Friday, September 19, 2008
Hundreds of billions of dollars worth of bailouts (according to Paulson)
Absolutely no need to finance it, of course.
Thursday, September 18, 2008
Subsidizing the Yankees
A House sub-committee is holding hearings today on alleged improprieties in the use of tax-exempt bond financing to pay for the new Yankee Stadium. Not to put too fine a point on it, but highly questionable representations concerning site value seem to have been made in the IRS private letter ruling request, which found the financing eligible for tax-exempt treatment without its being subject to the dollar cap on issuance of private activity bonds.
As an aside, even if the site value claims were true and the ruling remains valid, the plan that the IRS was asked to approve appears to have been a sneaky end-run around the intent of the dollar cap for private activity bonds, possibly undermining important public accountability and transparency goals in the design of the tax subsidy (as suggested in testimony before the sub-committee by my NYU colleague Clayton Gillette).
My own belief is that the Yankees should be punitively taxed, not subsidized. Major league baseball has already taken constructive steps in this direction, but the federal government should get in on the action as well.
And (shedding light perhaps on my mood swings concerning the election?) I will not feel totally sure that at last, for the first time since 1993, there will be baseball playoffs without the Yankees, until they are mathematically eliminated. Until that happens, how sure can one really be?
As an aside, even if the site value claims were true and the ruling remains valid, the plan that the IRS was asked to approve appears to have been a sneaky end-run around the intent of the dollar cap for private activity bonds, possibly undermining important public accountability and transparency goals in the design of the tax subsidy (as suggested in testimony before the sub-committee by my NYU colleague Clayton Gillette).
My own belief is that the Yankees should be punitively taxed, not subsidized. Major league baseball has already taken constructive steps in this direction, but the federal government should get in on the action as well.
And (shedding light perhaps on my mood swings concerning the election?) I will not feel totally sure that at last, for the first time since 1993, there will be baseball playoffs without the Yankees, until they are mathematically eliminated. Until that happens, how sure can one really be?
War with Spain?
Sorry guys, but you're going to have to wait your turn in line. After Iran, Russia, China, Syria, and North Korea, we will see what we can do.
Accounting rules and the financial meltdown
Today's WSJ had an interesting, albeit not very clearly written, op-ed by Zachary Karabell blaming post-Enron accounting rules for helping create the AIG meltdown. Read in conjunction with the WSJ's front-page coverage of the AIG drama as a case study in "deleveraging," the story appears to be as follows. As we all know, financial institutions (like all other companies) dislike having to write down their assets on the books and have long resisted doing so even when value has declined. For a long time, they could. But post-Enron, the accounting rules were changed to require more write-downs to market value. This, in turn, then triggered a self-reinforcing cycle of write-downs triggering mandatory asset sales, triggering distress prices far below fundamental value, triggering more write-downs, triggering more mandatory asset sales, and so forth. (Apparently a story that Bernanke, among others, has endorsed.)
One part of the story is that whoever buys the assets at distress prices far below fundamental value ends up doing just great when the dust settles. In the more rational world of an economics textbook or model, all you need is two such prospective purchasers who are competing with each other, rather than colluding, to drive the price up to fundamental value and make this scenario impossible. But apparently there isn't enough liquidity and prospective demand for under-valued assets for this to happen, especially when the bowling pins start falling one after the other.
As an aside, this I gather was at play in the collapse of Long-Term Capital Management some years back. A credit crunch forced them to sell assets for way below fundamental value, leaving some very happy purchasers to clean up (but apparently there were too few of them to drive the prices back up, and perhaps there was even implicit collusion to all enjoy part of the good thing that was popping into their laps).
Anyway, all this can't and won't happen in textbook financial markets, but I gather it actually is happening out there in the world, even at this very moment. One of the issues it raises is what to do with the accounting rules, which play a triggering role in the self-reinforcing downturn.
Obviously we want financial accounting to report true value. The argument here is that true value is hard to identify when you have a temporarily low market value and a higher fundamental value, and when the market mechanisms (arbitrage, etc.) that are supposed to drive these together aren't currently operating.
Is the solution not to write down assets to market valuation when there's reason to think that fundamental value is actually higher? This might sound good to me if we had Olympian companies and accountants honestly and objectively trying to determine when the two have been temporarily driven apart. However, given managerial incentive problems, along perhaps with evidence that they try to ignore, rather than just publicly deny, downturns in the making, it doesn't sound very good either.
So let's call it an open question for now what if anything should be done from an accounting standpoint about the deleveraging scenario that is currently hitting the markets so hard.
One part of the story is that whoever buys the assets at distress prices far below fundamental value ends up doing just great when the dust settles. In the more rational world of an economics textbook or model, all you need is two such prospective purchasers who are competing with each other, rather than colluding, to drive the price up to fundamental value and make this scenario impossible. But apparently there isn't enough liquidity and prospective demand for under-valued assets for this to happen, especially when the bowling pins start falling one after the other.
As an aside, this I gather was at play in the collapse of Long-Term Capital Management some years back. A credit crunch forced them to sell assets for way below fundamental value, leaving some very happy purchasers to clean up (but apparently there were too few of them to drive the prices back up, and perhaps there was even implicit collusion to all enjoy part of the good thing that was popping into their laps).
Anyway, all this can't and won't happen in textbook financial markets, but I gather it actually is happening out there in the world, even at this very moment. One of the issues it raises is what to do with the accounting rules, which play a triggering role in the self-reinforcing downturn.
Obviously we want financial accounting to report true value. The argument here is that true value is hard to identify when you have a temporarily low market value and a higher fundamental value, and when the market mechanisms (arbitrage, etc.) that are supposed to drive these together aren't currently operating.
Is the solution not to write down assets to market valuation when there's reason to think that fundamental value is actually higher? This might sound good to me if we had Olympian companies and accountants honestly and objectively trying to determine when the two have been temporarily driven apart. However, given managerial incentive problems, along perhaps with evidence that they try to ignore, rather than just publicly deny, downturns in the making, it doesn't sound very good either.
So let's call it an open question for now what if anything should be done from an accounting standpoint about the deleveraging scenario that is currently hitting the markets so hard.
Wednesday, September 17, 2008
The AIG rescue
It may well have been the right decision, all things considered, but I must say I really don't like it. The obvious points are moral hazard plus the question of exactly what the government is going to do with the new asset in its portfolio.
Interesting point about this is that the decision was presumably made by Bernanke and Paulson. These are the rare Bush Administration appointees - Gates comes to mind as well - whom I personally would trust in these matters as much as the average appointee in, say, a Reagan, Bush Sr., Clinton, or Obama Administration. (Maybe more than the average, given the hacks that are likely to be appointed to some roles in any Administration - so let's say I trust Bernanke and Paulson as much as the average good appointee in a historically typical Administration.)
But even so, any appointee in such a position arguably has slightly skewed incentives. (I would as well if I were the officeholder.) While the catastrophic downside that you are trying to prevent (if serving at the Fed or in the Treasury) obviously does in fact matter enormously, it arguably matters a little more to you than it does socially. Given that your job is to prevent it, and that you will go down in history as a horrendous failure if it happens on your watch, the clear incentive structure is to err on the side of worsening moral hazard, rather than of taking a bit too large a chance of an economic meltdown.
Over time, then, one would expect too many rescues, and I fear that this may fit and feed into that scenario.
UPDATE: It's interesting to observe, though I'm not sure what to make of it yet, that the market fell more than 400 points today despite / because of / without being affected by the AIG rescue.
Interesting point about this is that the decision was presumably made by Bernanke and Paulson. These are the rare Bush Administration appointees - Gates comes to mind as well - whom I personally would trust in these matters as much as the average appointee in, say, a Reagan, Bush Sr., Clinton, or Obama Administration. (Maybe more than the average, given the hacks that are likely to be appointed to some roles in any Administration - so let's say I trust Bernanke and Paulson as much as the average good appointee in a historically typical Administration.)
But even so, any appointee in such a position arguably has slightly skewed incentives. (I would as well if I were the officeholder.) While the catastrophic downside that you are trying to prevent (if serving at the Fed or in the Treasury) obviously does in fact matter enormously, it arguably matters a little more to you than it does socially. Given that your job is to prevent it, and that you will go down in history as a horrendous failure if it happens on your watch, the clear incentive structure is to err on the side of worsening moral hazard, rather than of taking a bit too large a chance of an economic meltdown.
Over time, then, one would expect too many rescues, and I fear that this may fit and feed into that scenario.
UPDATE: It's interesting to observe, though I'm not sure what to make of it yet, that the market fell more than 400 points today despite / because of / without being affected by the AIG rescue.
Tuesday, September 16, 2008
Behind the market meltdown
Why are these things happening on Wall Street, and what can we learn from them?
Legal and economic scholarship concerning markets and regulation are actually in the ballpark of understanding this, if not of developing bulletproof answers. During my early years in the legal academy (which I entered in 1987), market-based, anti-regulatory law and economics was sweeping all before it - on merit, based on the insights it was advancing and the defects in prior ways of thinking about the issues.
But the pendulum has decisively turned with the rise of behavioral law and economics plus a greater understanding of the range and importance of agency costs and asymmetric information problems. (An example, in his recent writing about the subprime market, is my NYU colleague Oren Bar-Gill.)
Unfortunately, the devastating law & economics critique of politics and government solutions proved to be wrong in only one sense - it was too optimistic (!). So what will come of all this is unclear, although one certainly could imagine regulatory responses (to help in the future, not with what we face at the moment) addressing the blizzard of bad subprime loans to people who didn't understand what they were doing, the unwitting use of securitization to magnify agency problems and misaligned incentives, etc.
Unfortunately, I anticipate government remaining indefinitely in the hands of people who rely on an outmoded version of free market ideology (outmoded in their invocation of it even though in fact it retains enormous force rightly applied) as a thin veneer over a conscious actual policy of organized piracy on behalf of friends and campaign contributors.
Legal and economic scholarship concerning markets and regulation are actually in the ballpark of understanding this, if not of developing bulletproof answers. During my early years in the legal academy (which I entered in 1987), market-based, anti-regulatory law and economics was sweeping all before it - on merit, based on the insights it was advancing and the defects in prior ways of thinking about the issues.
But the pendulum has decisively turned with the rise of behavioral law and economics plus a greater understanding of the range and importance of agency costs and asymmetric information problems. (An example, in his recent writing about the subprime market, is my NYU colleague Oren Bar-Gill.)
Unfortunately, the devastating law & economics critique of politics and government solutions proved to be wrong in only one sense - it was too optimistic (!). So what will come of all this is unclear, although one certainly could imagine regulatory responses (to help in the future, not with what we face at the moment) addressing the blizzard of bad subprime loans to people who didn't understand what they were doing, the unwitting use of securitization to magnify agency problems and misaligned incentives, etc.
Unfortunately, I anticipate government remaining indefinitely in the hands of people who rely on an outmoded version of free market ideology (outmoded in their invocation of it even though in fact it retains enormous force rightly applied) as a thin veneer over a conscious actual policy of organized piracy on behalf of friends and campaign contributors.
Monday, September 15, 2008
Call me crazy but ...
... I've pretty much decided to stop following the 2008 presidential campaign. My sentiments are the same as previously, and I will of course vote. But I am simply finding it too infuriating and distressing; I could use stronger words if I wanted to get back in the mood. Given how little I can actually do, I feel there simply are more constructive and enjoyable uses for my time than following the daily twists and turns.
I gave up on baseball right before the 2004 season when the Yankees got A-Rod. I figured it wasn't worth following if they just kept on getting everyone. I came back when the Red Sox miracle happened. Ready to repeat that chapter, but this time it's serious business not fun and games, and also I think the prognosis is pitch dark. UK law and public policy schools should feel free to contact me this November.
I gave up on baseball right before the 2004 season when the Yankees got A-Rod. I figured it wasn't worth following if they just kept on getting everyone. I came back when the Red Sox miracle happened. Ready to repeat that chapter, but this time it's serious business not fun and games, and also I think the prognosis is pitch dark. UK law and public policy schools should feel free to contact me this November.
Fall of the titans
Lehman Brothers apparently was founded in 1850, and Merrill Lynch in 1914. The fall of these two titans - though Merrill Lynch is merely being sold, not liquidated - truly is an epochal event, symbolizing how high the metaphorical flood waters, no less than the literal ones in various hurricane zones, are rising these days.
Saturday, September 13, 2008
Something about McCain that I've been wondering about lately
Let's see: he's been violent in public, and he's called his wife a "c---" in public. What sort of behavior in private does that fit the profile for?
Campaign / budget update from the Tax Policy Center
According to the widely respected Tax Policy Center, analyzing the candidates' campaign platforms:
"The simple bottom line: under Senator Obama’s tax plan as described by his campaign advisors, the ten-year federal deficit (before spending cuts) would total nearly $5.9 trillion; a comparable total for Senator McCain’s tax plan is almost $7.4 trillion. Expanding each candidate’s plan to include proposals made in stump speeches yields ten-year deficit totals (again before spending cuts) of $5.4 trillion for Obama and almost $11 trillion for McCain."
Neither candidate's spending cuts are included due to a lack of specificity from both in saying what these would be.
On the spending side, I'd say the ten-year McCain total is several trillion dollars too low given the foreign military adventures he would engage in.
"The simple bottom line: under Senator Obama’s tax plan as described by his campaign advisors, the ten-year federal deficit (before spending cuts) would total nearly $5.9 trillion; a comparable total for Senator McCain’s tax plan is almost $7.4 trillion. Expanding each candidate’s plan to include proposals made in stump speeches yields ten-year deficit totals (again before spending cuts) of $5.4 trillion for Obama and almost $11 trillion for McCain."
Neither candidate's spending cuts are included due to a lack of specificity from both in saying what these would be.
On the spending side, I'd say the ten-year McCain total is several trillion dollars too low given the foreign military adventures he would engage in.
Friday, September 12, 2008
Krugman gets it 99 percent right
From his column today on the presidential campaign:
"T]he deceptive and dishonest 2000 Bush-Cheney campaign provided an all-too-revealing preview of things to come. In fact, my early suspicion that we were being misled about the threat from Iraq came from the way the political tactics being used to sell the war resembled the tactics that had earlier been used to sell the Bush tax cuts.
"And now the team that hopes to form the next administration is running a campaign that makes Bush-Cheney 2000 look like something out of a civics class. What does that say about how that team would run the country?
"What it says, I’d argue, is that the Obama campaign is wrong to suggest that a McCain-Palin administration would just be a continuation of Bush-Cheney. If the way John McCain and Sarah Palin are campaigning is any indication, it would be much, much worse."
To this I'd just add, among the key Bush personality traits that has shaped his presidency is the fact that he is a natural, lifelong bully. But he does not appear to be a violent bully to quite the same degree as McCain. That's a rather large consideration when one considers that, under the current U.S. government system as it actually operates, the president effectively has plenary and unilateral war-making powers, and has lately been claiming equally plenary and unilateral domestic national security powers.
"T]he deceptive and dishonest 2000 Bush-Cheney campaign provided an all-too-revealing preview of things to come. In fact, my early suspicion that we were being misled about the threat from Iraq came from the way the political tactics being used to sell the war resembled the tactics that had earlier been used to sell the Bush tax cuts.
"And now the team that hopes to form the next administration is running a campaign that makes Bush-Cheney 2000 look like something out of a civics class. What does that say about how that team would run the country?
"What it says, I’d argue, is that the Obama campaign is wrong to suggest that a McCain-Palin administration would just be a continuation of Bush-Cheney. If the way John McCain and Sarah Palin are campaigning is any indication, it would be much, much worse."
To this I'd just add, among the key Bush personality traits that has shaped his presidency is the fact that he is a natural, lifelong bully. But he does not appear to be a violent bully to quite the same degree as McCain. That's a rather large consideration when one considers that, under the current U.S. government system as it actually operates, the president effectively has plenary and unilateral war-making powers, and has lately been claiming equally plenary and unilateral domestic national security powers.
Thursday, September 11, 2008
Out-of-print album watch
First Dennis Wilson's Pacific Ocean Blue came back into print a couple of months ago - a great and very sad listen (if rather 70s) that is packaged with the equally good aborted follow-up, Bambu.
On Tuesday, Tom Verlaine's Dreamtime is coming back into print, his second solo album after the (initial) break-up of Television. I have the old LP but have been waiting for this one for years.
The next one on my list would be the Feelies' Crazy Rhythms. Hard to imagine why that one is out of print when it still has a following.
On Tuesday, Tom Verlaine's Dreamtime is coming back into print, his second solo album after the (initial) break-up of Television. I have the old LP but have been waiting for this one for years.
The next one on my list would be the Feelies' Crazy Rhythms. Hard to imagine why that one is out of print when it still has a following.
Ten good things about John McCain
I've been a bit harsh on him at times, but here are 10 GOOD things about John McCain, the best I could think of:
1) He performed up to his ability in military school.
2) He never lies when his lips aren't moving.
3) He's been right, at one time or another, about most major domestic policy issues (since he's taken both sides).
4) He creates good jobs ... for lobbyists in his campaign.
5) You try making better decisions with as little time, care, and information as he uses.
6) While his tax plans would cost $7 trillion over the next ten years, he is hoping to make back 1 percent of that amount by reforming earmarks.
7) He's willing to share his POW story with us again and again and again and again, even though he hates talking about it.
8) So far as we know, he's only gotten into a couple of physical altercations with fellow members of Congress.
9) To forgive is divine, and he just hired the guy who slimed him in South Carolina in 2000.
10) There are probably a couple of vile names that he hasn't called his wife in front of witnesses.
1) He performed up to his ability in military school.
2) He never lies when his lips aren't moving.
3) He's been right, at one time or another, about most major domestic policy issues (since he's taken both sides).
4) He creates good jobs ... for lobbyists in his campaign.
5) You try making better decisions with as little time, care, and information as he uses.
6) While his tax plans would cost $7 trillion over the next ten years, he is hoping to make back 1 percent of that amount by reforming earmarks.
7) He's willing to share his POW story with us again and again and again and again, even though he hates talking about it.
8) So far as we know, he's only gotten into a couple of physical altercations with fellow members of Congress.
9) To forgive is divine, and he just hired the guy who slimed him in South Carolina in 2000.
10) There are probably a couple of vile names that he hasn't called his wife in front of witnesses.
Rosanne Altshuler becomes co-director of the Tax Policy Center
The Urban-Brookings Tax Policy Center just announced that, starting in January, Rosanne Altshuler will become its co-director, joining Len Burman and Bill Gale. This is great news on many levels. Rosanne, one of the best international tax economists in the country, is an incredibly thoughtful, careful, and creative scholar who has made important contributions and is at the forefront of thinking seriously and fair-mindedly (not a universal trait) about where U.S. international tax policy should go. She also has fantastic knowledge in multiple arenas, ranging from the empirical issues to understanding legal and institutional details. The only downside, a selfish one, is that we in the NYC tax policy community will regret seeing less of her.
9/11
Being in downtown NYC, I saw the whole thing happen and then lived through the crazy days that came after it. I will never forget the shock, rage, and fear of that period.
But by its seventh anniversary there's an even more hateful overlay. Now, 9/11 invokes in my memory above all:
1) "All right, you've covered your ass. You can go home now." (Bush to the CIA briefer in August 2001.)
2) My Pet Goat.
3) The instantaneous decision, made at the top but immediately embraced (and indeed anticipated) by the entire Republican establishment and base, to treat it as a wedge issue for political gain, rather than as a Pearl Harbor-like national focal point. Only people who hated their opponents and loved power more than they cared about anything else could have done such a thing. If there were a hell they would rot in it eternally for that alone.
But by its seventh anniversary there's an even more hateful overlay. Now, 9/11 invokes in my memory above all:
1) "All right, you've covered your ass. You can go home now." (Bush to the CIA briefer in August 2001.)
2) My Pet Goat.
3) The instantaneous decision, made at the top but immediately embraced (and indeed anticipated) by the entire Republican establishment and base, to treat it as a wedge issue for political gain, rather than as a Pearl Harbor-like national focal point. Only people who hated their opponents and loved power more than they cared about anything else could have done such a thing. If there were a hell they would rot in it eternally for that alone.
Monday, September 08, 2008
When will the U.S. default?
For my current work in progress, "The Long-Term U.S. Fiscal Gap: Is the Main Problem Generational Inequity?," I recently took a look at the question of how fast, under current budget scenarios, the U.S. debt-to-GDP ratio would explode. The sequence is potentially interesting because capital markets, in determining when U.S. public debt should cease to be considered a safe investment, may look only so far ahead, given not just myopia (which need not be posited here), but (a) the fact that the real issue is credibility, which may be affected by the timing of the exploding debt problem, and (b) the unpredictable psychology of bubble markets.
Luckily for me - as I do theoretical not empirical work - the General Accounting Office recently did a long-term simulation of the projected U.S. debt-to-GDP ratio over time under present policy. It's available via their public website (details available to the curious who contact me if they can't find it themselves).
More specifically, the GAO did 2 simulations, one under the CBO baseline and the other adjusting it to be more realistic (e.g., expiring tax cuts are extended for a while, discretionary spending grows with the economy & population). The CBO baseline is plainly ridiculous - for example, it shows massive budget surpluses from 2010 to 2020 that no one expects will actually happen - so I present below only the figures for the alternative simulation.
YEAR - - - - - U.S. PUBLIC DEBT / GDP (as %)
2008 - - - - - - - - - 37.1
2010 - - - - - - - - - 38.7
2015 - - - - - - - - - 47.1
2020 - - - - - - - - - 60.8
2025 - - - - - - - - - 80.7
2030 - - - - - - - - - 109.2
2035 - - - - - - - - - 145.6
2040 - - - - - - - - - 188.4
2045 - - - - - - - - - 236.6
2050 - - - - - - - - - 290.1
2055 - - - - - - - - - 348.5
2060 - - - - - - - - - 412.0
2065 - - - - - - - - - 480.3
2070 - - - - - - - - - 553.8
2075 - - - - - - - - - 632.0
2080 - - - - - - - - - 714.8
As a bit of background, the all-time U.S. high debt to GDP ratio was 109 percent, right at the end of World War II. BUT - in 1945 it was clear to the world that, with peacetime rapidly approaching, annual budget deficits and thus new debt issuances were about to plunge. This time around, the picture would be radically different absent a credible prospect of voluntary budget reform.
Some people may conclude from this that we still have a bit of time. Maybe so, maybe not, because financial markets can be very forward-looking and even, say, the Chinese government might be able to precipitate the plunge right now (which is not to say they'd ever rationally want to do this).
Luckily for me - as I do theoretical not empirical work - the General Accounting Office recently did a long-term simulation of the projected U.S. debt-to-GDP ratio over time under present policy. It's available via their public website (details available to the curious who contact me if they can't find it themselves).
More specifically, the GAO did 2 simulations, one under the CBO baseline and the other adjusting it to be more realistic (e.g., expiring tax cuts are extended for a while, discretionary spending grows with the economy & population). The CBO baseline is plainly ridiculous - for example, it shows massive budget surpluses from 2010 to 2020 that no one expects will actually happen - so I present below only the figures for the alternative simulation.
YEAR - - - - - U.S. PUBLIC DEBT / GDP (as %)
2008 - - - - - - - - - 37.1
2010 - - - - - - - - - 38.7
2015 - - - - - - - - - 47.1
2020 - - - - - - - - - 60.8
2025 - - - - - - - - - 80.7
2030 - - - - - - - - - 109.2
2035 - - - - - - - - - 145.6
2040 - - - - - - - - - 188.4
2045 - - - - - - - - - 236.6
2050 - - - - - - - - - 290.1
2055 - - - - - - - - - 348.5
2060 - - - - - - - - - 412.0
2065 - - - - - - - - - 480.3
2070 - - - - - - - - - 553.8
2075 - - - - - - - - - 632.0
2080 - - - - - - - - - 714.8
As a bit of background, the all-time U.S. high debt to GDP ratio was 109 percent, right at the end of World War II. BUT - in 1945 it was clear to the world that, with peacetime rapidly approaching, annual budget deficits and thus new debt issuances were about to plunge. This time around, the picture would be radically different absent a credible prospect of voluntary budget reform.
Some people may conclude from this that we still have a bit of time. Maybe so, maybe not, because financial markets can be very forward-looking and even, say, the Chinese government might be able to precipitate the plunge right now (which is not to say they'd ever rationally want to do this).
Sunday, September 07, 2008
Open empirical question
Brendan Nyhan suggests that liberal blogger Josh Marshall is guilty of a "smear" when he compares Guiliani's speech at the recently concluded RNC convention to a speech by Josef Goebbels. Nyhan notes that "casual Nazi analogies demean and cheapen the discourse -- it's an easy way to active a series of unflattering associations and attach them to a public figure that you don't like." He then compares Marshall's Nazi analogies to Bush's arguably comparing the Democrats to Vietnamese Communists in his video address to the convention.
Here's my problem with so rapidly dismissing the left side of this, which is comparing the current Republicans to Nazis or fascists. I regard it as a genuinely open empirical question how far these guys are willing to go to destroy American democracy. For my money, the discourse at the RNC convention truly was Nazi or fascist-style: demeaning opponents as less than fully human or at least not American, militarism, outrageously over the top lying (Palin on the Bridge to Nowhere, Guiliani denouncing cosmopolitans, Romney denouncing Eastern elites), claiming that only people from small towns are real Americans, etc. Then there's the executive authoritarianism, the claims the president can lock up anyone indefinitely, lying to get us into wars, government secrecy for everything (including indefensible legal opinions embracing torture), the use of torture itself when its intelligence payoff has pretty much been proven to be negative, complete politicization of the executive branch, use of the Justice Department to throw political foes such as Don Siegelman in jail, and repeated, systematic attempts to intimidate the media and prevent it from questioning even demonstrably false claims (whether about Guanatanamo or Palin's earmark record), etc.
I feel they are destroying civil society and the rule of law, and I honestly don't know how far they would go. Explicit dictatorship? Jailing of the opposition? Reichstag fire style fake terror attacks? (Bush and Cheney have both been quoted considering the equivalent in foreign affairs to create casus bellis with Iraq and Iran.) I don't think that leading Republicans themselves know what they would do or where they are headed beyond the next news cycle, but that doesn't mean that they aren't, via their incentives and inclinations and the pressure of events, headed somewhere very nasty.
At this point, I feel there are reasonable arguments to be made on both sides of this - yes, they are something new in American politics and there really is no limit to how far they would go; or no, it's pretty much still business as usual and neither politics nor government have ever been pretty.
But Nyhan is guilty of simply assuming the no side here. He might be right, but at this point I feel we genuinely don't know.
Here's my problem with so rapidly dismissing the left side of this, which is comparing the current Republicans to Nazis or fascists. I regard it as a genuinely open empirical question how far these guys are willing to go to destroy American democracy. For my money, the discourse at the RNC convention truly was Nazi or fascist-style: demeaning opponents as less than fully human or at least not American, militarism, outrageously over the top lying (Palin on the Bridge to Nowhere, Guiliani denouncing cosmopolitans, Romney denouncing Eastern elites), claiming that only people from small towns are real Americans, etc. Then there's the executive authoritarianism, the claims the president can lock up anyone indefinitely, lying to get us into wars, government secrecy for everything (including indefensible legal opinions embracing torture), the use of torture itself when its intelligence payoff has pretty much been proven to be negative, complete politicization of the executive branch, use of the Justice Department to throw political foes such as Don Siegelman in jail, and repeated, systematic attempts to intimidate the media and prevent it from questioning even demonstrably false claims (whether about Guanatanamo or Palin's earmark record), etc.
I feel they are destroying civil society and the rule of law, and I honestly don't know how far they would go. Explicit dictatorship? Jailing of the opposition? Reichstag fire style fake terror attacks? (Bush and Cheney have both been quoted considering the equivalent in foreign affairs to create casus bellis with Iraq and Iran.) I don't think that leading Republicans themselves know what they would do or where they are headed beyond the next news cycle, but that doesn't mean that they aren't, via their incentives and inclinations and the pressure of events, headed somewhere very nasty.
At this point, I feel there are reasonable arguments to be made on both sides of this - yes, they are something new in American politics and there really is no limit to how far they would go; or no, it's pretty much still business as usual and neither politics nor government have ever been pretty.
But Nyhan is guilty of simply assuming the no side here. He might be right, but at this point I feel we genuinely don't know.
Wednesday, September 03, 2008
Siberia sounds toasty by comparison
I gather from a Michael Isikoff blog on the Newsweek site that Doug Holtz-Eakin has been posted from the McCain campaign over to Sarah Palin as director of her domestic policy operation (such as it is).
Wow - what a reward to Doug for having endangered his (previously justifiably high) reputation for all these months by carrying water for the campaign's wildly irresponsible tax and budget policies.
Wow - what a reward to Doug for having endangered his (previously justifiably high) reputation for all these months by carrying water for the campaign's wildly irresponsible tax and budget policies.
New wine in old bottles
I find the newly released Byrne-Eno album quite charming, even delightful, but am going to pass on the new Brian Wilson (odds seem high against its actually being much good).
Tuesday, September 02, 2008
Call me old-fashioned, but ...
.. while I think chest-beating invocations of patriotism can be over-done, I still have this crazy belief that elected U.S. national leaders should be, well, pro-U.S., rather than Alaskan nationalists.
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