JANUARY 27, 2009
"Obama Rocks the Casbah" (also on Essay Blog)
One of the memorable moments for me of the 2008 election season was a barely noticed comment made by Sarah Palin during her debate with Biden. She was responding to Biden's election year anti-Iraq war conversion;
"Oh, yeah, it's so obvious I'm a Washington outsider. And someone just not used to the way you guys operate. Because here you voted for the war and now you oppose the war. You're one who says, as so many politicians do, I was for it before I was against it or vice- versa. Americans are craving that straight talk and just want to know, hey, if you voted for it, tell us why you voted for it and it was a war resolution. And you had supported John McCain's military strategies pretty adamantly until this race and you had opposed very adamantly Barack Obama's military strategy, including cutting off funding for the troops that attempt all through the primary.And I watched those debates, so I remember what those were all about"
Of course, Sarah Palin is such a lightweight, how can one possibly compare her to Obama? Talk about no straight talk. "Straight talk" and his interview on Arab television are mutually exclusive terms. The media has been sitting around since the election wondering just what the heck Obama believes. His interview on Al-Arabiya TV did not help clarify matters at all, except to show how feckless this man really is. Maybe Obama was being ultra clever and nuanced when he Addressed the Muslim World On Arab Television. But his comments were disturbing if not outright despicable. On the one hand, he differentiated himself from Bush, in implied agreement with his interviewer, by inferring that somehow George Bush was an avowed enemy of "all Muslims" as opposed to just terrorists; on the other hand, he almost was strutting about how "nervous" bin Laden and others seem about Obama---until, that is, the interviewer called his bluff. The interviewer wondered why they should be "more nervous" about Obama than Bush.
"Question: How concerned are you and -- because people sense that you have a different political discourse. And I think, judging by (inaudible) and Zawahiri and Osama bin Laden and all these, you know -- a chorus --
THE PRESIDENT: Yes, I noticed this. They seem nervous.
Q They seem very nervous, exactly. Now, tell me why they should be more nervous?
THE PRESIDENT: Well, I think that when you look at the rhetoric that they've been using against me before I even took office --
Q I know, I know.
THE PRESIDENT: -- what that tells me is that their ideas are bankrupt. There's no actions that they've taken that say a child in the Muslim world is getting a better education because of them, or has better health care because of them.
They are more nervous of him because they know, that he knows, they have not provided "health care" for children? He could not even step up to the challenge put before him by the interviewer to say he was going to "kill or capture" bin Laden. So why was Obama bragging that bin Laden and Zawahiri are "nervous"? He thought that is what the interviewer wanted to hear--then he realized he was getting trapped into saying something he thought the audience did not want to hear. Yeah, I am sure bin Laden is extra nervous. But unlike Palin, I am sure Obama is nuanced, and bin Laden realizes Obama has his number on education and health care. That could even make Lindsay Graham nervous.
Then, Obama goes off on the interviewer led tangent implying Bush hated Muslims and Obama loves them.
"Question: President Bush framed the war on terror conceptually in a way that was very broad, "war on terror," and used sometimes certain terminology that the many people -- Islamic fascism. You've always framed it in a different way, specifically against one group called al Qaeda and their collaborators. And is this one way of --
THE PRESIDENT: I think that you're making a very important point. And that is that the language we use matters. And what we need to understand is, is that there are extremist organizations -- whether Muslim or any other faith in the past -- that will use faith as a justification for violence. We cannot paint with a broad brush a faith as a consequence of the violence that is done in that faith's name.
And so you will I think see our administration be very clear in distinguishing between organizations like al Qaeda -- that espouse violence, espouse terror and act on it -- and people who may disagree with my administration and certain actions, or may have a particular viewpoint in terms of how their countries should develop. We can have legitimate disagreements but still be respectful. I cannot respect terrorist organizations that would kill innocent civilians and we will hunt them down.
But to the broader Muslim world what we are going to be offering is a hand of friendship"
This is absurd. Language certainly does matter. George Bush bent over backwards to distinguish between terrorists and Muslims in general. What is wrong with the term "Islamofascist" when applied to the terrorists anyway? How can Obama virtually brag about how "nervous" Osama bin Laden is now, since he himself took office. Is he? Isn't that a "cowboy" comment? If he is, is he more nervous than when Bush was president? And just to whom is that "hand of friendship" being extended that George Bush did not extend it to? To Syria, Iran, Hamas? It was Bush who was not stereotyping all Muslims, against bipartisan opposition, when he supported the Dubai Ports deal. Where did Obama stand on that one? No comment is where he stood. That sure is straight talking courageous manliness, isn't it?
Just who with and how so will Obama be different than Bush? The Middle East clearly did not like us going into Iraq. But we did and won. And now Hussein is dead and gone. Is Obama going to apologize for that? The word "Iraq" never escaped his lips. The interviewer was almost keeling over wanting to get a question in on Iraq, but Obama "had to get back to dinner with his wife". Obama freakishly pined with the interviewer for the good old days of "20 to 30 years ago" when Arab American relations were apparently in their hey day. Like the hey day of 1993 when the first WTC bombing occurred; or the hey day of 1990 when Hussein marched into Kuwait; or the sunny skies over Lockerbie in 1988 when Pan Am flight 103 was blown up in the sky; or the good old days of 1986 when 246 marines were killed in their barracks in Beirut; or the uber great old days of 1979-1981 when Iranians took our embassy hostage under the immoral Jimmy Carter. Just what the hell was Obama talking about?
(posted at 5:04 pm by Mike Rulle)
Keynes is everywhere we look these days. Were it not only so for Hayek. Robert Shiller of Yale brings up Keynes' "animals spirits" as key to our recovery Animal Spirits Depend on Trust . He is only 4 months behind me on that one. But I have moved on. When I first brought it up in late September, I was referencing the now contorted TARP bailout bill. In my critique of the bill, I allowed for the possibility that in a pure financial crisis, comparable to a run on the bank, that it could stimulate confidence that the Government was on top of the situation, thus forestalling the "run" on mortgages. My point was they did not need to pass that bill to accomplish the same result. The problem, which became obvious quickly, is that TARP was overwhelmingly opposed by voters. The second problem is that Paulson/Bernanke did everything conceivable to ensure a complete lack of confidence in their actions. So it was hard to argue something that was so opposed would stir "animal spirits". Plus "animal spirits" and "confidence" is everywhere we turn in writings. At this point, we may as well believe in Voo Doo. Animal spirits are not something the government can just turn on and off. Shiller apparently believes Obama can, however. The whole "animal spirirts" concept by Keynes is that it is spontaneous and mysterious; if anything it is a nod to his philosophical rival Friedrich Hayek. Further, as Greg Mankiw states;
"Bob thinks that confidence would rise if the government borrowed more and spent more. Other economists think that confidence would rise if the government committed itself to, say, lower taxes on capital income. The sad truth is that we economists don't know very much about what drives the animal spirits of economic participants. Until we figure it out, it is best to be suspicious of any policy whose benefits are supposed to work through the amorphous channel of "confidence."
Professor Mankiw is a very gracious and polite person, which is one reason I like and respect him. He just politely called Shiller a circular reasoner. "If only we had confidence, we would be confident". A less polite person would use a more harsh term, like "idiot".
(posted at 1:30 pm by Mike Rulle)
"The Price of Everything" (also on Essay Blog)
Debate about the "stimulus" package will be with us for some time. The reason is that it will take years for the money to actually be spent. There will also be plenty of time to see who benefited from such action. It is possible the recession could end before most of the money gets spent. This will cause its supporters to say it worked. If we are not out of the recession, this will cause its supporters to say it was needed. This is one of those topics that has little consensus, and less ability to even measure precisely. An example is this debate between 2 well known economists Brad DeLong and Kevin Murphy. Murphy believes spending causes a contraction while DeLong estimates there will be some benefit (less than 1 for 1). Robert Barro of Harvard believes that each dollar spent causes zero growth Robert J. Barro: Government Spending Is No Free Lunch. The Obama administration is using a Keynesian multiplier of $1.5 for each dollar spent---obviously the very high end of all forecasts. Others have done studies that show tax cuts create $3 of growth for each $1 of taxes cut. The hard truth is it is very difficult to demonstrate the efficacy of these programs, in part because they are specific to time and place.
What should guide policymakers now when there is little or no agreement on economic policy? This is a trick question as it really is largely a function of what one believes is fair, right or just, not analysis of what the real "multiplier" is. In a democratic system, politics determines that from a policy perspective. To me, much of the argument for and against stimulus has nothing to do with Keynesian multipliers and everything to do with what one believes the role of Government is. I am against this stimulus package because it limits freedom. I am also against it because there is obviously no agreement on what it does. "First, do no harm" should be a guiding principle. I also believe economies (mankind really) are far more complex than absurd theories of multipliers imply. We have all heard of the concept "no one can make a pencil". I recently read a book by Russell Roberts- GMU Economics Department called The Price of Everything. It is a book on microeconomics in novel form that describes the mystery of the so-called "invisible hand". It does so in a way that links "the market" to personal motivations, behavior and incentives.
Roberts personalizes economics in this book. It is definitely "Hayekian" in that it describes the magic of how markets are a mysterious mixture of self organizing order and chaos. There is no "pencil czar", yet we all can just go into any store and buy a pencil. Robert's actual description of the complexity of the real life "pencil system" is a marvel to read. I think if politicians reflected less on telling people what they need to do, and more on providing avenues for private incentives and personal freedom, we would be ahead of the game. The primary focus from a policy perspective, therefore, should be on how Government regulates and taxes its citizens. Philosophical bureaucrats like Obama and much of the left believe things are simpler than they are. As Thomas Sowell has often said, regulators look at only the first effects of things, not how any rule or regulation effects the "pencil system" as a whole. For me, there has to be compelling reasons to regulate and tax. We have far less compelling reasons than we do regulations and taxes today. Yet this has been the trend for years and it is debilitating for a society. Government intrusion is an enervating force. It is like a black hole which sucks all energy into itself. The US is not so far gone that the ebb and flow of the left and right will cause it to decline quickly. We may even reverse the trend at some point. But history shows us that civilizations eventually weaken and sometimes even die. My view is that civilizations begin the dieing process when its citizens cede increasing authority to central powers.
(posted at 9:33 am by Mike Rulle)
What the heck happened with Caroline Kennedy? That was strange. We learn from the Financial Times Kennedy ends her bid for seat in Senate that "Mr Obama was widely expected to reward Ms Kennedy for having boosted his primary campaign by encouraging Edward Kennedy to endorse him." Well, that didn't work out so well. Governor Paterson presumably did not expect such backlash both from within his own party as well as the voters. Kennedy's embarrassing public appearances put the nail in her coffin. It is hard for an outsider to know what was really going on behind the scenes, so one can just speculate. Cuomo was not chosen because his AG position would have given Speaker Sheldon Silver the power to put his own person in, something Paterson would not want. Also, Andrew Cuomo's divorce from Caroline's cousin does not exactly make them political allies. Cuomo will surely run in 2010, unless he has his own skeletons, so he wanted her out of the way. Apparently, much of the party did as well.
Representative Kirsten Gillibrand is a virtual unknown. She is a Democrat who represented a largely Republican District. Apparently she is for offshore drilling and also voted against the bailout. That is unusual for a House Democrat. She looks like a stand in, but in politics one never knows. Caroline Kennedy was effectively forced to withdraw, just as she tried to force her way in. Her opponents, which eventually included Patterson himself, were threatening all sorts of public revelations regarding taxes, "nanny problems", and her marriage. She did not have the charisma or savvy to pull it off. She has been so sheltered from reality she did not realize politics is a contact sport and actually believed being JFK's daughter was all that was required to succeed. Maybe 10 or 20 years ago that was true, but not now. The Kennedy magic has been eclipsed, as there is a new magician in town. The Kennedys are now officially "history". Joe Kennedy must be spinning in his grave.
(posted at 8:33 am by Mike Rulle)
That was close. For a while there I thought that we were going to miss out on getting Tim Geithner as Treasury Secretary Diminished Geithner Faces Mighty Tasks. Now all is safe again. Did any one watch him testify before Congress? Half if not more of a Treasury Secretary's effectiveness is the confidence he can inspire. Now we have a guy facing "mighty tasks" who cannot even own up to his own tax evasion tricks. This is what it has come to in Government. We are all "realists" now. No one heard of this guy until 2 months ago, but suddenly he is so indispensable that we must have him and him alone. Its a joke.
(posted at 8:20am by Mike Rulle)
It is peculiar that experts on the Environment should conflate smog and air pollution with global warming. In the NY Times article A Strong Signal on Global Warming several commentators discuss Obama's decision to allow California to once again set its own emission standards for automobiles. Ex-EPA head William Reilly, for example, asserts this will help set stricter "air pollution" standards by limiting carbon dioxide emissions, "the largest contributor to global warming". First of all, those who believe in man induced global warming also believe that even the most severe auto emission restrictions will hardly put a dent in their forecasts. Secondly, the evidence linking CO2 with global warming is weak to non-existent. So what is the meaning of Obama's reversal of Bush's policy? Not much, other than California for all practical purposes, once again gets to set emission standards on cars for much of the country. Their standards are hardly different than what was already passed by Congress last year. What is different is they get to impose how those standards are implemented by type of vehicle.
(posted at 8:09 am by Mike Rulle)