Wednesday, December 31, 2008

The Show That Never Ends

I'm a reasonably well-informed person. I pray daily for peace. I try to act charitably, socially, and politically, based on my understanding of major world tragedies, such as wars, to help relieve suffering.

However much as it pains me to say this, I completely sick and tired of this particular corner of the world's problems. I know I'm supposed to care. I know that this is a tremendous problem on the world's stage, and the cause of many problems that affect me directly, but FOR CRYING OUT LOUD - ENOUGH ALREADY! 2000 years at least, 60 years since the first war, more than 40 years since the '67 war, and they can't work it out?

I now firmly believe there are no victims here, except the everyday folks who want to make a buck and be left alone. Both sides share the blame, and until we lock them in a room, with Dr. Phil for example, I could go the rest of my life without hearing the phrases, Gaza, West Bank, Two-State Solution, Hamas, Likud, Oslo Accords..........if neither side wants a solution, and I'm starting to believe neither side does, then enough already.

Am I the only person who feels this way?

Monday, December 29, 2008

Baptists and Bootleggers and the Gas Tax

I always worry when elites on both sides of an issue agree. And worry turns into terror when it's two complete opposites like the editorial page of the New York Times and the friggin Wall Street Journal's auto reporter both think we should increase taxes. I mean from the Times calls for tax increases are like restaurant reviews - they appear almost daily. But from the WSJ's guy in Detroit? What's going on?

Bruce Yandle, an economist who used to teach at Clemson, coined this awesome phrase, baptists and bootleggers, to describe the unusual, and unlikely political alliance that maintained blue laws (the prohibitions on alcohol sales on Sunday) in the South. Both groups were opposed to each other publicly, but on this one issue their interests converged. And the South kept Blue Laws in place.

We're seeing a classic example of this phenomenon right now with the gas tax. There is this growing consensus among elites that a gas tax is a nice behavioral modification device - sort of like this one. It's based on the seat-belt laws/cigarette tax argument and freaks me out because everything I read about it seems to suggest these folks know what's good for me.

This particular confluence of arrogance has brought together at least four groups I can see. The first one is obvious - environmentalists and coastal liberals who are not as dependent on automobiles as the rest of the country. Hard core folks like these just believe we should be driving Prius' or walking. The second are Neo-Cons who say Arabs in general are bad and by cutting our dependency we'll improve our national security concerns. However when I see simple statistical analysis from the U.S. Department of Energy like this that shows we are more dependent on Canada than Saudi Arabia for oil it makes me wonder why we want to destabilize Quebec.

Third are the boys from Detroit who would probably trade a gas tax for the elimination of CAFE standards for a gas tax in a second - especially if it involved a deal for government cash. Finally, fourth are politicians who are saying something like "Look at all the money that a gas tax would make!"

We know what Candidate Obama said about a gas tax holiday during the election, and it suggests that he is not an avid opponent of it.

It would be a good bone to throw to environmentalists, and if it were linked to the elimination of CAFE standards, Detroit would probably get behind it, but what would it mean? Well part of it would depend on the rate, and a huge part of it depends on the impact on behavior.

Cost during a recession? Not as much as you'd think with declining gas prices and decreasing use of cars, so it has short term appeal as well, especially if it's sold as a way to "pay for" the 2 trillion or so we are going to spend next year on fiscal stimulus............2 trillion............WOW.

My concerns are four fold. First, as Krauthammer argues, it should come as a revenue neutral proposal. I just don't believe that will come through the sausage making machine. I also really, really, really doubt that Neo-Cons understand the economics of tax increases.

Second, this pretty smart guy argued that we have to be aware of unintended consequences of government action. That always sits in the back of my mind when I hear people with Ivy League educations explaining to me how public policy x will only lead to outcome y that they have predicted. It never seems to work that way. This is a good example of that.

Third, any tax increase spreads price increases throughout an economy. Milk, eggs, and Wii's don't get delivered by mules - they get delivered using trucks and trucks use fuel. And some trucks don't use get the idea.

Finally, fourth is it not the case that real estate market is in the dumps? How does punishing folks who have to drive a lot influence all the excess housing in suburban areas like FL and CA? How willing are both parties to screw the developers stuck with excess housing in Ex-burbs?

Sunday, December 28, 2008

Wolves in Non-Profit Clothing?

Perhaps because Ohio has one of the worst tax climates for business in the nation its governor, Ted Strickland, is begging the Obama people even before they get in office for 5 billion bucks.

Now honestly I don't know Ted Strickland. I've got an Uncle in Ohio who is a nice guy. I know LeBron James plays in Cleveland, and they have the Rock and Roll Hall of Fame, so in sum, I'd say Ohio is probably in my column of places I don't really mind all that much. But 5 billion bucks seems a little high compared to the bargain price of 7 billion the Governator wants for California.

But I do have a major problem with people quoted in a piece for the Washington Post who are, at the very least, disingenuous, and that's what this budget expert for these guys is being when he says that increased federal government help is the only possible solution to Ohio's problems. And the president of this "non-profit" agreed and said without federal assistance they won't be able to pay the state's Medicare bills.

Ah, but here's the rub.........those two "non-profits" both receive MORE THAN HALF OF THEIR OPERATING REVENUE FROM THE STATE OF OHIO!!!!!!! Check out the financials here and here (I did, and it's not pretty).

Is it worse than giving grants directly Halliburton? I'm not sure, but it sure annoys me as someone who works at a non-profit that actually is not a government lackey organization to see these people cited as dis-interested community experts. THEIR JOBS DEPEND ON GOVERNMENT FUNDING!!!!!!

Isn't part of journalistic responsibility to be asking questions about why people say what they say to reporters? After all, the Washington Post is more than happy to give readers a heads-up about the fact that Cato is staffed by "50 or so small-government and individual-liberty scholars." Why not call out these "non-profits" for what they are - government agencies masquerading in sheep's clothing.

Saturday, December 27, 2008

A Small Addendum

Teddy will be happy with this. To my piece on state governments. I noticed this post from Greg Mankiw via Tyler Cowen..........of course neither one of those guys apparently remembers this and hence they both miss the point that whether or not something is efficient hasn't mattered to a politician since 1905. Hell, that sounds like something you'd see on an old Miller Beer bottle. "Corrupt as Hell since 1905!"

While I respect Mankiw's work, I still have to say to him that questions of efficiency when it comes to giving away almost a trillion dollars still doesn't matter to a politician today......even if you are at Harvard.

Please excuse the short post - the holidays and all..........

Wednesday, December 24, 2008

State Governments Belly Up to the Bar

Like at least one former Reagan aide, I don't doubt that, with a bunch of caveats, government spending in the private sector can create some demand side help and promote certain policy objectives. I'm not agreeing that it's a good idea, but that empirically you can do it.

But waaaay more troubling to me is whether or not giving state governments 1 trillion dollars with this plan is a good idea.

1 TRILLION DOLLARS. That's a thousand billion. To state governments, which, as I noted in this post have not been especially good balancing their budgets during economic prosperity. Now Robert Kuttner says that the interest on a trillion bucks would "only" be 2.5% which is relatively cheap and shows the markets don't anticipate inflation.

2.5% annually on 1 trillion bucks is still 25 FRIGGIN BILLION DOLLARS in the first year. That's not my idea of cheap unless we are going to generate a lot more than 25 billion in economic growth minus the "carrying charges" that the 10 most corrupt state governments are going to charge.

So let me ask a question here. Setting aside the corruption issue, why does the thought of transferring a lot of the stimulus package to the states worry me? Well two reasons. First, a lot of states are facing huge deficits as I've noted before. And those deficits are partially the result of really bad politically motivated spending like this political jobs bank in California for unemployed state legislators.

Second, as Steve Erie's excellent book Rainbow's End shows, New Deal spending programs were captured by political machines throughout the country and used reward the friends of the powerful - not exactly the kind of stimulus you want. So it's actually a bit worse than just giving the money directly to Dick Cheney's old employer because some of it will probably get stolen by state politicians first.

Libertarians are just naively whining about the wasteful spending. That's a waste of intellectual resources because the government is going to do something. Fish gotta swim..... Conservatives seem to understand that some big stimulus package is coming, but want to put pressure on Obama to make some hard choices.

Frankly, I think the idea of an income tax holiday is both the best way to address the problems associated with passing the money through the hands of corrupt politicians before it gets sent to the companies that donate the most money to government officials...........which means we almost certainly won't get it.

Tuesday, December 23, 2008

Does Anyone Do Anything Privately Anymore

Public sharing of private matters by Hollywood stars, folks on reality television, and now politicians drives me nuts.

Call me old school, but if you have issues, either drink your way through them like Sinatra did or go to AA, or whatever, but don't tell me all about it and serve as some shining example. People in the public eye are flaky enough - I don't need to hear anything more about the challenges and heartbreak being attractive, rich and successful, and getting paid to go to parties.

By the same token if you start a wildly unpopular war that leads to a lot of people getting killed and does not have any clear objectively good outcome (although I'm not Carnac the Magnificent) while relying on your sense of doing what's right, then perhaps you should just leave office quietly, stop trying to justify the action and have faith in your principles.

Instead, this is on the front page of the Washington Times:

EXCLUSIVE: Bush, Cheney comforted troops privately
Met with thousands of war injured, kin out of spotlight

Way to be "private" and "out of the spotlight" putting it on the front page of a major newspaper and all. Next time I want my wife to not know something I'm calling Fox News so it can be broadcast.

A Little Holiday Cheer - Chicago Style

Tons of columnists and media figures have been throwing around the phrase "The Chicago Way," lately. So since it seems trendy, I figure Chicago deserves one more post this year from its best writer during my lifetime - Mike Royko.

In 1967 Royko was writing for the Chicago Daily News and beginning a career that would last three more decades. He also did something virtually no other columnist in the world would do - write a column everyday. In other words - he was blogging.

Enjoy his take on Christmas the Chicago Way.

Everyone have a safe holiday and I'll be back online the day after Christmas.

PS - I have no relationship or previous knowledge of the blog I've linked to for this. It's just a way to get the column.

Monday, December 22, 2008

Even Santa is Packing This Christmas

In 2000 and 2004 prominent white liberals would always threaten to move to Europe or Canada if the Republicans won the White House. American conservatives, who probably never did foreign study programs at Middlebury aren't threatening to move. Instead they are building bunkers and stocking up on ammo.

It's been a common theme throughout many Red States like Missouri, Tennessee, North Carolina, Nebraska, Alabama, Ohio, South Carolina, hell even Texas experienced a surge. Texas? Surge in gun sales? Isn't that like Amy Winehouse experiencing a surge in drug use?

Good thing President Obama doesn't have jurisdiction in the North Pole or even Santa might be thinking about asking Mrs. Claus for an AR-15 under the tree this year.

Obama's walking a fine line in a lot of those states like North Carolina and Ohio. It's one thing to say that you want Rick Warren to say a prayer before you get inaugurated and irritate gay activists. It's a whole different animal enacting gun control laws and energizing rural voters in those states that he won by thin margins.

We are going to find out a lot more about what things like "the audacity of hope" and "change" mean when the rubber hits the road. When Obama made his comment about religion and guns in rural areas, what exactly did he mean? It looks like gun owners have a pretty good idea of what he had in mind.

Sunday, December 21, 2008

He's Trying to be Ironic..........I hope

Why give money to charity? - well you could do it because a prominent columnist in a major newspaper tells you to do it like this column by a self-proclaimed liberal suggests.

And by the way, a Rhodes Scholar should think about consulting this little known text to understand why religious folks give more money and why they don't go around writing national newspaper columns about it.

Saturday, December 20, 2008

Just Flip a Coin Already

When the good people of Minnesota were asked to choose in November between Norm Coleman and Al Franken they said "yes." So now instead of a settled Senate race they have a spectacle.

The good news is, that some of the institutions with real legal status aren't leaning one way or another either. Institutions with less credibility are now reviewing thousands of ballots one by one to see what they think the voters meant because the ballots weren't clearly marked......imagine instant reply in the NFL lasting 1.5 months with about 3 review boards involved. It's a nightmare.

It's become such a joke that on the website for this Minneapolis newspaper you can actually look at hundreds of these ballots that NEVER WOULD HAVE BEEN COUNTED IN A NORMAL ELECTION to try to determine what the voter meant. Unsurprisingly Democratic and Republican members of the 678 review panels (slight exaggeration) have dramatically different views of which ballots should count.

I used to teach statistics, a sin for which I will pay dearly in the next life. I can honestly tell you that in Florida in 2000 and now in Minnesota in 2008 WE WILL NEVER KNOW WHO REALLY WON THE ELECTION. It's not possible to go back to determine what those ballots meant. When you have millions of ballots cast and it comes down to a few hundred the result will never be clear because there are thousands of votes in every election that get lost or are marked improperly or get left in a car trunk in Kansas for Pete's sake. In those instances the result is going to come down exclusively to the rule that's chosen to decide the outcome. Those rules have the illusion of fairness and such, but in reality the losing side always cries foul. In Florida the rule we settled on was leaving it up to the U.S. Supreme Court.

Now in Minnesota they seem to want to include as many institutions as possible which I'm assuming is an attempt to put some credibility in the outcome.

No one in their right mind thinks this process will be fair or credible. Lawyers are involved - fair and credible outcomes have been excluded.

States should adopt a simple rule - if the outcome is within say 1000 votes we flip a coin - period. It will save money, move things along, and eliminate the arbitrary nature of "recounts" in which lawyers for each candidate scream about counting invalid ballots that simply should not be counted. It's a dumb process, so if you want arbitrary, make it quick, painless, and save us the cost of a recount.

Don't like the outcome of a single flip - make it 2 out of 3?

Friday, December 19, 2008

Hitting the Pause Button

My life has been improved dramatically by the AT&T U-VERSE television system my wife and I got earlier this year (not a paid ad for AT&T, but if the good folks in their marketing division are looking for a way to increase your internet ad exposure.........). My favorite part is the DVR function where I can pause live TV. The first few times I did it, it was mostly to show it off to friends or just savor the prospect of being in control of my television, completely, to the second. But now I use it all the time during diaper changes, binky failures (if you don't have kids, it's when the pacifier falls out of your kids mouth), cooking, beer runs, you name it.

That ability to say "hold it, stop for a second," has been an amazingly powerful positive force in my life. Way cheaper than therapy. In fact, when I don't understand things generally I want them to slow down. For example, when I think a salesperson is trying to con and confuse me I would really like a pause button. The same holds true for politicians when I sense they are trying to pull something over on me.

With this in mind, I'd like to broadly recommend that we hit the PAUSE, not STOP button on just about everything the folks at the Fed, Department of Treasury, Congress, and the White House, want to do to solve this financial crisis we are living through.

I think I speak for all of us when I say that I understand there's a serious problem here. We all are deeply worried about job loss, the recession, declines in housing values, and problems in credit markets. Those of us outside of the Beltway are the ones feeling this crunch, so it's not as if we don't appreciate the magnitude of the situation. Those of you in DC still have jobs after all (if you don't work in the White House that is).

But I think I can also safely say that I have never been more confused about what SHOULD be done and SHOULD DEFINITELY, POSITIVELY NOT be done before in my life. Let's suppose that we really do need to put ourselves into the scariest debt situation I could ever have imagined in my worse nightmares. If so, no one involved in government seems to be able to consistently and clearly explain to me how spending more government money is going to solve this, and that, to me, signals we need to pause.

More specifically if we are going to mortgage our prosperity, can we at least do it in a more systematic fashion? In the last couple of days alone we've seen the Fed cut rates to nearly zero, then act to unilaterally lower mortgage rates and back consumer credit. Bush just gave a bridge loan to the auto industry that doesn't involve any bridge construction, and hell the Fed even talked about printing it's own damn money!

Is it any wonder that consumers aren't spending and investors are scarred? No one has any notion of certainty.

So Senors Ben and Hank - TAKE THE WEEKEND OFF! Get a massage or something. No new plans for a week or so. We all could use a break.

While Rome Burns......

Members of BOTH PARTIES have voted themselves pay increases. This year they now make, on average, $169,300.

Of course after the administration handed the folks in the buggy industry 14 billion and change that pay increase costs only 2.5 million, which looks like pocket change no?

Just a quick question - bloggers and news folks hammered the auto folks for flying corporate jets to the first begging session. Where's the screaming about Congress voting itself more of your money?

Welcome to Wonderland

What's wrong with tax cuts? They can create bubbles sayeth Vernon Smith, no fan of regulation or higher taxes.

So a libertarian Nobel laureate criticizing a Democratic president for a tax cut................In other news Paul Krugman now defending the Laffer curve.........

This is Very Bad

This longish piece from the leftie Center on Budget and Policy Priorities shows how bad things look in the short term for state government budgets.

Think that's bad, how about this list of about a gillion blogs all across the country talking about how bad things are with state government finances.

But wait, it gets even worse - here's a conservo-tarian on the potential cost of underfunded state government pension costs to their employees. Yes, state employees get something called a pension. If you don't know what that is, you'll also be shocked to hear that people used to have cars with ONLY am radios.........

By the way, here's a crazy idea from the National Tax Payers Union - pay government employees with the same salaries and benefits as people in the "real world" get. It would save, they argue, more than $20 billion in CA and NY alone.

Or you can raise taxes as Ian Welsh over at Firedoglake suggests implicitly by repealing Prop 13..............pick your poison.

Rule of Law, Constitution Inconviently Intrude Upon Vigilante Mob from Illinois Legislature

This fawning piece from Chicago Magazine about Ed Genson, the guy representing Gov. Slobodan Blagojevich made me laugh - pretty hard - this morning. It's a link from the Huffington Post which like most national news outlets is scrambling for perspective on the soap opera that's emerging on the shores of Lake Michigan.

You see I know a little something about Ed Genson and the Chicago criminal justice system because my father is involved with criminal law in the city. He knows Genson, has worked with him (and told me a hilarious story about how Genson likes to use the same story about sitting on his father, the bail bondsman's, knee at 26th and California as a young lad during his closing argument in every case) and described him to me as "the best 'business-getter' in the city," even before the Blagojevich case. So the piece in Chicago Magazine is typical of the PR machine that Genson uses to build his reputation as "Uber Defense Lawyer" in Chicago. Just between you and me, he loses a lot more than someone who has as big a reputation has he does. But as my Old Man told me, "he will fight; he'll litigate."

And in this particular instance I'm thrilled he's fighting because as much as I hate Blago and his ilk, the actions of the state legislature and political establishment in this case are beyond disgusting. Did Democrats in Illinois know Blago was like this BEFORE he got caught thinking about selling a Senate seat? Of course they did. Claude Rains sounded more sincere closing down Rick's Cafe American than most Illinois politicians today sound with their outrage over Blago's activities.

So they decide to cover their tails by trying to railroad him into resigning? Yeah, because if I'm an indicted, semi-broke, corrupt politician, my first instinct will be to resign because a bunch of other, slightly less corrupt politicians want to make me resign. Oh, and there is this little thing called the Illinois Constitution which outlines pretty clearly how to move forward in this instance LEGALLY.

This is about a state political establishment that wants the national embarrassment to stop and the press to go away. They don't want to follow legal procedures and play by the rules now because, well, the law in Illinois was always wildly overrated anyway. Blago is probably guilty as hell, but unless Chevy Chase was right, this isn't Russia, or even Serbia. We actually make people go to trial and make it reasonably fair for the accused to not go to jail if they aren't guilty. The Feds have it easy in this one if the politicians in Springfield would stop acting like idiots which may be too much to ask of politicians.

Obama Can Count

In 2008 Barack Obama managed to make the GOP play defense in a bunch of red states like VA, IN, NC, and more than held his own in Democratic strongholds. His first substantive move to expand the Democratic base into the Deep South and West has been roundly slammed by gay and lesbian activists - selecting Rick Warren to give the invocation at the inauguration.

I'm going to waste a lot of time on this as anybody can see what's going on here:

Estimated percentage of population that's gay - anywhere from 2% to slightly under 10%. Percentage of gay people who are going to vote Republican, about the same percentage of people who think NASA faked the moon landing.

Estimated percentage of the population that classifies itself as Evangelical - probably around 25%-29% of the population. Percentage of those folks who might consider voting Democratic is pretty substantial.

The media's constant reference to Warren's church as a "mega" church bugs me, and seems to sound a bit too much like Mega Lo Mart for my tastes. I think it reflects an underlying confusion in the media about evangelicals specifically and anyone who actually believes in God generally. But the realization among Democrats that many people of faith are open to listening to Obama is smart politics plain and simple.

Thursday, December 18, 2008

Objective Media - Just like the Tooth Fairy

In what I hope will be a continuing series, I begin to look at why I have long been an advocate of an openly partisan media. I'm absolutely serious here. I think newspapers and TV news would be more profitable, and citizens waaaaaay better off with a partisan press.

Today's example - consider the Manhattan Worker's Daily story about all the friggin money that our Most Entertaining President ever raised for his foundation - $500,000,000. That's a lot of zeros for a library and "philanthropic activities" (insert inappropriate joke here). Paragraphs 3-5 give you a full flavor of the slant of this piece:

"The donor list, posted on the web site of the William J. Clinton Foundation,, indicates that his organization accepted multimillion-dollar gifts from a variety of foreign governments, companies and individuals who might have an interest in United States foreign policy. The foundation raised $500 million over the last decade to pay for Mr. Clinton’s presidential library and his philanthropic activities.

Federal law does not require a former president to reveal his foundation’s financial benefactors and Mr. Clinton until now had declined to do so, arguing that many who gave expected confidentiality. But when Mr. Obama asked Mrs. Clinton to join his cabinet, the former president agreed to release his list as part of a nine-point agreement intended to keep his multifaceted activities from compromising his wife’s work if she wins Senate confirmation to become the nation’s top diplomat.

Mr. Clinton’s advocates said the publication of the list showed that he had nothing to hide and argued that most of the largest contributors had already become known. The foundation said that its median gift since its inception came to $45 and that nearly 90 percent of its gifts were $250 or smaller."

Sounds quite reasonable no? I mean all those foreign governments and companies who "might have an interest" in US policy and "Federal law does not require," and my personal favorite paragraph bit about how 90% of the gifts were $250 or smaller. Yeah, just like the local soup kitchen raises money from the Saudi government and George Soros.

Of course that is in pretty stark contrast to the the first four paragraphs from the AP piece:

"Former President Bill Clinton's foundation has raised at least $46 million from Saudi Arabia and other foreign governments that his wife Hillary Rodham Clinton may end up negotiating with as the next secretary of state.

The Kingdom of Saudi Arabia gave $10 million to $25 million to the William J. Clinton Foundation, a nonprofit created by the former president to finance his library in Little Rock, Ark., and charitable efforts to reduce poverty and treat AIDS. Other foreign government givers include Norway, Kuwait, Qatar, Brunei, Oman, Italy and Jamaica. The Dutch national lottery gave $5 million to $10 million.

The Blackwater Training Center donated $10,001 to $25,000. The State Department -- to be led by Hillary Clinton if she is confirmed -- will have to decide next year whether to renew Blackwater Worldwide's contract to protect U.S. diplomats in Iraq. Five Blackwater guards have been indicted by a U.S. grand jury on manslaughter and weapons charges stemming from a September 2007 firefight in Baghdad's Nisoor Square in which 17 Iraqis died.

The foundation disclosed the names of its 205,000 donors on a Web site Thursday, ending a decade of resistance to identifying the sources of its money. While the list is heavy with international business leaders and billionaires, some 12,000 donors gave $10 or less."

And then the AP piece ends with a note about a 450,000 dollar thank you gift from Marc Rich's wife. The MWD piece ends with some legal crap about how this will impact Hilary's new gig. And before I forget, the implication that Bill Clinton somehow acted irresponsibly by asking rich, powerful people he knew for money is hilarious. What's he supposed to do? Stand in front of the Safeway with a bell in a bad Santa outfit?

So let's see, Blackwater, conflict of interest stuff, and the phrase "decade of resistance" concerning the anonymity question from the AP. I should note that the Blonde Bimbo Totalitarian News Corporation posted the AP story. Same news, different story.

News/objectivity never equals 1.

The Political Problem with Creative Destruction

My wife and I are getting estimates for solving a drainage problem in our basement. Let me start by saying that by drainage problem I mean leak I'm sick of mopping up after it rains. This is not a hugely serious problem, but it's one we want resolved for a couple of reasons. So we get two radically different estimates. One guy says, sump pump, drill some holes in the foundation, complete drainage system, $3,800 bucks. But, he guarantees the work. Another guy says, the problem is a simple drainage problem that will involve re-routing one downspout outside the house for 195 bucks. No guarantee or promise.

The $3,800 estimate comes with this nice little schematic, a four step process, very official looking set of forms to sign. All very professional looking. The $195 deal is from a grizzled old guy who "thinks" this should solve it, but involves trusting his experience without a nice set of drawings and plans. It's a nice contrast in approaches. Based on the scope of the problem and cost, guess which one I'm going for since it's my money?

Applying scope and costs is useful in understanding the Big Three bailout debate. Why we are so likely to choose the cheaper, if somewhat more uncertain, fix in our homes and lack the same confidence in "less is more" when it comes to attacking bigger, more expensive challenges in politics and economics? Roger Cohen's really nice op-ed piece in the Manhattan Worker's Daily raises the problem nicely. He argues that:

"Americans have always lived at the new frontier, at least in their imaginations. It’s taken the death of the likes of the wonderful Pan Am to keep them contemplating the horizon rather than their navels. The risk of saving the moribund is the demise of the vital — and the long-term cost of that is incalculable."

So we have to let the Big Three die a natural, economic death because that's how markets work. Sure, there will be nasty job loss, and I won't hear that Mellencamp song as much in truck commercials, which is not a bad thing. But in the long run it's the American way, apple pie, all that. Omelets and broken eggs. And Rog, the short term cost is like at least 25 billion bucks! So we can understand the consistent public polls showing opposition to any bailout for the Big Three.

But it's interesting, isn't it, that if we live on this "new frontier" that only 55% of us oppose the bailout. And, it's pretty likely that despite current GOP Senate opposition to a bailout, either President Bush or Obama is going to cut a deal and write a check to GM and Chrysler, and possibly Ford.

The simple response to this is that it's a pure Public Choice interest group story in which interest groups flex their muscle in the system to distribute the money of other taxpayers (those of us who don't work for the Big Three directly or indirectly) to themselves (the UAW, Big Three management, Big Three dealers, etc). The politicians who support the funding get "paid" by Big Three interests during elections either through campaign funding or the support of organized labor.

But that's short sighted, and I'll illustrate it with a simple point. Let's assume that 55% of the public opposes a bailout as that survey says. 45% of the public does support the plan, and that's waaaaaaay more than the percentage of people who have direct or indirect interests with the Big Three. The survey also notes that:

"Union households are no more apt than those without a union member to favor the plan, 44 percent compared with 42 percent. However, the union householders who support the plan are more likely to be strongly behind the bailout."

Now that's not consistent with an interest group story, with all due respect to my public choice friends. Other union members should be supporting this plan completely. So what's going on here?

People, by and large, are sometimes afraid to trust the "do less" solution. It's pretty, nay, VERY clear that when potential loss increases in politics, folks seek risker paths to avoid those losses. Hence the wider support public support for a bailout, an expensive, risky solution, in the face of a big economic problem. So whether or not you belong to a union you might think this bailout is not a bad idea.

Add in the fact that the public thinks that the solution will be paid for largely by someone else's money and you can see why almost half of the public supports the expensive sump pump because a big expert plan seems to be a safer route than the "do less, get more" route. I happen to think this is a really big deal in politics generally. Debates are about espousing large, complicated plans and positions to sell to voters. Campaigns are about presenting solutions to problems, or even finding new problems for politicians to solve. Politicians can act like entrepreneurs and actually "sell" new problems and new solutions to the public. My favorite example of this is how effective both parties have been in increasing the penalties and salience of crime despite decreases in the crime rate.

All this is a long way of saying that the GM bailout politics is not only a Dem/Rep, union/non-union, regional political story. It's also about a part of the public wanting to be sold the more expensive, complicated "plan" when faced with what's characterized (in this case correctly) as a major economic problem. When a lot of money is on the table, it's hard to believe that we don't need plans and funding and experts to solve the problem. Trusting other institutions (in this case markets and the invisible hand) where we don't completely understand or CONTROL the mechanisms is not natural for us. Just fyi, I hope to write a bit more about this in terms of Obama's vague use of terms like "hope" and "change" more in coming posts. It seems to me that a lot of this is very applicable.

Where's FJM in politics?

Britney Spears is to Joel McHale what the Kennedy clan is to political observers - why they get paychecks. I think any pop culture fan or political junkie understands we are going to get a lot of stories about Britney and the Kennedy's because both sell, although thankfully the Kennedy's get naked less often.

Still that doesn't explain Ed Morrissey's post over on Hot Air this morning on the Kennedy's and political dynasties. He notes that the reason the Dems want Caroline to get the Senate seat is not her thoughtful ruminations on trade-policy or education reform:

"The better question is why so many dynastic and quasi-dynastic candidates have begun appearing in Congressional races of late. Caroline Kennedy’s pursuit of an appointment explains the issue, I believe. Democrats nationwide aren’t haranguing David Paterson to appoint Caroline Kennedy to the seat because of extensive qualifications — indeed, she has a remarkable lack of qualifications. It isn’t her name so much as it is her money. She’s loaded. Democrats want to appoint someone who can fund a campaign rather than govern rationally."

Ok, fine - word that. And he argues that wealth is increasingly important in today's elections. Welcome to Poli Sci 101, but whatever, it's solid.

But his next assertion loses me, and involves hand-waving and laziness:

"The wealthiest people come from hereditary wealth. Those candidates will begin holding family seats once ensconced, as political parties will want to ensure that the seats remain secure. That will transform the Senate into an American House of Lords, as Mahtesian puts it, probably within a couple more generations."

The wealthiest people come from hereditary wealth - yeah, like Bill Gates and Warren Buffet. Family seats get "ensconced?" So why is it that the vast majority of seats DON'T get ensconced? Well because self-made rich people who want to compete in an open political system can thrown lots of money around and beat old tired family wealth. The Senate into a House of Lords? I didn't realize that the Senate's political power had somehow vanished last night while I was changing diapers at 3 am. Last time I checked the Senate is a full partner in legislating, not at all like the House of Lords which is such a mess the Brits can't decide what it should do or who should be members.

Don't get me wrong - rich people are always going to throw money at politics and run for office. Voters in places like New York and Chicago, which are basically one party states like North Korea where elections don't matter because there isn't any competition, will cast ballots for any Kennedy, Jackson, Ford, or Molinari that appears on the ballot. But it must be a damn slow news day if this merits a crosspost and a couple of Google hits - without any NSFW pics to boot.

Welcome Dear Reader

A few months ago I was struck by the enormous scope of change that was occurring in the world around me politically, economically and socially, and more specifically in my family. I began to realize that despite my disgust with public therapy, most blogs, the media, and just about every politician and political commentary, that I needed to get some things off of my chest. Hence this forum.

Who I am is relatively unimportant because 1) it's highly likely no one will read this and 2) even if a few folks come here it's even more unlikely any of them will bring further attention to it. Therefore think of me as a guy sitting at a bar who you have never met who has some things he'd like to say about politics, economics, and public policy. I'm going to talk, and the bartender is paid to be here. I could be a crazy drunk, an interesting character you'd like to see once in a while, or someone you actually want to get to know. Your presence is purely optional and voluntary. Your interest in listening is going to depend on the amount of alcohol you've had, the relative sanity of my rants and how you judge the quality of the experience and compare that to other things you could be doing. I figure blog reading is pretty much the same thing. So if you want to sit down, have a shot and beer, and shoot the breeze, stop by. If not, good for you! Go out and do something constructive while I kill time.

In the spirit of full disclosure I work for a non-profit in the Midwest. I'm a recovering academic (it's an interesting 12 step program - step one is wanting a decent salary, but step two involves getting used to actually going to an office everyday from 8-5) with a background in political economy. I'm happily married with a newborn son.

If you guessed I don't like either political party from the title - you get a cookie.