Clark's Coincidence

OK, I usually steer clear of posting this kind of post, but it's time for some speculation, theorizing, hypothesizing, and rank rumourmonging.

It should come as no surprise to long-time readers of this blog (if any) that I'm a fan of the idea of retired General Wesley Clark as Secretary of Defense, but knowing that retired military can't serve as SoD too soon after their military time, I certainly wouldn't mind seeing him in any of various other Cabinet positions. (He does have a degree in economics from Oxford, after all; potentially useful in these times.)

Then, there was that overblown dust-up about his remarks that McCain's Vietnam service & POW-hood were not alone enough to qualify him for the Presidency.

Well, I don’t think riding in a fighter plane and getting shot down is a qualification to be president.

After which, the Obama campaign Largely disavowed him and his words. After that, I had pretty much abandoned any such hopes for him.

However, a couple of recent news items have me rethinking that. The first one that caught my attention in this regard was the appointment of Samantha Power to Obama's transition team. As you may recall, back in March, she was reported to have said:

[Hillary Clinton] is a monster, too — that is off the record — she is stooping to anything.

(A brief aside: I find it interesting that reporters will grant off-recordness by default to Bush administration officials, but report things from Obama advisors that are stated as off-the-record in midsentence.)

After this came out, Power resigned from the Obama campaign. However, it was recently announced that she would be part of his transition team for the Department of State, after Hillary Clinton was leaked as the likely (since official) choice for Obama's Secretary of State. This seemed like an unsubtle enough way of provoking those who were jumping on his campaign for misstatements and inartful phrasing that it got me thinking that there might be room for forgiveness for Gen. Clark, as well.

However, there was the talk of current Secretary of Defense Robert Gates staying on for at least a time with the Obama administration, also since confirmed. Apparently, Obama wants to keep him around while we withdraw our forces from Iraq, preferably within that 16 month time period that Obama had described during his campaign.

At this point, I thought to myself, "hmm, 16 months after inauguration, that would be in May 2010. I wonder when Clark would be eligible for an appointment to Secretary of Defense?" So I double-checked my recollection that it was a ten-year waiting period (10 U.S.C, Subtitle A, Part I, Chapter 2, § 113, "A person may not be appointed as Secretary of Defense within 10 years after relief from active duty as a commissioned officer of a regular component of an armed force."), and went to look up when Clark had resigned his commission. And what did I find?

Clark retired May 2, 2000; ergo, eligible May 2, 2010. The very same month that that 16 month period comes to an end. It could certainly be purest coincidence. But, as a famous presidential speechwriter once said, "Would it be irresponsible to speculate? It would be irresponsible not to!"

Light at the End of the Crazy Tunnel

You know, I'm getting kind of sick of the "bipartisan" call on behalf of Republicans and the Beltway.

Face it, suckers, you lost.

Real America voted for the Black Man as President because he was speaking our language: change from the status quo, infrastructure rebuilding, bringing back our civil liberties, not to mention fixing our communities. I was talking to someone the other day who admitted that he voted Republican, but was glad that Obama won. I was walking down the street to the mall, and there was a group of people just walking around yelling "Obama won!" and cheering for the sheer joy of it.

That's Real America, motherfuckers. Get over yourselves. You lost.

Even if the Presidental Limo gets outfitted with spinners and those air-freshener crowns in the back, I don't give a fuck as long as I get my tax cut and we get alternative energy spending. Spinners on a car have never bothered me one bit, some are actually cool, and as for those crowns, well, my 60 year old mother thought they were awesome. And we're white. So suck on it losers, we won.

This election was a referendum on Republican policy, and America bitchslapped it with a resounding "Hell, NO!" at the polls. If George Bush had a mandate in 2004 with a few thousand votes, Obama's got a SUPERMANDATE, and doesn't have to be bipartisan, bitches. Go on, grab at those straws, but it's still not going to erase the EPIC FAIL that is the Republican party, take your motherfucking ball and just go home. Your game was good for a bit, but someone who knew what they were doing came to the court and wiped your ass with it. Now you're just being whiny about it. You've lost your power, at our hands. And you damn well deserve that, what with all the destroying of our country you've done. And I will do what my parents did for me, and remind the youngsters of this time, so that they grow up and never vote for you depraved motherfuckers.

Young people voted, and do you think that they voted just for themselves? They see what trouble their parents are in, their grandparents, aunts, uncles...and they voted for someone who would make a reasonable stab at change, so that the hardships they see for their family members might ease up. Why on earth do people think that only old people vote for "the children"? Do you think those young adults are totally incapable of voting for a candidate that would make Mom and Dad's life better? Apparently, there are some people out there who don't know any young people.

We're all in this together, us and the whole fucking world. You can take your isolationism and and exceptionalism and shove it straight up your ass.

And your bipartisanship? Launch that into motherfucking space - I don't want to see that shit again, unless you're talking bipartisanship with socialists and progressives. You lost, fair and square, America has spoken, and we resoundingly said that we don't want to listen to YOU.

Election night prep

This is just a collection of links to the CNN election results pages for the races that seem to be of special interest, mostly for my own benefit, but feel free to follow along. Note that I'm extrapolating the likely URLs based on their 2004 results pages, so there likely will be dead links until the day, and might be even then; I'll update them if I find different URLs. And I'm publishing before all the names are filled in; I'll be completing it as time goes by.

• Presidential Election: Obama v. McCain
• Senate races:
  • Alaska: Begich v. convicted felon "Series of Tubes" Stevens
  • Colorado: M. Udall v. Schaffer
  • Georgia: Martin v. Chambliss
  • Kentucky: Lunsford v. McConnell
  • Minnesota: Franken v. Coleman
  • Mississippi: Musgrove v. Wicker
  • North Carolina: Hagan v. Dole
  • New Hampshire: Shaheen v. Sununu
  • New Mexico: T. Udall v. Pearce
  • Oregon: Merkley v. Smith
  • Virginia: Warner v. Gilmore
• House of Representatives:
  • Arizona: 8th: Giffords v. Bee
  • Colorado: 4th: Markey v. Musgrave
  • Florida: 8th: Grayson v. Keller, 21st: Martinez v. L. Diaz-Balart, 24th: Kosmas v. Feeney, 25th: Garcia v. M. Diaz-Balart
  • Minnesota: 6th: Tinklenberg v. Bachman
  • North Carolina: 8th: Kissell v. Hayes
  • Ohio: 1st: Driehaus v. Chabot, 2nd: Wulsin v. Schmidt, 15th: Kilroy v. Stivers, 16th: Boccieri v. Schuring

Update: Their URLs are inconsistent, and my predictions were wrong. Updating as I find what's where.
Senate races should all be updated now.
All links should be working now. Results are starting to come in.

Ayers, or ???

I just want to point out another overlooked but significant point about the alleged Obama/Ayers best-friendsness/acquaintance/heard-of-the-guy. What was the alternative, from Obama's point of view? Just ditch the committee, in effect saying, "well, fuck the poor, I can't work with this guy, so they're just going to have to suck it up?" What kind of character would have behaved that way?

On an unrelated note, I'd just like to say that one of the greater trivial annoyances (isn't that like "jumbo shrimp"?) of the past few days has been repeatedly having my nose rubbed in the fact that the English language consigns the verbs "pall" and "pal" (if you can even tolerate its having been verbed) to share identically spelled gerund forms. Curse them!!

Lipstick, pigs, & female dogs: Redux

They've gone and made the connection explicitly now. (Via Digby)

[Karl] Rove said he believed that Obama's "lipstick on a pig" comment was a "deliberate slap at Governor Palin," saying it came too soon after the Alaska governor's pitbull comment not to be.

Like I was saying, especially now that they're making the connection to the pitbull remark, this really points out that she went there first. Just because she's a woman, doesn't mean she couldn't be sexist, or make sexist remarks. (I'm not seriously suggesting that hers was a sexist remark, but it was at least as much so as Obama's.)

Lipstick, pigs, & female dogs

And just a quick note about the lipstick thing: If it is supposed that Obama's comparison of McCain's economic policies to a pig with lipstick was somehow really about Palin, shouldn't somebody be bringing up Palin's insult to hockey moms, when she essentially called them pit bulls with lipstick? And you know what they call a female dog, after all.... Is this really the line of reasoning (if I may take liberties with the term) that they want to follow?

Yet Another Alternative

Another unfounded assumption I've noticed in the discussion of Sarah Palin. Everybody seems to assume she's lying now about having "said thanks but no thanks" about the "Bridge to Nowhere". But could she not have been lying when she claimed to support the bridge while running for Governor, instead? She might be completely honest about her position on the bridge, now!

Take that, liberal media!

How about a Greek middle school? Would that work?

OK, this is a bit of a puzzle yet, and explanations are entirely speculative so far, so I'm going with the one that seems fairly likely for the purposes of this post. Whatever the actual explanation, though, it can hardly be favorable to the McCain campaign, except inasmuch as everything is.

So, apparently, Candidate McCain chose to (or at least ended up) give his big acceptance speech, the highlight of the Republican Convention, in front of an image of a ritzy, dare-we-say elitist, North Hollywood middle school (not entirely dissimilar to an expensive McMansion, for that matter). Going with the reasoning of the Republicans and their pet pundits, that Obama's backdrop of Greek columns (much like George Bush's background when addressing the RNC, incidentally) was supposed to present him as a Greek god (so what was Bush going for? Roman emperor?), the only reasonable conclusion is that the McCain campaign chose a middle school backdrop to make McCain seem younger.

Kidding aside, it seems likely that it was a mixup due to the middle school sharing a namesake with Walter Reed Army Medical Center. I think it says something about the staffers of the McCain campaign that they would think it reasonable that Reed looks that beautifully kept up. It would seem to fit well with delusions that the Army's medical services are keeping things completely shipshape for our wounded veterans, not a speck of mold or anything, and no expense has been spared in keeping it lovely. If anything, it looks like we might have spent altogether too much on fancy architecture and groundskeeping! Except, of course, that it isn't. Just another notion based on fantasy.

There's a mavericky madness to his method

I have it on good authority from a senior adviser to the McCain campaign* that the Maverick's choice for a running mate was sealed last Thursday morning, when he found Sarah Palin's face in his sunny-side up eggs for breakfast.

*What? I can't help it if one of the ferrets claims to be a senior adviser!

An alternative explanation?

Much of the foofoora about John McCain's choice of running mate, Alaska Gov. Sarah Palin, seems to have an underlying unstated assumption for which I haven't seen the justification yet: that she was his first choice for a running mate. I don't have any particular reason to think she wasn't, but it grates on me to see all this talk that seems to just make the assumption, without any evidence cited.

And it would be amusing to think that maybe Mitt Romney, Joe Lieberman, and Tim Pawlenty had all been offered the slot, and fled from him like the proverbial rats from the ship, until he finally found a sucker willing to run as the sidekick's sidekick.

A Modest Contradiction

Candidate John McCain spoke of his new running mate selection, Alaska Governor Sarah Palin:

She's exactly who I need. She's exactly who this country needs to help me fight the same old Washington politics of 'Me first and country second.'

And yet... notice to what his first sentence refers. Notice to what his second sentence refers. Notice which sentence comes first, and which one comes second.

I guess McCain is his own "same old Washington politics" which he disparages by implication.

Workin' it: Answered

Over at TPM, Josh Marshall asks:

When Mitt Romney says that it was "hard work" that got John McCain all those houses that he got for marrying Cindy Hensley, what does he mean exactly?

I believe George W. Bush said it best, during the Sep. 30 debate in 2004:

You know, it's hard work to try to love her as best as I can.... I told her after we prayed and teared up and laughed some that I thought her husband's sacrifice was noble and worthy.

Incidentally, that was occurrence number eight of eleven that night, of the phrase "hard work". Just sayin'.

I'm Confused

From Sadly, No! comments, someone linked to this post at Pharyngula. Total Catholic Meltdown over someone "stealing" the communion wafer.

But I'm puzzled. Why on earth would you want to take one home? There's really nothing special about the taste. What was that guy thinking? "Damn, these are tasty, I'm going through the line again!!" or "Wow, I would like to taste that again!" If he fakes an illness for which he can't leave his house, he could call up his local parish and even have it delivered to his home! Complete with Mass!

Why? It just seems so odd. Granted, the people sending death threats have to chill the fuck the out. But as a Catholic myself (more culturally now than when I was younger), I'm more bemused at the idea than outraged. Why would you want to take with you a plastic-y wheat-tasting wafer?

If you really, really are longing for that taste, I suggest buying these instead. The wafer taste is very similar to the outer coating, and communion wafers completely lack the fun-filled sugar balls in the middle. Now those would be worth taking from Church!

Is It A Funny?

I really hope that this was meant to be a funny, and not, say, serious.

Under their belief-system, every single individual in the entire country can elect to be on drugs. What would our society look like if this happened? People's lives would be destroyed and their productivity in our society would be unarguably compromised. In essence, people will have the right to govern their bodies but our country will lose its ability to effectively govern as well. This will then jeopardize the freedoms of people everywhere.

Just because you can't handle your drugs, doesn't mean that other people can't. And being on drugs is possibly the only explanation for our embarrassment of a president, but last time I checked, he was a Republican, no matter now much the wingnuts claim he isn't.

Remember: Happiness and freedom are both protected under the constitution.

Where's my fucking pony?

Perhaps the most vexing element of Libertarian thought is their implicit (and often explicit) contempt for our government.

Because there is absolutely no reason whatsoever for anyone to have contempt for our government. No Siree, nope, no contempt here! I do agree that not everything should be a cutthroat capitalistic society because there are quite a few things that need government oversight, or should be provided by the government because I fucking pay taxes. Glam wars are not part of that equation.

That would be quite the concept: want to start your own war? Get a bunch of people together and go fight it in the name of [your entity here], personally funded by you and whatever delusional freaks you manage to swindle. Hell, it worked for Oliver North!

Awesomeness!

Fafblog is back! Yipee!

Bwah-ha-ha-hah!!!

This is just too good to pass up.

I'm a kind of sabot right now.

They singled me out and evicted me, but they didn't notice my guest. They let him go in escorted by my wife and daughter. I guess they didn't recognize him. My guest was …

Read it, and find out!

Sec. Alphonso Jackson, still at it in HUD

Remember that Secretary Alphonso Jackson of the HUD that I have that grudge against? And my later follow up? Well, it looks like he's still at it.

After Philadelphia's housing director refused a demand by President Bush's housing secretary to transfer a piece of city property to a business friend, two top political appointees at the department exchanged e-mails discussing the pain they could cause the Philadelphia director.

"Would you like me to make his life less happy? If so, how?" Orlando J. Cabrera, then-assistant secretary at the U.S. Department of Housing and Urban Development, wrote about Philadelphia housing director Carl R. Greene.

"Take away all of his Federal dollars?" responded Kim Kendrick, an assistant secretary who oversaw accessible housing. She typed symbols for a smiley-face, ":-D," at the end of her January 2007 note.

Cabrera wrote back a few minutes later: "Let me look into that possibility."

The e-mails, obtained by The Washington Post, came to light as a result of a lawsuit provoked by HUD's decision last September to strip the Philadelphia Housing Authority of as much as $50 million in federal funds. In December, it declared the agency in violation of rules that underpin its ability to decide precisely how it will spend federal housing funds. Kendrick was the official who formally notified the authority that she had found it in violation.

What a lovely group they do seem to have in that office. "Nice city ya gots there. It'd be a pity if something were to happen to it, know what I mean?"

Noted in passing

"Recent press reports suggesting a disconnect between my views and the president's policy objectives have become a distraction at a critical time and hamper efforts in the Centcom region," [suddenly retiring Centcom CINC Admiral William] Fallon said in a statement Tuesday in which he announced his resignation as head of U.S. Central Command, arguably the most important in the U.S. military....

"I don't believe there have ever been any differences about the objectives of our policy in the Central Command area of responsibility," Fallon said in his statement Tuesday, and he regretted "the simple perception that there is."

In keeping with one of my own pet peeves here, I would point out that their having the same objectives, doesn't mean they necessarily share views on how to achieve those objectives. The statement as is still leaves that possibility wide open, and military commanders don't really have any business choosing (big picture) objectives anyway; they're supposed to be figuring out how to achieve those objectives handed down to them. What we call the means to an end. So he's really not denying what he's trying to give the appearance of denying, here.

Furthermore, the second quoted paragraph there leaves open the possibility that there are differences in other areas. Not that I think there's likely much to that, but it does strike me as rather odd that he would specify and limit the policy in question that way. Why?

All told, he certainly seems to exude the air of somebody going out of his way to give the appearance of denying something, without actually denying it. Lying without lying, one might say.

Introducing Class Wargames

I've wrapped up a short piece introducing my alternative economics blog, Class Wargames. So now, I'm announcing it here. Go take a look.

Compare and contrast

Michelle Obama:

For the first time in my adult life, I am really proud of my country. Not just because Barack is doing well, but I think people are hungry for change.

John McCain:

It's harder and harder trying to do the Lord's work in the city of Satan [Washington, D.C.].

Now, which one do you suppose gets called out by the media for not being patriotic enough? The one who just suggested our nation's capital is chock full of demonically possessed bureaucrats and legislators? Does he sound like he's proud of our country? Really proud?

Update 2008-03-20: Now that I've given it some time for the McCain quote to get out there, if it would, here's the current tally via Google News: Michelle Obama: 304; John McCain: 24. Any questions?

Hope springs eternal

Another apparently underreported bit of math I noticed last night: According to the CNN results, at least, all the Republican candidates put together got fewer votes (1,319,960; 100% precincts reporting) than even the lesser of the two Democratic candidates (Obama: 1,356,330; Clinton: 1,455,959; and that's with 99% precincts reporting, so there will be a few more). Granted, Republican turnout was probably somewhat suppressed by the presumption that McCain had things all wrapped up (which he now does). Still, this was in Texas! This could augur very well for the general election in November.

Added: I suppose I should compare the numbers in Ohio as well, for completeness. Their greater preference for Clinton meant Obama did get fewer votes than all Republicans combined. Republicans: 1,010,864; Obama: 979,025; Clinton: 1,207,806 (all 100% precincts reporting). Even there, the mean of the Democratic candidates' votes (1,093,415.5) beats the Republicans' total.

Updated 2008-03-06: This other possibility had occurred to me, but I didn't want to bring it up without at least anecdotal evidence, even if it does tend to support my own preferred candidate. At The Rude Pundit (shockingly profanity-free for once), there's talk of Texas Republicans not just staying home because McCain's the obvious winner, but getting out and voting in the Democratic primary for the candidate they think will be easiest to defeat in November, perhaps most often Clinton. "Republicans knew that McCain would win Ohio and since in Texas we have open primaries, the RNC, Texas Repubs and Rush had been telling all their zombies to vote Clinton because they think they can beat her. My own mother, who hasn't voted for a Democrat for 40 years, told me that she voted for Hillary because 'you know, I support McCain, so I voted for her like everyone else up here.' My mother wasn't our only contact to verify our suspicions." All things considered, while I certainly consider these counts a good sign for November, I'm certainly not expecting a 2-to-1 blowout in Texas then, either.

Hagee vs. Farrakhan

Just a note of something I checked out in this Obama & Farrakhan vs. McCain & Hagee dustup we've been hearing about lately. (Short version, if you haven't heard: Obama had to denounce and reject Farrakhan's support, repeatedly, during a live televised debate recently; McCain, on the other hand, warmly embraces the support of similarly radical (in degree, but he's Christian!) pastor John Hagee, and the media barely bats an eyelash) I thought I'd just do a quick comparison of Google News hits, and lo and behold: The Final Score (for now): Obama and Farrakhan, a numerologically significant 1,984 hits; McCain and Hagee, merely 459. Double standards, much?

The Trouble With Capitalism: Market Saturation

pp. 35 & 36:

Market Saturation

The increasing maturity of most consumer markets in the industrialised countries was becoming a noticeable constraint to economic growth in the industrialised world by the end of the 1960s. This meant that in addition to static demand for non-durable goods (food, drink and clothing) the markets for most durable products (automobiles, television sets etc.) tended more and more to be governed mainly by replacement demand rather than by the continuous opening up of new groups of first-time buyers, which had been possible throughout the 1950s and early 1960s. Hence demand for goods generally began to grow more in line with population — which was in any case increasing more slowly than in the immediate post-war period — rather than at the rapid rates recorded up to the mid-1960s.

The result was that companies serving these markets were obliged to diversify into new products or services in their unavoidable quest for further expansion, especially as they were barred by anti-monopoly restrictions from taking over their competitors, at least within their national frontiers. One consequence of this was the emergence, particularly in the USA, of 'conglomerate' groups or companies with diversified activities ranging from telephone equipment manufacture to hotel chains....

One thing that I'm particularly sensitive to in reading this book, and elsewhere, is the idea that at least a significant part of the trouble with the modern economy is exaggerated expectations of return on investment on the part of investors. This is essentially one reference to it here. Still, it doesn't seem to crop up as much as I'd guessed it would. I'm not sure whether this is because the author understates its role (or I'm just wrong in its significance), or he just assumes it as a near-axiom, not worth mentioning because it's a given.

Yet gradually, as may now be recognised with the benefit of hindsight, the development of such new consumer markets proved insufficient to offset the impact of the saturation of existing ones.... Thus for many it was an article of faith that every economy was subject to a normal or 'underlying' growth rate or trend, from which it might be expected to deviate only under abnormal circumstances and, implicitly, for relatively short periods. Likewise, as already noted, many of the cruder apostles of Keynes had convinced themselves that 'demand management' could actually permit the stimulation of increased consumption simply by injecting more money into the economy, and that consequently excess productive capacity need never be a problem again. Thus they, along with most OECD governments, failed to appreciate that, once the short-term limits of purchasing power have been reached, the only consequence of artificially trying to extend them further is bound to be inflation.³

3. Even now it is quite common to find economists who reject any notion of limits to demand growth, usually on the grounds that it is based on the 'lump of labour fallacy' — that is, the suggestion that there is a fixed amount of output (and hence labour) required to meet demand (cf. S. Brittan, Capitalism with a Human Face, Fontana, London 1996). The obvious perversity of this argument is based on a refusal to bring the time factor into the equation, since it is not a question of suggesting that demand is finite in any absolute sense but only over a given time period. Yet since rates of return on capital are reckoned in relation to periods of time it should not be necessary to point out that it is the short- or medium-term limitation which is crucial in defining whether there is a ceiling on demand growth.

I think we're getting pretty close now to the "limits of purchasing power," "bound to be inflation" point he's talking about. By the way, have you checked the price of wheat lately?

The Trouble With Capitalism: Investment promotion

Investment promotion (pp. 23 & 24)

Besides undertaking to apply the weapons of macroeconomic management to influence the level of output and employment, governments resorted to other forms of intervention to help sustain activity. Most conspicuously, they became significant promoters of investment, whether through state subsidies or incentives to private investment, or else through direct state equity participation in enterprise. The proliferation of such mechanisms — including grants, tax concessions, loan guarantees and subsidies to research and development — was for many countries (notably those of continental Europe as well as Japan) simply an extension of their traditional approach to economic development. Yet its rapid growth throughout the Western market economies (including the United States) in the post-war period meant that 'corporatism' had become a universally accepted element in the post-war capitalist system. What was scarcely perceived at the time — and is still not widely accepted even in the supposedly more laissez-fair 1990s — is that such uncontrolled use of state support for enterprise (whether in the private or public sectors) was bound to result in serious distortion of competition and international trade patterns.⁵

5. See H. Shutt, The Myth of Free Trade, Basil Blackwell/The Economist, Oxford 1985

Note that I would certainly agree that, here in the US, the "grants, tax concessions, [and] loan guarantees" have certainly gotten rather out of hand. More on that when I cover the later chapters.

Transnational corporations (p. 32):

Such was the basis of what was later to become known as the 'global economy'. Perhaps surprisingly, it has been widely acclaimed in the 1990s as the very model of a dynamic, free-market economic system in which the inability of either governments or private corporations to control the pattern of development is treated as a positive virtue. However, as suggested in this chapter, it is really the legacy of a post-war attempt to organise the world economy along the lines of international cooperation rather than uncontrolled competition & in a climate of opinion which had, indeed, come to reject laissez faire as an intolerably unstable basis for economic management. The fact that it proved a recipe for anarchy based on rampant market distortion was the result of misplaced commitment to the idea of the sovereign nation-state, combined with a lack of political will to curb the power of transnational corporations.

The Trouble With Capitalism: The New Deal

I'll be mostly glossing over the next couple of chapters in The Trouble With Capitalism, as the mostly deal with historical background. But I'll doubtless find a few bits worth mentioning. Like the following. (pp. 15 & 16)

[W]hen US President Roosevelt assumed office for the first time in 1933 he was committed to a programme of vigorous intervention by the federal government to stimulate and underpin a recovery in the US economy — the New Deal — based on broadly similar principles to those applied by the Fascist regimes in Italy and Germany....

It is significant that one area where the Roosevelt administration's proposals for state intervention in the economy met with little opposition was support for the financial sector. Nothing had been more fatal to attempts to restore confidence in the United States following the Wall Street crash than the catastrophic collapse in the banking sector, with no fewer than two thousand banks failing in 1930 alone. This prompted the new administration to introduce, as one of its earliest measures, legislation requiring all banks to insure their deposits (up to a maximum level for each one) through a government agency, the Federal Deposit Insurance Corporation, thus guaranteeing small savers against total ruin.¹³ This measure... foreshadowed what was to become, after World War II, an implicit commitment by the state to act as 'lender of last resort' to the banking community — in other words, to come to the rescue of any institution whose failure could be considered a threat to the stability of the financial system as a whole, regardless of how reckless its lending policy may have been. Yet as with so many other moves tending to advance the role of the state in sustaining the capitalist system, this far-reaching commitment was made as a purely pragmatic response to otherwise ruinous market trends. It is scarcely a matter of wonder that those responsible, who were also closely linked to the main beneficiaries, were not inclined to emphasise its ideological implications.

13. In reality the use of an insurance scheme was cosmetic, since the level of premiums paid by the banks never corresponded to the actuarial cost of providing the necessary cover and it has been understood ever since that the federal government will provide whatever support is necessary to avert the collapse of any bank which might entail 'systemic risk'.

In short, the kind of trouble that these policies were meant to avert does sound a lot like the current problems of the sub-prime collapse. Especially that bit about "com[ing] to the rescue of any institution whose failure could be considered a threat to the stability of the financial system as a whole, regardless of how reckless its lending policy may have been."

Counting the costs

This story in The Australian ties in rather well with my current reading, and helps bridge the gap of the decade since it was written.

THE Iraq war has cost the US 50-60 times more than the Bush administration predicted and was a central cause of the sub-prime banking crisis threatening the world economy, according to Nobel Prize-winning economist Joseph Stiglitz.

The former World Bank vice-president yesterday said the war had, so far, cost the US something like $US3trillion ($3.3 trillion) compared with the $US50-$US60-billion predicted in 2003....

Professor Stiglitz told the Chatham House think tank in London that the Bush White House was currently estimating the cost of the war at about $US500 billion, but that figure massively understated things such as the medical and welfare costs of US military servicemen.

The war was now the second-most expensive in US history after World War II and the second-longest after Vietnam, he said.

The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit.

"The regulators were looking the other way and money was being lent to anybody this side of a life-support system," he said.

That led to a housing bubble and a consumption boom, and the fallout was plunging the US economy into recession and saddling the next US president with the biggest budget deficit in history, he said.

Professor Stiglitz, an academic at the Columbia Business School and a former economic adviser to president Bill Clinton, said a further $US500 billion was going to be spent on the fighting in the next two years and that could have been used more effectively to improve the security and quality of life of Americans and the rest of the world.

The money being spent on the war each week would be enough to wipe out illiteracy around the world, he said.

Just a few days' funding would be enough to provide health insurance for US children who were not covered, he said.

The public had been encouraged by the White House to ignore the costs of the war because of the belief that the war would somehow pay for itself or be paid for by Iraqi oil or US allies.

"When the Bush administration went to war in Iraq it obviously didn't focus very much on the cost. Larry Lindsey, the chief economic adviser, said the cost was going to be between $US100billion and $US200 billion - and for that slight moment of quasi-honesty he was fired.

"(Then defence secretary Donald) Rumsfeld responded and said 'baloney', and the number the administration came up with was $US50 to $US60 billion. We have calculated that the cost was more like $US3 trillion.

"Three trillion is a very conservative number, the true costs are likely to be much larger than that."

This is just the kind of thing Shutt is going on about in this book. (My reading in it is currently far ahead of my posting about it.)

Afterthought (added 03-01): I might also point out that that sum comes to around $10,000 for every man, woman, and child in the United States. Enjoy your tax cuts!

The Trouble With Capitalism blogging

So, since I've gotten myself an old new book from the library, The Trouble With Capitalism: An Enquiry into the Causes of Global Economic Failure by Harry Shutt, and I'm reading it now, I thought I'd share some of the choicer excerpts as I go along. Some, I'll just post without comment; others, I might point out things that have come to pass since then, or how it relates to my own beliefs in the area, or even where I feel it might be in the wrong. Keep in mind, it is a 1998 book, so some of it is a bit dated. I might even pick on it a bit in places, for instance where it says the Interwebs don't seem to be really taking off. But it'll be good-natured; in that example, his thoughts seem to have been born out eventually by the bursting of the New Economy dot-com bubble.

A choice bit from the very first page of the introduction, to start off with:

The rapid advances of this new consensus [the superiority of laissez-faire capitalism] to near universal acceptance owes much to the recent conspicuous failure of economic models based on extensive state intervention to deliver adequate levels of prosperity or security — most spectacularly in the fallen Soviet empire. Yet despite this apparently compelling logic, anyone endowed with a reasonable capacity for impartial observation of everyday realities — and for treating official propaganda with due scepticism — might recognise that such claims of a triumph for the free market and of its supposedly magical powers are profoundly perverse, for at least three reasons.

Further on in the introduction (added 2-28):

This book is an attempt to expose the realities of the contemporary evolution of the global capitalist economy, and thereby to dispel the illusions which lie behind the neo-laissez-faire prospectus. By viewing it in the context of the longer-term development of the world economy it also seeks to demonstrate that the reason for the aggressive and irrational dogmatism of the Western political establishment in trying to forge this new consensus is a growing sense of the increasing fragility of capitalism rather than of its enduring strength. Indeed the reader may well conclude that only acute awareness of a genuine threat to the survival of the dominant vested interests could explain such systematic distortion of reality.

In some respects, it may be noted, the analysis presented here of the chronic weakness of profit-maximising capitalism is traditional, in that it emphasises the distorting and destabilising effects of the recurrent excess supply of capital in relation to the demand for it. What is perhaps less familiar is the revelation that technological change is leading to a long-term relative decline in the demand for fixed capital, thereby rendering traditional capitalist structures obsolete — much as the new technology of steam power made inevitable the replacement of feudal structures and cottage industries by capitalist enterprise some two hundred years ago.

A Troubling Thing

When I read people debating about Clinton on various blogs, I've noticed that something always pops up that bothers me: the implication that Senator Clinton will run the presidency just like her husband did. I saw one comment, when one commenter provided the reasons for not voting for Senator Clinton, that basically outlined policies from Mr. Clinton's years in the White House. I mean, there were a few instances of Senator Clinton's voting record, but many were not. I'm not sure that it really is a valid point to bring up Mr. Clinton's policies and assume that's how his wife will run the presidency. It almost has the underlying current that Mr. Clinton will be running the country by proxy...as if Senator Clinton has no mind or will of her own. That kind of bothers me. I have no problems with people discussing Hillary's record and past history as a Senator, or the fact that she's a DLC-type. But really, do we know for a fact that she will most definitely run the presidency just like her husband did? Is pointing out his record even relevant to discussing how she would run the country? I would like to think that she has a mind of her own and can stand or fail on her own merits. For the record, I'm not decided on who I will vote for in the primary. I could live with either as the candidate.