Posted tagged ‘Bailout’

Bad Andrew (and George): Sullivan (and Will) Can’t Do Economics

October 24, 2008

I know, I know — a dog bites man story.

Still, this quote approvingly retailed by Sullivan from Will should win some kind of prize for the most ideologically blinkered thought (sic) of the year:

Hundreds of billions of dollars that the political class would have liked to direct for its own social and political purposes have been otherwise allocated. That allocation, by government fiat rather than by market forces, must reduce the efficiency of the nation’s stock of capital.

It’s hard to know where to begin with so much idiocy crammed into so few Augustan words.

Just two thoughts:

First:  those billions that the notional “political class” would have liked to direct to its own ends did not exist as politically available funds until the crisis occurred.

The notion that in the real world any Congress would have said, hell, just increase the deficit by 150 percent or so to buy cupcakes on the moon is nonsense.  I’d like to think that Will (or Sullivan) knows this, but I’m not in fact sure that either of them do.  Spending too long repeating half-learned shibboleths from decades before tends to reduce your ability to connect ideas with observations of the real world.

Second:  Look at that last sentence in the quote again.  A more or less minor error slips in when Will seems to conflate real and financial capital — true beginners buffoonery. For a bigger howler, consider his complaint about government vs. private sector capital allocation.  If “market forces” were so effective at allocating capital, we would, of course, not be in the position of bailing out private market players right now.


Image:  The Panic – Run on the Fourth National Bank, No. 20 Nassau Street [New York City, 1873.  Library of Congress Prints and Photographs Division Washington, D.C. 20540 USA.  Digital ID: (b&w film copy neg.) cph 3a00900 Source:  Wikimedia Commons.

More on Republicans Unclear on the Concept

September 30, 2008

Up from the comments on this post, another attempt to analyze the source of the House GOP caucus’s behavior in the current crisis.

I have to say, I had forgotten this scene, and I must now acknowledge its value in explaining our current predicament.

Not exactly yom ha’zikaron appropriate…but I will atone.

(Thanks, John).

Be Glad That Barney Frank Uses His Powers For Good, Not Evil.

September 29, 2008

Watch this.

(headline shamelessly stolen from Brad DeLong.)

Republicans Unclear on the Concept.

September 29, 2008


“You keep using that word?”

“I do not think it means what you think it means.”

Read Pelosi’s offending speech for yourself and tell me that this is too much for grown men and women to bear.

Fools and knaves.

Update: dialogue fixed thanks to commenter and occasional guest blogger (more please) Michelle Sipics.

Dog Bites Man: McCain Campaign lies again

September 28, 2008

I used to like euphamisms, like “dissemble,” “misleads,” “fabulates.”  But my thesaurus got sulky at all the work and has headed off to a bar on an unscheduled work action, so I’ll just call it like it is:

In one of the least surprising post debate reactions imaginable, Senator John McCain’s campaign continued to lie about big things and small.

The big?  Well I was struck by the candidate himself charging that in the matter of the bailout, his opponent, Senator Obama put electoral politics before the country — given this story.  (Not to mention the interesting sequence of events that followed Obama asking McCain to join him in providing a common set of principles for the solution.

This isn’t news, of course — McCain continuously, routinely lies about his own shenanigans, that of his associates, and of course, on a daily basis, that of his opponent (just think of the often debunked lie about Obama’s tax proposals repeated in Friday’s debate).

On some level, I must admit, these big lies neither surprise me nor bother me all that much.  The problem he faces, of course, is that McCain’s record itself is at odds with what every poll seems to suggest the American electorate wants.

Given where McCain actually stands, thus, his only chance is to accuse Obama of precisely the sin he has just committed — see his behavior in the bailout story referenced above for only the most recent of a long list of examples —  and hope he can confuse the voters enough about what Obama and he actually stand for to sneak out a victory. (H/t and shorter form of the link above to Andrew Sullivan.)

What really gets me, though, and what I think reveals the deep pathology at the heart of any prospective McCain administration, are the little lies, the unnecessary b.s.-is-better-than truth stuff that seems to be a constant in that campaign.

The one that caught me eye was this one, from yesterday.   Justifying McCain’s attempt to inject himself into the bailout negotiations again, this time by phone, his spokesman, Mark Salter said,

“He’s calling members on both sides, talking to people in the administration, helping out as he can.”

So whom did the Senator call?  Paulson, Bush, and Bernancke — and about a dozen Republican members of Congress.

That’s fine.  McCain is a grown man (are you sure?…ed) and he should call whoever he thinks needs to hear from him.  And whatever you think of the proposed deal on its merits, the hold-up now is coming, by all accounts, from the loon wing of the House Republican caucus, so having the Presidential candidate from that party lean on some folks might even have an effect.  The list of his calls is as uncontroversial as anything can be in an election season.

But why lie about it?  Why say you are going to call Democrats when you are not?  This is just so petty, so minor, why even bother?

Because, of course, once you get the habit of deceit it becomes hard to break.

The only remaining question, I hope a rhetorical one, is to ask whether a man and an organization he leads that displays this kind of habit should be entrusted with the Presidency.

*Institutional logrolling alert:  I note with pleasure that the article in the Boston Globe to which this link leads was written by Carolyn Johnson, one of the growing number of accomplished graduates of MIT’s Graduate Program in Science Writing.  See — there is life after a masters program.

Image: Robert Arneson, “See No Evil/Hear No Evil”, one of seven “eggheads” found around the UC Davis campus. Released under the GNU Free Documentation License. Source:  Wikimedia Commons.

Financial Disaster: The Musical

September 22, 2008

I don’t have a lot of useful stuff to say about the current financial crisis (except that no one should be surprised what happens when you combine leverage, financial engineering, a familiar mania, and a near complete failure  in the assesment of moral hazard; it’s happened before, and it will happen again.)

Lots of folks who blog, and are therefore self-appointed founts of opinion, have similar problems.  Some have turned to that which soothes the savage beast to try and account for the seemingly sudden evaporation of something on the order of five percent of our GDP in one week.

I thought I’d do the same, but I’m not subtle like the likes of Ta-Nehisi Coates.  I think Woody nailed it a long time ago:  bad guys steal your wallet; really bad guys strip you down to scorched earth.  To put it another way, I think this song expresses the reason I do not want to let the Bush Administration loose with any fountain pen.


Image:  Currier and Ives, 1875.  Source:  Wikimedia Commons.

Good Econ/Bailout Writing

September 17, 2008

John Cole has already posted this link, but I thought I’d second his recommendation of David Leonhardt’s column from yesterday on the long term perils of the finger-in-the-dike school of bailout economics.

Leonhardt is one of the handful of really good mass-media econ journalists out there now.  From where I sit, econ writing for the public is in significantly worse shape than writing about the natural sciences, my own area of concern.  (Anyone out there disagree?  Hit the comments, please.)

Which leads to a kind of bleg:  I and some of my colleagues at MIT are thinking about whether we should try to expand the scope of what we consider science writing to encompass at least some of economics now.

Partly, this is missionary zeal — it seems like a real need if journalism in general is to serve any civic function. And in part this reflects both the history of the impact of economic thinking on at least some sciences (see e.g. Darwin’s acknowledged debt to Thomas Malthus) and the penetration of versions, at least, of a number of the ideas and methods of the natural sciences into contemporary economic thinking.   (See, for example, the emergence of behavioral economics as a sub-discipline.)

But before we actually do much about this — creating an econ. strand in our grad program on science writing, for example, or setting up the kinds of boot camps that the MIT Knight Fellowships run or anything else — it would be good to know what folks out there think the besetting problems are in the attempt to communicated economics to the public.

Any thoughts?

Image:  Poster for the “War of Wealth” by Charles Turner Dazey, a play that opened February 10, 1896.  This image is available from the United States Library of Congress‘s Prints and Photographs Division under the digital ID var.0760.  Source:  Wikimedia Commons.