Thursday, March 20, 2008


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!

Thursday, March 13, 2008

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?"

Wednesday, March 12, 2008

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.

Monday, March 10, 2008

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.

Saturday, March 08, 2008

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?

Wednesday, March 05, 2008

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?

Tuesday, March 04, 2008

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?

Saturday, March 01, 2008

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."