Read it, be bored and ignore. Or hang with me on this one because what's in and not in the AP article linked above -- as opposed to hot-button "identity" issues -- is a crucial issue in the election. If you prefer identity politics, however, fine. I'm Jewish. I'll put Moses, Jesus, Marx, Freud, Einstein and maybe even Spinoza or Maimonides up over Martin Luther King, Jr. and lay a touchdown and know I had the best of it. Let's really get down to chopping pecans. I'd put Feingold or Wyden over Obama and lay two touchdowns and -$1.50 and know I was creaming the price.
I'd rather go ahead with macroeconomics, though. There's 1970s phrase that is absent from the AP article but is the spectre-haung throughout: STAGFLATION, meaning price inflation coupled with zero economic growth. I apologize for being boring but think for a second what "stagflation" means to the average person without all the fancy book-learnin' Kelso has. It's countrywide (PUN-INTENDED) tragedy in super slo-mo. Does anyone really think that urban crime was CAUSED by unruly Blacks and that Rudy Giuliani single handedly brought law-and-order to America? Urban crime and drug addiction and misery of the 70s and 80s was the by-product of atrocious economic conditions in the form of stagflation brought on by the fiscal insanity of (not social spending) but the Vietnam War and Oil Crisis (sound familiar?) and Livestock Crisis and Gold Crisis and Petrodollar Crisis followed by a recession caused by the --er -- "tough" monetary policy of Paul Voelcker during Reagan I.
One can argue Voelcker both ways, the dove would say it was too much too soon, the hawk would say that he paved the way for the prosperity and drop in crime during the Clinton years. It's a worthwhile argument to have perhaps in the early days of the HRC administration because she, Congress and whoever is Fed Chairman may well be faced with the same decisions on both the fiscal and monetary fronts. But we'll hold off on that particular discussion until then.
Also please everyone abandon the Giuiani Myth. Please. Crime fell as preciptously in those years in Los Angeles (liberal Democratic Black mayor Tom Bradley), Denver (liberal Democratic Black mayor Wellington Webb), Seattle (liberal Democratic mayor Norm Rice) and in New York as well FOLLOWING Giuliani during Bloomberg's mellower tenure. And if anyone wants to shove that Freakonomics idiot in my face about this, please read Leavitt's book and tell me if either his scholarship or math are any good. Not to me, they aren't, anyway. Left-leaning James Surowiecki in both his New Yorker finance column and book The Wisdom Of Crowds is not only better at the scholarship and math (without the "Chicago" PhD), he's also better at demonstrating some of the left-wing applications of traditional free-market "Chicago" thought.
But I have a lesson for Obama and his civilian and MSM supporters in "non-partisan" or "bi-partisan" politics. Unlike Obama, I have quite a bit of philosphical distance between myself and George W. Bush on foreign policy. There is, in fact, one Bush appointee who I admire and feel sorry for. No, it's not Colin Powell. I loathe Colin Powell and think he's a coward. It's Fed Chairman Ben Bernanke. Unlike Alan Greenspan, who has shown himself to be neither a conservative, right-winger or even free-marketeer, but merely a Republican partisan (the "welll-knowns" in Blogovia are to be complimented for getting the facts out there), Bernanke seems truly his own man. I have no doubt that Bernanke is a "Republican" maybe even a registered one, but unlike Alan Greenspan, Bernanke is a true-to-life intellectual -- no, Greenspan is no intellectual. Getting one's cock sucked by Ayn Rand did not make one an intellectual, merely available. There surely hasn't been anything admirable in the way Greenspan has taken full credit for a terribly difficult decision Paul Voelcker had to make.
Typical of the Bush Administration; they took a page out of the Reagan playbook in the way Reagan's most admirable second, George Shultz, got the shaft. The wars abroad, the wars at home, plus the crazy pro-war, pro national security state, pro-Big Pharma Medicare give-away plus the housing bubble have put Bernanke in a terrible pickle in terms of monetary policy. There is at present and has been since Bernanke was appointed too much liquidity in the system and too much inflatitionary pressure as one may observe by looking at the futures prices of Crude and products, pulp and paper, and --yes -- Gold. There was a time when the gold market was very brisk especially during inflationary peoriods. Then as financial futures became a more-efficient way to handle inflation risk, the gold market got super-dead. Brisk again.
I have no influence whatsoever on anything. The fiscal policy of the Bush administration has been the worst in American history. But I feel terribly for Ben Bernanke. The only legit Bush appointee was placed in a situation that could only make him look bad. His choices: crush the housing market or toss liquidity into a $100/bbl, $800/oz-Au enviroment. Inflation being relatively low given a medium-term American retrospective, he gambled on the latter and lost. I can't blame him, although I would have been more cautious and either done nothing at all, or tightened reasonably sharply, figuring that America's such a mess, 200bps could only help in the long-run and if Bush didn't like it, well fuck him, he made my life's ambition into a disgrace.
More excitement to announce: Later, I'll revist Uribe/Chavez a week on and do Panamanian by-elections. Time to cross off the Kelso link and the bookmark!
Kelso's Nuts love you
4 comments:
I learned something today. Stagflation.we are in stagflation now with projected 2% growth and ridiculous inflation.
This is when hustlers get rich.
I vividly remember The East Bay (Oakland Ca) in the 70's and 80s. It was crazy.
Lovely...but off the hook.
Dave: Thank you very much for going through the whole thing and taking away the macroeconomic argument and not seizing on the verbal pyrotechnics. When you're writing about macroeconomics even to the intellectual corner of blogovia you still have to spice it up.
It will be awhile, but someday you and I will get together in person and have a couple of beers and a few laughs and settle the world. I look forward to that.
Crazy. Lovely. Off-the-Hook. To be sure. But plenty of lessons to be learned from that time with regard to economics, finance, history, social policy, "law-and-order" urgh, and fun...
Some tropes though: hustlers always make money which is not always a bad thing; "ready-rock" is poison and maybe as bad -- not quite -- as Tom Brokaw wanted us to believe. but a little perico, some baking-soda, distilled water, some good friends and good music and the shutters closed maybe not so much, but what the fuck do I know....?
One studies, works, does his or her best by his or her family and tries to squeeze a little pleasure out of life.
Cuidate, mi brother
Give your readers some credit, Kelso! I only wish you'd post more financial and economic analysis like this.
I've already made this comment on DCNY's recent econ post, but I'll repeat myself. Consumer spending may be somewhat useful as an economic indicator, although it's most definitely over hyped. Bush being such a completely incompetent and uncomprehending dumbfuck, I'm not surprised at all that he thinks tax "relief" will encourage consumer spending and thus prevent recession. In the first place, I don't think many people would use that money to go on a spending spree. They already did that so they'll have to use the money to pay off debt or to avoid foreclosure on their homes. Second, even if they did go out and spend that money on a big screen TV, so fucking what? That does nothing to counteract stagflation. Energy prices continue to rise, costs of goods and necessities continue to rise, unemployment continues to rise, and the US dollar continues to fall. All I can hope is that the falling US dollar will start to bite all of those outsourcing motherfuckers in the ass, as I read on (I think) the Economist's website the other day regarding India.
When people say that the president has no influence on the economy and just gets all the credit or all the blame, I don't know whether to laugh or hit them in the back of the head. OF COURSE the president influences the economy! Allowing US corporations to move jobs overseas, massive corporate tax cuts and corporate welfare, huge bills racked up by wars, doing nothing to stop predatory lending, and so much more. So we should all be taking a very close and well-informed look at the financial policies of the 2008 candidates. We better hope it's not Obama being inaugurated a year from now, because I can't imagine he'd come up with anything helpful.
SuziRiot: For real you like this kind of stuff? OK. I can do this until the cows come home but I doubt it suits everyone's fancy.
You have supported my point very well here. During any other president's tenure, were there to be a recession looming, consumer spending, while not the be-all-end-all , would be an important number to follow because you fucking well want more of it. In Bush's Amerikkka, who knows what you want? With stagnant growth and inflation rising, do I want more or less consumer spending? I don't know. There's no way to know. Do I want a looser or tighter monetary policy? There's no way to know.
BUSH'S FISCAL POLICIES HAVE BEEN THAT BAD.
So, Bush has come up with a tax relief plan for the middle-class and poor. I think it's a crappy idea because it's just throwing more gasoline on the fire, but let's hope it's not the total shell-game the Bush/Lieberman plan of the $400 "rebate" was. You remember. Every taxpayer was given a $400 "rebate" and later it was announced that it was merely a loan against the next year's taxes with the max interest rate the IRS can charge.
Being that Lieberman is Obama's closest confident in the Senate it's not surprising that Obama's "plan" is a $250 "rebate."
I don't agree with everything in HRC plan, but at least it confronts all the problems seriously.
Doesn't Obama's "YES WE CAN" bear a striking resemblence to Gerald Ford's "WhipInflationNow"? Stagflation then, stagflation now. The only difference is that Gerald Ford was a true liberal and Obama is a DLC man. There is no doubt in my mind that Gerald Ford's policies in theory and practice are left of every candidate's in this race except for Kucinich's.
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