September 30, 2008

Revealing (Imputed) Bush Quote

Bush chairs the meeting with Congressional leaders about the bailout:
After some more give and ake, Sen. Richard Shelby, the top Republican on the Senate Banking Committee, presents a five-page list of 192 economists and business school professors who oppose the plan. Bush isn't impressed. "I don't care what somebody on some college campus says," Bush says. Instead, he says he trusts Hank Paulson, who, he says, has more than 35 years of experience and access to more information than those academics on Shelby's list. [Boldface imine.--gs]
Adam Smith? J.M. Keynes? Friedrich Hayek? Milton Friedman?

There's a hint here about what went wrong with the Republican party[1]: the lack of an intellectual foundation[2]. Not just the lack, but the belief that it is unnecessary and even contemptible.
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[1] The stupidity of addressing a political ally this way during a bipartisan conference is beside the point I'm driving at.
[2] Gingrich may have one, but it's annulled by his being such an obvious opportunist jerk.

September 28, 2008

Krugman & Meself?!

Three weeks ago, I tainted the Next Right site with "false doomsday preaching"--
Twenty years ago we were the last best hope of man. Ten years ago we were the locomotive of the world economy. Ten years from now, will we be a nuclear-armed banana republic?
Last week, Krugman wrote:
As a friend said last night, we’ve become a banana republic with nukes.
Not the first time I've wondered if I should switch sides...

September 27, 2008

McCain Surges...Then Stumbles

Proposition. A politician good enough to pull off the upset against Obama would have been good enough to defeat Bush for the nomination in 2000.

The contrapositive is...

"Prison for Dummies"?

Buy it here.

Addendum 20081012. Santos is a convicted drug dealer who has set out to rehabilitate himself within a prison system which is uninterested in rehabilitation. Being radically libertarian about the Drug War doesn't mean I admire drug dealers. Nevertheless, I believe in rehabilitation and wish Santos well with his extraordinary efforts. However, this gives me pause:
"Inside" could earn Santos a lot of money, but federal law prohibits him from profiting off his crimes. He has gotten around the rule by giving the manuscript to sister Julie, who now owns it. If she chooses to set aside the proceeds for her brother for when he is released, that's her prerogative.
That may be her prerogative, but will the government agree that it's his prerogative to accept the money?

September 26, 2008

Parker on Palin

With a friend like Parker, who needs enemies? Money quote:
Palin’s recent interviews with Charles Gibson, Sean Hannity, and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League.
This ignores a crucial distinction.

To be unready for prime time is not necessarily to be out of one's league.

(Notwithstanding some interleaved constructive advice, Kathryn Jean Lopez piles on:
And, frankly, if it turns out that the “authentic” Palin of rallies and the Republican convention is just good speech delivery in a woman with some good spirit, I want to know that sooner rather than later
To repeat, unready for prime time is not the same as out of one's league)

Addenda:
1. I'd been looking for 44-year-old Palin to get on the national stage in 2012, 2016 or later. Given achievements like her successful negotiation of a new Alaska pipeline, I believed she could climb the learning curve by that time. However, her early entry runs the risk that she may get permanently discredited before she gets her bearings.

2. Gibson and Couric were overtly and covertly hostile, but were they unfair? Palin's pit-bull-with-lipstick joke was a challenge to bring it on. Well, they brought it...

Where is the Turkish Army When We Need Them?


Appalling

Didn't Barney Frank block reform of the housing GSEs?

This morning's news:


Frank blames House GOP for breakdown of deal

Who has the majority?

I've been relentless against Bush and the Congressional GOP for not getting things done when they controlled the government.

Now it's looking like the Democrats will be just as bad if not worse.

Time to Rise above Principle?

A long time ago I heard that expression attributed to Senator Robert Kerr of Oklahoma.

My worry is that, after six DeLay/Lott years of spending like a drunken sailor who just won the lottery, Congressional Republicans may have chosen the
absolutely worst possible time
to begin insisting on frugality, limited government powers, letting the market work, etc.

We might all be much better off if they continue prostituting themselves for just a little longer. Then again, who knows?

September 24, 2008

'Country First' or 'L'√Čtat, C'est Moi'?

Press release from McCain headquarters:
Senator John McCain announced today that, in order to focus on his search for a clue leading the country out of the financial crisis, he is suspending his presidential campaign and replacing running mate Sarah Palin with New York Attorney General Andrew Cuomo. "I thank Governor Palin for her willingness to serve, but Andrew is the man I need," declared McCain. "Who understands the housing disaster better than Bill Clinton's HUD Secretary?"
Kidding aside, McCain's action might be credible if his recent responses to the crisis had been cogent. They weren't and it isn't.

Do we want the loonie or the empty suit?

September 22, 2008

Is McCain Unfit to Be President?

Consider Will Collier's and Stephen Bainbridge's, and Robert George's comments on McCain's rants about the mortgage crisis. I chime in here and with the third comment here.

George Will:
It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?
The point can't be made any better than that.
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I took an online quiz which presented choices between the candidates' anonymously presented positions, and I overwhelmingly preferred McCain's.

Then again, I know what a Republican politician's solemn commitment is worth.
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McCain is slipping on Intrade--and he deserves to.

Next-Day Addendum. The right blogosphere did not exactly explode in indignation at Will's column.

We Need a Commission

There's plenty of blame to go around for the current financial crisis, but I'm not sure whether it should be evenly distributed. Here's a high-grade amoral ploy: the faction that primarily caused a given problem makes political hay by pinning the blame on the faction that tried to prevent it[1].

Something like the Challenger Commission or 9/11 Commission is needed, i.e. a council of elders composed of people with reputations for objectivity and integrity. Put some credentialed foreigners on it too.

Who were the Republican legislators that helped the Democrats block the regulatory Fannie proposals that failed a few years ago?
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Nobody seems to be talking about putting the federal budget so we're better positioned to deal with the next crisis when it comes along.
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[1] Not that I wrote "a given problem". There are plenty of problems and plenty of responsibility for them, and I don't doubt that both parties and multiple factions are trying the ploy I mentioned.

Flagrant Market Manipulation

SEC Press Release Friday September 19, 2008: "SEC Halts Short Selling of Financial Stocks to Protect Investors and Markets; Commission Also Takes Steps to Increase Market Transparency and Liquidity" How does banning short selling increase liquidity? That would be 799 financial stocks, btw. SEC to market makers: never mind, short away!

SEC Press Release Sunday September 21, 2008: "Statement of SEC Division of Trading and Markets Regarding Technical Amendments to Short Sale Order"--
...However, this exception now requires that, for new positions, a market maker may not sell short if the market maker knows a customer or counterparty is increasing an economic net short position in the shares of the Included Financial Firm.
In effect, they're not allowing investors to buy puts.

Doubtless entirely of its own volition--
The SEC has delegated to each national securities exchange the authority to identify additional listed companies that qualify for inclusion in the list of companies covered by the revised prohibition.
--, the New York Stock Exchange has added 31 companies to its do-not-short list, including major foreign banks, General Motors, and the icon General Electric.

Such flailing around does not increase my confidence in the powers-that-be. If things are really serious, they should close the market and coordinate a coherent response.

September 21, 2008

Indicators?

During the Friday bailout rally, a number of ETFs--SPY, QQQQ, MDY, XLF, etc.--closed below their opening prices (which, of course, were up sharply over the previous close). Now premarket prices are down close to 2%.

Was This a Smear of Obama?

After this column, the right blogosphere was aflame with accusations that Obama had violated the Logan Act, which forbids unauthorized US citizens from intervening into American diplomatic disputes.

Oops. Never mind...

I must say that the right blogosphere hasn't exactly been cluttered with retractions...

September 19, 2008

The Corner Thinks This is 'Brilliant'?!

Or is Palin starting to believe her own hype?
Gov. Sarah Palin is now talking about "a Palin and McCain administration."

I've also heard her refer to McCain as "my running mate" -- a term I don't recall ever hearing a VP nominee use when discussing the guy at the top of the ticket.
This is the first meaningful negative I've seen about Palin--and it's a big one.

Ambition is healthy. Overweening ambition is dangerous. That applies to Palin every bit as much as it applies to Obama.

The jury remains out, but maybe Krauthammer will get to say "I told you so" after all.

Couple this with McCain's ignorant demagoguery against the SEC Chairman, and you see serious mistakes by a campaign that needs to play a near-perfect game.
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Two quibbles about Palin (but quibbles count in a close election):

1. All her photos look more or less the same.
2. When I'm in a bad mood, she looks like a younger version of Harriet Miers.

Award a Point to Obama

"John McCain can't decide whether he's Barry Goldwater or Dennis Kucinich."

Wham! That oughta leave a mark.

(Via Jake Tapper, or see here.)

September 17, 2008

A Modest Proposal for a Stock Market Regulation

If we're going to regulate, let's regulate effectively:
No common or preferred stock shall be sold in the United States except at a profit to the seller.
This way stocks will only go up!

Embarrassed afterthought. Mea culpa.

If an investor acquired a stock sufficiently under the current price, of course the price can decline while he sells it at a profit.

I don't have this securities-regulation thing down pat yet, but if first you don't succeed...

The correct answer lies in the uptick rule. Don't just reinstate it. Give it teeth!
No common or preferred stock shall be traded in the United States except at a price greater than or equal to the preceding price.
Take that, you unAmerican pessimists!

I'm Not a Fan of Larry Kudlow

Kudlow, one day before the AIG bailout (see here or here):
Treasury Secretary Henry Paulson is the man of the hour. This weekend he drew a clear line in the sand: no more federal bailouts. Not for Lehman Brothers. Not for Merrill Lynch. Not for anyone, at least as of this writing.
At least he's noticed that we're no longer in the Goldilocks Economy with King Dollar...

Uptick Rule, Again

One of the country's most famous traders, who spurned incredible wealth to heed a call to public service, has advocated--in a laudably measured manner, whether one agrees or not--reexamination of the uptick rule.
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Seriously:

Assume for the sake of argument that the market is locked into a downward spiral and a catastrophic crash can only be avoided by external intervention.

Ad hoc, kneejerk regulatory responses are even more transparent attempts at manipulation than what short sellers are allegedly doing. At worst, such responses, coming on the heels of political/bureaucratic incompetence and phony reassurances from Fannie, Freddie, Lehman, et al, will only aggravate the panic. At best, kneejerk regulation is likely to lock in distortions that will impair the competitiveness of US markets going forward.

If the threat is not catastrophic, let the market do its work of creative destruction[1]. If the threat is catastrophic, close the market for a week or two and coordinate a solution with a critical mass of domestic and foreign heavy hitters.
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[1] There is also the alternative of letting the market unwind the mess even if the threat is catastrophic.

Preciousss, We Sstill Hatesss Nasssty Short Sellerss

I keep saying the following. The markets should treat buyers and sellers evenhandedly. To that end, the SEC prefaced its repeal of the uptick rule with a crackdown on naked shorting, and the agency continues to implement that crackdown. I don't favor reimposition of the uptick rule, but if the rule is brought back it should be balanced by a downtick rule on margin purchases.

Dinocrat notes that Jim Cramer has resumed slamming the repeal of the uptick rule. Jim Cramer readily went long-short when he ran a hedge fund but his current customers are retail investors who primarily go long (and his stock is down over 60%). This Jim Cramer:
The last two market tops -- one in the spring of 2000, the other last October, when the Dow pushed through all-time highs -- had little in common...(p)Here's what both market tops did have in common, at least for Cramer: He buried his head under the pillow and pretended logic made no sense. He told investors to discard everything they'd learned over the years as nonsense. He told investors to keep buying stocks just because it felt good. Without peeking, I'm sure you can guess the outcomes.
Cramer is an energetic entrepreneur, but I don't find him credible as a policy wonk. Where were his calls for the uptick rule while the oil price was dropping?

Vodkapundit's Will Collier notices somebody else who is not cut out to be a policy wonk:
Just When I Think It’s Safe To Stop Holding My Nose…McCain goes and says something really, really stupid:

John McCain said in an interview with CNBC Tuesday that...regulators also need to “do a better job in reining in short sellers.”

Unbelievably dumb. Nancy Pelosi dumb. Herbert Hoover dumb.
Yep. Couple that with McCain's sneaky campaigning for immigration amnesty, and I'm glad I restrained my impulse to donate when McCain picked Palin.

September 15, 2008

Who's Responsible for the Mortgage Mess?

My uninformed guess is that the Democrats started the corruption, but support or acquiescence from key Republicans was essential to keep it going past the danger point.

We know where the buck is supposed to stop[1].

The longer we go without ubiquitous comparisons to Enron and without Congressional calls for prosecutions, the likelier it is that the primary malefactors are Democrats. Nevertheless, the Democrats might succeed in finessing the issue so as to seize the White House and increase their Congressional majorities[2]. Addendum: See here.

Addendum: See here.
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[1] The administration has long been aware that the mortgage situation was precarious. Did it back off as a quid pro quo for Congress's going along with George's Excellent Nation Building Adventures?

[2] But they'll fix it once they have power. Sure they will.

September 14, 2008

The Correct Line of Attack on Palin

Palin mania on the right is nowhere nearly as extreme as the left's Obama mania, but a comparison does come to mind.

The McCain used mockery to counteract Obama mania. IMO direct attacks would not have worked; if anything, they would have boomeranged. I suspect that the Obama campaign was prepared for direct attacks, but derision caught them flat-footed.

So what is the left thinking as it hysterically spews deranged venom at Palin? An element of truth is an essential ingredient of successful mockery. They should be working along the lines of SNL and Lisa Nova.

IMO McCain still has an uphill climb to the Presidency. All the Democrats have to do to win is recover their composure and campaign competently. All they have to do is not be the 1986 Red Sox...but Gore's managing to lose in 2000 is not an encouraging precedent.

Afterthought. As an antiPalin hit piece, the Lisa Nova interview skit is too blatant. The skit's Gibson actually comes off better than the real Gibson did. The perfect touch would have been to make fun of Gibson too while keeping the balance of disadvantage with Palin.

Chinese CPUs

CNET reports that the Chinese are developing their own computer chips:
..."Their motivation is pretty clear. They don't want to be totally dependent on the outside world for something as important as microprocessors," said Tom Halfhill, an analyst at In-Stat. "The most interesting part of the chip is that they're adding about 200 new instructions to assist with x86 compatibility...It won't be an x86 processor. But the 200 instructions will optimize the (Intel) performance...I don't think they're doing this to compete with (Intel) x86 per se (but) If somebody has to run some software that's only available to x86 you can do it."
Halfhill may be indulging in wishful thinking. On the other hand, to date Chinese economic expansion has been based on pricing more than quality. The Chinese may (or may not) find that building something as complex as a CPU is harder than they anticipate.

September 12, 2008

Gibson vs. Palin

Charles Johnson has posted a ten-minute clip.

Both by body language and occasional quavers in her voice, Palin seemed nervous. She kept trying to shift into the person-to-person informality in which she is comfortable, but gravitas was needed. Palin did about what might be expected from a first-term governor who has unexpectedly been thrust into a hostile national spotlight. Her insecurity is the counterpart of the teleprompter-less Obama's uh's and um's.

Gibson was a pompous jerk who deserved a cream pie in the face. IMO Palin's objectively best move was to counterattack like George H.W. Bush did during Dan Rather's 1988 ambush interview. She doesn't yet have the experience to be confident about using such a tactic, but it might have worked anyway.

Hostile interviewer Gibson underperformed more badly than Palin did. Most of us have had to endure sessions with smug, arrogant, unfair, entrenched, incompetent authority figures--teachers, bosses, interviewers, reviewers, bureaucrats, etc.--, and that's how Gibson came across. Many voters, women in particular, may get so angry at Gibson that they will overlook Palin's deficiencies. Gibson made a much stronger case for media bias than he made against Palin.

There is considerable merit to Glenn Reynolds' suggestion that candidates bring their own cameramen to interviews. I can't help wondering if the VP debate will be manipulated via preferentially leaked gotcha questions.

The Gibson interview was an early round of a match between a fast-learning rookie and a bunch of know-it-all veterans. Hopefully Palin will correct her deficiencies faster than the MSM correct theirs.

Addendum. My impression is consistent with UPI's Martin Sieff's:
...Tactically, she made the mistake of trying to be friendly and informal with Gibson, who assumed a superior, professorial and critical stance toward her. She would have been far better going on the attack to rattle him.

September 11, 2008

Never Forget

If life had gotten differently, I might very possibly have been near the top of the Towers that day.

September 10, 2008

Psychological Threshold?

As I write, for the first time the Intrade odds have shifted to slightly favor McCain (although they are essentially tied).

Clearly McCain has taken the initiative, but he has had no setbacks for quite a while whereas Obama has been stumbling.

The debates are still ahead. The political terrain favors the Democrats, but they can no longer win merely by avoiding mistakes (unless the Republicans make serious ones).
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Perhaps the worst outcome for the country would be to have Obama eke out a very narrow win: e.g. via the House or the courts, or while losing the popular vote. Coming in a strongly Democratic year, that would delegitimize his Presidency before he ever took office.

September 9, 2008

A Modest Proposal to Democrats and Republicans

People people...all this squabbling about Obama's and Palin's limited experience...tsk tsk. A little sweet reason is needed here.

Consider that Vladimir Putin was only a field-grade officer, but he became a popular and successful president.

Thank you.

On the Academic Elite

A long time ago somebody said to me, "It doesn't bother me that academia is crazy. My neighbors are crazy, but their quirks tend to cancel each other out. What bothers me is that most academics are crazy the same way."

September 8, 2008

It's Still Early...

...and a week is an eternity in politics, and there will be setbacks, and I don't want to jinx the McCain-Palin ticket (about which I still haven't fully made up my mind).

It's a real battle now, but the terrain still favors the Democrats.

But if McCain pulls it off, the only comparison that comes to mind is Dewey-Truman.

Nevertheless,...

September 7, 2008

And the Beat Goes On...

I looked at Yahoo! Finance to check on Fred and Fannie.

There was a headline about the auto industry. Last year an energy bill authorized $25B in loans. I hadn't known that energy independence can be achieved by government subsidies to noncompetitive US automakers...

But that wasn't the headline. The headline was that the industry wants $25B ($50B?) more.
The White House said last week it was talking to members of Congress and the industry about the financing.
Thanks, Dubya! Btw, what's next year's deficit, you fiscally responsible Harvard MBA Republican you? $400B? $500B?
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Twenty years ago we were the last best hope of man. Ten years ago we were the locomotive of the world economy. Ten years from now, will we be a nuclear-armed banana republic?

Assuming we're not one already.

September 4, 2008

Sarah Palin's Debut

Successful speech. Two thoughts:

1. Her attacks on the Democratic ticket might have seemed excessive if she herself wasn't being attacked so viciously.

2. Afaic Larry Kudlow correctly asked where the emphasis on the economy is.

I've been noting for a while that the S&P 500 is below its value at Bush's inauguration: that is, below its value in a dollar which has itself become debased. The media are starting to notice.

The Palin nomination was a game-changer, but IMO the failure to address the economy (unless McCain's speech does so) leaves the Democrats positioned to pivot to that issue. Note to the Obama brain trust: anyone for 'It's the economy, stupid'?
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Dinocrat:
There continues to be something surreal about this year’s presidential campaign...What’s going on that people experience such intensity of feeling about mere politicians?
Part of it might be emotional reaction to the perversion of political discourse begun by Read-My-Lips Bush, continued by the Clinton-era GOP Congress, and consummated by the Bush administration (and by today's Democrats of course). The public knows the country is on the wrong track, but the wise guys have set the system up so adult speech is political suicide.

Addendum 20080925. Not just speech, behavior.

The public knows the country is on the wrong track, but the wise guys have set the system up so adult behavior is political suicide.

September 2, 2008

McCain and Palin

Dinocrat asks:
Why do so many commentators (enthusiastically, instantly) jump to a conclusion when there is so much evidence yet to be considered?
IMO her enemies want to knock her out before she gets her bearings on the national stage. They have no case for disqualification on the merits, so they have to be fast, sustained, and dirty. Apparently some of the mud is starting to stick.

Palin is competitive and a quick study, but she can’t learn instantaneously.

Once McCain picked her, afaic it became his responsibility to protect her in the early going.
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Intrade’s odds that she’ll be withdrawn currently are above 10%.

Currently there is no sign of Palin on the convention front page.
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I was about to donate…and then I remembered ‘Read my lips’.

Jack Risko’s call for restraint is spot on. I trust that my unease is groundless.

I trust, but I’ll verify.

Palin Today

The good news is that Obama has been forgotten and Palin/McCain are getting all the publicity.

The bad news is that the publicity is about Palin's 17-year-old daughter's pregnancy[1]--and about Palin lawyering up for Troopergate (documentation is here and here) and being threatened with a subpoena.

I want to believe that McCain is ready for this. It's important that he promptly demonstrate control of the narrative.
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[1] Young Bristol has my sympathy and I hope things work out for her. Perhaps she was foolish or perhaps an accident occurred. If she made a mistake, it seems a youthful and human one. Take care and good luck, young lady.

As for Supermom, maybe she could have spent less time being super and more time being mom.