Wednesday, December 31, 2008


I just unsubscribed from the Obama email list, and there are a lot of emotions swirling around in my heart right now – most notably guilt, worry, and annoyance (in ascending order, which is why the verdict came in the way it did).

The Obama website and email list were certainly very effective tools, especially for people in my neighborhood of the political engagement spectrum (which is to say experienced hobbyist but not professional). While I didn’t rely upon it for news, all my donations to the Obama campaign were made through it, and I used it for organizing as well (a friend and I very easily cut our own canvassing turf on it). Point being, with regard to the luvh.rakhe account, both the campaign and I were happy with the results.

In the aftermath of Election Day, I was surprised to see the emails from Barack and Michelle and David and the whole gang keep rolling in at such a steadyclip. But any annoyance was tempered by jubilation and awareness of the importance of Obama’s New Media operation. And when they sent out the feedback questionnaire in late November, though I didn't even consider filling it out, I fully acknowledged that it made sense to conduct.

But yesterday's email from David Plouffe, soliciting a $100 donation for the inauguration, struck me as a little ballsy. Didn't this campaign just spend the most on a campaign - ever?

This brings me to my worry - fundraising. Typically, when we worry about fundraising, we are worrying about Congressmen, and our primary worry is actually about distraction, that they start raising reelection money on Day One of their terms. That's not what's going on here - it's relatively effortless for the Obama campaign to send out an email solitication or to tack on one of those red "Please Donate" buttons to the bottom of an email that doesn't start out as a solicitation. And I don't believe a President, least of all a President Obama, does or would spend any time raising money him/herself. What I am worried about is the relationship of Obama to money. Fundraising is a necessary evil, and for the democracy-minded, the emphasis is on the "evil," not on the "necessary." I'm still deeply unsettled by Obama outspending McCain by orders of magnitude. Granted, Obama's fundraising, in addition to being the most prolific in history, has also been the most egalitarian. Still - donations before he even takes office? Those would ostensibly be for his 2012 reelection, but they could also be funneled to various midterm candidates 2010. In other words, it's cementing, entrenching, and probably even deepening the role of money in politics.

This, of course, is just a vague and inchoate worry. And I grant that it may be too naive. That's why it was actually annoyance that carried the day, and at the end of it all, all I was really doing when I unsubscribed was just reacting to some spam.

PS, a coinage. I invite you to use "unsubscribe" for any sort of quitting or withdrawal. Example as follows.
A: I've met someone else.
B: Are you unsubscribing from me?
Also acceptable is "In 2009, I'm unsubscribing from McDonald's."

PPS, Happy New Year!

Monday, December 29, 2008


The Israeli bombardment of Gaza over the past three days calls out for commentary. But as I read about what is going on, I find myself unable to focus in a serious way about this latest round of violence. I started to read this lengthy commentary by Daniel Levy, who is one of the first people to turn to for sensible and peace-oriented ideas for the Middle East, and I couldn’t even get through it. My first reaction to the violence was, frankly, anger at the incredibly disproportionate use of violence on the part of the Israeli government. But that reaction quickly morphed into a disturbing indifference brought on by a deep cynicism about the near-term possibility for progress on this issue.

What a final settlement between Israelis and Palestinians will ultimately look like is well known. Regardless of how much blood is shed in the interim, a final settlement will look similar to what was negotiated at Taba, and what has been proposed in the Arab Peace Initiative. Everyone interested in peace knows this. The problem is that many of the primary stakeholders in the conflict—including the United States—don’t actually seem interested in peace.

Perhaps I shouldn’t be so negative. There have been some encouraging signs of late. The debate in America on this issue seems to be opening up a little bit, to the point where labeling someone who makes statements critical of the Israeli government as anti-Semitic doesn’t get much traction any more. The departing Prime Minister of Israel, Ehud Olmert, made some remarkably courageous statements (“The Time Has Come to Say These Things”) in an interview with the Israeli newspaper Yedioth Ahronoth. And there is, of course, hope that the Obama administration will at least be more proactive than the Bush administration in trying to reach a settlement. Levy offers sound advice for Obama in his piece, “Pursuing Peace Amid Pessimism.”

But the deck is stacked against any real progress, with the bombing of Gaza putting up a whole host of additional obstacles. Ehud Olmert may be interested in peace, but he is a lame-duck. The politicians vying to succeed him—Tzipi Livni, Ehud Barak, Benjamin Netanyahu—are much more interested in showing how tough they are on national security issues by fully supporting the bombing of Gaza. The electoral pressures for such aggression will not change anytime soon. Similar progress-preventing political pressures exist for Obama. He did make some encouraging statements in support of the Arab Peace Initiative, but I remain skeptical that he would risk mucking up his first 100 days by trying any bold moves in the politically treacherous and emotionally fraught arena of Israel/Palestine. As for Hamas, the violence will only strengthen them politically in the Palestinian territories and move them farther away from any accommodative gestures towards peace. The media coverage and debate in America is so embarrassingly one-sided that it won’t produce any pressure on Obama to, in turn, pressure Israel to halt settlement activity.

I feel as though we’ve been here before and we know what happens next: more bloodshed of innocent Israelis and Palestinians, more anti-Americanism and anti-Semitism, higher oil prices, more recruiting opportunities for fundamentalist groups, less American influence in the world.

This violence will accomplish nothing positive. And I’m resigned to riding out this next wave of negative consequences. Wake me up when the stakeholders seem serious about peace.

Thursday, December 25, 2008

Not being a native english speaker has its advantages

Friend of the Pickle Marie, who is Danish and speaks English almost perfectly does not, in fact, speak English perfectly. The term "garbage disposal," for example, was not a term with which she was familiar. Apparently they don't have garbage disposals in Denmark. Go figure.

The other day, Marie was heard to coin the term "chopping sink." It's really much better than garbage disposal. Garbage does not belong in the sink. I'm going with chopping sink. I hope you will too.

Merry Christmas.

Tuesday, December 23, 2008

On Inflation, China, and Being Humble

Worried about deflation? Yeah, me too. But, as I mentioned in a previous post, I’m even more worried about inflation. It may seem strange to worry about two diametrically opposite phenomena—deflation and inflation—at the same time. But that is the paradoxical mess in which we find ourselves.

The NYTimes editorial “The Printing Press Cure” put it this way:

Flooding the economy with freshly printed money may prevent a self-reinforcing downward spiral. But it may cause trouble long after the present danger has passed. One reason is that it could cause inflation later. In a worst-case scenario, inflation, or the fear of inflation, could dissuade foreign investors, who finance the United States’ debt, from buying and holding dollars. That, in turn, could provoke a disorderly decline in the currency, sending prices and interest rates sharply higher.

In a humorous, but frightening essay in the Wall Street Journal, James Grant said this about the looming dollar dilemma:

Economic commentators praised the central bank's determination to fight deflation -- that is, to reinstate inflation. All hands, including President-elect Obama, seemed to agree that wholesale money-printing was the answer to the nation's prayers.

One market, only, registered a protest. The Fed's declaration of inflationary intent knocked the dollar for a loop against gold and foreign currencies. In many different languages and from many time zones came the question, "Tell me, again, now that the dollar yields so little, why do we own it?"

Our troubles, over which we will certainly prevail, stem from a basic contradiction. The dollar is the world's currency, yet the Fed is America's central bank. Mr. Bernanke's remit is to promote low inflation, high employment and solvent finance -- in the 50 states. He wishes the Chinese well, of course, and the French and the Singaporeans and all the rest besides, but they don't pay his salary.

They do, however, buy the U.S. Treasury's bonds, which frames the emerging American dilemma. If the Fed is going to create boatloads of depreciating, non-yielding dollar bills, who will absorb them? Who will finance the Obama administration's looming titanic fiscal deficits? Who will finance America's annual surplus of consumption over production (after 25 more or less continuous years, almost a national trait)? Inflation is a kind of governmentally sanctioned white-collar crime. Every crime needs a dupe. Now that the Fed has announced its plan to deceive, where will it find its victims?

Everything, it seems, depends upon our Chinese creditors continuing the money-losing policy of financing our government’s deficit spending and bankrolling the shopping sprees of the debt-strapped American consumer. If they cease this seemingly foolish policy, then the dollar will turn into toilet paper and things will really fall apart. Worried yet?

But let’s not panic. The Chinese have good reason to continue to prop up our currency. They must keep the dollar strong and the American consumer strong so that all their export-oriented factories don’t go bankrupt all at once. They have to worry about a fragile social contract that exists between the government and all the former peasants who now work in those export-oriented factories. With mass unemployment caused by factory closings, social unrest in China would surely follow.

So, great! We’ve got the Chinese over a barrel. There is nothing like social unrest to concentrate the mind of a political leader! We can just print as much money as we like because the Chinese will continue to buy up all of our increasingly worthless paper dollars.

Not so fast. The Chinese are no dummies. They are well aware that the dollar is probably a doomed currency. They know its value will decline over time. The only question in their mind is: how soon and how quickly should the dollar depreciate? This is a very important question. The ideal scenario, for both China and the U.S., is that the decline will be slow and orderly. That way, the Chinese economy will have time to reorient industrial production away from exports to America and towards domestically consumed products (stuff Chinese consumers want to buy). Similarly, the American consumer and the American government will have time to change their profligate ways. We must become a nation of savers who live within our means, and our government must run a balanced budget.

But if the Chinese sense that America has no intention of undergoing these difficult adjustments (that is, if we just keep printing our way out of the hole), there will be great pressure on the Chinese government to cut the dollar loose despite the potential for political destabilization. That pressure is already building.

Gao Ziqing, the man who oversees $200 billion of China’s $2 trillion in dollar holdings, said as much in a fascinating interview in The Atlantic Monthly:

We have a PR department, which collects all the comments about us, from Chinese newspapers and the Web. Every night, I try to pick a time when I’m in a relatively good mood to read it, because most of the comments are very critical of us. Recently we increased our holdings in Blackstone a little bit. Now we’re increasing a little bit our holdings in Morgan Stanley, so as not to be diluted by the Japanese. People here hate it. They come out and say, “Why the hell are you trying to save those people? You are the representative of the poor people eating porridge, and you’re saving people eating shark fins!” It’s always that sort of thing.

He went on to offer this advice to Obama and the American people:

The simple truth today is that your economy is built on the global economy. And it’s built on the support, the gratuitous support, of a lot of countries. So why don’t you come over and … I won’t say kowtow [with a laugh], but at least, be nice to the countries that lend you money.

Talk to the Chinese! Talk to the Middle Easterners! And pull your troops back! Take the troops back, demobilize many of the troops, so that you can save some money rather than spending $2 billion every day on them. And then tell your people that you need to save, and come out with a long-term, sustainable financial policy.

The current conditions can’t go on. It is time for the new government, under Obama or even McCain, to really tell people: “Look, this is wartime, this is about the survival of our nation. It’s not about our supremacy in the world. Let’s not even talk about that any more. Let’s get down to the very basics of our livelihood.”

I have great admiration of American people. Creative, hard-working, trusting, and freedom-loving. But you have to have someone to tell you the truth. And then, start realizing it. And if you do it, just like what you did in the Second World War, then you’ll be great again!

If that happens, then of course—American power would still be there for at least as long as I am living. But many people are betting on the other side.

This, I think, is excellent advice. The printing presses eventually need to stop and we need to pull ourselves up by our bootstraps. The nation’s psychology needs to change. We must become more humble in our foreign policy and more sensitive to the point of view of others. And Obama needs to lead the way.

I am actually hopeful that America can work with the Chinese to pull this off. Even Thomas Friedman, who is as guilty as any American of believing in the fallacy of American exceptionalism, seems to understand that something fundamental needs to change. He has good advice in his most recent column:

We’re going to have to get out of this crisis the old-fashioned way: by digging inside ourselves and getting back to basics — improving U.S. productivity, saving more, studying harder and inventing more stuff to export. The days of phony prosperity — I borrow cheap money from China to build a house and then borrow on that house to buy cheap paintings from China to decorate my walls and everybody is a winner — are over.

What Friedman doesn’t say is that the government must do its part by cutting the budget for the military and conducting a less belligerent foreign policy. That will be a tough pill for many Americans to swallow. But the Chinese are watching. And the dollar hangs in the balance.

CK Reservations

Caroline Kennedy's endorsement of Barack Obama was one of Ted Kennedy's biggest reasons, by his own account, for doing the same. And Ted Kennedy's endorsement came at a crucial time, conferring some institutional heft upon what was, to that point, a classically insurgent campaign. So I have warm feelings of gratitude towards Caroline Kennedy but, despite them, must register a few reservations about her "candidacy" for H-Rod's senate seat.

First, the same feelings I had about dynasticism when it came to H-Rod (the ones in fact that prompted me to start blogging) apply here -- in fact more so, since no one comes even close to the Kennedys. This Senate seat is in fact RFK's old seat. A single family having disproportionate politial power is pretty flagrantly undemocratic. Now, I don't advocate a legal bar on family members running for elected office, but I think they should stop themselves from doing it, and we should criticize them, on a quasi-ethical basis, when they do. And of course, I don't think we should single out Caroline - another name in the mix is Andrew Cuomo, and the "decider," Gov. David Paterson, is the son of a former New York State Senator (and when David Paterson was in the State Senate, he was in his father's old seat).

I admit some hypocrisy in finding Caroline Kennedy's endorsement of Obama desirable but not her candidacy for Senate. But I think there's a clear enough line between campaign endorsements and elected office to make the hypocrisy only cosmetic.

The second reservation is a bigger deal, I think, and it's that Caroline Kennedy has refused to make a financial disclosure. She's not bound to by law - those appointed to the Senate have different requirements than those elected. And she has pledged to make the disclosures should she be appointed. But I think that would be too late. Even though it's an appointment, we'd still like to get as close to democracy as we can, right? That means information, so that New Yorkers can lobby Paterson, who is, after all, elected.

Saturday, December 20, 2008

95 down, 1 to go

In case you haven't realized it, today marks the beginning of the final month of the Bush presidency. It's been 95 months, 413 weeks, and 2891 days (give or take). We have 1 month, 4.5 weeks, and 31 days left.

I've come to realize that a lot of my emotionalness about Obama's win is really about the end of Bush.

Friday, December 19, 2008

Going for the jugular

I just saw a Nissan commercial that began "You don't just need a car, you need a car company."


I'm not sure Nissan wont live to regret that strategy. It seems like a good way to galvanize Congress for an auto bailout.

Thursday, December 18, 2008


Threekend. It's so good, you already know what it means. We won't have one till next month, so there's plenty of time to adopt.

Wednesday, December 17, 2008

Something is Rotten in the State of Denmark

Frank Rich, writing about the moral bankruptcy of our times, summed up my feelings well in his op-ed in the NYTimes on Sunday:

As our outgoing president passes the buck for his failures — all that bad intelligence — so do leaders in the private and public sectors who enabled the economic debacle. Gramm has put the blame for the subprime fiasco on “predatory borrowers.” Rubin has blamed a “perfect storm” of economic factors, as has Sam Zell, the magnate who bought and maimed the Tribune newspapers in a highly leveraged financial stunt that led to a bankruptcy filing last week.

After a while they all start to sound like O. J. Simpson, who when at last held accountable for some of his behavior told a Las Vegas judge this month, “In no way did I mean to hurt anybody.” Or perhaps they are channeling Donald Rumsfeld, whose famous excuse for his failure to secure post-invasion Iraq, “Stuff happens,” could be the epitaph of our age.

Our next president, like his predecessor, is promising “a new era of responsibility and accountability.” We must hope he means it. Meanwhile, we have the governor he leaves behind in Illinois to serve as our national whipping boy, the one betrayer of the public trust who could actually end up paying for his behavior. The surveillance tapes of Blagojevich are so fabulous it seems a tragedy we don’t have similar audio records of the bigger fish who have wrecked the country. But in these hard times we’ll take what we can get.

Rich didn’t have enough space in his column to mention the other three stories of mind-boggling fraud, corruption, and lies that appeared in the paper that day.

First, there was a “follow the money” expose' on Chuck Schumer’s close ties to Wall Street. Mr. Schumer was the leading advocate in Congress for deregulation of the financial industry; and in return, he received the most campaign donations from Wall Street of any Congressman in the government, except John Kerry. And we were supposed to believe that Wall Street is mostly in bed with the Republicans. Um, sorry folks. The biggest difference between the Rubin/Summers Democrats and the Paulson Republicans may turn out to be which Wall St. firm each camp calls when the government needs to find out how much money still needs to be printed in order to recapitalize the U.S. banking system. Paulson has been calling his friends at Goldman Sachs, where he was the former CEO. Summers, however, will call the folks over at Citigroup, home to his mentor and confidant, Robert Rubin.

Another front-page article appearing that day reported the story of Marc S. Dreier, “one of New York’s most accomplished lawyers,” who swindled people out of at least $35 million by selling fake promissory notes issued by his company. Mr. Dreier needed the cash to fund his lavish lifestyle that featured a $30 million art collection, homes in the Hamptons, Manhattan, and Santa Monica, a Mercedes 500 and an Aston Martin, and a yacht with a Jacuzzi and a crew of 10.

Dreier will shortly find himself in prison; but he should consider himself a lucky man. Why’s that? Well, no one will remember his name or even really care that he made off with a mere $35 million. You see, the story of his rather sizable swindle broke the same weekend as the mind-blowing $50 billion fraud perpetrated by Bernard Madoff, who for many years ran the largest Ponzi scheme in the history of mankind. Madoff’s story is simply unbelievable. It would be laughable if the victims of his crime didn’t include many of the same sweet Jewish grandmothers who, I like to imagine, helped put Obama over the top in Florida when their grandkids, inspired by Sarah Silverman’s video, flew down from New York to convince them to go with Barak. Countless people have lost their life’s savings, not to mention any remaining trust they may have had in Wall St.

But Madoff is not the only villain in his story. A number of fund-of-fund managers entrusted their entire portfolio (of other people’s money) to Madoff. This, despite the fact that they were being paid millions by their clients to diversify the investments and to conduct the proper due diligence on the folks to whom they were farming out the dough. No one needs to give these managers 1% of their investments just so they turn around and hand it all over to some two-faced criminal. I’m sure the original investors could manage to accomplish that feet all on their own without any profession help from a clueless middle-man. It’s absolutely pathetic.

Add these stories to the Blagoyevich scandal, and the whole stinking pile of lies makes for a rather depressing picture. Maybe I’m looking at history with rose-colored glasses, but it seems to me that, these days, a larger than usual number of politicians and lawyers and bankers are turning out to be crooks. Or maybe they are just coming out of the woodwork now because the economy is imploding. Whatever the reason, it sure seems as though we are living in an age of widespread mendacity.

Monday, December 15, 2008

Gasp! Kristol is Right About Something: The Bailouts

Wow. I agree with William Kristol. This is a first. And, hopefully, a last.

Sunday, December 14, 2008

Like an Alpen mountain stream

It’s a good rule of thumb that when people are choking on terrible local pollution, they aren’t going to care that much about global atmospheric pollution that you can’t see or smell, that doesn’t make you sick, and that has undetectable very long term consequences. When the air you breathe and the water you drink are filthy, climate change isn’t going to be at the top of your list of priorities.

This bit of photo journalism from today’s NYT, then, is a trenchant illustration of why the US, Europe, Japan, Canada, Australia, and New Zealand are going to have to act to reduce carbon dioxide emission without necessarily getting the developing world to come along at first. Yuck.

Friday, December 12, 2008

Misha Saakashvili, Character Assassin

The most recent New Yorker features an interesting profile on Mikheil Saakashvili, the Georgian President I love to hate. Misha does not come off very well, to say the least. I was particularly turned off by his habit of resorting to character assassination when questioned about criticisms he’s received from his political opponents.

In late November, one of his former allies, Erosi Kitsmarishvili…said during parliamentary hearings that he believed Saakashvili had been planning to invade South Ossetia for some time. … Saakashvili dismissed his criticisms (“Erosi has always been all about the money,” he told me), and his government denied the charges.

Then, later in the article:

Nino Burjanadze, who had been one of the leaders of the Rose Revolution but split from Saakashvili’s party…announced that she had forty-three questions for Saakashvili about the events of the summer, and called for an official inquiry. (When I asked Saakashvili about Burjanadze, he said, “Nobody likes her.”)

Following Misha’s lead, I won’t bother to mention any of Saakashvili’s reprehensible behavior to back up my assertions, and I won't attempt to engage in any kind of useful discussion of what should be done about Russia or Georgia. Instead, I will simply say this: Saakashvili is hotheaded and arrogant. Nobody likes him except russo-phobic ex-cold warriors. He is an embarrassment to America, as we continue to back him in a myopic attempt to counter perceived Russian revanchism. Let’s hope his days as the leader of Georgia are numbered.

Wednesday, December 10, 2008

On Naomi Klein, Russia, and Corruption

Naomi Klein is the shining star of the anti-corporate, anti-globalization progressive movement. Her latest book, The Shock Doctrine, is a worldwide best-seller, and she has attracted much interest of late now that her crusade against Milton Friedman and his laissez-faire economic policies seems to be vindicated by the recent financial meltdown. I recommend reading Larissa MacFarquhar’s profile of Klein in The New Yorker.

But despite being a card-carrying liberal, I am no fan of Naomi Klein.

Klein’s basic thesis in The Shock Doctrine is this: business interests (corporations) team up with the political powers that be (Washington, IMF, World Bank) to push through free market economic policies (deregulation and privatization) whenever there is a shock event (natural disaster, currency devaluation, regime change, terrorist attack). These policies end up enriching the few at the expense of the many.

One of the case-studies Klein cites in support of her thesis is the transition towards a market economy that took place in Russian in the early 1990s following the demise of the Soviet Union. Jeffrey Sachs, one of the Western economists who advised the Russian authorities at the time, labeled his economic policy suggestions (most conveniently for Klein) as “shock therapy.” Klein has this to say about the Western-led reorganization of the Russian economy:

Beginning in 1990, the [World] Bank led the charge for the former Soviet Union to impose immediately what it called "radical reform." When Mikhail Gorbachev refused to go along, Yeltsin stepped up. … After [Yeltsin] ordered army tanks to open fire on demonstrators in October 1993, killing hundreds and leaving the Parliament blackened by flames, the stage was set for the fire-sale privatizations of Russia's most precious state assets to the so-called oligarchs.

Russia is far from unique: From Chile's dictator Augusto Pinochet, who accumulated more than 125 bank accounts while building the first neoliberal state, to Argentine President Carlos Menem, who drove a bright red Ferrari Testarossa while he liquidated his country, to Iraq's "missing billions" today, there is, in every country, a class of ambitious, bloody-minded politicians who are willing to act as Western subcontractors. They will take a fee, and that fee is called corruption--the silent but ever-present partner in the crusade to privatize the developing world….In fact, corruption was embedded in the very idea of shock therapy.

This analysis is all well and good. Klein deserves commendation for “following the money” and documenting, in her book, the symbiotic relationship between big business and corrupt politicians.

Interestingly, it seems Vladimir Putin has been reading The Shock Doctrine, or more likely, he just happens to share Klein’s feelings about the post-Soviet economic upheaval in Russia. Since he came to power, Putin has been trying to institute a kind of economic justice in Russia by taking back—by hook or crook—a good part of what was stolen by the oligarchs in the 1990s. The most well known example of this re-nationalization was the takeover of Mikhail Khodorkovsky’s oil company, Yukos, by the state-run energy giant Gazprom. Khodorkovsky now languished in a prison in Siberia. More recently, Putin has been implementing a kind of reverse shock doctrine, by which he uses a crisis to turn Russia away from the Friedmanite model and towards a more state-controlled economic environment. The NYTimes reported that he is using the smokescreen of the current financial meltdown, together with the “natural disaster” of a giant sink hole created by a collapsed mine, to move in on an oligarch-owned mining company, Uralkali. From the Times:

The Kremlin seems to be capitalizing on the economic crisis, exploiting the opportunity to establish more control over financially weakened industries that it has long coveted, particularly those in natural resources.

“We will put capital directly into major companies, in cases when it would be beneficial to the state and eventually to the taxpayer, and in those enterprises that are the basis of the economy of the Russian Federation,” Mr. Putin said in a television appearance on Thursday. “We do not exclude that these tools may be used in a large-scale way.”

Go get ‘em, Vladimir! Take down those oligarchs! Naomi Klein approves … or does she?

I wonder how Klein feels about Putin’s attempts to even the score with the oligarchs who made off like bandits in the 1990s. I suspect that she, along with many of her progressive fans, might not be all that supportive of Mr. Putin. Perhaps she feels similar to the Russians cited in the Times article:

Russians undoubtedly have ambivalent feelings about oligarchs. They tend to resent the oligarchs’ wealth, believing that it was accumulated through underhanded means in the 1990s. But they also worry that government officials want to seize these assets for their own venal purposes, and that they will end up mismanaging them, just as in Soviet times.

This completely justified skepticism of Putin-style economic justice points towards a problem with the world-view of many progressives in the Naomi Klein camp. Namely, progressives are too reluctant to admit that corruption and bad behavior is not limited to capitalist actors alone, but is built into any governmental system. They are too quick to point the finger at corporations, and unwilling to see corruption as not simply self-generated by evil-doing rich guys but as a part of the governing process. Thinking of Putin’s Russia, it is easier to see that nationalization carries its own set of problems and its own inherent corruption, and that nationalization is not necessarily the best way to improve upon a corrupt privatized system.

With this in mind, Klein’s recent call to nationalize ExxonMobil, a very Putin-esque move, is terribly misguided. In her rush to punish the corrupting corporate actors, Klein offers up a solution that will simply shift the opportunity for theft from private actors (ExxonMobil) to public actors (bureaucrats). If all this makes me sound like a libertarian, that’s as it should be. Libertarians rightly see “nationalization” as a euphemism, in many instances, for the state stealing money from capitalists, just as progressives rightly see “privatization” as a euphemism, in many instances, for capitalists stealing money from the state.

The constant struggle towards better governance is to limit the abuse of the system—both by state actors and by corporate actors. That means nationalizing ExxonMobil is a bad idea . But it also means steps should be taken to limit the influence of corporate money in politics. Naomi Klein is half right: Milton Freidman-style economic policies are, indeed, fundamentally unjust. But pointing the finger only at corporations and saying the solution is to nationalize ExxonMobil is a flawed analysis. Illinois Gov. Bagojevich needed no prodding from any corporation to incentivize him to try to sell Obama’s Senate seat.

When Klein throws up her hands in disgust over the corruption built into the idea of “shock therapy,” the proper response is: “What? There’s gambling at Rick’s casino? Shocking.” Corruption will always be with us. The task is to minimize it.

Tuesday, December 9, 2008

Holy Crap

This is NOT change we can believe in. Why can't Illinois Governors stay un-arrested?

Sunday, December 7, 2008

Fictive Inflation

Inflation has a number of gnarly impacts here in the real world, but its effects extend far beyond that. Namely, an Amount that is Dramatically Shocking (ADS) (ransoms, payoffs, net worths of fabulously rich characters, etc) has to keep pace with the cost of living. Readers will no doubt recall the illustration of this idea in a bit from the first Austin Powers movie - the "one million dollars!" bit (a truly funny one, but sadly so over-quoted that it has been subjected to a sort of lameness-inflation.)

I suspect that the recent bandying about of astronomical amounts of money here in the real world - 700 billion, 35 billion, 1 trillion - will seriously unmoor ADS's (or purported ADS's). In a world of $35 billion bailouts, what's an audacious ransom? How much would a stolen ancient Mayan artifact be worth, and couldn't a scheming evildoer make more money (and more safely) if he just lined up at the TARP trough?

The new big numbers are so unfathomable that ADS's can't merely keep up with inflation - they have to obliterate it. Take the Six Million Dollar Man, which first aired in 1974. 1974's Six Million Dollar Man would cost you... 29 Million Dollars today. Yawn, right? How much would it take to make you tune in? $100 million? Even then, I don't know. The best bet might be to forgo amounts altogether and just go with an adjective like "bionic."