Friday, January 18, 2008

Bernanke - the wrong man at the wrong time

Speaking of Bernanke, he's not really doing a bang up job, is he? His testimony yesterday confused everyone and panicked the markets. Granted, not much is needed to panic the markets right now, but part of Bernanke's job is to see to the long term health of the economy - and he's failing. While it's certain that he's been caught between a rock and a hard place recently - he eases too much on the rates we could be hit with runaway inflation, he keeps things too tight we face recession - but yesterday's testimony was a self-inflicted wound. Besides endorsing the ridiculous tax rebates, which Wall Street knows will do nothing to stimulate the economy, he seemed to hedge on how much the Fed will ease at the next meeting. The markets were looking for confirmation that he'd ease by at least 50 basis points. They didn't get it and sold off.

Here's the thing. If you signal that you're going to slowly drop interest rates over time, nothing will happen. Any sane investor, knowing that rates will be lower a month from now, and all else being equal, will wait. So, if you're going to cut rates in order to get the markets moving, you should do it all at once rather than by dribs and drabs. I think Bernanke should drop the Fed Funds rate all the way down to 2% and do it today. It would be a shock to the markets from both a timing and a size perspective. I'd accompany the cut with a statement suggesting that no more help was forthcoming from the Fed in terms of interests rates. The markets would then be aware of the playing field and could adjust accordingly.

That's the monetary side. Fiscally, Bush should trash the rebate nonsense, let the Democrats know that he'll veto any new spending measures, demand the 2003 tax cuts become permanent, and propose significant cuts in both corporate and capital gains taxes.

If Bernanke acted today and Bush on Monday, the markets would rejoice. We might need some pullback on rates down the road if inflation starts to rear its ugly head, but we'd be past the recession scare by then. Anyhow, that's my plan, if I were king for a day.

Of course it won't happen. We're going to get rebates, which historically have little or no stimulus effect. And we'll get spending from the Democrats, their answer to everything. We'll pay for them both down the road. If that's the price we have to pay for some real fiscal stimulus, I suppose I'm okay with it. But I'm not sure we'll get real stimulus - the Republicans are playing defense here, as usual, and when was the last time they didn't capitulate?

One last point. Bernanke came out against making the Bush tax cuts permanent, at least as part of this stimulus plan. He acted, as Jimmy Pethokoukis said on Larry Kudlow's show last night, as if tax cuts were some necessary evil, things we should only do as a last resort. Bernanke didn't exactly say that outright but you got the feeling. He did say outright that making the tax cuts permanent would not have an immediate stimulating effect on the economy. I disagree. So do the majority of people on Wall Street, who also believe additional tax cuts - again, on capital gains and corporate taxes - are in order and would likely have an immediate effect. But his comments yesterday made everyone pause and take note of the man. The markets are now rightly suspect about his supply-side, free-market bona fides, and have clearly lost confidence in him. He's a good man and might be a fine Fed chairman under other circumstances, but every step of the way over the past volatile six months, he's come up short. I think he's going to be a one-termer. And at this point, I hope so.

"I got you confused with the other one..."

I don't expect the average man on the street to know the difference between Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson. I do, however, expect a member of the House Budget Committee to. Behold, dear reader, the genuises who are running your government:

Saturday, January 12, 2008

Horseraces, and Rudy

I've been getting flack about not posting for awhile. Well, one person mentioned it. Since he may be this blog's only reader, I feel I should post something this morning. Give my fan base a little something to chew on. Keep 'em coming back, don't you know. I don't want to end up like Earl Peckham in Peter Devries' Peckham's Marbles:


"I'm on sabbatical from the university where I've been teaching." This was bending the truth more than a little. He had left in a huff after being denied tenure, that in turn resulting from his failure to attract students to his elective seminars. His creative writing course had been a special problem. Two years before, his enrollment had dwindled to one. And last year it had fallen of a little.


So what's in the news? Well, the primary horseraces are about as interesting as can be. I'm a little afraid that the Republican race is starting to break John McCain's way. And that if it's not McCain, it will be Huckabee. Right now I'd say there is about a 75% chance that one of the two will end up being the Republican nominee. While I believe McCain would be good on the war, I think he'd be horrible on everything else. Huckabee would be horrible, period. So in that race, McCain would be preferable.

Rudy may still have a shot. He has to win Florida or he will be dead. He's still my top choice, though if Fred Thompson had performed all throughout the primary campaign the way he did in the Fox debate the other night he'd be my man. Really, where has this guy been? The Thompson we saw the other night had energy, vigor, purpose, clarity of thought. He was unapologetically conservative. He pointed out where others were not, especially Huckabee. What's more, he still came off as the straight-talking, non-politician. Here I am, this is what I think, take me or leave me. I started thinking during the debate that this may have been part of the reason he was not a star in the Senate - he couldn't bring himself low enough to succeed in that bottom-dwelling environment. He has too much pride, too much dignity, to prostitute himself the way one must to shine there. At any rate, everyone knows he was a senator but he seems like an executive. The other night he seemed like a leader. And it was hard not to be excited by his performance. But it may be too little too late. But he's got to run strong in South Carolina, perhaps he even has to win, to continue.

Romney must win Michigan to continue but even if he does I don't see it happening for him. There is something about Mitt that doesn't connect with the public. It has nothing to do with the whole flip-flopping thing but it may be related to the idea that he comes right out of central casting - he's perfect for the role of a politician. He seems nothing other than. Someone said something the other day to the effect that he's wired too high, he's too on all the time, no one can ever see the human side of him. I think I agree with that. It may not be fair - he seems to be a good, decent man, and his policy positions are acceptable to conservatives, but he excites no one.

I see on Drudge this morning that Mitt teared up yesterday in Michigan while talking about his dad. I know Hillary's ploy is credited by many for her comeback in N.H. so I'd hate to think Mitt's tears were calculated for the same effect, i.e. to show him as a sensitive guy - hey everyone, look! I can cry too! Now will you vote for me? I'm going to give Mitt the benefit of the doubt on the tears. But it still does nothing for me. Ed Muskie fought back tears forty years ago during the N.H primary and it was a disqualifier for him. Real men didn't cry back then, especially men who wanted to be president. Now we live in the age of Oprah and we have a president who tears up on a regular basis. For many people these days, especially women, a presidential candidate crying in public is a net positive, though don't ask me why. I prefer the old way (big surprise!!)

So that leaves Rudy, who I mentioned above was still my top choice. Why? I said in a post long ago that I'd get around to telling you why. Now it may be too late to matter because if he loses Florida we'll see no more of him. Sure he'll still be around on Super Tuesday but it won't matter. Florida is key.

So what is so appealing about Rudy? To put it simply, he returned New York City back to it's rightful spot as the greatest city in the world. It wasn't when he got there - it was dark, and dirty, and dangerous. The bums, pimps, whores, and dealers were in control of Times Square. You didn't dare walk too far into Central Park, and never at night. It was an inch away from being a total welfare slum. Businesses and residents were taking flight.

And look at it now. It's bright, and clean, and safe. Walt Disney rules Times Square. Central Park is a virtual paradise. Business has returned. Tourism is back. It's lost none of its hustle and bustle, none of its energy, none of its charm. It's the greatest city in the world.

And no one disputes it was Rudy Giuliani who turned it around. His vision, his policies, his tenacity. And he did it in spite of the multitude of entrenched bureaucracies and special interests who lined up vehemently against him. The city council was against him, the school board was against him, the media, the citizens groups. Everyone wanted him to fail. And he won. Not only did he win but he was able to bring some of those who were against him over to his side. Part of it was because they saw the results, but part of it was his demeanor, his temperament. What everyone else saw on 9/11 the people in NYC had seen for eight years. Rudy ability to talk calmly, honestly, and reasonably about the issues is a large part of his success. He's tenacious, yes - and that's good - but it's tenacity towards the final end of getting things done; tenacity towards getting the opposition on board. That was a necessity in New York. I don't want to use the old "he's a uniter, not a divider" line - it suggests that he might be ready to compromise on his beliefs just so he can say he's done something. Rudy is able to convince others to come along with him and do it his way.

Does that translate nationally? It could. I've been saying for over a decade that both the CIA and the State Department need to be purged. They are filled with lifetime bureaucrats with their own agendas, agendas pursued in defiance of the administrations they are supposed to be serving. George Bush has learned that. And I think Rudy knows that. He knows he can't fight the war on terror effectively with the CIA and State Dept. as currently constituted. There must be institutional change, there especially, but throughout the government as a whole. Can Rudy do it? No one knows, but he's the only one with the vision, ability, and guts enough to try. "Change" has become the catchword of this campaign on both sides. You want change? Rudy is the only one who'll deliver real change. Change for the better, as he keeps pointing out.

To put it in simpler terms, and I'm stealing this from someone else - I wish I could remember who but it was some time ago. Anyhow, let me state that the following comes almost directly from someone else. So here it is: in your lifetime, how many politicians have actually delivered on the promises they made? I don't mean that they delivered this or that new program or tweaked this or that institution. I mean how many have made large, wide-ranging, earth-shaking promises, and then gone on to do it? I count two. Ronald Reagan, who said he'd defeat the Soviets and he did; and Rudy Giuliani, who said he'd make NYC great again and he did. Based on actual performance, I think the gap between Rudy and the other candidates is enormous. He is clearly, in my book, the best man for the job.

Now though, as the war on terror has subsided in the public mind, the reasons for a Giuliani presidency don't seem so compelling. That's part of why he's fallen in the polls. Also because of the McCain and Huckabee surges, which he didn't expect, which have thrown his whole national campaign strategy into question. He seems an after-thought now. He's realized he needs something new to run on so the other day he came out with a tax cut package that I like. Maybe others will to. Perhaps a win in Florida makes him the man with momentum going into Super Tuesday. He then wins New York, Connecticut, and New Jersey and comes out of Super Tuesday as the man to beat. It's a long shot - I give him about a 15% shot at getting the nomination right now. Things have to fall perfectly for him, but he's not dead yet.

Friday, January 4, 2008

The End of Reaganism, Part III: Huckabee in Iowa

The Corner live-blogged the Iowa caucuses last night. Here are a few samplings.

At 8:13 p.m., Katherine Lopez posted this comment from a reader who was at one of the caucus sites:

"Looks like lots of young evangelicals."


Rich Lowry posted these results from an entrance poll at 9:39:

Huckabee...did well among (relatively) young voters, scoring higher among voters 17-29 and 30-44 than among older voters. Also, 37% of GOP voters said it mattered a great deal that a candidate shared their religious beliefs. Huck got 55% of them.


Mark Steyn followed shortly thereafter with this observation:

I'd...disagree with Ramesh's idea that this was a good night for Christians reaching across the aisle. It would be truer to say that for a proportion of Huck's followers there is no aisle: he's their kind of Christian, and all the rest - foreign policy, health care, mass transit, whatever - is details. This is identity politics of a type you don't often see on the Republican side.


Rich again, shortly after 10:00, regarding the youth vote:

Andy Kohut says it was 17% in 2004, and that up to 22% is a notable bump.


Rich again, after the results were nearly final:

60% of voters were evangelicals. Huck beat Romney among them 45-19%. 40% weren't evangelicals. Romney beat Huck among them 33-13%.


David Freddoso weighed in shortly after midnight with this regarding caucus-goers under 30 :

40 percent chose Mike Huckabee.

22 percent chose Mitt Romney.

21 percent chose Ron Paul.



Notice a trend? While it is certain that evangelicals put Huckabee over the top in Iowa, it was among young evangelicals where he ran the strongest. And among those young evangelicals, issues mattered little. The fact that Huckabee shared their faith was enough. Just as a female Democrat might feel perfectly justified voting for Hillary because she's a woman, just as a black Democrat might likewise vote for Obama because he's black, we now see the same phenomenon within the Republican party among evangelicals. Identity politics has arrived for the GOP.

I mentioned the young evangelical angle in one of my previous posts, stating that:

It is among...young people that Huckabee will be finding most of his support among evangelicals.


When I wrote that statement I was referencing an article in the current issue of National Review, which described the transformation within the evangelical community among those under 30. Though I didn't mention it then, I was also referencing personal experience. I know lots of young evangelicals: on my wife's side of the family all the nieces and nephews - and there are a bunch - can fairly be described as evangelical Christians. Many of them are now coming of age and will be able to vote in the next election. A few of them have married fellow evangelicals. Finer young people you will never meet. And, as far as I can tell, they are each and every one Huckabee supporters. None of them are what one would consider politically aware - like most young people, they follow politics only at a superficial level, if at all. On Christmas day I discussed with one of my nieces her support for Huckabee and she admitted as much. She told me since she was not really aware of the issues, she had to make her choice based on who she trusted the most. She trusted Huckabee because he was a man of God. He wouldn't disgrace the office. I couldn't argue with that, though I urged her to find out more about the issues, including the vital issue of Huckabee's electability. She seemed eager to hear my views on why Huckabee would make a poor candidate in a general election and a bad president. But by then it was time to open gifts and tend to more important family matters. Now she is back in Florida with her husband, an Air Force helicopter pilot who's already served a tour of duty in Iraq and is slated for another soon. He also supports Huckabee.

Since my first 'End of Reaganism' post on December 22, talk in the blogosphere on the subject has exploded (I can't really take any credit for this, since no one reads my blog.) There was a lot of talk about it before the New Year but David Brooks' column in the NYT on January 1 seems to have been a fresh catalyst. NRO actually had a symposium in which many of their writers weighed in. It's been discussed in The Corner, and many other places. For the most part, the consensus seems to be that Reaganism is alive and well, just waiting for a leader to rally us back to where we once were. Perhaps. But I think this consensus missed a vital point. Due to a significant demographic shift, we are losing one of the wings of Reaganism, the social conservatives made up in large part by the evangelical community. Huckabee, it seems to me, could just as well have run as a Democrat and these young evangelicals would still have supported him. His liberal policies, his astonishing naivete on foreign policy in a time of war, his economic populism, his nanny-statism, none of that seems to matter to this bloc of voters. Actually if it matters at all to them, it is a net positive, for these youth are kind-hearted, indeed tender-hearted, people. They want human suffering alleviated to whatever extent possible and through whichever agent is available. They've yet to discover that government bureaucracies are incompetent at delivering the outcomes they so sincerely hope for.

Mike Huckabee will either lose in the primaries or later in the general election - of that I have little doubt. But he's signalled to other evangelical populists that there is a base among the young for similar candidates to build on in the future. Unfortunately for the Reagan coalition, this base has little idea who Ronald Reagan was, and they care even less. Mike Huckabee shares their faith - what else matters?

Wednesday, January 2, 2008

New Year Plans

Ah, another new year. What shall we do to greet it? How do we make a fresh start out of this fresh start?

If you're me, you head to the medicine cabinet and take a couple of Tylenol because you woke up with a splitting headache. It's not fair either because it wasn't the booze - all I had to drink on New Year's Eve was half a glass of wine with dinner. With a headache the size of the one I had, I should at least have had the pleasure of a bender, of tripping the light fantastic with some ditsy blonde or, even better, some sophisticated brunette, to the strains of Glenn Miller and Harry James, and finally, Guy Lombardo. What's that you say? They don't do that anymore? Those people are all dead? Oh, yes, that's right. Now it's New Year's Rockin' Eve, or some other such nonsense. At least it was a dozen or so years ago when I last made it a point to stay up to see the new year in. I shudder to think of what they do now. An all Gangsta' Rap New Year? How does Auld Lang Syne sound as a rap song? Or maybe an all Britney Spears and Friends New Year? I suppose the point of a show like that would be to pile insulting banality upon insulting banality until the sheer weight of it all caused what's left of the civilized world to finally give way.

Grumble, grumble. Anyhow, when I last left you I was at the medicine cabinet. I popped a Zicam while I was at it because I thought I felt a cold coming on. Not a good start.

By the way, that crack about dancing with the ditsy blonde and the sophisticated brunette? I was just kidding babe. Really.

I vacuumed the house, made a few New Year's phone calls and generally lolled away the morning. By lunch time I was feeling much better. The woman who is my life (really, honey, I was only kidding) and I decided to do something. The whole fresh start thing. A movie was suggested. They've made Ian McEwan's Atonement into a movie. I blogged about it previously. It's a great book and normally great books turn into terrible movies but I've heard good things about Atonement. We checked the listings and found the afternoon showing had already started at the nearest theatre. It was playing elsewhere farther away but we'd have to hurry and even then we'd probably miss the beginning. Oh well, we'll see it another day.

The National Gallery of Art was the next suggestion. They have a J.M.W Turner exhibit and an Edward Hopper exhibit running now and we wanted to see both. Great. Let's go. You sure they're open on New Year's day? Sure, everything's open these days.

Ahem. We parked near the Capitol and walked down towards the gallery. The wind was howling pretty good at this point so we decided to enter at the East Wing. Except we couldn't enter. The doors were locked. The place was dark. Closed. So much for that idea.

Okay, we're downtown, what else can we do? Well, the Smithsonian really is always open. The Most Beautiful Woman In The World had an idea - let's go see Julia Child's Kitchen at the American History Museum. A great idea, I thought. Now to some of you this may sound a bit strange. Julia Child? Yes, I say, Julia Child. I consider her to be an American Hero. A quite remarkable woman in many respects besides her cooking. Read the whole entertaining link above but how about this tidbit about her courtship with Paul Child:


In the summer of 1946, they traveled across the country together, accompanied by 8 bottles of whiskey, a bottle of gin and a bottle of mixed martinis. Paul wrote to [his brother] Charlie, "(Julia) never 'puts on an act', or creates a scene. . . She frankly likes to eat and use her senses and has an unusually keen nose." In another letter he reported "She also washes my shirts! Quite a dame!"

Quite a dame indeed. So let's go see her kitchen.

My wife, who's also quite a dame, and I walked down past the National Gallery West Wing, and then past the Natural History Museum, which had lots of people crowded around, coming and going. See, the Smithsonian is open. Okay, onward to the American History Museum.

Which was deserted. Not a soul around. An ominous sign. Then we saw a real sign - Closed For Renovation. Reopening Summer 2008. Oh, right. I think I read something about that a while back. Anyhow, Julia's kitchen would have to wait.

So far we were zero for 2008. Might as well head home.

On the walk back to the car the wind calmed down and all of a sudden it was a lovely day. We strolled along and realized that we'd rather be out walking than in some museum anyway. We both love walking, especially in the city. We go to New York City and I'm happy just to stroll along amid the hustle and bustle - I don't have to really do anything anymore. Just walking around will do. We did lots when we went to London and Paris and Rome and Vienna, and other places in Europe, but I am determined that on our next trips there we'll do less sightseeing stuff and more just walking and strolling stuff. Anyhow, what I'm trying to say is that even though nothing worked out for us as planned, it all worked out.

Tuesday, January 1, 2008

Happy New Year Mom

This one's just for you:

2008

Happy New Year folks. Ring it in with the below video of Benny Goodman's band, vocal by a very young Peggy Lee. She'd go on to have one of the greatest careers ever by a female vocalist but, for my money, she was never better than this. Enjoy.