30 September 2008

The Wall Street bailout, or the Public's denial of Facts.

I watched part of yesterday's floor debate in the House (surprisingly inspirational) and subsequent vote (surprisingly tense, especially for CSPAN) on HR 3997 (bizarrely titled, "To amend the Internal Revenue Code of 1986 to provide earnings
assistance and tax relief to members of the uniformed services,
volunteer firefighters, and Peace Corps volunteers, and for other
purposes" — some of the maneuverings of the legislature are far too arcane to figure out).

What I've most been struck by in the aftermath, however, is the denial on the part of the voting public of the facts of the situation. I suppose there is a strong instinctive urge towards vengeance, and thus people are bizarrely satisfied with watching the Dow tumble, because to them it represents "the fat cats getting what they deserve." Back in the world of reality it represents the health of the entire economy, including the parts which pay their wages, or provide for their retirement and the education of their children. Unfortunately, Congress (facing down the barrel of a tight election) has been held hostage by this short-sighted reaction among the populace.

Who's to blame for the failure to communicate that this rescue package is to rescue the whole economy and not just stockbrokers? Well, I think there are a number of culprits. Certainly that aforementioned desire on the part of the public to punish Wall Street for its excesses played a role. Note that nobody complained when selling a house for far above its actual value, or making money hand over fist in his 401K on the back of this bull market. That's just Capitalism in action, baby! Congressional leaders did a decidedly poor job of communicating the situation to the public (and it was on them to do it, since the President is basically on extended holiday now). Even though some of the floor debate was great, not that many people actually bother to watch it. Which brings me to my final point: the media loves a story so much that they spun the whole deal as a "Wall Street bailout", which might've doomed it from the beginning.

David Brooks, whom I often find smarmy and obnoxious, lays it out well.

Also, Paul Krugman, whom I find myself liking more as I become more and more liberal, dispels one popular notion that all these billions are coming from Red China.

Finally, Nate from the ever-awesome fivethirtyeight.com has a few interesting thoughts.

26 September 2008

An open letter to Change Congress

I support the Change Congress movement, which seeks to sever the connections between Congress and the wealthy lobbyists who fund their campaigns. I was disappointed to receive an email from them today titled "How bad can it get?" In this message, CC lays the blame for the ongoing financial crisis squarely at the feet of Congress, which is itself a dubious claim. They then go on to lambaste Congress for giving $700 billion to "Wall St millionaires" as an example of the utmost folly.

I'm incredibly disappointed that this usually quite sensible organization has got this issue so dead wrong, so I'm posting this letter which I sent to them in response:

Dear Change Congress,

I'd like to write to express my disappointment with the email which you've sent to supporters like myself. I associate the Change Congress movement not only with the goal of severing the connection between monied interests and Congress, but also with a desire for political discourse based on facts instead of scandal.

Your appeal is very misleading about the nature of of the proposed Wall St bailout. You say, "They can never find the money we need for health care or education, but somehow they can write Wall Street a $700 billion blank check." This is a gross misrepresentation. Congress isn't giving $700 billion away, they're using it to buy securities, which can some day be resold. Now it may be true that the eventual sale price will incur a net loss, but it might just be the case that the venture makes a profit. In 1992, Sweden spent 4% of GDP in a similar bank buy-out, but it ended up costing betwen 0-2% of GDP after the assets were re-sold. Surely you should know better than to blatantly misrepresent the truth of this bailout.

Furthermore, you say, "I would happily pay an extra $2,000 for health care for poor children. But $2,000 for Wall Street millionaires? What is wrong with our system?" Notwithstanding the point above that this money isn't being given away, the bailouts are not going to be pocketed wholesale by investment bankers. The purpose of the bailout is to inject liquidity into the lending markets which will, it is
true, help out the ailing banks, but also help those millions of Americans you mention get mortgages, car loans and jobs generated by companies borrowing to expand their operations.

I support Change Congress to get away from this hyperbolic fear-mongering, so I'm especially shocked and disappointed to see it coming directly from you!

Jeffrey Barrett

11 September 2008

We pledge ignorance...

The latest (and possibly best?) example (hat tip to Boston 1775, via MRhe) of why Sarah Palin is a bad, bad choice for Vice President:

[H]ere’s vice presidential candidate Sarah Palin’s invocation of the
founders in a response to a questionnaire from the hard-right Eagle
Forum Alaska during her run for governor in 2006. (After this exchange
received national attention, the webpage was deleted, but it survives
on an archive site.)

11. Are you offended by the phrase “Under God” in the Pledge of Allegiance? Why or why not?

Not on your life. If it was good enough for the founding fathers, its
good enough for me and I’ll fight in defense of our Pledge of

The phrase “under God” was added to the pledge in 1954. Francis Bellamy wrote the rest of the pledge in 1892. The founding fathers never heard it.

The relationship between modern US government and its origins in the Constitution is one of the greatest strengths of American governance. Not everyone has to appreciate that, or study early US history, but I think it's a reasonable requirement for a job actually named in said document.

05 September 2008

Electoral experience

I've been ticked off lately by how Republicans have several times referred to Sarah Palin as "Governor of the largest state in the union" as if it's an amazing administrative feat. Alaska is a huge, but almost completely empty wilderness. It is first in size, but 47th in population. In winning election as Governor she received 115,000 votes. Barack Obama's Senate victory, by comparison, required 3.6 million votes.

And if you want to really hammer the nail in the coffin, consider Palin's landslide re-elction margin as Mayor of Wasilla: 826 votes to 255.