Well Said

This article in the Wall Street Journal from Wednesday (29 October) is excellent. My favorite part:

The truth is that the Constitution grants Congress 17 specific (or "delegated") powers. And it commands in the Ninth and 10th Amendments that the powers not articulated and thus not delegated by the Constitution to Congress be
reserved to the states and the people.

This is why I get frustrated when I hear presidential candidates, to take one small example, talking about the need "to pay our teachers more." If the teachers in your school district are working three jobs and eating cat food, then by all means, increase your local taxes and pay them more. Godspeed.

How much teachers get paid or what or how they teach is of no concern whatever to the federal government. If you think it is, why then propose an amendment to the constitution changing Article I, Section 8 to include "...to provide education standards and funding," or some such language. Absent this, any money given by the federal government to local school districts (or to states to provide to local school districts) is an abrogation of the constitution without the niceties of the formal amendment process.

Further:

Unfortunately, these presidential attitudes about the Constitution are par for the course. Beginning with John Adams, and proceeding to Abraham Lincoln,
Woodrow Wilson and George W. Bush, Congress has enacted and the president has signed laws that criminalized political speech, suspended habeas corpus, compelled support for war, forbade freedom of contract, allowed the government to spy on Americans without a search warrant, and used taxpayer dollars to shore up failing private banks.

The courts have also been complicit. The Supreme Court decision in Wickard v. Filburn (1942) reinforced the federal arrogance that pervades current society. FDR felt that his administration had the authority to tell a farmer that he could only grow wheat on 11.1 acres of his land in 1941. Appellee Filburn, being an American, grew wheat on 23 acres harvesting an additional 239 bushels of wheat. These were to be used for consumption and production on his own farm. None of it was to affect interstate commerce, the only concern of the congress.

Well, poor Farmer Filburn lost his case and now most people wouldn't raise an eyebrow if you said to them that there may be a federal law restricting the use this or production of that. No one seems to ask, "Why" or "Under what authority?"

Why are teachers or farmers (farm subsidies) or automakers (see here) entitled to extra-constitutional care? What separates them from, say, motel operators? Why isn't it the concern of Barack Obama that a motel operator might have to work a second job? Or doesn't spend enough time with his children? Why doesn't the congress subsidize motel operators and pay them to keep their rooms unoccupied so that all motel operators can charge consumers (that is, us) more money? Why shouldn't motel operators be given huge sums of federal money to insure that they continue to produce inefficient rooms that many people don't seem to want to rent and encourage them to enter into fiscally irresponsible labor agreements with their staff?

Since we seem to disregard completely the fact that none of the above mentioned examples are of any federal concern, why not include everyone? We'll just tax rich people, like 70% of everything they make and 90% of their estates, you know, to spread everything around. To make life "fair."

The federal government was designed ambitiously and humbly. Not every possible scenario was capable of being foreseen. No one knew this more than the collection of genius that wrote the constitution. That's why there are "gaps," as it were. That's why they left it open to amendment. There was disagreement then of what the thing meant. Hamilton regarding the congress' authority to regulate interstate commerce and to coin money and regulate its value as a sound basis for the establishment of a national bank--he also saw the bank as integral to the nation's survival and growth. Madison looked at the lack of the explicit authority to establish the bank and fought Hamilton on this.

Both men looked to the constitution and were able to make strong, informed cases. The nation is the poorer that no one seems to know what the thing says anymore. It is regarded as an anachronistic afterthought. Its beauty is unappreciated.

We act now because it is the "right" thing to do; or it's "for the children," or it's "compassionate," or "when someone hurts, the government has to move," or it "will grow (sic) the economy." A pox on all of it. The majority of people are unworthy of our constitution. Sadly, we all deserve the government we have and the people we send to run it.

There is no correlation between the government and its charter. And no one cares.

Catharsis

Congratulations to the 2008 Philadelphia Phillies and to me and the rest of their fans.

Hot DAMN what a great season!

What the Next President Will Cost Greg Mankiw

An economist, professor, writer and blogger shows the potential cost of the two major party candidate's tax plans.
Read the entire post, it is well worth it.

Government

Bumper Sticker

Seen on a car at a shopping center near my home.

Getting back into my car I saw the driver was a guy.

C'est la vie.

The GEICO Version

of what's going on. Actually pretty brilliant (I've been sitting on this a while; more (more?) fully formed thoughts coming later, I'll be referencing this):


So Simple a Caveman Could Do It [Jim Manzi]

Discussion of the current financial crisis is often shrouded in a bunch of pseudo-technical jargon. People, especially intelligent and highly educated people, are often hesitant to ask basic questions. But as Socrates tells us, the beginning of wisdom is a definition of terms.


Imagine you live in a cave in hunter-gatherer society. Og is going to spend the day hunting. You have previously harvested some berries, lived frugally, and now have an extra handful of berries you can give Og to eat while he hunts all day. You and Og make a deal. When he returns from the hunt, he will give you two handfuls of meat. That’s debt. If instead of promising you a fixed amount of meat, you agreed that he would give you a fixed share — say half — of what he brings back to the cave, that’s equity.


The debt gets paid first; then Og and the equity holders split what’s left, if anything. If Og comes back with less than two handfuls of meat, and hasn’t saved any for a rainy day, then he can’t pay his debt and has defaulted. Note that as Og gets more and more confident about how well his hunting will go that day, the more berries he wants to take in the form of debt rather than equity.


Suppose that Og gives you an IOU for your debt (call this a bond) or for your equity (call this a share of stock). We could refer to the stocks and bonds as, collectively, securities. Suppose your friend in the cave has given a handful of berries to his cousin Ug in return for a promise for some of the meat that Ug brings back to the cave. You might agree to a deal in which you and your friend give each other a half-interest in each other’s securities. Why would you each agree to this? Because there’s a lot of uncertainty in how any one person’s hunt might go on any one particular day, and therefore you’re each more likely to have at least some meat to eat for dinner this way. This is called hedging, and it is one of the primary means by which financial transactions can create value. If you do hedge, you’d be wise to make sure that Og and Ug tend to hunt in different fields and for different animals, so that if one has a bad day, the other is more likely to have a good day. That is, you want to hedge with uncorrelated securities.

As time proceeds some smart people in the cave invent things to make all of this easier. Physical storage and exchange of berries and meat is replaced by money, which is really a kind of general-purpose IOU produced by trusted third-parties. Governments (a.k.a., groups of big guys who like to be charge and have spears) arise to adjudicate and enforce contracts, and eventually monopolize the creation of money. Banks are launched so that you have a safe place to store money, and can pay somebody else to do the work of deciding whether Og or Ug is a better risk for your loans of berries. A corner of the cave is set aside as a securities market for people to trade stocks and bonds under defined rules. One important type of transaction that this securities market permits is “shorting” a stock. This is, roughly speaking, a deal in which I pay you some money today in return for your promise that I can make you buy a share of Og’s stock from me 90 days from now at today’s price. Therefore, if the price of this stock is lower then than it is now, I can expect to make money and you can expect to lose money, since I should be able to go into the market and buy it at the then-current price and make you buy it from me at today’s higher price. All this financial infrastructure may seem parasitical to the “real” work of hunting animals and gathering berries, but it helps this cave become very wealthy because it serves to make sure that berries are allocated to the best hunters at the right times, and therefore increases the aggregate production of meat.


While this is happening a couple of sharp operators might sit together in a dark corner of the cave, and make a wager about whether Og will default on his bond. In plain English, we would call this a side bet. Though if you wanted to sell this idea to a fairly gullible person who holds Og’s bond, you might make it sound kind of gee-whiz by calling it a Credit Default Swap. If I hold one of Og’s bonds and I take a bet that pays out if Og defaults, then I’ve just hedged my risk.

The bookie who offers me the swap keeps some money on hand, but like all bookies what he really needs is a book of bets that cancel one another out, so that he makes money no matter who wins or loses. The bookie develops a variety of hedging approaches to do this. An illustrative approach is to have his associate quietly go over to the securities exchange and short Og’s stock. Since Og’s stock will tend to fall massively if he is believed to be likely to fail to pay his debts, the bookie will make lots of money on the short sale that he can then use to pay off the swaps. He, in effect, sits on both sides of the bet. Bookies will tend to hire lots of very smart caveman PhDs to develop sophisticated mathematical models to structure these off-setting bets in a way that makes them the most money.


Now, consider the dynamics that might occur in this cave if you had a string of very good hunting seasons.


Hunters start to borrow more and more berries and enjoy much nicer meals while hunting. The hunters shift their capital structures to increasing amounts of debt versus equity. Less adept hunters see that they can succeed, and begin to hunt instead of gathering berries. Smart bankers observe that lending is very profitable, and compete to provide more and more loans to hunters, with terms that are more and more favorable to the hunters. This enables the banks to make more money, and they can use this to offer higher interest rates to depositors. Banks who think this is too risky and don’t make bigger and bigger loans will have less profits to use to pay higher interest rates to attract deposits, and will therefore tend to shrink. Bankers also realize that the odds of every depositor showing up on one day to demand their money is almost zero, so they can hold a lower and lower proportion of deposits actually on hand, which enables them to make more loans which enables them to offer higher interest rates and attract more deposits. They see that this is risky, but like making more loans, if they don’t do this, they will not have the profits to pay competitive interest rates to prospective depositors, so very few people will deposit with them, and therefore they will lose business.


Of course, there is a great solution to all this risk the banks are taking on: They can buy swaps to hedge this risk. They and the bookies who provide these swaps call it "credit insurance" because this makes everybody feel better. The business of providing swaps is very lucrative, because the hunting is so good that they almost never have to pay off. Like the banks, the bookies begin to be forced by competition to take larger and larger risks, which require ever more sophisticated models. Large banks and other financial institutions begin offer swaps because they are so profitable, and because the detailed hedging strategies embedded in them are so hard to understand that the banks that buy them rely on the brand name of the provider to feel safe.


What happens if we then get a string of bad hunting seasons because the weather changes? The worst hunters can’t bring in any meat, and many good hunters have borrowed so much that they can’t make their debt payments. Lots of bank hedging strategies start to fail because previously uncorrelated hunting performance across different fields and animal types suddenly become correlated — the weather gets worse everywhere at once. Defaults start to rise substantially across all portfolios, but the banks aren’t worried at first, since they have "insured" the debt.


But when the providers of swaps are called upon to pay off, they realize they have a huge problem. Lots of the other people over at the securities exchange are also shorting the same equities at the same time for the same reasons, because so much debt has been insured in this way. They know that they all will have to sell. This would drive down the price of the offsetting equities too rapidly to be able to execute the short-selling strategy that they rely upon to be able to pay the bank.


An invisible crisis becomes visible when a major swaps provider projects that it won't be able to meet its contracts, and threatens to declare bankruptcy (let’s call them, oh, AIG). Suddenly all the bankers confront a horrible realization: Their credit insurance was an illusion. If more than a tiny fraction of market participants rely on it, then as soon as it is needed, it isn’t there. Banks all simultaneously foresee that if even one large provider of swaps goes bankrupt, it could create a chain reaction. Banks that were depending on that provider’s swaps will not have sufficient funds to pay depositors, and will go bankrupt. Other banks that have lent money to this bank will suddenly be short on money. Since nobody has clarity on how exposed various banks are to swaps or similar instruments — either directly, or because they have more standard loans out to banks that are exposed to them — depositors of even highly conservative banks begin to withdraw money. No bank holds enough money to make good on all depositors’ claims at once. Realizing this, depositors scramble to get their money out before their bank goes under. A series of bank runs start. Banks begin to stop making normal business operating loans to hunters in order to conserve capital and protect themselves against runs. More hunters can’t get berries to eat while hunting, so they hunt less, and defaults increase further. This leads to more defaults by providers of swaps, which in turn leads to more bank runs and more constriction of lending, and so on. In short, financial contagion ensues, leading to an enormous economic contraction.


Unfortunately, all of us in the developed world appear to be living in a cave that is teetering on the edge of such a catastrophe right now.
10/15 11:06 AM

Political Calculus

Gunman Kills 15 Potential Voters In Crucial Swing State

Frickin' brilliant

Bad

I know it's terrible to think this funny, but so be it.

Nozick v Rawls

This is disheartening.

I got my hands on a used copy of Anarchy, State & Utopia. Maybe afterwards I'll try A Theory of Justice.

Fox Sports

I'm loathe to write of bias for many reasons. Namely that it is almost never as bad as the offended party usually claims (as he is viewing the matter subjectively), it is almost impossible for any person to relay information without projecting his own prejudice in some manner, it is silly to expect him not to, and it's too easy to dismiss the forest for the few trees of bias. When the bias becomes the forest (see MSNBC or Fox News) then it becomes a problem most easily remedied by simply not watching. I've never understood people who claim to hate a news outlet and yet continue to solicit that outlet, especially the fragile waifs so easily offended by the New York Times (it is only the "paper of record" because of longevity and marketing, not for content). I complained for months about the content of the Philadelphia Inquirer; how the writing wasn't merely biased but juvenile in its incoherence and structure and, most offensive, riddled with poor grammar. There were other problems of incompetent delivery and impotent management (Supervisor: "I can't get rid of a delivery guy just because he's not delivering your paper."--read that again). The problem was easily solved by cancelling the paper and instructing the semi-literate simpleton at the customer service desk never to solicit me again (surprisingly, she didn't get that part as I still get telephone and mail solicitations at least monthly). I picked up a copy of the Inquirer after the Phillies clinched the pennant. It has gotten worse.

But I digress.

The coverage of the first game of the World Series by Joe Buck and Tim McCarver was beyond the pale. It started during the Phillies series against the Dodgers, but I assumed that the Dodgers were getting all of the favorable attention due to the fact that they're in LA and that Joe Torre is their manager. But it continued, more pronounced, last night with the Tampa Rays.

Their manager, Joe Maddon, was referred to as a "genius" no less than three times. Dubbed thus by the Nobel Committee of analysts in the Fox Sports booth for his irreplaceable, concurrent work in the fields of quantum chromodynamics; analytic number theory and mechanism design theory. All while managing a baseball team. Genius, indeed. He wears glasses.

Their right fielder, Ben Zobrist, was able to overcome the insurmountable, awe-inspiring challenge of converting to RF from short-stop. I hear a movie-of-the-week is in production. His heroism duly noted, Buck and McCarver went into fits of hysteria in the fifth inning when the center-fielder charged-in to try to catch a short pop-up and Zobrist, our hero, backed him up! He grabbed the ball off a hop after the CF missed it to prevent extra bases. Dear reader, don't you get it? He executed fundamental baseball skills that are taught to the six-year olds at the fields near my house; a feat pulled off by not-quite sober softball players nightly. He mastered a skill performed no less than a thousand times this season alone in Major League Baseball, even by the knuckle-dragging troglodytes with "Phillies" emblazoned on their chests. Yet this was impressive.

He was to be outdone, though, as far as the great McCarver was concerned, by his teammate, catcher Dioner Navarro. In the sixth inning he caught the ball. Let me set this up. The pitcher threw a ball--his job. The batter did not swing, this is good since: he was a Phillie; it was out of the strike zone; it was correctly called a ball by the umpire; I am a biased Phillies fan. Little did I appreciate what came next. McCarver declares, "What a great job by Navarro!" You see, he caught the ball. Never mind that his job description is "catcher." Never mind that "catching" is the sort of applied physics that my dog has mastered. The myopic McCarver seemed to think the ball was in the dirt. With the super-fast film that is used by the broadcasters in these games, it's a pretty bad call on his part, but perhaps forgivable since he's very old. However, they re-played the pitch, very slowly. Now we could all see, very slowly, that the ball was a good three or four inches off the dirt. I'm not saying that catching in the majors is easy and I would most likely soil myself if I were to don the gear and have to catch a professional pitch, but has the bar been set so low that we bestow "greatness" on a man for not letting a ball get by him? A man whose sole job description is not to let the ball get by him? I want McCarver to represent me at my next job review. Neither McCarver nor Buck revised the greatness tag after review.

All of this happened and more while the Phillies were mere pedestrians. Nothing anyone did was remarkable. And outside of our pitching, this was true. So I was more than a little boggled when one of the two jackasses stated matter-of-factly that the Rays bullpen was superior. It isn't, not by a damn site. I never would have believed it if you told me at the start of the season that the bullpen would help bring us to the playoffs and the World Series, compensating for some quiet bats, I would have thought you nuts. But they did.

And while the Phillies did nothing remarkable, the Rays did less. That's why we won and will take the Series in five games.

A pox on Fox for delaying the feed so it isn't synchronized with the live radio broadcast so I can't enjoy the dulcet tones of Harry Kalas while they're playing.

I do plan to record the radio broadcast for the last half-inning for posterity.

Go Phillies. One down, three to go!

Thoughts While Subject to Fox's Coverage of the World Series

Joe Buck is a biased prick and Tim McCarver is a horse's ass.

Otherwise, top flight coverage and analysis.

Also, not enough commercials. I think we can get a good five, maybe ten minutes between half innings. Stretch this puppy waaaayyy past midnight.

The Reason They Won (& Will Win)

On Thursday, 25 September I got in my car and 610 WIP-AM was on the radio. Typically I listen to the mid-day guys, but it was on from the day before and I was about to switch over to NPR when Angelo Cataldi says something or other about a "hot dog" themed day. He says that if you answer this trivia question you'll get a Ryan Howard jersey.
The question, "where did Bruce Willis & Demi Moore get engaged?"
Before I even knew what I was doing I called the station on my cell phone and got through to the producer and told him I knew the answer. You can't just call in with the answer though, they always want you to "bring something to the table." So I said I also wanted to make the case for Howard being the NL MVP this year. This was before 9:00am.
I drive to work, still on hold.
I get to my desk and get the computer up.
They haven't taken any calls, just talked to Mitch Williams and some other guest and commercials. The show ends at 10:00.
While at my computer I start googling to see if I'm right.
Nothing.
There is nothing on Bruce or Demi's wikipedia pages about where they got engaged or even anything on the place I'm thinking of's site or wikipedia entry. All of google. Nada.
But that doesn't matter since nothing has been mentioned of this trivia question in almost an hour.
At 9:57 Cataldi brings up the question and says "Adam, where did Bruce & Demi get engaged?"
"Adam," I say to myself, "who the hell is Adam?" I then realize that some guy may have called in faster than me and I'm out.
"Ghost," says Adam.
"What the hell does that have to do with hot dogs?" says Cataldi.
"I don't know," says Adam, "it sounded good to me."
Cataldi dumps Adam and says, "Sean, do you know where they got engaged?"
"Pinks hot dog stand," says I.
"Where?" says he.
"Hollywood."
"Congratulations, you just won a Ryan Howard jersey from the Sports Outlet in Glendora, NJ, hold on."
"Whoo hoo," says I.
I'm on hold for a few minutes then this guy pucks up and gets my information and tells me that someone will be in touch.
Over the next few days I tried calling, one day I talk to a guy who explains that the info has to go to his boss who then contacts the store, then they call me.
Never get a call.
I'm at a real estate closing and my GPS doohickey has me drive right past the Sports Outlet. I stop on my way back to the office. They say they don't have my name but it can take a few days. I try to be nonchalant. I look around the store which is absolutely freakin' awesome.
I tell them I have business in the are the next week and I'll try back then.
After a few more call to the promotions guy at WIP that weren't returned, I think I'm not getting the jersey.
I stop in the store the next week (I did have a closing there, I didn't go just for the sake of going) which was Thursday, 09 October, Game 1 of the NLCS. I talk to the woman I spoke with before and she remembered me and said they still didn't have my name from the station.
Then this guy comes in from the back and says he remembers me from the week before. I start to explain my predicament, especially the lack of response from the station. He says that he talked to the woman in charge of promotions at the station and that they had some things fall through the cracks. He tells me not to worry about anything.
He points to a rack of replica jerseys and says, "Take your pick, just try it on before you settle on it."
I am the proud owner of a replica Chase Utley alternate home jersey. They didn't have a Howard jersey in the alternate, which is what I was diggin'. I love WIP and the Sports Outlet in Glendora. And the PHILLIES!
The only game I didn't wear the jersey they got pounded.
I've already ordered my 2008 World Series patch and am debating on whether I should have it put on before the Series and risk adulterating the ju-ju or just wait until the parade.
Great problems to have. What election? What debate?

Coming soon: A painfully fond memory of October 1993

GO PHILLIES!

2008 National League Champions.

Man I forgot how cool this feels.

Give 'em hell, boys, and bring us home a championship!

Entrepreneurial Spirit

Great story from this morning's Marketplace.

Amity Shlaes

Author of The Forgotten Man (have I mentioned this?) on the Daily Show:

Redistribution and Envy not Fairness

Where to begin? I'll try with this, Barack Obama discussing his tax plan with a plumber:

"Your new tax plan is going to tax me more, isn't it?" the plumber asked,
complaining that he was being taxed "more and more for fulfilling the American
dream."
"It's not that I want to punish your success. I just want to make sure that everybody who is behind you, that they've got a chance for success too," Obama responded. "My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody ... I think when you spread the wealth around, it's good for everybody."

Let's follow that up with this colloquy with Charles Gibson:

GIBSON: All right. You have, however, said you would favor an increase in the
capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I
certainly would not go above what existed under Bill Clinton," which was 28
percent. It's now 15 percent. That's almost a doubling, if you went to 28
percent. But actually, Bill Clinton, in 1997, signed legislation that
dropped the capital gains tax to 20 percent.
OBAMA: Right.
GIBSON: And George Bush has taken it down to 15 percent.
OBAMA: Right.
GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was
increased to 28 percent, the revenues went down.
So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?
OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.

Aside: let's give Charles Gibson a big round of applause for understanding part of the deleterious effect of tax increases and his historic accuracy.

Then there's this description of Obama's tax plan by the Wall Street Journal. His plan will, according to him, cut taxes on 95% of "working families," (n.b.--he does not say "taxpayers"). He will raise taxes on the other 5%, no doubt in the name of fairness (above) and patriotism* (here, I know I've already posted this but something this asinine needs to be aired fully). Let's put aside the "fairness" of 95% of the populace penalizing the other 5% for being, what? good at whet they do? Or just for the sin of being rich or wealthy. They didn't earn it, so it's "fair" to take it from them, eh?

His plan moves pretty far away from the argument of whether a progressive tax system is more "fair" than a flat tax system. The majority of the "working families" that will receive the "tax cut" don't pay income tax. As the Journal piece has it:

Here's the political catch. All but the clean car credit would be "refundable,"
which is Washington-speak for the fact that you can receive these
checks even if you have no income-tax liability. In other words, they are an
income transfer --a federal check -- from taxpayers to nontaxpayers.
Once upon a time we called this "welfare," or in George McGovern's 1972 campaign
a "Demogrant." Mr. Obama's genius is to call it a tax cut.

So let's give Obama credit for diligent lexicography, but I still can't seem to find where it is the responsibility of the federal government to play the role of Robin Hood. Nor where the people ever gave the government the authority to do this stuff.

Let's say, for the sake of argument, that it is a concern of the federal government to provide some welfare services for people (it isn't, but I grant it here for giggles), it is now the explicit policy of would-be President Obama to forgo mere welfare services (or add onto them) by just giving people cash for lack of productivity.

And the fact that Obama acknowledges that the Capital Gains tax increase will decrease federal revenues when he is planning to give more federal money away to people who didn't earn it that was taken from people who did.

This is offensive on just so many different levels.

First of all, increasing taxes on the most productive members of society (and believe me, it pains me to know that Paris Hilton, Brittney Spears and Bill O'Reilly fit into this category) necessarily leads to less productivity. This is to be avoided in the best of times. It is spectacularly dense when the economy is in the shitter.

This isn't some supply-side theory, or my desire to see Bill O'Reilly have more money. It is economic fact. And it is no right of mine to pretend to know when someone else has "too much money" (or even enough money) or to imagine that taking some of your money, under the authority of the government's police power, to give to them increases the amount of "fairness" in the world one bit.

Which brings us to giving people money for not earning a lot of money. This, too, will result in less productivity. It is so self-evident I really can't see how this entire proposal is taken seriously.

If the only effect of the tax hike would mean fewer Spears' albums, no Factor and less of whatever it is Paris actually does, then I'd be all for it. But this group includes people that are really fabulously productive and smart and like to invest their money so as to earn more. Sometimes it does; sometimes it doesn't, but all that investing leads to production and growth.

The only thing that will grow under Obama's proposal is the government, and government doesn't produce anything. Except garbage like this.

One would hope that, if elected, a grown-up with a lick of sense will take charge of Obama's economic policies. But if you hope in one hand and crap in the other, guess which one fills up first?
I think that's what we're going to be getting come January.

Perhaps if this is who we continue to appoint to elected office, we shouldn't be surprised at the results. This may be the best that they can give. As with a slow child, we should be encouraged by their effort.

I don't even know why I get surprised anymore. I look forward to next month when I can put away all of the italics and bolds.

Go Phillies.

*"Towards the government I feel no scruples and would dodge paying the tax if I could. Yet I would give my life readily enough for England, if I thought it necessary. No one is patriotc about taxes."
--George Orwell, War Time Diary, 09 August 1940

Good Line

by Victor Davis Hanson at National Review:

Then Fightin' Joe Biden was on the stump, veins bulging, hands pumping,
screaming that "John McCain could not bring himself to look Barack Obama in the
eye and say the same things to him (regarding Bill Ayers). In my neighborhood, you got something to say to a guy, you look him in the eye and you say it to him." So here we are in fantasyland where Biden with hairplugs and teeth whitener evokes his supposed blue-collar fides to suggest the veteran who was tortured and held for over five years by the communists is now scared of facing down the arugula-eating Obama.

I love this notion that Biden was or is some kind of neighborhood tough.

Regarding Ayers, I think he is a despicable, disgusting, dishonorable simpleton. If Obama agrees with just about anything this asshole has said or done in his life (not just the sixties) it shows a distinct lack of judgment on Obama's part.
Yet nothing has been shown by those who've looked (especially Stanley Kurtz at National Review) that Obama's ever sought or received consel from this cretin.

Perils of Government Intervention

Here is an article discussing how FDR's policies extended the Great Depression by at least seven years. The journal article is here.
I really must start The Forgotten Man by Amity Shlaes.

Liquidity Crisis

Great piece on NPR's Morning Edition yesterday. The Marriott case study is very good at explaining the "commercial paper" facet of the situation.

Good Post

I love this post by Rich Lowry of National Review. It's an e-mail from a reader and the emphasis is added by me:

More Paulson [Rich Lowry]
E-mail:

Mr. Lowry, with all due respect, you're missing the point. The Paulson plan cannot and will not work. It is hopeless and was from the very moment of its conception. It's a Keynesian solution to an Austrian problem; all the Treasury is doing is ensuring that the crisis is exacerbated and extended in exactly the same way that Hoover and FDR did. This is the classic "pushing-on-a-string" problem that all the contrarians have been warning about for some time now. You cannot correct fundamental investment misallocations caused by cheap money by providing more liquidity. It's spraying gasoline on the fire.
This is not about "a crisis of confidence" or "animal spirits" or all the usual Keynesian blather that is spouted by the half-educated in political economy. They're only addressing the symptoms, not the disease which as they try to fight off the contraction that inevitably stems from previous inflationary expansion. It worked in 1996 when they inflated equities. It worked again in 2003 when they inflated housing.
Now, there's nothing left to inflate and the contraction will be much more painful than it would have been if they hadn't tried to fight it off the two previous times. So, it doesn't matter when the Paulson plan was put into play, since it couldn't have worked anyhow. I know Mr. Kudlow and your other mainstream Keynesian and Monetarist contacts will tell you otherwise; they are wrong, as you will see.
It's a basic matter of defying economic gravity. After the boom, the bust must come eventually. And please don't confuse the bounce coming next week with an actual recovery; because just when everyone breaths a sigh of relief and starts writing about how the worst has passed, the bear will return with a vengeance.

10/09 06:57 PM

NLDS

Why the f**k is Blanton pitching for the Phillies today?!?

UPDATE: Blanton pitched a hell of a game. GO PHILLIES! My question remains, though. In the playoff teams usually go to a three-man rotation. Cole Hamels is demonstrating himself to be a colossal pansy, albeit a great pitcher. The Phillies needed to win yesterday. If they lost it would have been Hamels v. Sabbathia in game five. Again, Hamels is a great pitcher, but so is Sabbathia. Do you think we would have tagged him again? Hamels should have demanded the ball yesterday.

1984

I was re-reading 1984 (or at lease skimming it) and I was struck by the fact that no one knew, or remembered, how things got to be in the state they were in. Winston, our hero, was born in or around 1949 yet he didn't know how Big Brother came to be.
I think one of Orwell's many lessons is that horrifying dystopias don't necessarily come about in violent revolution. Liberty taken piecemeal is still liberty taken.
A good example of this is the FISA revision that Bush promulagted and was granted by congress. Leave aside the fact that if Bush's interpretation of executive, unitary authority that gave him the power to demand of the telecommunications industry without recourse was correct, no provision in the law granting the telecom providers immunity for cooperating with the president would be required. If Bush's supporters were correct that these changes were necessary to protect national security (an unprovable claim), it doesn't change the fact that the American people are less free and the government is more powerful.

In order to keep us safe.

WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH

I should also point out here that both major political condidates at one point or another said the FISA revisions were a bad idea and both of them voted for it. And we are less free thanks to this $700 billion bailout. And every single time congress tries to help one person, the remainder are less free.

Stop trying to help. Carry out your Article I functions. Go home.

More stuff

A good overview here and a terrible idea here.
The second article's thesis is that the root of the problem is the falling of housing prices and that the current proposal will not do enough to address this.
The current proposal will fail because the federal government getting in the way of the natural allocation of resources always has negative consequences. This guy's proposal leaves out the fact that propping up housing prices to artificially high levels keeps an artifical shortage of housing supply, leading to new housing construction that isn't necessary that is built by companies on credit with the whole thing fueled by government backed financing because everybody deserves a home regardless of credit worthiness and we're right back where we started.
Markets are a good way to organize economic activity. Governments are a bad way.
And if anyone needs a reminder of how fucking stupid socialists are, please see here.

Libertarianism

From What it Means to be a Libertarian by Charles Murray:

Freedom is first of all our birthright. When all the philosophizing is put aside, what has made me a libertarian is a homely image and the answer to a simple question. The image is of an ordinary human being making an honest living and minding his own business--the kind of person who makes up the vast majority of adults around the world. The question is: What does this person owe the government other than to keep doing what he is doing?
The operative word in that question is government. Our ordinary person owes many things to many people and institutions--to family, friends, community, church, workplace. But an obligation to government is unique. When the government decides you owe it something, that obligation is encoded in law. If you break a law, a representative of the government can compel you by force, at gunpoint if need be, to do what the law demands. The right to initiate the use of physical force, usually called the police power, is what makes government different from all other human institutions.
What should government be permitted to demand of this ordinary person? Very little. Longer and more complicated answers constitute much of the rest of this book. But the short answer gets to the essence of the libertarian position. A person who is making an honest living and minding his own business isn't hurting me. He isn't forcing me to do anything. I as an individual don't have the right to force him to do anything. A hundred of his neighbors acting as a mob don't have that right. The government shouldn't have that right either, except for stringently limited conditions. An adult making an honest living and minding his own business deserves to be left alone to live his life. He deserves to be free.

all italics in original

House Democrats

nod to maddad

September Madness

Inflation

The bill that the House wisely rejected the other day read 110 pages. The bill that the Senate foolishly passed reads at 345 pages.

Show of hands from everyone who thinks that extra 235 pages contains anything other than more government spending and expansion...

Hello...

Funny Line

From Mark Steyn the other day:

If the entire global economy is so vulnerable that only the stalwart action of Barney Frank stands between it and ten years of soup kitchens, can it, in fact, be saved?

Sarah, Sarah, Sarah

I'm just gonna squint my eyes realll tight when I vote for McCain so his is the only name I can read when I pull the lever.

Sarah Palin was recently interviewed by professional hairdo Katie Couric and was asked, inter alia, about Roe v. Wade:

Couric: Why, in your view, is Roe v. Wade a bad decision?

Sarah Palin: I think it should be a states' issue not a federal government-mandated, mandating yes or no on such an important issue. I'm, in that sense, a federalist, where I believe that states should have more say in the laws of their lands and individual areas. Now, foundationally, also, though, it's no secret that I'm pro-life that I believe in a culture of life is very important for this country. Personally that's what I would like to see, um, further embraced by America.

Couric: Do you think there's an inherent right to privacy in the Constitution?

Palin: I do. Yeah, I do.

Couric: The cornerstone of Roe v. Wade.

Palin: I do. And I believe that individual states can best handle what the people within the different constituencies in the 50 states would like to see their will ushered in an issue like that.

Couric: What other Supreme Court decisions do you disagree with?

Palin: Well, let's see. There's, of course in the great history of America there have been rulings, that's never going to be absolute consensus by every American. And there are those issues, again, like Roe v. Wade, where I believe are best held on a state level and addressed there. So you know, going through the history of America, there would be others but …

Couric: Can you think of any?

Palin: Well, I could think of … any again, that could be best dealt with on a more local level. Maybe I would take issue with. But, you know, as mayor, and then as governor and even as a vice president, if I'm so privileged to serve, wouldn't be in a position of changing those things but in supporting the law of the land as it reads today.

I'll give a pass on not being able to verbalize clearly her views on inherent, un-enumerated constitutional rights and that the states are the arbiters of what "privacy" is. This a question most people would need to ponder and chew on for some time to be able to answer succinctly. The problem is that if you give these candidates essay questions you can be sure as shootin' they ain't gonna be the ones answering them.

But on the "other cases" question, her answer is not acceptable. You're a federalist, eh? You were recently a mayor and are now a governor? You're familiar, of course, with eminent domain?

HOW CAN YOU NOT NAME KELO?!?

She was campaigning for governor when the decision was handed down. This (absolutely horrible) decision affects every town, burg, township, city, borough, hamlet and state in the frickin' Union! It speaks directly to liberty and property rights and judicial activism and caused not a little uproar when it was handed down. John Street knew about it for Christ's sake!

OK, maybe knowing the case name off the top of your head is asking too much, but even saying, "You know, the one where they took the lady's house to develop condos? And called it "public use?"...that one?" Ending your declarative statements with that little lilt of a question at the end? Since you don't really know what you're talking about? You know?

And the pap about no consensus on Supreme Court opinions in the "great history of America." She talks like the third-string on a small high school forensics team.

Why doesn't this dreadful performance make me switch my vote?

Because Biden's answer, while seemingly more informed, was worse. Just because you can introduce 1000 hours of testimony into the legislative record saying that something might affect interstate commerce doesn't make it so. Not every distasteful act is a federal offense. In fact, based on the limited scope of (designed) federal authority, there should really be scant few federal offenses. And Senators shouldn't be larding up the congressional record and the federal court system trying to invent new ones.
Further, his statement that Roe is a good decision becuase it is "as close to consensus that can exist in a society as heterogeneous as ours[,]" is simply stunning in it's stupidity. We've reached consensus on this issue? Democratic societies reach consensus via the courts? I thought that was done through the legislatures. It is not the role of the judge to assume the responsibility of building a consensus for society. I will digress on Roe more later.

And because Palin's devolution into Quayle II doesn't bode as ill as Barack's dedication to the further expansion of the federal government and the attendant loss of liberty that entails.

Maybe I'll vote for Barr after all. I'm going to a Libertarian event at the National Constitution Center tomorrow night. Maybe that'll convince me to waste my vote.

Another Piece

A very good post by Judge Richard Posner. He's more amenable to socializing our financing system, but it is a very good synopsis of what/how/why. Favorite bit:

Many lenders have so much of their capital tied up in mortgage-backed securities
or other novel forms of capital that are difficult to value that they cannot
attract new capital at a price that would enable the lender to continue in
business. The sale of the securities would just expose their lack of value. The
federal government, however, has essentially unlimited capital because of its
taxing power. It is prepared at this writing to contribute perhaps as much as a
trillion dollars to rebuild the capital of the banking industry. The Treasury
wants to make this contribution in the form of buying the dubious securities,
but that seems to be a mistake, unless pressure of time allows for no
alternative. If the Treasury pays the actual value (if anyone can determine what
that is) of the securities, it will not be injecting new capital into the
banking industry, but merely swapping one form of capital for another. If the
Treasury pays more than the securities are worth, then it is contributing
capital to the industry all right, but it is also enriching the owners and
managers of the banks, which creates the familiar moral hazard problem as well
as upsetting people by rewarding careless management practices. The more it
overpays, the most costly the bailout plan to the taxpayer.

The question is where to go next.