SmartRemarks

There’s been a lot of interesting political commentary going on this past week (just check out the industrious writers on my blogroll), but I admit that I haven’t felt inspired to chime in on it. Sometimes the weight of public affairs just seems overwhelming, and it helps to step back and focus on personal matters. However, there is one political meme that keeps recurring lately, in the public discourse and thus, also, in the back of my mind. It’s ubiquitous in the establishment press and on the internet; it came up repeatedly last week in Obama’s second press conference, and again today on NPR’s Talk of the Nation. And it’s certainly prominent in Congress.

Here’s the meme:  that Obama’s budget is too ambitious, since it dramatically increases the national debt (by what the CBO projects to be $9.3 trillion over ten years, as has been widely reported). That we’re all “fiscal conservatives” who naturally agree that deficit spending is A Bad Thing, and therefore that Congress clearly needs to scale spending back from what Obama has proposed.

There’s a simple question going unasked here:  why? Nothing about this meme is as self-evident as those who echo it seem to assume. 

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Tags: conservatism, Depression, economy, FDR, federal budget, financial crisis, Galbraith, history, Obama

Treasury Secretary Tim Geithner today announced a new plan that will allegedly help stabilize the financial markets, restore institutions’ balance sheets, and thus ease the credit crunch with all its attendant ripple effects. It’s an unwieldy construct with multiple parts, but ultimately a lot of it comes down to using taxpayer money to help purchase “toxic assets.” (E.g., CDOs backed by MBSs, the stuff hedged by all those CDSs. Isn’t it fun to play with the new lingo we’ve all learned these last few months?)

The stock market seems to love the plan, seeing as how it surged several hundred points today. But does that mean it’s a good thing? 

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Tags: bailout, banking, economy, financial crisis, mark-to-market, Obama, Paul Krugman, Timothy Geithner

Wall Street. A term that designates not only a physical place, but a symbol, a way of thinking. It’s the capital of investing (embodied in the stock market), the capital of high finance (embodied in the banking system), the capital of… capital. It’s the hub of the economy, domestically and internationally.

And it’s the single biggest stumbling block in the Obama administration’s attempt to get the economy back on track.

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Tags: Alan Greenspan, banking, economy, financial crisis, nationalization, Obama, Paul Krugman, Timothy Geithner

In fact, I’d go so far as to say that Obama’s address tonight may well have been the first presidential speech I’ve ever seen that genuinely lived up to the full meaning of the word “presidential.” The first time in my life we’ve had real, effective leadership in Washington. So this is what it looks and sounds like!

It’s sincerely heartening these days, of course, just to hear a presidential speech delivered in complete, grammatical sentences, shorn of angry fearmongering and brazen paralogia. But Obama had to achieve far more than that. He had a tightrope to walk, having to avoid being too doom-n-gloomy (and thereby get accused of talking down the economy) but also avoid making unrealistically rosy promises (and thereby get accused of empty politicking). The times we are in are indeed, as he phrased it, “difficult and perilous,” yet he had to make clear that they are not insurmountably so.

He pulled it off.

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Tags: Bill Kristol, economy, education, energy, financial crisis, George Lakoff, health care, media, Obama, polling, Rachel Maddow, Republicans, State of the Union

While the right wing is busy spreading FUD about the economy and the Democrats’ fiscal stimulus (thereby openly opposing schools and teachers, bridges and railroads, alternative energy and environmental protection, Food Stamps and social services), and disseminating outright misinformation about what worked in the Great Depression… most of us are just struggling to keep up with the flood of bad news the meltdown keeps producing and hoping that the next shoe to drop, won’t drop on our own personal heads.

Record low housing starts, skyrocketing unemployment, new proposals to mitigate foreclosures, uncomfortably familiar proposals about getting bank balance sheets sorted out… I’ve tried my level best to delve into the details of all this over the last few months, but sometimes you feel like you have to be glued to the news just to keep up with what’s happening, and be a professional economist just to understand it.

As it happens, though, amidst all the media hubbub, a site has emerged out there that’s doing a sterling job of keeping track of all this and explaining it in terms that laymen can understand. Founded by a diverse trio of experts just five months ago, The Baseline Scenario has been hailed by the likes of Bill Moyers and Paul Krugman, and cited by everyone from The Wall Street Journal to The Financial Times to The Guardian.

What it offers are works of opinion (what isn’t, these days?)—but it’s carefully sourced, logically structured, soundly argued, and (importantly) easy for non-experts to follow. (While I admire Nouriel Roubini’s RGE Monitor, this site is a bit more user-friendly.) The site has an excellent page laying out “The Financial Crisis for Beginners”… and of particular note in regard to this week’s goings-on among policymakers, it has this to say:

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Tags: economy, financial crisis

Boy, doesn’t that sound just too exciting for words? (Don’t drool all over your keyboard in anticipation.)

See, here’s the thing. On the one hand, an old friend had made a comment in response to my recent post about the top news stories of last year, with a link to a piece from AlterNet calling into question just how serious the problems on Wall Street really were. And I read that with some mild interest, but didn’t really follow up on it… until he shared that same link on Facebook, kicking off what became a lengthy discussion thread.

Meanwhile, on the other hand, on New Year’s Eve an entirely different old friend and I were having a semi-intoxicated discussion about the current economy, and he put forward the proposition that much of the blame for the downward spiral (on Wall Street, at least) should be pinned on mark-t0-market accounting. It was all a bit slurred, however, and didn’t quite dovetail with what I thought I knew about the subject, and I pretty much forgot about it… until the subject popped up again when he linked to an article about it in that very same Facebook discussion.

And it was off to the races!…

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Tags: bailout, economy, FASB, financial crisis, investing, mark-to-market

A completely subjective list, of course. But what the hell… aren’t they all?

Going in to 2008, one could hardly open a magazine or flip a channel without hitting a media comparison to 1968. It was 40 years ago (a nice, round number), and it was a paradigm-shifting political year that looked familiar, with an open competition for the presidential nomination in both parties, all while a war was on overseas.

As it turned out, 2008 was a momentous year in its own right, arguably the most significant year in decades, and without question one we will all remember vividly. But it was not assassinations and riots that made its mark in the history books, unlike in 1968; it brought distinctive events all its own.

There’s not really a lot of room for debate over the two most significant news events of the year, and the annual AP survey of news editors corresponds with what almost all of us would surely conclude on our own, a point-counterpoint of encouraging and discouraging developments:

1) The presidential election of Barack Obama

I’ve already written quite a bit about this one, of course… but suffice it to say that it’s historic for the fact that he’ll be the first African-American president; it’s historic for the fact that he won with a (generally) upbeat, honorable, serious campaign; and it’s historic in that it marks a realignment back toward progressive politics after a generation of destructive radical conservatism, and after eight years of arguably the single worst president in American history. How Obama really performs in office of course remains to be seen, but what he’s accomplished so far this year stands on its own.

2) The worst economic meltdown in our lifetimes

Written more than a little about this, too, of course. It seems almost quaint now to recall that when I started this blog, back in mid-September—although we now know that we were already nine months into a recession—it was still possible to ask “how bad is the economy?” and wonder if it would still get worse. Within days, everything started to go to hell in a handbasket… in a way that seems to have created a destructive feedback loop, where every new development just exacerbates what came before. Homes foreclosing, jobs disappearing, businesses (and entire industries) collapsing, credit freezing, investments evaporating… we’ll remember this for a long time, no matter how much we might prefer to forget it.

After that, the choices grow more arguable. My assessment:

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Tags: Blagojevich, Chicago, climate, Congress, economy, Election 2008, financial crisis, FISA, history, Illinois, international, iPhone, journalism, Madoff, media, Obama, Top 10 lists

All year long, throughout an interminable political campaign season, the debate kept popping up:  “are we in a recession?” Defenders of the Bush regime insisted “no”; critics looked at the economy outside their windows and said “yes, of course”; waffling purveyors of conventional wisdom pointed to arbitrary standards about consecutive quarters of GDP shrinkage.

Well, today it was made official—at least as official as any such thing can be. I’m not quite sure when or why everyone decided to defer to the National Bureau of Economic Research as the official arbiter of these things, but certainly everyone in the conventional media treated this like it was Breaking News, and damn sure the stock market reacted as if it was. Nothing has actually changed, but the announcement matters because everyone says it matters. (Thus demonstrating yet again the very sort of manic-depressive groupthink that created this mess in the first place.)

So, we’ve been in a recession for a year now. That means it’s already one of the longest ones on the books, and there’s reportedly “no end in sight.”

Everyone who’s seriously surprised by this, please raise your hands…

New question for debate: is it a depression? And who gets to make that official declaration? Because apparently all the disappearing jobs, multiplying foreclosures, collapsing industries, frozen credit markets, evaporating retirements, and so forth just aren’t quite enough to make it that serious yet…

Tags: economy, financial crisis

The internet has long been known as a hotbed of libertarian thinking—a bunch of rugged individualists sitting in their home offices tapping away at keyboards about their right to live unbounded lives. It has seldom spilled over into modern real-world politics, however, because there’s too much internal disagreement over what libertarianism is really about, and what its proponents’ priorities ought to be.

There are occasional surges of near-relevance—Ron Paul’s dark horse run for the GOP presidential nomination last winter, for instance, which generated much greater enthusiasm from the netroots than from any other demographic—but they always fade away again. (America loves to give lip service to liberty, but starts to squirm when anyone gets serious about the implications.) Thus, the relevance of libertarianism to American politics remains, shall we say, contested.

Most recently, this dispute has been dragged into the open again by the spat between Jacob Weisberg of Slate and Megan McArdle of The Atlantic over the implications of the ongoing financial crisis for libertarianism in America.

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Tags: Ayn Rand, conservatism, financial crisis, internet, libertarianism, Noam Chomsky

As I write this, the U.S. stock market has plunged downward for seven straight days. Just two days after dropping below 10,000 for the first time in four years, the Dow dropped below 9,000 for the first time in five years. That’s a 39% slide from its historic high of 14,000, set only a year ago… and there’s no clear bottom in sight.

Meanwhile, the bailout plan passed by Congress is so far failing to have any calming effect whatsoever, as the solvency crisis spreads around the world. Paulson is now talking about immediate capital injections, as I wrote earlier that most economists had been advising all along, and commentators are grateful that Congress (quietly) slipped authorization for that into the bill.

In a nutshell, people are in a panic. Read the rest of this entry »

Tags: Chris Miller, economy, financial crisis, inflation, unemployment