech

I have only caught snippets of the Obama race speech, but what I have seen is superlative.

Rate Cut

The Fed is cutting rates 75 basis points with more possibly to follow on Thursday.

Diddy Did It

The LA Times has an interesting article attributing Tupac Shakur's murder and a prior shooting to associates of Sean "Puffy" Combs, aka, Puff Daddy, P.Diddy, Diddy. The article doesn't speak to any involvement on the part of Diddy, and Diddy denies any such involvement, I just liked the alliteration in the headline.

Get Your Freak On

I know that Spitzer's resignation was in the bin if for no other reason than the rank hypocrisy. Why should he be exempt from the laws that he prosecuted others for breaking? But I wonder why some politician doesn't come along and just say "I bought sex, I like sex. I am a freak, what can I say? It's out there, if you don't like having a freak in the office, vote me out." Just a thought. It would help if you combined the statement with proposed legislation to decriminalize or even legalize prostitution. It could be called the "Let Your Freak Flag Fly Act".

Matt Yglesias hits the nail on the head on one of the most appalling aspects of our current approach regarding prostitution:
"The main impact of the current policy is, it seems to me, to make it easy for cops to rape prostitutes but hard for prostitutes to get out of bad situations."

The Concept of Obama

I think this is where the race argument rings true (though I think it is in supplement to his core appeal as opposed to constituting his core electoral appeal). The concept of Obama is a post racial America. I think that boosts Obama with independents and moderate republicans.

Black is the New Black

Geraldine Ferraro has asserted that Barack Obama would not be where he is now if he weren't black. I disagree. Democrats have preferred youthful vitality in their candidates over experience. Whereas republicans are obsessed with finding the next Ronald Reagan, Democrats are obsessed with finding the next JFK.

It is telling that in this primary contest the three favorites (Clinton, Edwards, and Obama) had remarkably thin records. The bulk of Hillary's experience claim stems from being a first lady. The last go around wasn't much different. Edwards and Kerry emerged as the favorites . Kerry had more experience than any of the three contenders this time around but that amounted to two terms as Senator and not much more. Edwards, in 2004 was completing his first term as a Senator and had no prior experience as a public servant. Edwards performance in 2004 essentially disposes of Ferraro's claim. He is the white Barack Obama. Where they are distinct is that Barack Obama is more intelligent(vastly) and does not come across like a snake oil salesman. Democrats are constantly looking to fast track their young talent, well, Obama is the young talent.

The I-Pod

Hal Varian has a great article over at the NY Times on the construction of an i-pod and how it illustrates the difficulty in discussing trade statistics.

Is Patriotism Good for Anyone Other Than Flag Manufacturers?

So asks the Cato Institute in its newest Cato-Unbound (a quasi blog/online magazine). George Kateb, author of Patriotism and Other Mistakes, will be writing the lead essay. American Enterprise Institute’s Walter Berns, author of Making Patriots; William Galston of the Brookings Institution and the University of Maryland, author of The Practice of Liberal Pluralism; and Chandran Kukathas of the London School of Economics, author of The Liberal Archipelago: A Theory of Diversity and Freedom will be writing the responses. This should be an interesting panel. Galston is always fascinating.

RE: Hillary and Rwanda

The article that Xtra posted concerning Hillary Clinton and Rwanda as a whole is an astonishing article which definitely deserves a thorough read, here is part that I feel deserves extra attention:

So, to sum up: the US didn't just fail to intervene in Rwanda. Our government urged the withdrawal of the UN peacekeeping forces that were on the ground protecting Rwandans, for no better reason than to keep the Belgians from looking like cowards. It refused to jam the radio station that was passing on instructions for genocide. It blocked further efforts to reinforce the peacekeeping forces there. It also failed to do any of the much smaller things that might have shown that our government was not wholly indifferent to the people of Rwanda who were, at that time, being hacked to death with machetes.

It's worth bearing this background in mind when you hear Hillary Clinton claim that she advocated military intervention in Rwanda. If you don't, you might think: well, it's perfectly comprehensible that she might have argued for military intervention but failed to convince her husband. After all, military intervention in another country is a big deal, not to be undertaken lightly. And it's easy to imagine Hillary Clinton being in favor of it, and her husband reluctantly concluding that it just wasn't something he could do.

It's a lot harder to imagine that while Hillary Clinton was advocating military intervention, she not only failed to convince her husband to send troops, but also failed to convince him, for instance, not to advocate the withdrawal of most of the UN peacekeepers, or that he really ought to order the Pentagon to jam Radio Milles Collines. If she was doing her best behind the scenes, and failed to accomplish even this -- if, despite her best efforts, she couldn't persuade her husband not to advocate withdrawing UN peacekeepers just to provide cover for the Belgians -- then we really need to ask how effective an advocate she really is, especially since no one except her husband, in full campaign mode, seems to remember her efforts at all.

Of course, I think it's a lot more likely that she either didn't advocate action on Rwanda at all, or did so only in passing. If so, this would have to be the definitive example of her attempt to claim responsibility for everything good that happened during her husband's presidency, while disavowing all responsibility for his mistakes. This was, in my opinion, the most shameful moment of the Clinton administration. It ought, by rights, to have a place in Hillary Clinton's "thirty five years of experience working for change." Or perhaps she might claim that she wasn't that interested in foreign policy at the time, or that for whatever reason she just didn't pick up on the genocide in Rwanda until it was too late to act. That would at least be honest.

But if, in fact, Clinton missed the chance to urge her husband to help stop the Rwandan genocide, then she should not pretend that she was, in fact, right there on the side of the angels all along. That's just grotesque.

BMW Possibly Bringing Electric Car to US

And not just any electric car, one modeled on the Isetta, the pimptastic trike Urkel drove in family matters. I would be proud to call the isetta my "whip".

Hillary and Rwanda

Hillary has had an obnoxious habit for claiming credit for all that went well in the Clinton administration while disclaiming any responsibility for its failures. Now, Bill and Hillary are claiming if Hill had been President the Rwandan genocides would never have occured. Anyhow, hilzoy over at Obsidian Wings has a good takedown of Hillary's claim. It is also a rather tragic and sad recounting of the U.S.'s and Europe's response to this tragedy.

Merit Pay

Well, a different type of merit pay.

hat tip: marginal revolution

And Then There Were Two…Ciresi Is Out

Mike Ciresi announced that he is dropping out of the 2008 Senate race for the DFL endorsement this afternoon.

That means that as far as the DFL race is concerned it is down to Jack Nelson-Pallmeyer and Al Franken.

Spitzer Implicated in Prostitution Ring

So says the NY times, now the presumption here is that he was a customer. Governor Spitzer finds himself in the company of many politicians, like Sen. David Vitter. Here's a question: how come the john gets off whereas the prostitute gets prosecuted? Why does either party get prosecuted? I don't like prostitution but it does seem to be an exchange between consenting adults.

Common Sense

George McGovern:

"The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else."

Bush Vetoes Torture Ban

He didn't veto any spending bills. He didn't veto McCain-Feingold. He didn't veto the farm bill. No, instead he uncapped his veto pen to veto a bill banning waterboarding, a torture technique.

Furman on Health Care

Jason Furman has an excellent paper on health care reform. His basic proposal is to eliminate the health care tax exemption (i.e. treat Employer Sponsored Health Care as taxable income) and provide progressive refundable tax credits (the tax credit decreases as you move up the income ladder). He approaches the paper from the perspective of the incentives our tax treatment of health care creates. So while he does a decent job of getting into some of the weeds too, such as automatic or default enrollment v. mandate or talking about to create risk pools for non-group purchasers, federal re-insurance, etc., the paper is really looking at the bigger picture of how this would impact health care spending.

I think the approach Furman outlines is essentially correct. Before we look at coordination, delivery and performance, we need to address the incentive structure. At present, the tax code provides a substantial incentive for upper income folks to spend but doesn't do much at all for lower income folks. This needs to be turned on its head.

More Farm Bill

I couldn’t agree more with Xtra concerning the Farm Bill, it desperately needs to be reformed from its current state in which the primary beneficiaries are corporate agribusinesses and the politicians they support.

And the funny part is that both right-leaning groups like the Heritage Foundation and left-leaning groups like the Center for American Progress concur on the need for the common-sense reforms that have been snubbed decade after decade.

For more info about the Farm Bill check out the lobbying work that Oxfam America has been doing in an effort to bring about reforms.

Another Hatchback to Enter the Market

Hatchbacks are ubiquitous in Europe but here they are seldom found. I suppose their likeness to station wagons (which they essentially are but on a smaller scale) kills their appeal. Anyhow, I like hatchbacks and when I was car shopping the dearth of hatchbacks made my task all the simpler. In the last two years the hatchback market has grown significantly and Mitsubishi is adding to the pool. Anyhow, geeks like me are sure to rejoice.

The Farm Bill

Dave Zeitland of Sex Drugs & Water Utilities has an insightful post on farm subsidies:

"In this op/ed, a Minnesota farmer complains that he cannot increase production of garden crops by growing them on former-program crop land because these acres will lose their corn subsidy forever if non-program crops are grown on the land for a year.

Why? Because national fruit and vegetable growers based in California, Florida and Texas fear competition from regional producers like myself. Through their control of Congressional delegations from those states, they have been able to virtually monopolize the country’s fresh produce markets.

...In other words, it seems that non-program crop states have been willing to support continued subsidies for program crop states because they are facing less competition in return. Less competition, higher prices and more money. Voila!"

US farm policy: harvesting poverty abroad, obesity at home, and making us all poorer in the process.

hat tip: Marginal Revolution

Hillary Clinton and Possible Illegal Fundraising

As Hillary Clinton attempts again and again to make a connection between Barack Obama and Tony Rezko (Rezko is pictured above with the Clintons), I stumbled upon this video on YouTube (pt. 1 & pt. 2) concerning Hillary Clinton’s involvement with business man Peter Paul and a fundraising gala he held for her in 2000 in which he personally contributed $2 million to the event.

The video and Peter Paul’s civil case against Bill and Hillary Clinton which is currently in front of a California appeals court alleges that Hillary Clinton’s direct involvement in planning this gala would make Paul's substantial contributions a direct donation to her Senate campaign rather than her joint fundraising committee, violating federal statutes that limit "hard money" contributions to a candidate to $2,000 per person. Knowingly accepting or soliciting $25,000 or more in a calendar year is a felony carrying a prison sentence of up to five years.

I don’t have a whole lot of background knowledge about this guy or the Clinton’s involvement with him, but I do find the relationship rather interesting considering how she is currently trying to portray Obama and Rezko.

From: Democratic Party

To: Democratic Votes

Sorry, your votes are worthless. But it was a pleasant exercise anyhow.

George W. and Hillary...What's The Difference?

This morning while I was eating my bowl of Kashi Strawberry Fields cereal (an excellent cereal I might add) I was watching Good Morning America and Hillary Clinton was being interviewed about her three wins the previous evening.

After all of the questions about how she celebrated last night and what not was out of the way the commentator asked what was in my eyes an excellent question.

The commentator noted that even with the wins last night Hillary was only able to decrease Obama’s delegate lead by six delegates (prior to last night he had a 112 delegate lead and after last night he had a 106 delegate lead), the commentator went on to ask that if she wasn’t able to close in on his lead if she still deserved to receive the nomination?

She of course avoided the question, but this question got me thinking. In 2000 Democrats were up in arms about the fact that George W. Bush was chosen to be president against the will of the people and was thus an “illegitimate” president.

If Hillary Clinton receives this year’s Democratic nomination without receiving a majority of the popularly elected delegates what is the difference between Bush’s “illegitimate” presidency and Clinton’s “illegitimate” nomination?

Hillary’s Fear Mongering Rips Off 1984 Mondale Ad

Hillary Clinton’s latest TV ad (it’s 3 a.m. and you are all going to die if I’m not president) has been discussed in the news a lot lately. In my opinion this ad is just blatant fear mongering that even Rudy Giuliani could be proud of.

But all fear mongering aside the funniest part is that she ripped off the ad from Walter Mondale’s 1984 advertisement from when he was running for the Democratic nomination against Gary Hart.

Here is the original Mondale ad: