Publius' Salon
Politics, society, and the humanities
Thursday, February 12, 2009 :::
Let old banks die, use the money to start new banks
Paul Romer suggests using the TARP money to just start new banks rather than throwing good money after bad in bailing out banks that are full of toxic assets.
Tom Philpott, over at Gristmill promises to discuss other banking models. He links to Martin Wolf at the Financial Times who writes, "a sizeable proportion of [U.S.] financial institutions are insolvent: their assets are, under plausible assumptions, worth less than their liabilities."
Monday, February 09, 2009 ::: The Independent reverses its opinion of pot.
The Independent, which was an active campaigner for the shift in status from Class B to Class C for cannabis, now reverses its stance and issues an apology.
Congressional Budget Office declares Obama plan is worse than doing nothing.
The CBO reported on Wednesday that Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, by .1 to .3% GDP. CBO does report the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action, but the cost beyond the near term into the medium term would exceed the benefit.
I recall during the ill-advised steel tariff, Mickey Kaus pointing out that the cost per job saved was around a quarter million per job.
This "stimulus" is in the same ballpark. Given the most generously small package, $750 billion and the most generous jobs creation figure 4.1 million, I get $183,000 per job saved. Given that maximal job production at optimal spending is unlikey, the quarter million figure is probabaly more accurate.
With that kind of money, you could pay people not to work until the next recession. Rinse and repeat.
Thursday, January 29, 2009 ::: Obama and Congress make hiring a liability
The Lilly Ledbetter Fair Pay Act will have the effect of depressing wages and employment. Making today's HR choices a long term liability will make employers hiring shy. Or more precisely, more shy than they already are.
If the economy were strong, this would be merely misguided. But in a down economy (and unemployment is a lagging phenomenon, so will recover after the recovery is in effect) doing anything to make hiring less attractive is bad medicine.
In the past several months, during the transition, two characteristics have emerged that have caught my attention. One is the President is interested in talking to anyone from the intellectual elite, right, left, or center. A sit down dinner at George Will's house with Bill Kristol and David Brooks being just the kind of thing I am thinking of. His appointments have struck the same tone, selecting well respected experts, including Bush Administration folks, rather than selections calculated to please his base.
Throughout the campaign, and mentioned again during the Inauguration, was a declaration of a post-partisan approach: "the stale political arguments that have consumed us for so long no longer apply." The combination of an appreciation of expertise and intellectualism plus a rejection of ideology is often a signal of Positivism.
"The question we ask today is not whether our government is too big or too small, but whether it works (...)." Is this pragmatism, or Pragmatism? The philosophy of Pragmatism being an American variety of Positivism.
In government, the most common variety of Positivism is Technocracy. The fact that Obama was always very nebulous (Hope and Change) and short on actual explanations on the how can now be read as meaning there never was any agenda more specific than to put the experts in charge. Technocracy is the form of government where the experts decide policy and administrate its implementation. Technocracy, like all other forms of Positivism fancies itself scientific, and hence non-partisan.
Obama said "On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord. On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics." To him, politics is not a process in which interested groups meat, contest, dispute, and sometimes compromise. Such a notion is petty, false, and worn out. Rather disinterested experts will be the arbiters of policy and the intrusion of the pubic into the affairs of government will be regarded as ungrateful, petty interference.
Discarding the will of the people, all to common for the technocrat, for the expert opinion arrived at scientifically by the best and brightest might be worth it, if it worked. It does not. Experts possess a general expertise about abstract examples, general circumstances, but no one is an expert in their own circumstances but themselves. Great plans devised by benevolent experts are always a mess.
Do not impose experts on the people, but let the people decide themselves, through the political process and through the market.
Monday, September 29, 2008 ::: A Do-Nothing Congress Explained
This has been one of the most do-nothing congresses in quite some time. I think I now know why. Its leadership is significantly to the left of the rank and file. This is why the congress does nothing, and when its forced to do something, it calls a recess and goes on vacation as it did when drilling was such a big issue. Nothing the leadership wants to do would be acceptable to the rank and file and so either the leadership gets defeated by its own party, or the leadership caves to the rank and file.
Barney Frank and Chris Dodd craft a bailout plan with the approval of Nancy Pelosi, Harry Reid, and the OK of Obama, and 40% of democrats vote against it. The leaders don't control the party. They know it. They could dodge a vote on the drilling issue, but not on the bailout issue. Even when Reid, Pelosi, and Obama provide cover, 40% of Dems turn and go the other direction.
Looking at the Missouri delegation, its the far left that voted no, and most of the Republicans. Roy Blunt is the outlier, I suspect because he is part of the leadership that negotiated the plan.
Using the scoring method of voteview.com, here is the Missouri Delegation again, in order of their voteview score, with their bailout vote and party affiliation.
* Dist. 1 - Rep. William Lacy Clay No 49 D * Dist. 5 - Rep. Emanuel Cleaver No 113 D * Dist. 3 - Rep. Russ Carnahan Yes 133 D * Dist. 4 - Rep. Ike Skelton Yes 212 D * Dist. 8 - Rep. Jo Ann Emerson Yes 256 R * Dist. 9 - Rep. Kenny Hulshof No 286 R * Dist. 7 - Rep. Roy Blunt Yes 342 R * Dist. 6 - Rep. Sam Graves No 362 R * Dist. 2 - Rep. Todd Akin No 407 R
Sunday, September 21, 2008 :::
I just had occasion to listen to the Aug 28th 2008 edition of Extension 720. I started listening to Milt Rosenberg as a child while my parents listened to the show. Rosenberg is thoughtful, professorial, and respectful of his guests. Upon the occasion of National Review contributor, Stanley Kurtz, being on town (doing research on Obama and the Annenberg Challenge), Extension 720 booked him for the following day. They contacted the Obama campaign national headquarters just down the street and requested a representative to provide a contrasting point of view. However the Obama campaign had no interest in participation as evidenced by the fact that instead of discussing sending a person, they hung up on the show's producer and sent out an e-mail asking people to call in and complain.
Its bad enough that the campaign's responce to its critics was to slander him an attempt to silence him, rather than to send someone to confront Kurtz in a debate where Rosenberg would have insured a useful and productive exchange. But they also used their own non-participation as a primary cause for attack. They chose to send no representative, so the responsibility for the absence of a Obama defender is their own, not WGN's.
It is worth noting that on September 16th, when David Freddoso was the guest author, Extension 720 found a willing defender of Obama, Dan Johnson-Weinberger, an activist and former student of Obama's rather than get burned again by the campiagn tactic of not sending a represenative and then complaining that they were not represented.
While it is true that the Kurtz interview happened during the Democratic convention, the notion that the Obama campian was unavailable to do media during their convention is absurd. You do major events to get people talking, so of course people are available to capitalize on the media. The campaign chose not to do Extension 720. The late notice (first thing that day, 13 hours advance) is more of an issue, but not at all uncommon in the media, where responding to news is so common. The booking itself was late, so advanced notice was impossible.
