Monday, September 15, 2008

Daily Political Roundup: Credit Crunch Pandering and Democratic Dumbassery

A quick roundup of some interesting posts:

Megan McArdle of The Atlantic
tears Obama a new one for pandering to the populists by criticizing the Bush administration for the credit crunch:

What, specifically, should the Bush administration have done, Senator? Don't tell me they should have beefed up SEC enforcement, since this is not a criminal problem (aside from minor lies by Bear execs after the damage was already done). Perhaps he should not have reappointed Greenspan, or appointed Ben Bernanke? Both moves were widely hailed at the time. Moreover, to believe that a Democrat could have done better is to assert that a Democratic president would have found a Fed chair who would pay less attention to unemployment, or a bank regulator who would have tried harder to prevent low-income people from buying homes. Where is this noble creature? And why didn't Barack Obama push for him at the time?

Indeed, I ask the Senator to name one significant thing that Bush has done to create this crisis that couldn't also be laid at the feet of St. William of Little Rock. If Democratic policy is so good at protecting the little guy from asset price bubbles, how come the stock market crashed in 2000?

This kind of foolish grandstanding is not the change we need. It's just more of the same.

It drives me nuts when so-called liberals are quick to blame capitalism and free markets whenever something goes wrong. Guess what--maybe the folks who were taking out "ninja" loans should have showed some restraint. It's called judgment, people.

Matthew Yglesias also jumps on the panderwagon by blasting the Fed for intervening in the markets:

If you happen to have some financial problem in your life, the Federal Reserve doesn’t care. At all. No matter how bad the problem is. Your personal desires and interests will have absolutely no bearing on the Fed’s thinking about interest rates or anything else. If you’re an extremely rich executive at a financial services firm, however, things look different. Even in circumstances where a taxpayer funded bailout isn’t undertaken — as with Lehman Brothers — the Fed still steps in in a variety of ways to ease the pain. Lehman will be given some time to unwind its assets in a patient way so as to try to minimize the extent to which it needs to sell at firesale prices in a way that undermines the portfolios of other firms. Needless to say, if bad economic times strike your town a very similar type of problem could emerge — it’s hard to sell your house for anything if half your neighbors are also selling — but Ben Bernanke’s not going to step in and save you.

I was going to despair that a seemingly intelligent young fellow actually believes this tripe, but the quality of the comments pointing out Matt's mistakes restored my faith in humanity. I particularly like this one:

Matt has a little bit of a valid point here, but the way he expresses it is likely to tarnish the image of progressives among economically sophisticated centrists.

The reasons to minimize the financial consequences of cataclysmic events like the Lehman failure have nothing to do with the rich people who benefit directly from that safety net. When the financial system collapses, it hurts everybody, and it tends to hurt poorer people more, because they have the least resources to cushion the blow. If the Fed had provided a “safety net…for [m]illionaires” (since there were no billionaires yet) in the early 1930s, it would have made things a lot better for poor people in the subsequent years.

It’s also true that a stronger safety net for the poor and middle class has some benefits for the economy generally. That’s where Matt has a valid point. A wise set of policies should include protection for the non-rich.

But I would say there is somewhat less urgency about that. A safety net for ordinary people would help, but the economy can get by without it — “get by” in the sense of avoiding a disaster like the 1930s. If the financial system collapses, on the other hand, the safety net for ordinary people will cushion the severity of the resulting disaster, but it probably won’t be enough to prevent it. Much of the New Deal was an attempt at a safety net for ordinary people, but the New Deal had only limited success in bringing about a recovery. By most accounts the Great Depression was still going on during the late 1930s.

Finally, Clive Crook, who is fast becoming one of my favorite bloggers, rips into the Democrats for once again trying to snatch defeat from the jaws of victory. Crook, who is an Obama supporter, just brutalizes the Democrats (who deserve the rough treatment):

For Mr McCain to win the election against the odds that faced him pre-Palin - with the economy in the tank and the incumbent Republican president setting records for unpopularity - would be sensational enough. For this to happen because of his vice-presidential pick, a decision that is usually of next to no consequence, beggars belief. The Democrats had to bring all their resources to getting themselves into this fix. They proved equal to the task.

As I argued last week, Mr Obama's own initial reaction to the Palin nomination was exactly right. All the party had to do was follow his lead. Mr Obama, in effect, would give her enough rope; her inadequacies would reveal themselves in due course; it cost nothing, in the meantime, to be courteous, and to keep pressing on the issues, where the Democrats still enjoy an advantage with most voters. Ms Palin's first television interview last week, an adequate but far from stellar performance, affirmed the wisdom of that course.

But the Democratic talking-heads had to exult in their disdain for Ms Palin and all she represents - namely, a good part of the electorate whose support Mr Obama needs. In the space of a few days, they irreversibly damaged Mr Obama's candidacy and transformed this election.

As a capitalist, I instinctively distrust the Democrats. One some level, their constant blundering should be reassuring to me, given the socialist tendencies of their left wing. But the practitioner in me simply can't abide the incredible incompetence and inability for them to play the game with a modicum of skill and common sense.


Independent said...

Hold it Chris:

Re: Pandering to the Populists

Are you implying that Obama spun the facts on the credit crunch? Maybe but then by definition, you must agree that McCain has been flat out LYING in his ad campaigns.

According to Rove: “McCain has gone, in some of his ads, similarly gone one step too far in sort of attributing to Obama things that are, you know, beyond the 100% truth test.” This prompted a response from Democratic National Committee spokesman Damien LaVera: "When Karl Rove says your campaign is dishonest, maybe its time to reevaluate."

Re: Palin

In a paparazzi culture where Brangelina’s garbage gets sifted through, why is it so confusing that we’d want to know more about Gov Palin? US citizens have a right to know who we are choosing to lead our country. The press has a job to do. This woman is too AFRAID to even give an interview and we’re talking about her as our potential commander in Chief? This is an absurd dangerous attempt at hopeless politics.

-And Todd Palin? – the Coors drinking Mans Man who catches salmon for a living and ride’s a “snow machine” LOL Is this really happening???

Republicans it would seem don’t know how to think for themselves, just tow the party line. I guess if we all pray really really hard to the lord, this to shall pass.

Re: Economy.

I can appreciate that you’re a capitalist who believes in accountability. Who in your opinion should be responsible for our shattered economy? If you were on the board for directors for the US, your recommendation would be to repeat 8 years of poor economic decisions? What are the Republicans really offering when they say change?

The Republican Party is not the fiscally responsible party of the Regan Years. They’ve morphed and have used 9/11 as credit card. McCain’s policies he supports have created an historic economic crisis. Don’t be surprised if the US Govt defaults on debt. Below is a link that’s really scary. Again, who in your opinion should be accountable?

Re: Taxes

I’m no economist so if I get beat up here, I’ll understand.

“Under Obama, the wealthiest 1 percent of taxpayers, those making roughly $600,000 or more, would see their taxes go up on average by $93,709 in 2009, according to an analysis done by the Tax Policy Center, because Obama would begin implementing his tax changes even before the scheduled expiration of the Bush cuts. Under McCain, those same taxpayers would see an average reduction of $48,860, reflecting in part additional cuts he is proposing.”

Apparently the Republican “socialist tendencies” defend Americans making over 600k a year. I watched Charlie rose last night and Lawrence Summers was the guest. His belief was that tax incentives to the middle class made sense. He’s no dumbbell. Again, I’m not an economist but just believe that we need drastic real change.


p.s Playing the game with skill doesn’t mean a hill of beans when your history is plagued with turnovers and poor statistics.

Independent said...

As I mentioned, the Republican Party has morphed away from the days of fiscal conservatism and have an identity crisis. What does it mean to even be Republican when the blasted Democrats can/might/will handle the economy better? The lines are blurred.

Dan Kennedy Wrote:

What Obama should do is stress his centrist credentials, his competence and his judgment. On Meet the Press on Sunday, Rudy Giuliani leveled the ludicrous accusation that Obama's tax policies are "socialist", which prompted host Tom Brokaw to point out that Obama's supporters include superstar investor Warren Buffett, the very symbol of American capitalism. Obama needs to show us more of Buffett, as well as the Clintons and the moderate team of business-savvy Democrats who managed the economy so skillfully during the 1990s.

"This country can't afford another four years of this failed philosophy," Obama said on Monday. Later, he added: "I certainly don't fault senator McCain for these problems, but I do fault the economic philosophy he subscribes to."


Anonymous said...

OK. Lets just Ronald Reagan ( the republicans buried him as a hero. ) Are we better off now than 8 years ago?

End of Clinton administration END of BUSH

Unemp. 4.2% vs. 6%+

gas 1.50/gal. vs. $4.00

war? Peace vs. IRAQ mess

Fannie Mae,
Freddie Mac,
Bear Stearns,
Merril Lynch,

All still there, vs. All gone or
No bailouts vs. bailed out

fed. DEBT SURPLUS vs. $9 Trillion upside

Bill of Rights
Miranda Rights
relatively in tact vs. evicerated

torture of different skinned/
different religion than NEOCONS?

NONE vs. Abu Graib
secret torture
dungeons all
over the world

8 1/2 billion no bid contracts
to VP's former Co./buddies?

0 vs. Haliburton,
these " Patriots,"
now based in Dubai

Shootings commited by VP
in the face of a lawyer
with no report to anyone for
24 hours?

0 vs. Only 1 DiCK

TREASONOUS outing of
0 vs. At least 1

War started based on lies
and fraud?

0 vs. at least 1

Friends around the world?

MANY vs. few left

And on and on. CHRiS! You and your conservative/Republican/NEOCON friends are smart,
right? Smart enough to know they were wrong 2 elections in a row? Smart enough to figure out that Fla. 2000 ( Bushes Brother and what's her name Republican ) and OHiO ,2004 ( Diebold CEO and his voting machines) probably rigged the elections?
TiME 4 A REGiME CHANGE! Mc"Alin" is a quant lil ticket, the Maverick OLD tempremental war hero senator and the " Hillary Lite," VP strategic move, but come on....just admit this is a SNAFU/FUBAR/ClusterF*CK and it's time to try something different! OBAMA won't solve everything, but he'll certainly do better than LiL KiNG GEORGE, or the old, drunken, post tramautic stressed, internet and economically illiterate and Phil Gramm advised McINSANE.....


Chris said...

I'm definitely not defending the Bush Administration; I've made it amply clear that I consider many of its actions incompetent in the extreme. But in the case of financial regulation, it is clearly not deserving of all, or even a majority of the blame.

I think the Republican party, given the advantages of incumbency, has demonstrated that it probably doesn't deserve another chance to run the country, as presently constituted. Of course, many within the Republican party feel exactly the same way!

Anonymous said...

Well said Chris. But will enough Republicans in the swing states end their denial? So far the polls haven't hown that..But maybe this lil, " correction," in the markets of 800 points in the Dow the last two days will awake the dead! AIG got another taxpayer bailout today of $85 Billion, WAMU and who knows is next. The Federal reserve is on its' way of bankrupting themselves with all these bailouts. ( I know, our geniuses in power will keep printing our plummeting/devalued money in the basement!)The bottom line Chris is that the Republicans have mortgaged your and my kids lives away and it is quite possible they will never have the opportunity or standard of living we have had.

the independent patriot....