Saturday, June 07, 2008


Optimist of the Day: George Bush

We're beginning to see the signs that the stimulus may be working. —George Bush speaking at the swearing-in ceremony for the Secretary of Housing and Urban Development Steve Preston

The stimulus to which Bush referred of course is the checks in the mail to taxpayers from the Treasury Department, which should help consumers make one last credit card payment. It's the economic equivalent of Bush's surge in Iraq and sure to be as successful.

As Bush was sharing his optimism with the nation, investors were seeing other signs. Here are some lede paragraphs from the major business journals that were being prepared as Bush spoke.

Jeremy Lerner reported for the Financial Times—

Wall street stocks fell the most since February on Friday after oil prices spiked and the unemployment rate jumped by the most in 22 years in May, reviving fears that the economy is heading for a recession."

The jobs data, rocketing oil prices and more bad news from financials dragged all 10 leading industry groups on the S&P 500 into the red.

Neil King, Jr. weighed in for the Wall Street Journal—

Crude oil notched its largest price jump ever on Friday, leaping nearly $11 to more than $138 a barrel, on news of a weakening dollar and continued jitters over the reliability of world supplies.

The surge, coming just as many analysts thought oil prices were set to fall, sent stocks plunging amid fears that the U.S. economy could be in for a combined bout of inflation and slow growth. The skyrocketing price of oil, now up more than 44% so far this year, is battering the airline and auto industries and causing consumers to cut back on driving and nonessential spending.

And Peter Goodman summed it up for the NY Times Business section

The unemployment rate surged to 5.5 percent in May from 5 percent — the sharpest monthly spike in 22 years — as the economy lost 49,000 jobs, registering a fifth consecutive month of decline, the Labor Department reported Friday.

The weak jobs report, coupled with a staggering rise in the price of oil — up a record $10.75 a barrel to more than $138 — unleashed a feverish sell-off on Wall Street, sending the Dow Jones industrial average down nearly 400 points. The dollar plunged against several major currencies.

Investors’ recent hopes that the United States might yet skirt a recession sank swiftly in the face of gloomy indications that the economy is gripped by a slowdown and pressured by record fuel prices.

I am continually astonished by how well the stock market has held up. Do investors not read? Or is it the case, as Grandma Fuse used to say, that they have more dollars than sense?


Thursday, June 05, 2008


Global Effect of the Day: The new world order

... notions of advanced economies being decoupled from global trends were misguided. Instead the new world order for developed countries was that they were no longer completely masters of their own destinies, but must accept the power of rapidly growing emerging economies to affect their rates of potential expansion and inflation, though [sic, "through"] demand for their exports and competition for consumption of commodities. —Jørgen Elmeskov, acting chief economist of the OECD, as quoted by Chris Giles in "Advanced economies ‘survive perfect storm’"

The venerable OECD, the Organisation for Economic Co-operation and Development, consists of 30 countries that "accept the principles of representative democracy and free market economy." Since the two concepts are by-and-large incompatible, you can probably guess which of the two principles prevails in practice.

The OECD is in reality the economic equivalent of NATO, allowing capitalists from first-world countries and multinational corporations to band together for the mutual defense of their acquisitiveness at the expense of national autonomy and the well-being of the local populations. Although each of the participating countries sends a representative holding ambassadorial rank, few Americans know anything about it.1

What captured my attention in the quote above was Elmeskov's infelicitous choice of words: "the new world order2 for developed countries." It isn't that he isn't speaking the truth. I'm just surprised he said it.

Maybe I should be more forgiving. Elmeskov is merely an economist and is probably not well attuned to the political ramifications of loose lips. And in all fairness he said it to a journalist from the Financial Times, which only insiders are supposed to read. But really! The whole point of conspiracy is to keep it a secret. I hope he doesn't lose his job or suffer an accident.

On the other hand, when conspiracy plotters have achieved their aims, the moment eventually arrives to announce the coup. Perhaps Elmeskov is the designated spokesman.

Related posts
The best place in the world to do business (11/08/04)
The death of the Left (11/27/04)



1To get some feeling for the OECD in action I very much recommend reading the story of the "Multilateral Agreement on Investment" (MAI), which was supposedly withdrawn after concerted opposition. But like the European Union's failed Constitution, which was defeated by popular vote in France and the Netherlands, the aims of the MAI have been implemented through bilateral and multilateral treaties such as NAFTA. [back]

2For years I have had to admire the work of capitalists, who managed to stir up fear in a significant minority of the American people that Communists and the U.N. were attempting to create "one world government." Meanwhile, out of the light, they were busily at work doing just that.

The issue for them, of course, was never that of the nation-state vs. world government. It was, rather, the kind of world government that would suit their purposes—a world government that would allow them to act across borders with unimpeded freedom. [back]


The Great Brown Hope of the Day: Barack Obama

This is close to a miracle. I was certain that some things will not happen in my lifetime. A black president of the U.S. will mean that there will be more American tolerance for people around the world who are different. —Sunila Patel, "a widow encountered on the streets of New Delhi," as quoted by Kevin Sullivan in "Overseas, Excitement Over Obama"

The Democractic primaries would surely have ended months ago if the international community had had a say. Barack was the clear favorite of pallid Europe as well as almost anyone wearing a shade of brown—

Obama ... has strong support in Europe, the heartland of anti-Bush sentiment. "Germany is Obama country," said Karsten Voight, the German government's coordinator for German-North American cooperation. "He seems to strike a chord with average Germans," who see him as a transformational figure like John F. Kennedy or Martin Luther King Jr.

"He's African, he's an immigrant family; he has a different style. It's just the way he looks -- he seems kind," said Nagy Kayed, 30, a student at the American University in Cairo.

For many, Obama's skin color is deeply symbolic. As the son of an African and a white woman from Kansas, Obama has the brownish "everyman" skin color shared by hundreds of millions of people. "He looks like Egyptians. You can walk in the streets and find people who really look like him," said Manar el-Shorbagi, a specialist in U.S. political affairs at the Cairo university.

Iranians are hoping that Obama will stand by his word to talk to them—

... government officials have taken no official position on the race. But "the majority of Iranians feel that the Democrats support what they want: a major and drastic change in relations with the U.S. So for them the coming of Obama would be a good omen," said Davoud Hermidas Bavand, professor of U.S.-Iranian relations at Allameh Tabatabai University.

International Naysayers

When it comes to the general election though, Sullivan suggests that some countries are holding out for McCain.

The Chinese leadership is said to be worried—

In China, leaders are widely believed to be wary that a Democratic administration might put up barriers to Chinese exports to the United States.

I doubt that Chinese leaders need fear Obama on trade. If they have a problem it will be with the U.S. Congress.

Iraq is divided, as usual—

In Iraq, views on Obama's victory were mixed. Salah al-Obaidi, chief spokesman for Moqtada al-Sadr, the Shiite Muslim cleric who opposes the presence of U.S. troops in Iraq, said the Sadr movement favors having a Democrat in the White House on grounds that McCain would largely continue Bush's policies.

But in Samarra, a Sunni stronghold north of Baghdad, Omar Shakir, 58, a political analyst, said he hoped McCain would win the election and combat the influence of Shiite-dominated Iran.

It all comes down to which side of the Iraqi civil war Obama supports. Any American withdrawal will implicity enhance the power of the majority Shia.

Then there's the all-important Israel—

Interviews suggested that McCain is more popular than Obama in countries such as Israel, where McCain is particularly admired for his hard line against Iran.

Which raises the question of just how many "countries such as Israel" there are? Off the top of my head I can think of one. No matter. In the American press Israel counts for about fifty.

The only group with a clear-headed view of the implications of an Obama Presidency seems to be the Palestinians—

Obama's candidacy has generated suspicion among Palestinians as well. Ali Jarbawi, a political scientist at the West Bank's Bir Zeit University, said that even if Obama appears to be evenhanded in his approach to the Middle East, he would never take on the pro-Israel lobby in Washington. "The minute that Obama takes office, if he takes office, all his aides in the White House will start working on his reelection," Jarbawi said. "Do you think Obama would risk his reelection because of us?"

This view was confirmed when Obama's first act yesterday after winning the Democratic nomination was to scurry over to AIPAC, the rightwing Zionist superlobby, to assure them of his pro-Zionist credentials.

Sana Abdallah gives the Arab view of his performance—

Palestinian and Arab hopes were dashed by a speech that U.S. Democratic presidential candidate Senator Barack Obama gave to a pro-Israeli lobby, in which he promised his full support to Israel and went further by adopting Israeli policy that sees Jerusalem as the "undivided capital" of the Jewish state.

Millions of Arabs were able to watch the address to the powerful American-Israeli Public Affairs Committee (AIPAC), which was aired live on some Arab television networks, serving as a "rude awakening" that the United States, regardless of its leadership, would continue to favor Israel at the expense of Palestinian and Arab rights.

One person at the AIPAC meeting, however, who evinced less than total admiration for Obama's pro-Zionist credentials was Hillary Clinton, who spoke right after Obama. Hillary still hadn't noticed that she'd lost the nomination.

Zvika Krieger had an ear attuned to the campaign rhetoric—

Most of the instant coverage has focused on Hillary's praise for Obama's pro-Israel credentials--"I know that Senator Obama will be a good friend to Israel"--which, short of dropping out this morning and throwing her support to him, was probably the nicest thing she could do at an event like this. But I didn't find her speech all that magnanimous; maybe I'm wearing the media's Clinton-hating goggles, but her references to Israel's female prime minister Golda Meir ("my personal heroine") and quoting Meir's urgent phone call "a few minutes after midnight" (3 a.m. is after midnight, right?) seemed like subtle reminders that Hillary still very much sees herself as in the race. Her quoting of Isaiah ("All day and all night, they shall never be silent") and her application of it to AIPAC supporters ("You never give up...there are some who say you shouldn't be here...not only do you have a right to stand up for what you believe in, but you have a responsibility to do so") echoed the rhetoric she has been using lately to describe her own self-righteous struggle for the nomination. Also, her compliments to Obama were couched relative to her own positions ("I know Senator Obama shares my view...").

If Obama can win over Hillary, he may be able to conquer the world.

Related post
Some thoughts on Obama's victory (6/3/08)


Wednesday, June 04, 2008


Analogy of the Day: Goldwater is to Reagan as ...

Goldwater was to Reagan as McGovern is to Obama. From the ruins of Goldwater's landslide defeat in 1964, conservatives began the march that brought them fully to power sixteen years later. If Obama wins in November, it will have taken liberals thirty-six years. —attributed to Times Book Review editor Sam Tanenhaus by George Packer in "The Fall of Conservatism"

Packer goes on to write—

Tanenhaus pointed out how much of Obama's rhetoric about a "new politics" is reminiscent of McGovern's campaign, which was also directed against a bloated, corrupt establishment. In "The Making of the President 1972," Theodore White quotes McGovern saying, "I can present liberal values in a conservative, restrained way... . I see myself as a politician of reconciliation."

And George W. presented himself as "a uniter, not a divider." Oddly enough, that has turned out to be true. No one has united the Democratic Party quite like George Bush, and I doubt that anyone else could have. May his memory linger on.


Tuesday, June 03, 2008


Some thoughts on Obama's victory

The buzz on cable news is that today will be the day that Obama crosses the threshold of pledged delegates needed to make him the undisputed winner of the Democratic nomination. That is not an interesting matter. If not today, then tomorrow. If not tomorrow, then the day after. In any event Obama has long been the de facto nominee in the minds of everyone except the most die-hard Clinton supporters, and I can only feel relief that the primaries are finally over.

But looking back at the process in which the Democrats have somehow managed to select a black man as their candidate, I feel almost dazed. Hillary's efforts to soldier on seem to have diverted us from the wonder of it all.

Like everyone else at the beginning of the campaign I expected that Clinton would be the Democratic nominee in 2008. That is not to say that I desired it. I have been opposing Hillary's nomination in these pages since 2004—and for reasons having nothing to do with gender. If she had won the nomination it would of course have been a victory for women. But passing a milestone is not the same as getting where you want to go. And I do not believe that Clinton was by any stretch of the imagination poised to take the majority where they now hope to go.

But still we are left with the miracle of Obama's success. Yes, Obama can be a masterful orator. Yes, many people want someone as different from George Bush as our political system can produce. And yes, Hillary was wildly overconfident. But something else had to be at work behind the scenes.

Stephen Ohlemacher offers the most coherent explanation that I've found. And like most miracles, it turns out that there's a perfectly rational explanation based in old-fashioned political science, the Obama campaign's mastery of Democratic party rules and—though Ohlemacher avoids saying it explicitly—black identity politics.

For background Ohlemacher writes

What made it especially hard for Clinton to catch up was that Obama understood and took advantage of a nominating system that emerged from the 1970s and '80s, when the party struggled to find a balance between party insiders and its rank-and-file voters.

The fiasco of the 1968 convention in Chicago, where police battled anti-war protesters in the streets, led to calls for a more inclusive process.

One big change was awarding delegates proportionally, meaning you can finish second or third in a primary and still win delegates to the party's national convention. As long candidates get at least 15 percent of the vote, they are eligible for delegates.

The system enables strong second-place candidates to stay competitive and extend the race — as long as they don't run out of campaign money.

"For people who want a campaign to end quickly, proportional allocation is a bad system," Devine said. "For people who want a system that is fair and reflective of the voters, it's a much better system."

Another change was the addition of "superdelegates" to the nomination process. But here's the rule change that made all the difference—

A more subtle change was the distribution of delegates within each state. As part of the proportional system, Democrats award delegates based on statewide vote totals as well as results in individual congressional districts. The delegates, however, are not distributed evenly within a state, like they are in the Republican system.

Under Democratic rules, congressional districts with a history of strong support for Democratic candidates are rewarded with more delegates than districts that are more Republican. Some districts packed with Democratic voters can have as many as eight or nine delegates up for grabs, while more Republican districts in the same state have three or four.

The system is designed to benefit candidates who do well among loyal Democratic constituencies, and none is more loyal than black voters. Obama, who would be the first black candidate nominated by a major political party, has been winning 80 percent to 90 percent of the black vote in most primaries, according to exit polls.

The implication is rather startling: Thanks to the de facto segregation of blacks into separate residential areas and thanks to the gerrymandering of congressional districts that has corralled blacks into solid voting blocks and thanks to the loyalty of blacks to the Democratic Party, one of their own has managed to elevate himself to the apex of the Democratic Party. To put it another way, if Americans were as segregated by gender as they are by race and if women were as faithful to the Democratic Party as blacks are, Hillary would easily be the nominee.

The outcome is a bit ironic when we consider the underlying social and political conditions that led to the victory and—when we consider the prospects for the general election—a little frightening. Now that identity politics has carried the day, can it be set aside?

Obama's Vice-Presidential running mate

I believe the answer to that question may very much depend upon Obama's choice of a running mate.

I'm sure the Obama campaign is polling for the public's view on the matter, as well they should. The conventional wisdom is that the selection of a Vice Presidential nominee has little to do with Presidential election outcomes. But in Obama's "peculiar situation"—and after the public's experience of an 8-year bout of Dick Cheney—I suspect that conventional wisdom is wrong.

It seems to me that the ideal candidate would be a white hermaphrodite from a swing state, preferably Southern, who speaks fluent Spanish, loves latkes, has served as a general and opposes the war. No names leap to mind.

One thing's for sure—whoever Obama picks had better be one helluva campaigner.

Related posts
A Presidential Candidate for Tomorrow (1/2/08)
Snatches from the Pink Snapper – 4 (1/29/08)
On the electorate (1/31/08)
Truth of the Day (2/28/08)


Monday, June 02, 2008


History Lesson of the Day: Consequences of the 1944 GI Bill

The original GI bill of 1944 is a landmark piece of US welfare legislation.... Because 7.8 million men – the ruling class of the next generation – benefited from the GI bill, its drawbacks have been ignored or denied. It had no impact on the bottom of the US income pyramid. It drove female students out of universities. It was the channel through which the hierarchical, macho culture of the military spread into boardrooms and town halls. Its cultural legacy includes the three-martini lunch, Playboy and a lot of soulless public architecture. —Christopher Caldwell in a column for the Financial Times, "Military makes its sacred claim"

The writings of Christopher Caldwell, who has über-Conservative credentials as a senior editor of the Weekly Standard, can also be found in the op-ed pages of the New York Times and Slate.

Caldwell attempts here to establish an historical basis for rejecting Senator Jim Webb's "21st-century GI bill" that was just passed by the Senate in preference to John McCain's stripped-down proposal.1 (McCain wants to offer the veterans something more in line with the generosity of Bush-Cheney and the Pentagon.)

According to Caldwell, the 1944 GI Bill—

Who knew we'd live to see the day when a conservative columnist would present neo-Marxist arguments against educational benefits for veterans? I felt as if he were trying to tempt me.

But assuming that Caldwell's conclusions are correct (which we shouldn't), there are notable differences between 1944 and now—

With these factors in mind I have to support the increase in veterans benefits. But I have a great idea for cutting their costs and for freeing up the money to pay for them: Get the military out of Iraq. Today.

6/3/08 – The LA Times has issued a correction to the material quoted in the footnote below:
GI Bill: A May 30 Op-Ed article about the GI Bill said the 1944 bill offered full benefits to any veteran who served 90 days. The bill paid for 12 months of college or vocational school if a veteran served 90 days, with additional benefits, up to 48 months of school, for each month of military service.



1The increase in veterans assistance represented by Senator Webb's bill is still a more modest plan than the original GI bill. Edward Humes, who has authored a book on the effects of that bill, writes

Before the Senate voted on Webb's GI legislation, McCain offered what he called a compromise bill, but it was rejected. Webb pointed out that there really was no compromise in McCain's proposal because it would have excluded most veterans by offering full education benefits only to those with multiple enlistments, even though 70% to 75% of enlistees leave after one tour.

Compare McCain's stingy standards with the original GI Bill: Any veteran who served 90 days during World War II, in combat or not, earned full benefits. [See correction above.] It is Webb's bill that represents the reasonable compromise between the gold standard set for the "greatest generation's" original GI benefits and what is doable in today's economy: a GI Bill that will truly pay for a college education after three years of service, without the onerous payroll deduction.

Humes also gives a helpful summary of McCain's recent votes on veterans issues—

* On Webb's GI Bill, he expressed opposition, and he was AWOL when it was time to vote on May 22.

* Last September, he voted against another Webb bill that would have mandated adequate rest for troops between combat deployments.

* On a badly needed $1.5-billion increase for veterans medical services for fiscal year 2007 -- to be funded through closing corporate tax loopholes -- he voted no. He also voted against establishing a trust fund to bolster under-budgeted veterans hospitals.

* In May 2006, he voted against a $20-billion allotment for expanding swamped veterans medical facilities.

* In April 2006, he was one of 13 Senate Republicans who voted against an amendment to provide $430 million for veterans outpatient care.

* In March 2004, he voted against and helped defeat on a party-line vote a $1.8-billion reserve for veterans medical care, also funded by closing tax loopholes.


Atom feed

Weblog Commenting and Trackback by
Blogarama - The Blog Directory

Blog Search Engine

Blog Top Sites

This page is powered by Blogger. Isn't yours?