posted by Curt, on November 17, 2008 09:49 am

I'm not the only one who has noticed how Obama's recent actions seem to be mimicking Lincoln's (as described by Doris Kearns-Goodwin in her bestseller Team of Rivals: The Political Genius of Abraham Lincoln).

Jacob Heilbrunn: Obama's Team of Rivals

Obama's 'Team of Rivals' Approach Could Mirror That of Abraham Lincoln

Obama may keep rivals close -- chicagotribune.com

And so I doubt it is a coincidence that Team of Rivals has returned to the Amazon.com bestseller list, weighing in all the way up there at #12.

Let's hope Obama has read Kearns-Goodwin's book carefully. Because, if he has, he'll realize that assembling the Team of Rivals is the easiest part of such an approach. The key to the success of Lincoln's cabinet (and also the secret to his "political genius") was his ability to make it work. Can Obama do the same? It's obvious that he's trying.

And he should get credit for that.

posted by Curt, on November 7, 2008 08:09 pm

Apparently a thousand or so people gathered outside of Temple Square this evening to protest the LDS Church's involvement in Proposition 8 in California. For those who may not be familiar with it, Proposition 8 was the referendum to amend the California constitution and define marriage as the union between one man and one woman, in the wake of the California Supreme Court's invalidation of the state's Defense of Marriage Act. The LDS Church urged its members to support the amendment, and support it they did--to the tune of countless hours donated labor and $20 million dollars donations. Against all initial expectations, Proposition 8 passed; the gay community in California and the United States was stunned by its failure. And they were plenty angry at the LDS Church.

Now they are preparing another legal challenge (to invalidate the amendment on procedural grounds) and protesting outside of LDS Temples (so far in Los Angeles and Salt Lake City). Objections to the LDS Church's involvement run the gamut from pure disagreement on the merits to concerns about church-state relations, tax exempt status, and downright hypocrisy (given the Church's history of persecution and alternative marriage practice).

And now the Proposition 8 opponents are trying to . . . what, exactly? Make the Church pay with bad publicity for its support of Proposition 8? I really don't get the idea of these protests. And I don't get the reason they are targeted specifically at the LDS Church. What exactly is accomplished by standing outside with signs and yelling, besides interfering with people who want to go on with their normal lives. Perhaps it's therapeutic, but certainly no more so than a gay pride parade. In cases where the organization is likely to be swayed by a display of popular uprising against their position, a protest may also make sense as a means of persuasion on the merits--but clearly that not what these protesters are driving at here.

The only think I can think is that they are mad at the church and they are trying to shame or embarrass it in the eyes of everyone else--either that or trying to threaten it in an attempt to prevent it from "sticking its nose into other people's business" ever again.

The members of the church exercised their rights to vote and support a cause. Usually, when people do this, others on the losing side of a political issue don't line up outside their homes and protest. And that's a good thing. It shows respect for the opposing viewpoint and an acknowledgment that the democratic process has worked. I am almost certain, had Proposition 8 failed, that LDS Church members would not be protesting outside the offices of the ACLU or the "No on 8" campaign headquarters--despite the ridiculous so-called "Mormon Missionary" commercial. But, the issue came out the other way, and the LDS Church is being targeted for it.

Don't get me wrong. Everyone has the right to speak and protest. No person or organization who speaks out on an issue should expect to be immune from criticism of their position. But I'm calling this one as ridiculous. The opponents of Proposition 8 need to make their case to the California people not the LDS Church. And if the best way they can think of to do that is to trying and publicly shame the church, well . . . let's just say they that maybe they won't be as successful as soon as I thought they would.

posted by Curt, on November 4, 2008 10:41 am

Well, two years of posturing, cross-country campaigning, mudslinging, scandals, and shallow debate will finally all come to an end. The American Presidential election process is remarkable and unique in many ways, but perhaps in its length most of all. I'll be honest and say that I'm glad to see it go, no matter who is elected.

I voted this morning, and, though I won't tell you who for, it wasn't for either Obama or McCain. I refuse to vote for anyone who supports the government's ridiculous and harmful bailout proposals. And you can expect the government printing presses to continue unabated under either one of our two main candidates.

I suspect that Obama will win this election, so it will be a historic one in that America will finally elect an African-American President. Let me tell what I look forward to (and don't look forward to) in an Obama Presidency:

1. I look forward to the impact of a new and more powerful role model for African-American youth than rappers and sports stars. I predict the impact of President Obama the role model will be lasting, substantial, and very beneficial--much more so than Obama's policy accomplishments as President.
2. I look forward to having a President who's a good speaker again.
3. I look forward to having a President who is committed to at least trying to resolve this country's health care crisis.
4. I look forward to the Republican Party being humiliated at the polls and regrouping to reclaim its identity as the party (more) in favor of limited government and American values.
5. I look forward to an end to the Bush and Clinton dynasties in American politics.
6. I look forward to an end of the constant and rather whiny complaints about evil geniuses Dick Cheny and Karl Rove.
7. I do not look forward to the appointment of liberal law professors (e.g. Harold Honghju Koh) to the United States Supreme Court.
8. I do not look forward to New Deal II, complete with foreclosure moratoriums and continued government bailouts.
9. I do not look forward to Democratic control of the Presidency and both houses of Congress
10. I do not look forward to large amounts of high-flying rhetoric inconsistent with the ordinary, and very political, strategies being pursued on the ground.
11. I do not look forward to the fulfillment of Joe Biden's foreign policy test prophecy.

And there you have it, some of my take on the next four years. Best of luck, President Obama, you're going to need it.

And congratulations to President Bush. I bet there is no one happier than him that the election is now over and he can begin making permanent plans to get out of the White House . . . well, except perhaps for a large majority of the American people. But their minds will change (at least a little bit) in the coming years.

Remember, it hath been foretold . . .

posted by Curt, on October 17, 2008 07:48 am

The causes of our current financial crisis have been discussed ad naseum these days. Lots of the talking heads you see on T.V. or the opinion leaders you read online are now admitting what many of them ignored during the credit boom years: that these problems are all a result of years and years of ridiculously loose credit policies, practices, and irresponsible borrowing. In an even more remarkable acknowledgment of the failure of the credit and consumption creed, many are even admitting that the U.S. economy needs to wean itself off of credit. But, even with this acknowledgment, these individuals, almost to a man still support massive (and continued) government intervention. Why? Because, according to them, quick deleveraging (i.e. debt destruction) would be disastrous for the economy. We need government intervention, they say, to ensure orderly deleveraging of the debt--otherwise we'll be plunged into another Great Depression.

Putting aside the question of whether "orderly deleveraging" is just another phrase for prolonged economic pain, one might well ask himself whether it is moral, or even possible, to have manic, highly leveraged growth on the way up and orderly deleveraging on its way down? Latching on to the assumption that economics really is a "science," applicable laws would suggest that an equal and opposite reaction is required for recovery. I have my doubts that we can have a period of orderly deleveraging that lets us all down slowly from the highs of our 30-year credit binge. But our fearless economic leaders are certainly giving it the old college try. I just don't think they'll succeed. If the idea of skyrocket up and float softly down isn't clearly contrary to the laws of economics, it certainly seems contrary to the Law of the Harvest.

Since we're not willing to boom and bust, probably can't boom and deleverage orderly without pain, I suppose we're left with the choice to try and regulate bubbles out of existence. But, knowing the little I do about human nature, I'm pretty convinced that won't work either.

posted by Curt, on October 13, 2008 10:22 am

The world's governments have gotten together and somehow managed to guarantee everything. No bank or major company will be allowed to fail during the next year, and they'll hand out as much money as the world's banks want to take on. Nobody is really sure where all the money is going to come from in order to do this. But that's irrelevant at this point since the stock market is rising (for now).

The FASB now allows banks and other companies holding mortgage-backed securities to value those assets at whatever they think they are worth (they can "use their own judgment"), therefore making the problem balance sheets just disappear before our eyes.

Pelosi is angling for yet another stimulus package, proving that her leadership response to an economic crisis is to hand out $150 billion in "free" money once every four months until the economy improves. And only a couple of our representatives from either party will even try to oppose her.

Obama and McCain are falling over themselves to try and be the most generous with money that they don't have, both insisting that they can continue to increase spending while guaranteeing mortgages, keeping bankrupt Americans in "their" homes, and offering tax breaks to millions.

General Motors is on the brink of failure and is considering merging with one of two other American automakers that are also on the brink of failure. And boy oh boy is the market cheering it all.

The icing on the cake is that our leaders are actually patting themselves on the back??!!

As much as I say that nothing will surprise me anymore, I am surprised at the speed and joy with which we are sowing the final seeds of our own financial destruction (most of it has already been assured, but, believe it or not, this can make things much worse).

As a fellow online commenter said, this has reached the point of complete madness. In years to come, people will look back at this crisis and just shake their heads at our response. It's more than ridiculous.

posted by Curt, on October 8, 2008 07:04 am

Wikipipedia defines The Law of Unintended Consequences as follows:

The "law of unintended consequences" (also called the "law of unforeseen consequences") states that any purposeful action will produce some unintended consequences. A classic example is a bypass — a road built to relieve traffic congestion on a congested road — that attracts new development and with it more traffic, resulting in two congested streets instead of one.

This maxim is not a scientific law; it is more in line with Murphy's law as a warning against the hubristic belief that humans can fully control the world around them. Stated in other words, each cause has more than one effect, and these effects will invariably include at least one unforeseen side effect. The unintended side effect can potentially be more significant than any of the intended effects.

The law seems to be in full operation regarding the U.S. government's recent efforts to stabilize the economy. In order to build support for the bailout, Bush, Paulson, Bernanke, and Congress all told people that the world was going to end if they didn't act immediately. We'll never know what would have happened without the bailout, though I believe that the consequences of not acting probably would have been severe.

But what it seems clear that the government's actions have done is caused an even greater general financial panic. When the bailout didn't work immediately, people panicked even more. And now, it seems that any further government action on the economy simply convinces people that their panic is justified. All this results in people pulling their money out of the stock market, and, perhaps more importantly, hunkering down and refusing to spend--maybe accelerating the move of the problems from "Wall Street" to "Main Street." At this point, you really have to wonder how much control the government retains over the whole situation. Ironically, it's numerous attempts to control the situation may have resulted in the economy being more out of control that it might otherwise be. How significant this potential unintended consequence is, in relation to the alternative, still remains to be seen.

Now, Bernanke and Paulson are smart guys. They know that their actions will have unintended consequences, and I think they weigh the potential benefits of each decision against its potential costs (e.g. growth potential v. inflation potential for a rate cut). But I wonder about the extent to which they fully considered the potential psychological impacts of their actions, and the resulting impact that mass fear mobilization could have on their ability to retain whatever level of control they had over the course of the U.S. economy.

Now no one can foresee all the consequences of their actions. It's obvious that just because your actions may result in something happening that you don't expect you shouldn't quit acting altogether. But the government response to this crisis may provide yet more evidence that it is not always better to "do something, anything now" as opposed to waiting to do something better later.

posted by Curt, on October 1, 2008 08:21 pm

Yes, the Senate passed the bailout bill today. Overwhelmingly. Both of Utah's Senators--Hatch and Bennett--voted in favor. Now it's up to the House.

But I thought I'd take a break from doom and gloom bailout analysis and ranting to have a chuckle and shake my head in disbelief at CNN's newest invention: Headline t-shirts, in your choice of many different colors.

Now you can go on CNN and off to the side of a headline (where you might ordinarily see a video icon, you may also see a t-shirt icon like this:

If you click on that t-shirt icon, you get taken to this page:

You can order your "CNN Headline T-shirt" in any color of your choice for only $15.00.

CNN apparently doesn't offer this service for every headline it displays on its site, apparently only for those they deem worthy of it. Here is a sample of offerings current as of October 1, 2008:

A conservative problem for Palin?

How financially afraid are Americans?

Football star plays drums at halftime.

Tripe, feet, offal back on grocer shelves.

Massive Facebook pillow fight erupts.

Pot-bellied dolphins put on diet.

McCain Palin decry 'gotcha' journalism.

Hollywood shows Palin fascination.

Haunted house faces $2500-a-day fine.

Pastors' politics may break IRS law.

Sax 'genius' stunned by $500,000 gift.

Skydiver proposes; rings falls out plane.

Rescuers free whale from shark net.

Ahh, America's capitalistic, innovative mentality at work. I just have a feeling this isn't going to last long folks. Either get your CNN t-shirts now or pick them up at DI in a couple months. If the badness of the idea doesn't kill this one, then the recession should. CNN t-shirts should be the first thing axed from your discretionary spending list.

posted by Curt, on September 30, 2008 06:02 am

Even though I suppose some might say it shows a lack of sophistication, I'm a big fan of the old T.V. series legal drama Perry Mason. I've seen just about every episode. In those shows there were always three things you could count on: (1) someone would die within the first 15 minutes; (2) Perry Mason's client was always innocent; and (3) the murder would inevitably be caused by an attempt to blackmail. Watching Wall Street and our illustrious political representatives (a good number of whom, for principled reasons or not, actually stood up and voted Wall Street down yesterday) I feel like I'm on the receiving end of a Mason-type blackmail attempt.

The American people, through the House of Representatives basically thumbed their noses at Wall Street yesterday. The Street's first response was disbelief. Their second response seems to say, "well, if you're not going to give us the money we want, we're going to show you just how bad things can get." I get this unsettling feeling that the banks supposedly at the heart of this crisis are trying to play chicken with the government and the people.

Don't you think that the banks have a vested interest in preventing the collapse of the financial system? If the system is in danger of collapsing because credit has dried up and banks refuse to lend to each other, then why won't they do some lending to prevent a collapse? As I ponder this question, the only conclusion I can reach is that they don't want to. They want the bad assets gone, and they want them gone at much, much more than the current market value. And they are going to bluster and threaten and refuse to lend until the government comes through with the money. I think they are convinced they have us over a barrel and they aren't going to budge until we do what they want. And I have a bad feeling that the government will come through later this week--although I was admittedly very surprised about what happened yesterday, so I'll speak in less certain terms than I have heretofore.

I'm not a conspiracy theorist, but I must admit this whole bailout has me very suspicious of motivations. Let me explain it to you as I now see it, two weeks down the line.

• Paulsen and Wall Street have known they had a really big problem on their hands for a while, probably at least since the government was forced to take over Fannie and Freddie.
• They devised the solution that basically died in the House yesterday, but were faced with the problem of how to drum up support for an ugly, expensive bailout. (And this is where the conspiracy part kicks in).
• So they let Lehman Brothers fail in order to create fear and urgency in policymakers and get support for the bailout.
• AIG was then not allowed to fail (although allowed to come close) because it would have too severely harmed the banks the plan was trying to save (but it was handled in a way that also created panic).
• When this was not quite enough, the powers that be decided that WaMu would have to fail (after hanging on for weeks), suddenly, overnight (and on a Thursday after all other banks had "failed," meaning been seized by the FDIC on a Friday evening or over the weekend) in order to create some more panic and more support for the bailout (I don't know if Wachovia was part of the same pattern or not).
• Now they are simply refusing to lend to each other, thus driving down markets throughout the world in an attempt to create sufficient fear to get the votes they need to seal the deal.

Maybe I'm completely off base, but until someone can give me a good reason why these banks can't lend right now, despite the apparent fact that their own fate and the fate of the world financial system depends on it, then I don't know what else to think.

And if we are in a giant game of "chicken" with Wall Street, it seems to me that we'd better make our stand now.

All this reminds me of a scene in Frank Capra's It's a Wonderful Life:

GEORGE BAILEY: Just remember this, Mr. Potter, that this rabble you're talking about . . . they do most of the working and paying and living and dying in this community.

Well, it is too much to have them work and pay and live and die in a couple of decent rooms and a bath?

Anyway, my father didn't think so. People were human beings to him, but to you, a warped, frustrated old man, they're cattle.

Well, in my book, he died a much richer man than you'll ever be.

. . .

I know very well what you're talking about. You're talking about something you can't get your fingers on, and it's galling you. That's what you're talking about, I know.

Well, I, I, I've said too much. I... You're, you're the Board here. You do what you want with this thing.

There's j-just one thing more though.

This town needs this measly one-horse institution if only to have some place where people can come without crawling to Potter.

Come on, Uncle Billy.

UNCLE BILLY: Oh boy, that was telling him, George, old boy. You shut his big mouth. You should have heard him.

BAILEY BUILDING & LOAN EMPLOYEE: What happened? We heard a lot of yelling.

UNCLE BILLY: Well, we're being voted out of business after twenty-five years.

Easy come, easy go.

Kind of fits in with McCain and Obama's populist rhetoric these days, though the part about providing loans for housing to indigent people is kind of ironic, given the current crisis. But I feel a little bit like Wall Street is playing the part of a modern-day Mr. Potter and trying to force this rescue right down our throats by threatening us with utter collapse if we don't go along with them.

America had a "George Bailey" moment yesterday. For George, the consequence of standing up to Potter was that he gave up his schooling to stay home and run the Bailey Building & Loan after his father's death. There will be consequences for not passing the bailout too. We'll see if we're willing to face them (though as I've always maintained the bailout will be worse than the cure).

posted by Curt, on September 28, 2008 07:12 am

With the second apparent approval of a bailout deal, I just thought I'd post this photo of our illustrious legislative representatives. Today they have achieved their greatest success: fleecing the American taxpayer for the benefit of Wall Street. Very soon, I predict, many of them will be out of office. The photo is from the New York Times.

posted by Curt, on September 25, 2008 12:44 pm

A while ago I posted the following quote from a satirical article in The Onion:

"Every American family deserves a false sense of security," said Chris Reppto, a risk analyst for Citigroup in New York. "Once we have a bubble to provide a fragile foundation, we can begin building pyramid scheme on top of pyramid scheme, and before we know it, the financial situation will return to normal."

Today, with the approval of this bailout bill, we are doing exactly that: we're trying to rebuild the credit economy on top of the collapsing credit bubble. The United States' excessive "prosperity" over the last 30 years has been nothing but a mirage; a mirage created by nearly unfettered access to easy credit. Finally, the credit largess in this country became so unsustainable that, as President Bush noted last night, the credit markets froze.

The credit markets did not freeze because, as President Bush implied, we all panicked. The credit markets are frozen because the money they loaned out isn't getting paid back. These credit markets should be frozen--or the money flowing out of them should be slowed to a trickle from a flood.

The market is trying to tell us something. And it's trying to tell us more than "the housing bubble and deregulation caused all of this mess."

This is the message that the market is trying to send to America: start living within your means now, or you will be forced to.

Our policymakers didn't listen. And you should vote every single one of them that votes for the bailout out of office at the first possible opportunity.

We have now added $700 billion more (at the very least) to the bubble that was already so big that it was too painful for us to let deflate. This money will be nominally borrowed from foreign investors who, for some strange reason, are still determined to finance US debt. But, in reality, the money will be taken, a few cents at a time, from the dollars in your wallet and savings account through inflation. The cost will be tremendous, and it will be born in a disproportionate amount by the prudent and responsible.