Getting Political

Economics: Presidential candidates slip on Econ 101 – Nov. 9, 2011

Economics: Presidential candidates slip on Econ 101 – Nov. 9, 2011.

This is one of the things that has driven me (and lots and lots of other people) insane over the past few years.  In almost literally econ 101 (my intro macro and micro classes in my MBA program), supply and demand and Keynesian principles – and rules – were clear and easy to understand.  I’m not saying that everyone out there should be a Keynsian economist, but the ideas behind it are clear.

Yet we can start with the very beginning of the economic crisis, with the bail-outs of Merril and Bear and the government and Fed “buying” into all of these entities that it has never touched before.  It’s one thing for the government to put money into circulation for stimulus.  It’s another to start owning companies.

But two things that are key to basic economics were ignored amid all the yelling.  First, that the government is the only entity big enough to make such massive economic moves – short of JP Morgan (the person) back in the day, no one person could pump that much money into the economy as the ARRA did.  And yes, the budget that first year was MASSIVE.  But from day 1 Geithner and Obama said that this was temporary, that the government must pull back at some point.  Bernanke said that he had a plan already in place for “unraveling” the Fed’s involvement in these companies.  So the government had to do this stimulus spending (Keynsian) but it also had to stop at some point and address deficit concerns, etc.

Second, that claims made about how dangerous these spending policies were and about the “fixes” failed to address supply and demand (the $2/gallon promise) or the fascination/obsession over a balanced budget.  Remember the last time we tried a balanced budget during a recession?  Yeah, that led to the Great Depression.

Unfortunately, the majority of Americans just aren’t that bright.  Sorry, that’s not fair.

The majority of Americans do not want to listen.  They want to hear that gas prices will go down.  They want to hear that a deficit (isn’t that inherently bad??) will go away.  They want to hear that it is possible to balance a budget (and nothing will go wrong, right??).

I want to hear those things, too.  But 99% of my brain knows that such things are pipe dreams.

And there is a deep-rooted fear that this appeal to the masses, if you will, will unseat many truly smart people, doing good things, just to put others into the White House and Congress who will either do the same things anyway (because, after all, when the $2/gallon promise falls through, it’s still just supple and demand) or, even worse, hold our government hostage while sound policies are derided in the name of some ridiculous ideal.

Jerry Brown’s budget cuts deep, looks to extend tax hikes, reshapes government| PolitiCal | Los Angeles Times

Jerry Brown’s budget cuts deep, looks to extend tax hikes, reshapes government| PolitiCal | Los Angeles Times.

My first reaction to this is “what!  cuts again!  this is wrong, this cannot be tolerated this…etc.”

And fundamentally that is my reaction.  These budget cuts tend to hit education particularly hard (lobbyists just aren’t as strong, let’s face it), and it’s easy to say “well, if we increase ratio to 25 students to each teacher, that ripples through savings of X.”

But the state’s budget is a mess.  I honestly don’t know how any governor can do anything to improve the situation without screwing over just about everyone.  So many expensive budget items are not only in the budget, but are so entrenched that it’s impossible to get things changed.

And when it boils down to it, lobbyists come into play.

What was interesting was watching the nursing community put up such a huge fight when Whitman was running for governor against Brown.  My wife is a nurse and to see such a strong response makes me realize how weak of a position education really has.

the new (scarier?) conservative

The front page of the San Francisco Chronicle a few days back included a story about Carly Fiorina’s bid to oust Barbara Boxer as one of the US Senators from California.  Actually, the article is more about how Carla is part of a “new” breed of pro-woman, pro-life voters.

This article struck me for a number of reasons.  First, there is an immediate concern that people will be so wrapped up in the Whitman-Brown gubernatorial race that they will forget about the one for Senate between Fiorina and Boxer.  While I am worried that Whitman is going to grab me off the street and tell me I’m an immigrant and try to send me to China (can’t send me “back” if I was born in New Jersey and have never been to the “homeland”), I am also concerned about Fiorina’s platform.

The other and perhaps more important aspect to Fiorina’s run is that she is apparently representative of this new group of women voters that are feminist and fight for women’s rights, yet are also pro-life.  I must admit that I had a hard time separating the two – that a woman can believe fiercely in her own rights, yet no in having the choice on the issue of abortion.  One can be pro-choice but anti-abortion.  But specifically pro-life, which means taking away the right to choice, is striking.

This brings me around to several articles that emerged when the Obama administration took over and the Democrats seemed to “control” Washington (ugh – what a mess that all is now, including Obama’s recent moves regarding the oil spill in the gulf, compromises on health care reform, inability to bridge the gaps even within his own party, etc) about how young, moderate conservatives no longer had a party to call their own.

As the Republican party has become more and more conservative and, if you listen to Limbaugh and Palin, rather extremist (IMO), it seems that there are many that identify themselves as right of center (sometimes significantly so) yet are not comfortable with what the party has declared to be its values.  I used to think I was a bit right of center.  I’m a centrist, but maybe a bit conservative.  But now, as I look at how far to the right the Republican party has swung, I look at my opinions and realize I’m decidedly on the Democratic side.

But this is in terms of beliefs.  I don’t necessarily want to label myself as a Democrat, but if I go by positions on various issues, that’s where I am.  In comparison, there are many mild conservatives that have beliefs and positions that leave them too far to the center of current Republican ideals and therefore with nowhere to go.

I believe in Keynesian economics and, more specifically, that the only financial entity that can “afford” to make massive, nation-wide fiscal changes is the federal government.  I believe that the only way to fund such stimulus is by deficit spending.  I can easily place myself within the Democratic camp on this one.

In comparison, what if there is a conservative who believes that the government has to intervene, has to spend to grow, and must put in regulations on the financial sector yet also is pro-life, generally small-government-oriented, and in accordance with other Republican positions?  Well, based on the rhetoric that comes out of the right-wing camp about the stimulus package alone, I have a few friends that feel left out in the cold, with no party to call their own.


thoughts on Specter

Yesterday, “Democratic” Senator Arlen Specter lost in his state’s primary to a Tea-Party-affiliated (the line between Tea Party and anti-establishment is blurry, IMO, especially when you consider that it was founded on opposition to the ARRA stimulus package, specifically).  This is a bit of a tough situation to really assess, but is nonetheless important.

First, Specter has annoyed the bejesus out of me for a while.  First a Republican, then claims that he doesn’t like where his party is going but really just doesn’t like where his numbers are going and switches to the other party, then everyone loves him for “crossing the aisle” and being “bipartisan.”  Just because someone votes against party lines once (then changes parties entirely) doesn’t make that person a messiah.  Yes, party lines have been as rigid as they have been…since I started following politics (a whopping 10 years, maybe), but that doesn’t mean we should start putting people on pedestals.  I mean, the whole rage over Snowe from Maine?  She really only cast that one vote in support of the health care bill to put it before the Senate and is praised for her courage from Democrats, but really didn’t show a consistent bipartisan spirit otherwise.

But just because Specter was a useful ally because he crossed party lines and helped give Democrats a strong(er) majority in a ridiculously partisan Congress doesn’t make him a savior of any kind.  From what I’ve read of his track record (which isn’t extensive, by the way – I follow Pelosi more, for instance, at least partially because she’s from my district in CA), he doesn’t deserve that kind of estimation.

But enough of that rant.  What is perhaps more disconcerting is that the whole Tea Party movement does nothing to stop this partisan mess that is going on in Congress.  Yes, it sends a message to both parties.  I would argue, however, that mid-term elections always send a message to the President as there is almost always disillusionment following the election (how many presidents really deliver on every campaign promise within the first 1.5 years?  How many aren’t attacked left and right by the opposition, even if they are the incumbent, much less the force of change that Obama represents?  People pick up on this, and vote accordingly).  But while the message of massive, rather organized (though if you watch even a couple episodes of the Daily Show you will likely see how illogical some of their platform arguments are) discontent and anger over the “established” ways of “government as usual” is important, the formation of a highly ideological movement that has developed legitimate political and popular backing just creates more partisanship.

Does anyone really think that putting Tea Party-oriented candidates in Congress will decrease partisanship?  Or that somehow bills that have been stuck here or there will suddenly move forward?  Or that government as usual will in fact stop operating as government as usual?

The obvious truth, as one reads this post, is that I’m more of a “work from within” kind of guy.  I do believe that it’s possible to make change from within.  Some of the most influential senators have been the least visible ones, the ones that have been deal-makers, ones that help find compromises and get the job done.  These aren’t the ones that kill off public options (and I don’t think that such people would have made any difference at all in the electrical storm that was the health care reform bill and is the still existent overall debate) or that even make it onto Sunday morning shows.  And I’m not sure they even exist anymore (I do wonder if Clinton or Obama, in another 12 or so years, might have become those kind of people in the Senate had they not run for higher office).

This post, as are many of mine, is all over the place, and is indicative more of how torn I am over the political landscape than anything else.  I’m more of a centrist than anything else, and many nowadays would probably even call me slightly conservative (though definitely not on health care reform or economics – I’ve already been called a socialist on the latter topic).  But overall I’m just a pragmatist.  And it’s becoming just flat-out hard to be a pragmatist in today’s climate.

a stadium for santa clara…

Measure J here in Santa Clara in the upcoming fall elections covers the building of a new sports stadium in the city.  This would be the new home to the 49’ers, a well-known, established football team with a loyal following that would certainly come down the peninsula for games just as they currently head up to the city to Candlestick Point.

Based on the phone surveys, television commercials, and the number of trees killed on flyers in the mail, this is a pretty hot topic.  This group endorses it, another group opposes it.  The teachers support it, but the school janitors don’t (I’m just making that up, but it really seems that divisive at times).

I was speaking with a work colleague about the topic while thinking about this blog post and started off by comparing the project to a stimulus package.  On the one hand, this is a big, government-driven project that will create jobs right now and into the future.  Ongoing business at the stadium will also generate tax revenue.  The measure is actually written relatively well considering how often these kinds of projects go massively over budget, with various protections built-in.  This is the type of project that only a government can put together.  With very few exceptions (McGowan’s ATT Park for the SF Giants, Jones’s Texas Stadium for the Dallas Cowboys), no individual business (much less a person) could start up such a project.  This energizes the local economy, contributes to GDP, and helps overall long-term growth.

On the other hand, the main argument I’m seeing in the mail (and I must admit I’m throwing a lot of stuff away) is that this is a bad idea because this is going to be paid by debt.  And we’re all in this mess because of debt, right?  Well, personally, I don’t think that holds a lot of water (at least not to a quasi-Keynesian like me).  Deficit-spending (i.e. fueled by borrowing) is not bad unto itself.  It is in fact the only way to fund big stimulus projects, almost by definition (if the economy needs to be stimulated, it is unlikely to have enough existing monetary power to fund such projects without borrowing).  The problem is if such spending goes unchecked or if there aren’t plans to recoup that debt as part of the plan.

As I thought more about the issue last night, I realized that there is a key issue with thinking of this as a stimulus project.  One of the problems with any stimulus package – including the American Recovery and Reinvestment Act (ARRA!!!! as pirates would call it), the big federal package started under President Obama at the start of his administration – is that there is a lag before its effects are felt.

Let’s say that the money goes into a project the day after the ARRA was approved.  Person X is hired after being unemployed for some time.  Person X now has money.  Person X spends some time paying off bills, perhaps overdo, and then saves for a while out of a renewed inclination to do so (the national savings rate is still higher than it has been since, I think, the 1950’s or so, perhaps ever).  Eventually, after Person X is confident of his or her income and financial stability and perhaps the well-being of his or her family’s well-being, there is some spending.  Then the money multiplier (where $1 from Person X leads to something like $100 of GDP growth) kicks in and things start to get better.  This is the lag.

Well, the key is that such stimulus packages go towards “shovel-ready” projects.  These are not only ones that are ready to go right off the bat, but also ones that have already been approved, presumably because they have gone through some vetting (not always the case – lots of examples of ARRA funds going to some dumb projects).  The Santa Clara stadium, however, is a totally different situation.  The fact that we’re voting on it indicates that it’s not shovel-ready, and the benefits are still unclear.  Such projects – stadium construction – have historically gone over budget.  Those overruns are almost always borne by the taxpayers (even if the original costs are designed to be covered by the team).

I don’t know where I stand on this, even with the mail-in ballot sitting on the table in front of me.

BBC NEWS | UK | Scotland | South of Scotland | Bomber publishes appeal documents

BBC NEWS | UK | Scotland | South of Scotland | Bomber publishes appeal documents.

So…as if it weren’t controversial enough that Scotland released the terrorist behind Pan Am 103, now he has released documents that “prove” his innocence.

Newsweek had a mini-article – the stuff they have in the front now, that are analysis but not a full blown article – about how Scotland asserted itself with the release of Abdelbaset Ali al-Megrahi as a legit international state.  It wasn’t clear whether it was a good move or not, just that at least Scotland pushed forward their existing compassion for convicted felons with terminal illnesses.

For all the times that I have been tired of rhetoric, especially lately, where it feels half of what the administration says is because it needs to say it, not because it’s what should be said…I am behind all those that have condemned this move.  I have two reasons.

The first is personal.  I do remember Pan Am 103, even though I was only 10 when it happened.  No, I did not quite get the fact that this was a terrorist act, or what it meant that someone had done this in the name of something.  What did hit me was that someone had meant to do this.  And why would anyone want to do something so terrible?  Selfish reason, I guess, to let my own pre-teen shock be a factor.  But it’s my blog so..

The second has to do with a book I read a few years back called “Explaining Hitler.” *  The book put forth the following notion – is Hitler on the spectrum of morality within which we all exist, but on the very, very extreme edge?  Or is he actually off the chart (meaning that we exist in a “normal” range, though with some pretty crazy extremes nonetheless)?

I think that the same question can be asked here.  Megrahi is at least at the far extreme, IMO.  I don’t think he’s off the chart, if indeed Hitler was, and I don’t think he’s as far over as Hitler, either.  But the point is that there is a spectrum, and if Megrahi is towards one end, then maybe Scotland’s political history of compassion shouldn’t apply in this case…

*NB – I don’t think anyone will ever be able to explain or help us really understand Hitler.  But Rosenbaum tried to examine each of the arguments for what forces created such a…I’m loath to say “monster” in general but maybe it’s right this time and their validity in terms of history, etc.

NB^2 – I am not saying that this book is “the” book on the topic.  Just one that I read.

reconsidering MAD

Under the Eisenhower administration, Secretary of State Dulles pushed forth a nuclear policy known as MAD – mutually assured destruction.  It’s a rather frightening approach, but the idea was that if we had enough weapons with enough range and power, we could basically ensure our safety by raising the stakes so high that no country – not even the Soviet Union – would ever dare start a nuclear exchange.

Eisenhower’s and Dulles’ strategy had some particular flaws – their pursuit of a MAD policy lead to one particularly powerful bomb that, should it be dropped from a bomber aircraft, the explosion would be so large that the plane would not be able to get out of the fallout zone even at maximum airspeed.  It was also instituted early enough in the nuclear standoff that neither side had truly considered how to conduct diplomacy and brinksmanship in such a situation.  MAD led quite directly, in my opinion, to the Cuban Missile Crisis, which is easily the closest we ever came to being blown off the face of the earth.  This has some interesting parallels to our current situation with Iran and North Korea and their respective nuclear programs.


The President needs to shut up (or stick to the important stuff)

Twice now, while watching the Daily Show I’ve wanted to get up and write something about the idiotic, stupid, waste of time that is this whole affair with the arrest of Henry Louis Gates Jr.  Why did the President of the the whole freaking United States have to make any comment whatsoever on the actions of the police on a charge of disturbing the police in Cambridge, MA?  Now I see this on CNN:

CNN Political Ticker: All politics, all the time Blog Archive – Beer choice at Obama meeting touches off new debate « – Blogs from

So the President invites them all to have beer, the white house has to releases press reports on what types of beer, and some Democrats are UPSET ABOUT THE TYPE OF BEER CHOSEN?  What the heck?

If the President make a comment about the possibility of racial profiling, that might be okay.  But the bottom line is that no one knew what actually happened at the time the POTUS made his statement that the police acted “stupidly.”  Heck, I didn’t know, and he seemed to know even less than I did.

What I want to hear from the President is how he intends to fund universal heatlh care long term (and no, I don’t think he’s trying to kill old people, sheesh).  I support it entirely, but I want to know how we’ll handle those costs in the future.  And I want to hear about how Treasury and the Fed will work to unwind themselves of all this debt and the increase in the monetary base over the next few years.  About whether the stimulus is enough or not (is it just me, or have people begun to forget about the stimulus and some of the major macroeconomic issues at play here?).

Obama, IMO, has proven that he is bad, plain and simple bad, at extemporaneous comments.  And that he makes comments more often than he should. Of all the things a President should  be doing, apologizing for a “poor choice of words” is not one of them.  He just shouldn’t have made that comment in the first place.  Obama needs to learn when to shut up and just say “no comment until things are clear.”

This is just so frustrating.

anyone else think Palin’s resignation speech was less than stellar?

Palin’s Resignation: The Edited Version |

First – I got this off someone else sharing it on facebook.  Sometimes this whole social networking thing is useful.

I wanted to comment on Palin’s resignation when it first happened, because it made so little sense and, on a more superficial level, if one listened to the speech itself one wondered what kind of speech writers (or even proof readers) she had. 

Vanity Fair had a little fun with “editing” her speech, but overall this stresses the importance of having good speech writers.  There are great speakers – those that can deliver a stirring, moving, and motivational message – and there are great writers – those that create the spirit of the message through the deft use of the right words built on a solid foundation of proper grammar.  sidenote:  it is amazing how good grammar has such an impact on most listeners and readers – something as simple as that can raise any letter, speech, or other message to another level, yes shouldn’t we all know good grammar?  I certainly violate those rules all the time.

Of course, there have been great speakers and speech writers – I would have to think that Lincoln was one, though I guess, having never heard him speak myself, I cannot say for certain.  I don’t know how much of Obama’s speeches are his original writing versus editing and crafting from speech writers.  But I do know that Ted Sorenson did a lot of writing for John F. Kennedy, and I also know that JFK could deliver one heck of a speech (the Peace Speech is some powerful stuff, and if you listen to how he delivered important yet somewhat dry messages such as those surrounding the Cuban Missile Crisis, one certainly leaves, even today, with a sense of the situation’s gravitas).  It’s quite possible that JFK wrote an original that ended up as the majority of the speech, and that he was in fact a great writer as well.  But the bottom line is that few orators don’t utilize the skills of others to craft a truly magnificent message. 

And less than great orators with less than stellar speech writing skills with which to start can come off as awkward to even the most casual of listeners.

Team of Rivals…

I have had this thought in the back of my head for a while now and it’s now formed into something that I want to articulate into something here.

Another comparison that has been made constantly is that Obama has followed Lincoln’s precedent and created a cabinet that is a “Team of Rivals.”  Also the title of a great book by Doris Kearns Goodwin, the reference is to how Lincoln’s cabinet included many of his biggest rivals in the Republican party, including William Seward, the favorite going into the convention, as Secretary of State and Salmon Chase, who had an undying and almost heartless pursuit of the presidency even for the 1864 election, as Secretary of the Treasury.

However, if you take even a slight look at things, Obama’s cabinet isn’t a team of rivals.  You can’t even create a team of rivals today.  Seward and Chase were major players to be nominated for the Republican ticket.  The process was of course extremely different than today – there isn’t a big campaigning process that lasts for a year and covers the entire country.  But at the convention, via the means utilized at the time, they were really #1 and #2, with Lincoln eventually taking advantage of the split to get the nomination.  They were true rivals.  

Who played those roles for Obama?  Well, he had a major rival, sure – Hillary Clinton.  No question there, and she is going to be the Secretary of State, as was Seward.  But can you really call Joe Biden or Bill Richardson, both of whom put their names in the ring for the 2008 nomination but dropped out very, very early, “rivals?”  Is he really building a cabinet in a way that is different than past presidents – getting the right people around with the right skills?  (The Panetta nomination is still about Obama picking someone with the skills that he feels are right for the CIA, whether everyone else agrees or not).  

One thing that is definitely similar but the timing is way off – Lincoln helped create the Republican party in the several years before 1860, and his cabinet helped solidify its leadership.  Seward hadn’t even moved from the Whig to Republican party until relatively late in the game.  

In a sense, Obama’s campaign was the culmination of the rebuilding of the Democratic party.  At the least, after Gore lost in 2000, things were pretty much in disarray.