Mint.com’s blog has a handy visual guide to the financial crisis on a recent entry. I just discovered Mint.com a few days ago – and I’ve enjoyed using the site itself to keep track of my personal finances. I especially like the nice pie graphs they make to track your spending.
Mark Lilla described the downfall of the conservative intellectual movement in last week’s Wall Street Journal, describing how conservative intellectuals in the 1960s had originally and self-consciously understood themselves to be elites, trying to educate the public, as the public overwhelming supported liberal politicians. Lilla describes the changes as the sons and daughters of these thinkers took over the institutions of the conservative movement from The Weekly Standard to The National Review, just as conservative politicians began to win elections. This generation – Bill Kristol, Jonah Goldberg, Rich Lowry, and the rest was different:
Over the next 25 years there grew up a new generation of conservative writers who cultivated none of their elders’ intellectual virtues – indeed, who saw themselves as counter-intellectuals. Most are well-educated and many have attended Ivy League universities; in fact, one of the masterminds of the Palin nomination was once a Harvard professor. But their function within the conservative movement is no longer to educate and ennoble a populist political tendency, it is to defend that tendency against the supposedly monolithic and uniformly hostile educated classes. They mock the advice of Nobel Prize-winning economists and praise the financial acumen of plumbers and builders. They ridicule ambassadors and diplomats while promoting jingoistic journalists who have never lived abroad and speak no foreign languages. And with the rise of shock radio and television, they have found a large, popular audience that eagerly absorbs their contempt for intellectual elites. They hoped to shape that audience, but the truth is that their audience has now shaped them.
Today there are a few conservative movement intellectuals left – George Will for one. One could make a case for David Brooks and David Frum. Most of the rest are party hacks – or intellectuals who happen to be conservative, rather than members of the conservative movement and it’s institutions.
This isn’t a healthy result for a two party system.
[digg-reddit-me]Hillary Clinton is not the best candidate for Barack Obama to choose as his Secretary of State.
She has the necessary gravitas; she has the experience; she has a similar worldview (more on that later); she has significant political weight in America; she has many established relationships with worldwide leaders; she has an undeniable star power since her primary campaign; she has been a workhorse in the Senate; she knows – at almost all times – the proper and diplomatic answer to preserve the status quo.
There are a few obvious obstacles to placing Hillary in this position:
All of these obstacles can and should be overcome – if she is the best candidate for the job.
But she isn’t. There is in fact another high profile candidate who brings considerable assets Hillary lacks while also lacking her deficiencies: Chuck Hagel.
Hagel:
I think Hillary Clinton is – of the possible choices I have heard mentioned – the second best of all the options. But Hagel is far better – because he agrees with Obama on these significant matters of controversy.
The ideal place for Hillary would be in the Department of Defense. She would be a ground-breaking pick – and one that would burnish the national security creditials she will want to use again in her almost inevitable retry.
It would make even better sense to leave Robert Gates in as Secretary of Defense for the next year or two – and work with him to start those tough spending cuts on big, Cold War era projects that will be needed. Then, after those cuts have been pushed through – get Hillary in as Secretary of Defense. This would also have the secondary effect of keeping her extra busy mastering her new position in the run-up to the 2012 election, helping prevent any potential mischief. In the meantime, Hillary could spend the next two years in the Senate working with Ted Kennedy on the project that she started her political career working on: health care. She could also focus on infrastructure improvements – as she has been – and which are extremely important if less than glamorous.
Update: Ken Silverstein over at Harper’s has his own list of reasons Hillary shouldn’t be Secretary of State.
His number 2 is a very important point I overlooked:
H/t to Andrew Sullivan on the link.
[Above image by Angela Radulescu.]
Everyone seems to have very strongly held positions as to whether Joe Lieberman should be allowed to keep his committee positions in the next Senate. I don’t have a strong position.
It’s clear that Lieberman went further than any Democrat should have in attacking the nominee of his party on a personal level – saying he would be afraid for America if Obama won as late as the day before the election. (TPIP has an excellent video from Rachel Maddow’s show over at his site explaining some of the various reasons Joe the Lieberman shouldn’t be allowed to keep his position.)
Yglesias points out that Lieberman – in trying to make the case to keep himself as head of his various committees – seemed to be threatening to vote against the positions he has held for years if he is removed:
As it stands, Lieberman seems to be saying that he deserves to stay in charge of the committee in virtue of his moderately progressive domestic views, but that continuing to hold those views is contingent on him getting favors from the Democratic leadership.
As Rachel Maddow pointed out, Lieberman’s position has more than a mere symbolic relevance – as he held off various investigations of the Bush administration since 2006 with his committee chair position. As long as Lieberman is considered a Democrat, his criticisms of the Democrats will carry extra weight.
But at the same time – by removing him the Democrats would risk alienating moderate Republicans, who they will likely need to get past filibusters. Without Lieberman the Democrats would have no chance at the 60 votes needed to override filibusters. Plus, Lieberman’s demotion and the accompanying commotion would not send the message of bipartisan cooperation Obama is trying to cultivate as he readies to take on the many challenges ahead.
Either option has it’s negatives. The best approach would be for Obama to step in; for Lieberman to apologize to Obama; for Obama to indicate that he would be willing to consider doing what he could to prevent Lieberman from having his committee chairmanships removed; and for whoever the enforcer is in the party – Rahm Emanuel – or whoever else – to extract from Lieberman a promise to vote with the Democrats on any potential filibuster issue. He can vote his conscience or politics or whatever on the issue when it comes to the floor – but he would make a public statement that he would not support any filibuster to block the agenda of the president of the United States of America.
That’s the only thing the Democrats need Joe Lieberman’s vote for – to prevent the filibuster. At almost every other point, with decent party unity, and most likely some Republican cross-overs, they win with ease.
Joe Lieberman’s public statement that President Obama’s agenda deserves an up or down vote could make a significant difference in what can be accomplished in the first 100 days.
It seems as if Hillary Clinton is going to be the next Secretary of State. And it seems like a done deal at this point – with the coy public statements and influentials lining up behind it.
I’m not thrilled. I think she’s a better choice than John Kerry or Bill Richardson, whose names were also being bandied about.
But the candidate I think would be truly brilliant for Secretary of State would be Chuck Hagel. Obama is certainly going to do some controversial things in foreign policy – common sense things really that became political fodder for attacks – such as engaging in direct diplomacy with Iran, being more aggressive with regards to Pakistan, etcetera. A Republican as Secretary of State would help help provide political cover for these controversial decisions; but more importantly, it would make it clear that Obama is not taking “liberal” positions – but common sense ones. It would serve as notice to the world that Obama’s foreign policy is bipartisan, reflecting not just this president but a broad consensus across political parties. In fact, Chuck Hagel is perfect for this role as defended Obama’s foreign policy positions against both Hillary Clinton and John McCain.
The position I would reccomend for Hillary would be Secretary of Defense. Obama could come to some agreement with Robert Gates that allows him to stay for a year or so – and offer to put Hillary in after that. She’s tough enough; it would give her important credentials for a later run for president; it would be breaking yet another glass ceiling.
[digg-reddit-me]Question: Are we entering another Great Depression?
Answer: I don’t think so, but I’m not an economist. (Though I did write a very popular piece on 11 Things I Learned While Trying to Figure Out the Financial Crisis a few weeks ago – which makes me a certified internet expert.)
Here’s why I don’t think we’re entering another Great Depression.
First, my understanding of the Great Depression is that it was – in essence – a crisis in the financial markets caused widespread fear and panic unchecked by the government. And as people lost faith in the financial system, it led to a paralysis of the entire economic system. The problem was not as much in the “real economy” – the economy whose primary purpose is to create products and services for uses other than creating profit – but in the financial economy – the part of the economy whose primary purpose is to redistribute excess wealth to create profits. The Great Depression was also worsed by the physical calamaties that hit America at the same time – most especially the Dust Bowl which devestated America’s farming belt – but at it’s core, the Great Depression was a matter of a broken financial system.
Since that time, a few factors have changed financial markets:
The first three items on that list seem to demand a corollary to the Feiler Faster Thesis – promoted by Mickey Kaus – which explained how “political trends that used to last for weeks now last for hours.” This thesis was used recently to explain in part why Barack Obama’s and Hillary Clinton’s big moments in the campaign never seemed to give them any momentum – or more precisely why their momentum in the press and in public polls lasted for days rather than weeks as political reporters had come to expect. The corollary related to the current financial situation would be that as players in financial markets are bombarded with increasing amounts of data and are able to make trades and move money faster, the markets themselves speed up. This helps explain the dramatic ups and downs of Wall Street in the past few months – as the indices swung from positive to negative and back to positive in an unprecedented manner. The Feiler Faster thesis also could be said to have speeded up the real economy – as computerized inventory, logistical innovations, and more precise estimates of needed supplies have made many retailers and suppliers more responsive to economic conditions. But it seems clear that though these effects have speeded up the real economy at the margins, the financial markets have begun to move exponentially faster. The Great Depression – which lasted for over a decade – could be considerably shortened by this speeding up of the financial markets relative to the real economy – and to the extent that the effect of this volatility in the financial markets on the real economy could be mitigated, the results of this crisis would be minimized. The crisis will and already has effected the real economy – but so far, while the financial markets have fallen almost 30% from their relatively stable position in August, the real economy has only marginally slowed down.
The final item on the list should also give hope to those who fear we are entering another Great Depression. Unlike in 1929, we have a government willing to act and experiment in order to jumpstart the economy. And we will soon have a government led by Barack Obama that is more pragmatic and less ideological in proposing solutions. At the same time, various national and internationals reforms instituted by governments to protect against the kind of instability that caused the Great Depression have proved their worth in the past few months – as deposit insurance, regulation, coordination between central banks, a social safety net, and prompt government action have all contributed to mitigate the crisis.
Right now, the various governments’ decisions to act as a backstop against financial instability have helped begin to rationalize the markets – and prevented fear from entirely dominating. It has been argued that if Lehman Brothers had not been allowed to fail, this fear and sense of distrust pervading the financial markets could have been contained. Of course, few would have predicted the collapse of Lehman Brothers would have such a cascading effect – except now, after the fact, as it seems obvious.
It seems likely to me that the next Great Depression will likely be catalyzed not by a market collapse – but by the collapse of a nation, especially America. As long as governments are willing to place themselves as backstops against financial instability, the markets will go up and down – but the system will hold. It may be reformed. It may evolve. But the key characteristic of the Great Depression was the hoarding of financial resources caused by a lack of trust in the market. As long as the market is able to be backed by the government, it cannot truly fail – unless the government goes first. The paradox is that a government is only as strong as it’s economy is – which brings us back to trust.
Which is why – as Paul Krugman argues – Obama must act dramatically and quickly, while he still can.
Of course, as an alternative to all this – one might propose an effective tax on hoarding, inspired by the Austrian town of Worgl’s actions during the Great Depression – perhaps with exemptions for the first $100,000 of savings per person so as not to discourage saving.
[T]he North Carolina county where Palin expressed her delight at being in the “real America” went for Obama by more than 18 percentage points.
The actual real America is everywhere. It is the America that has been in shell shock since the aftermath of 9/11, when our government wielded a brutal attack by terrorists as a club to ratchet up our fears, betray our deepest constitutional values and turn Americans against one another in the name of “patriotism.” What we started to remember the morning after Election Day was what we had forgotten over the past eight years, as our abusive relationship with the Bush administration and its press enablers dragged on: That’s not who we are.
So even as we celebrated our first black president, we looked around and rediscovered the nation that had elected him. “We are the ones we’ve been waiting for,” Obama said in February, and indeed millions of such Americans were here all along, waiting for a leader. This was the week that they reclaimed their country.
Aside from the schlocky sentence, “The actual real America is everyone,” an excellent column.
I’ve just gotten around to reading this Sunday’s news columns – the ones I normally read on either Sunday or Monday. Tom Friedman’s column impressed me a great deal – even though it started out as the saccharine sales pitch I am so used to hearing from him – it ended with this tough talk:
So to everyone overseas I say: thanks for your applause for our new president. I’m glad you all feel that America “is back.” If you want Obama to succeed, though, don’t just show us the love, show us the money. Show us the troops. Show us the diplomatic effort. Show us the economic partnership. Show us something more than a fresh smile. Because freedom is not free and your excuse for doing less than you could is leaving town in January. [my emphasis added]
That last line is the one that gets me. It gets to the heart at much of the more reasonable conservative frustrations with the “international community” and Europe. (The less reasonable frustrations are another story.) But more important – Friedman identifies one of the arguments Obama will need to make in order to translate the goodwill generated by his election to motivate worldwide leaders to help him take on the global challenges we will are facing.
Also – I’ve decided to start linking to the regular version of New York Times articles rather than to the printable format which I prefer. As the Times will likely be facing some financial problems in the near future, I figure it’s the least I can do.
Matt Yglesias brings up a good point in disagreement with Jindal’s prospects for the coming political cycles:
[T]he next few years aren’t shaping up to be an especially promising time to be a governor. A governor presiding over an economic boom can cut taxes while increasing spending, and thus develop a reputation as a popular can-do pragmatist. Think of George W. Bush, George Voinovich, Christie Todd Whitman, and other classics of the 1990s…[R]ight now [Jindal]’s looking at the need to cut $1 billion in spending. Not his fault (though the decision to make up the budget shortfall with a mix of 100% service cuts and 0% tax cuts reflects the intellectually and morally bankrupt nature of contemporary conservatism) any more than the “free money for everyone” governors of the nineties were really geniuses, but it’s going to make it difficult for him to rack up the sort of Record Of Accomplishments that you’re usually looking for in a presidential candidate.
Not quite a conspiracy – but Joshua Micah Marshall just reported on the final piece of the puzzle I seem to have been missing that helps explain:
The final piece being – Brent Scowcroft (h/t Andrew Sullivan), the former National Security Advisor under Presidents Gerald Ford and George H. W. Bush and a former Lieutenant General in the Air Force, and a guy so personally close to George H. W. Bush that he co-wrote Bush’s memoirs with him.
Hagel, Powell, and Gates all have been close allies of Scowcroft, especially in fighting against neo-conservatives in the George W. Bush administration. And he has apparently been working behind-the-scenes with Obama and his foreign policy team since the summer at latest.
Indeed, the roots of this defection of foreign policy realist Republicans to the Obama camp can probably be seen in this April 2008 article in the New York Times in which Lawrence Eagleburger, of the realist camp himself, describes a battle going on for McCain’s “soul” between the realist and neoconservative Republican foreign policy camps. By the summer, it became pretty clear which side had won that battle – as McCain embraced one neoconservative position after another and surrogates claimed he wanted to “kill the United Nations.”
By the summer, Scowcroft had begun to unofficially advise the Obama campaign; there was talk of Bob Gates staying on at Defense; Senator Hagel began to criticize McCain while praising Obama; and Powell decided to endorse Obama publicly.