Tuesday, March 30, 2010
Monday, March 29, 2010
I'm going to cite what Palin said recently about a subject in which I, as a financial journalist, have a particular interest: the role of the Fed. Here's an excerpt from her January 13 interview with Glenn Beck. (Note: I'm linking to Media Matters because they've conveniently posted this transcript, not because I like those left-wing hacks.)
Me: As Beck and Palin clearly don't (or didn't) know, the Fed's profits go to the Treasury. Demanding a windfall profits tax on those profits is like saying we should tax the IRS because they have so much income. It's the kind of thing you say when you don't know what you're talking about. It's the sort of thing that makes me not want Palin anywhere near the Oval Office -- because I want policymakers to have some clue about policy. It's not because I look down on moose hunters or something. It's because she's not qualified for the job.
BECK: Did you see that the Fed made the -- you know, Exxon had their record profit a couple years ago. It was $45 billion. The Fed just had record profit, over $50 billion. Nobody's having hearings on the Fed, nobody is looking for a windfall profits tax on the Fed. Nobody seems to -- we can't even open the Fed's books.
PALIN: Yeah. Yeah.
BECK: Where do you stand on the Fed?
PALIN: That -- it's so ironic there too, especially that you bring up this private-sector company, Exxon, because in Alaska we saw what was going on with Exxon, and we did have our own hearings on what was going on with this private-sector company and how could the state of Alaska adjust some things to make sure that there was a share of the resource -- yet you're right. Nobody has even lifted a finger to go that route with the Fed. And it's a scary thing -- it's one of those things that we're thankful for, Glenn, that you're bringing this to light. And I don't know anybody else who is, certainly nobody else who has a platform or the megaphone like you do.
UPDATE: In response to Buckley's ancient quote, a government of random Boston residents and one of Harvard faculty would both be extremely sub-optimal, given the limiting and irrelevant nature of the selection mechanism. Also, Podhoretz closes by saying he'd prefer Palin over Obama as president. That's another example of extreme sub-optimality.
Sunday, March 28, 2010
Friday, March 26, 2010
I reviewed the book for the New York Post and later defended it against Matt Welch's knowledge-free criticism. I also got in touch with Frum and when he started FrumForum I went on to write a number of articles there; I hope to write more for that site in the future.
Comeback didn't influence me so much by changing my mind with its policy prescriptions. I was impressed by many of Frum's proposals and disliked a few (e.g., a "war on obesity"), but had a lot of common ground politically with Frum before I read the book. No, what was influential was the growing recognition (sparked by the book, increasing thereafter) that Frum's emphasis on rethinking policy -- or indeed thinking about it at all -- made him more and more an exception on the right; that instead, ideological orthodoxy, infotainment values and paranoid hysteria were pervasive and that these tendencies were manifest in both conservative and libertarian circles.
Frum's forced resignation has convinced me the sclerosis of the right is even worse than I thought. It's a condition that will be hard to cure, if that can be done at all.
UPDATE: Frum's post: "So What Happened?"
UPDATE 3/27: Tunku Varadarajan reiterates the amazing theory that the reason for Frum's termination was "goldbricking," i.e. he wasn't doing much work there so why pay him? I highly doubt that, given (a) the timing, coming right on the heels of Frum's controversial "Waterloo" piece and the WSJ's denunciation of him, and (b) one would think AEI would've asked him to do more work, if that was the issue, rather than firing him, especially in that (c) he was one of the best-known people they had. But if the "goldbricking" theory is true, then AEI is guilty not of ideological orthodoxy but of something even worse: stupidity. Did they not notice the timing and how Frum's termination would be perceived? As John Aloysius Farrell puts it:
If AEI was not punishing Frum for his apostasy, then its timing was at the very least awful, and the episode handled with a clumsiness that Larry, Moe, and Curly would admire.
UPDATE 3/28: Also see John R. Guardiano on "David Frum vs. the Right's Company Men."
Wednesday, March 24, 2010
Financial theory is in flux. Ideas that once were widely accepted among financial economists are in dispute. In particular, the efficient-markets hypothesis — which dominated academic thinking about finance for decades and influenced the investment industry while never fully being embraced by it — has faced growing skepticism in recent years, and all the more so in the aftermath of the market mayhem of 2008.
The efficient-markets hypothesis, or EMH, holds that the price of a financial asset swiftly and surely reflects information relevant to that asset. Most often applied to a particular type of asset, namely stocks, the EMH suggests there is no way to beat the market through stock-picking skill, at least not with any regularity. Rather, in this view, stock prices move in a “random walk,” buffeted by new information that was not available before (and which may be favorable or unfavorable, versus expectations).
UPDATE: I'm slated to be on the Gabe Wisdom Show to discuss this article on Mon., April 12 at 7 pm ET.
I don’t think of myself as having gone squishy. I think of myself as having grown sober. And my conservative critics? On them, I think the most apt verdict was delivered by Niccolo Macchiavelli, 500 years ago: “This is the tragedy of man. Circumstances change, and he does not.”Meanwhile, Tunku Varadarajan denounces Frum as a "polite-company conservative" and makes the case for heavy mouth-breathing:
Passionate "extremism" is part of any political debate, and the more of it the better.Really, Varadarajan? The more extremism the better?
UPDATE 3/25: The American Enterprise Institute has now made a powerful statement supporting Frum's critique of conservative narrowmindedness -- by firing him.
Update 3/25 #2: Matt Welch weighs in on Frum. It's a subject Welch has not been very well-informed about in the past.
Sunday, March 21, 2010
Undoubtedly much of the American public is outraged by the health care legislation passed by the House tonight, not least the ugly way in which it was rammed through against popular opposition. But I think it will take time before the American people appreciate just how destructive its impact will be.
Sure, folks know medical care will become bureaucratic and unresponsive. Just as a Canadian premier escaped to America for a necessary operation, Americans will soon enough learn the joys and hassles of medical tourism. People also realize that taxes will be heading up, up, up to keep up with the extraordinary cost of this program, which was not fully funded.
But I think folks are in for a surprise if they are expecting mere Eurosclerotic economic decline. After all, European socialist countries have experienced decades of anemic growth, social and economic stratification, yet have maintained a reasonable standard of living nonetheless.
But there is a crucial distinction between then and now. They had a dynamic growth engine (i.e., the United States) the equal (at least) of their combined economies importing their goods. Now that the U.S. is slamming the breaks on its economy, who in the world will -- or even can -- pick up the slack?
It will take time for this consequential economic shift to gain recognition. Let's hope that fully sinks in before the next elections.
Friday, March 19, 2010
1. Cosmos, by Carl Sagan. I read this around when it came out in 1980 (I was about 15) and never saw science as uninteresting again, even if some of my classes were. Enjoyed his intertwining of science and history; was less enthused by his politics.
2. Modern Times: The World from the Twenties to the Nineties, by Paul Johnson. Read this around the same time, and it furthered my conservative reaction against the 1970s. Later came to think of it as less than profound scholarship, but its sweep and drama still left an impression.
3. The Creation, by P.W. Atkins. An evocative view of cosmology, and as with Sagan, showed that science could be lyrical. Had some affinity for Atkins' atheism, but remained wary of dogma in matters of religion (or non-religion).
4. Safire's Washington, by William Safire. Safire's brand of libertarian conservatism always appealed to me. Still does, perhaps because he managed to avoid either libertarian or conservative extremes.
5. The New Left: The Anti-Industrial Revolution, by Ayn Rand. I was never really a Randian, but I was definitely fascinated by her while in college and at times thereafter. Unlike many, I didn't start with her novels, and never liked them. But the non-fiction essays in this book, particularly "Apollo and Dionysus," drew connections for me between politics and science.
6. The Rise of Theodore Roosevelt, by Edmund Morris. A rousing story about a great man en route to the presidency. I could never buy into the later right-wing disdain for T.R.
7. The Last Lion: Winston Spencer Churchill, Visions of Glory and The Last Lion: Winston Spencer Churchill, Alone 1932-1940, by William Manchester. These fostered my sense of history, fascination with greatness, and loathing for appeasement and pacifism as causes of war.
8. The History of the Decline and Fall of the Roman Empire, by Edward Gibbon. An epic story, presented in a formal yet accessible writing style that influenced, among others, Churchill (and me).
9. The Case for Mars: The Plan to Settle the Red Planet and Why We Must, by Robert Zubrin. This expanded my affinity for space exploration, helping make that the main focus of my career for a few years around the late 1990s. I never was sure we need a crash effort to get to Mars, though, and have become less enthused about that over time.
10. Alexander Hamilton, by Ron Chernow. He was incredibly smart, and right about a lot of things; and as with T.R., I have little interest in libertarian dismissals of him. This book helped inspire my turn toward writing on economic and financial history in recent years.
11. Bonus book: Science: Good, Bad, and Bogus, by Martin Gardner. Hilarious as well as thought-provoking.
Buy any of these books via the Amazon links above and I'll potentially get some share of proceeds. (As is true with Amazon links throughout this site, though proceeds have been scarce.) Note: I've generally tried to link to the versions of the books I read, not later revisions.
Wednesday, March 17, 2010
UPDATE: The book's publicity agent, in sending it to me, told me the short answer is "his brotherhood." The story is told in some detail in Ch. 19, which recounts the story of Lt. (j.g.) Nathaniel "Blackie" Adams, a key participant in Bush's rescue.
Sunday, March 14, 2010
Saturday, March 13, 2010
At Barron's, Thomas H. Kee Jr. says the stock market won't get better until 2023.
In the WSJ, Peter Berkowitz blames Climategate on litany of academic woes, including postmodern attack on objective truth; never bothers to show any connection.
Tuesday, March 9, 2010
There are three key points with regard to spending. Spending more money than you make on a reoccurring basis is irresponsible. Irresponsibly spending someone else's money is unethical; and if you're a fiduciary, a fiduciary breach. And irresponsibly spending someone else's money when they're too young to vote and not born yet is immoral.
He and Paul Volcker will be speaking about this fiscal debacle next month; I wonder if the latter feels disconcerted that his current position gives an undeserved imprimatur to an administration whose behavior is accurately described above.
Monday, March 8, 2010
It's one thing to argue the problem's been overstated, or that proposed solutions would be ineffective or too expensive (there are some good arguments there); it's another to deny the warming is anthropogenic or even real. By going there, the skeptics/denialists are demonstrating that they don't know what they're talking about and/or don't care, and I think these shortfalls will become clear enough to the public, despite the PR ineptitude of many scientists.
Sunday, March 7, 2010
Monday, March 1, 2010
Kotlikoff’s new book Jimmy Stewart Is Dead: Ending the World’s Financial Plague with Limited Purpose Banking offers an ambitious proposal to fix — or, more precisely, replace — our ailing financial system. The title refers to It’s a Wonderful Life, in which Stewart played a trustworthy small-town banker. Any resemblance the banking industry may once have had to that movie is long gone, as Kotlikoff points out, and the recent financial sector — with bankers taking on massive risks they neither disclose nor understand, then leaving taxpayers with the bill —is better described as “It’s a Horrible Mess.”