Roubini

The Financial Times profiles my favorite economist. I will admit that that is the first time that I have ever seen the words playboy and economist within seven city blocks of each other.

Oh and 2009 = "Worst year". Happy New Year!

Calculus

David Aaronovitch asks a very important question. Is Israel doing exactly what Hamas wants it to do? What is the move after the move after the move?

Welcome to Israel

In the wake of the latest Israeli action in Gaza against Hamas, CFR has posted an interactive guide to the Israeli-Palestinian conflict.

It will be interesting to see how Obama approaches Israel and the Palestinians. 11th hour efforts like Bush and Clinton or something more meaningful?

Flossy

From The New Yorker's archives, Mark Twain explores the mindset of the middle class gangsta.

Feats of Strength

Stratfor discusses Pakistan's asymmetric warfare tactics and The WSJ reports on Pakistan's troop movement to the Indian border.

Happy Holidays!

Legacy

More on Bush's legacy in The Boston Globe.

And from The Weekly Standard. Lincoln. Bush. REALLY?

Snobbery

It's thinking like this that will destroy the GOP for a generation (if it hasn't happened already).

Palin. Thatcher. Really? Now that's Kool-Aid.

Deep Throat

Stratfor takes a look at Mark Felt (aka Deep Throat) and how understanding who a source is affects our understanding of the story. A must read for anyone interested in Watergate and puppetry.

43

There is no way that President George W. Bush can be considered anything other than one of the three worst presidents in U.S. history (along with James Buchanan - uh, The Civil War and Warren G. Harding - Teapot Dome).

What a complete putz.

Malfeasance

In the NY Times, Thomas Friedman comments on U.S. and Chinese corruption in the wake of the Madoff scandal.

Be Forewarned

The Chinese Navy is sending warships to battle the Somali pirates. I can't wait for the YouTube.

But it is AAA Rated!

Not enough talk about the culpability of the rating agencies (SROs) in this mess. The RGE Monitor discusses the FER's recommendations for SRO reform.

Gokouun o Inorimasu

It's funny that in Japanese wishing someone good luck consists of praying for them. So even though my links are mostly downers (and this one from the WSJ about Japan's experience with Keynesian stimuli is no exception), I'm still on a running high from this morning's 7 miles on a treadmill, which is strange considering I hate the treadmill, and this didn't depress me as much as it should have. I think the fact that I was cozy inside instead of freezing in the 19 degree weather outside had something to do with it.

Sometimes I really love the WSJ. In the face of capitalism's failure, they press on. Ganbarimashou!

Burrata

Mozzarella stuffed with cream-soaked mozzarella? Oh my!

Preying On Crisis

The New Yorker profiles Naomi Klein, The New Left, and the failure of Milton Friedman's Chicago School of Economics (i.e., laissez-faire capitalism).

Sign Me Up

Who doesn't love negative yields?

Dinner Time

Finally, a well-deserved bailout. Denying access to the King of Cheeses would spell certain global chaos. If Blue Stilton, Point Reyes Blue, Ballerina (local to WA - no link), or Winey Goat (second one down) are having trouble, then please bail them out as well.

Investing In Infrastructure

Where do I sign up for my piece of the $1T deficit (to be paid back by myself at a later date of course with interest)? I've got a slew of ideas.

1. Skeet shooting park in the huge dirt lot across the street
2. Widen Gilbert road to 12 lanes
3. Build a freeway underpass underneath downtown Gilbert
4. Olympic size swimming and diving pool (salt, not chlorine) across the street
5. Free heliport and helicopters .... hmmmm ... 1 mile north of my house
6. Lifetime national hunting and fishing licenses for myself and all of my family and friends
7. Lots of desalination plants for Southern California (I'm sick of them stealing water from the Colorado)
8. Freeway system that is vertical (like in Minority Report), as well as forcing The Big Three to build cars that can use the vertical freeway system
9. Personal nuclear reactors (think Mr. Fusion)
10. A moon base and transportation to it for all Americans that pass the travelling to a moon base test (I should be paid $1B to create the test)

I know I didn't ask for anything completely outrageous. I'm simply trying to be reasonable here.

Nationalization

The New York Times discusses the nationalization of The Big Three (not the biggest three).

Five years from now when the government owns most financial institutions and the largest manufacturing sector in the U.S., will we say, "Well done."? Ten years? Fifty years?

Brinksmanship

Stratfor takes a look at the escalating India-Pakistan crisis and how the current crisis could affect the two countries, as well as Afghanistan, Iran, Russia, and the U.S. Pretty grim stuff. Let's hope for a troop build-up along the border and a couple of artillery duels.

Repeatability

Stratfor looks at the similarities between the Mumbai attacks and the New York Landmarks Plot that was broken up.

Ok, so on my list of things to do to ensure survival:

- Hoard food. Check.
- Don't spend money (except on food and ammo). Check.
- Get a vicious attack dog that can survive by hunting and killing its own food (small animals or criminals). Still searching.
- Buy a diesel powered generator and build an underground storage tank. Still digging.

And new this week:

- Don't visit well known public places. Check.

The Big 3 Lose Again

Reposted in its entirety, as Craiglist took down the ad. Very disappointing Mr. Craigslist.

"OK, let me start off by saying this Xterra is only available for purchase by the manliest of men (or women). My friend, if it was possible for a vehicle to sprout chest hair and a five o'clock shadow, this Nissan would look like Tom Selleck. It is just that manly.

It was never intended to drive to the mall so you can pick up that adorable shirt at Abercrombie & Fitch that you had your eye on. It wasn't meant to transport you to yoga class or Linens & Things. No, that's what your Prius is for. If that's the kind of car you're looking for, then just do us all a favor and stop reading right now. I mean it. Just stop.

This car was engineered by 3rd degree ninja super-warriors in the highest mountains of Japan to serve the needs of the man that cheats death on a daily basis. They didn't even consider superfluous nancy boy amenities like navigation systems (real men don't get lost), heated leather seats (a real man doesn't let anything warm his butt), or On Star (real men don't even know what the hell On Star is).

No, this brute comes with the things us testosterone-fueled super action junkies need. It has a 265 HP engine to outrun the cops. It's got special blood/gore resistant upholstery. It even has a first-aid kit in the back. You know what the first aid kit has in it? A pint of whiskey, a stitch-your-own-wound kit and a hunk of leather to bite down on when you're operating on yourself. The Xterra also has an automatic transmission so if you're being chased by Libyan terrorists, you'll still be able to shoot your machine gun out the window and drive at the same time. It's saved my bacon more than once.

It has room for you and the four hotties you picked up on the way to the gym to blast your pecs and hammer your glutes. There's a tow hitch to pull your 50 caliber anti-Taliban, self cooling machine gun. I also just put in a new windshield to replace the one that got shot out by The Man.

My price on this bad boy is an incredibly low $12,900, but I'll entertain reasonable offers. And by reasonable, I mean don't walk up and tell me you'll give me $5,000 for it. That's liable to earn you a Burmese-roundhouse-sphincter-kick with a follow up three fingered eye-jab. Would it hurt? Hell yeah. Let's just say you won't be the prettiest guy at the Coldplay concert anymore.

There's only 69,000 miles on this four-wheeled hellcat from Planet Kickass. Trust me, it will outlive you and the offspring that will carry your name. It will live on as a monument to your machismo.

Now, go look in the mirror and tell me what you see. If it's a rugged, no holds barred, super brute he-man macho Chuck Norris stunt double, then contact me. I might be out hang-gliding or BASE jumping or just chilling with my ladies, but I'll get back to you. And when I do, we'll talk about a price over a nice glass of Schmidt while we listen to Johnny Cash.

To sweeten the deal a little, I'm throwing in this pair of MC Hammer pants for the man with rippling quads that can't fit into regular pants. Yeah, you heard me. FREE MC Hammer pants.

Rock on."

Ch. 11

The WSJ reports on the latest bailout request from the Big Three.

Let them file Chapter 11 and have the government guarantee DIP financing while they restructure and are protected from their creditors. The "people won't buy cars from a bankrupt auto maker" argument is bunk.

Mumbai = Sarajevo?

I hope that India shows restraint. The last thing the world needs is for two nuclear armed nations to go to war.

Ostrich Time

I'm about to stop reading the news and just start stockpiling food, ammo, and Dairy Queen coupons.

The Financial Times looks at the recession news. But listen to Big Ben (not Roethlisberger) and just don't worry. Everything is a-ok.

Mumbai

Stratfor looks at the strategic motivations and potential geopolitical consequences of last week's attacks.

Active

The Financial Times previews the nationalization of the banks.

Mi Amigo's 10K Turkey Trot

As we have been doing for time immemorial, the Fullers ran the Thanksgiving Day 10K Turkey Trot. I haven't run this particular race for about 20 years so it was nice to once again run with a grown man dressed as a turkey (for the record, I beat him).

This year we had several new Fuller participants (Nick, Lisa, Rachael, and Maverick). The weather was perfect and the course fast (although a little too much headwind the last two miles).

So on to the race. I haven't run a 10K since high school. I haven't run fast in over a year. Let's just say that expectations were low, meaning I was hoping to come in under 45 minutes.

When the race first started, I was pretty tight. However, due to my desire to get out of the crowd and into some open space, I ran the first mile in 6:15. And I felt like I wanted to vomit in my ...

Actually, I didn't feel like vomiting. I felt like slowing down because my lungs and legs were asking me what I thought I was doing. I told them to shut up and that I only had another five.2 miles to go. I then settled into a nice pace that fluctuated by 20 seconds or so around 6:50 depending on whether I was going up the hill or running into a headwind. The last mile I felt ok and finished in 42:34 (6:52 pace).

Three minutes slower than my best, but I'll take it. I'm always thinking I'm losing speed. I don't think it's happening yet. Next year 2:59 is going to happen.

Perspective

Bigger than all of these combined:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

Bloomberg says it is more like $8T. I will now vomit in my mouth. We are getting so hosed.

Cal-i-for-ni-a

The Economist takes a look at what is becoming of The Governator's environmental plans in the face of a recession that has hit California particularly hard.

The Right Flank

Stratfor reviews Obama's moves thus far and concludes that it looks like Obama is going to govern from the center and that politically he needs to strengthen the right side of his coalition.

Enough Ink?

Christopher Wood in The WSJ says (with a much larger megaphone) what I've been saying from the beginning. Inflation, deflation, print, print, print, print, print, spend, spend, spend, spend, spend, Zimbabwe.

See-Saw

So now that we understand that the government has no clue what to do, what do we think they are going to do next?

A week after telling us they were no longer going to be buyin up toxic assets, but instead would only be providing capital injections, the government has now decided to do both with Citi.

I think I'm going to start taking bets on what the government will do next.

Buy Citi: 4:1
Buy my house: 28:1
Buy my neighbor's house: 17:1
Buy GM: 6:1
Buy the state of California: 12:1

Any others?

My People

I gave a talk in sacrament meeting a month or so ago. I used a running metaphor and talked about how I inherited my desire and ability to run fast from my Mexican ancestors (my dad is an original marathoner). This unexpectedly drew a lot of laughs.

Being in Arizona again after almost a decade has caused me to remember how different it is living in a border state, especially with the immigration issue being such a hot button topic the past couple of years.

CFR takes a look at the increasing drug violence in Mexico.

Georgia Part II

Stratfor reports that up to 100,000 Russian passports to Ukrainians within the past two months in a country where dual citizenship is illegal.

Distractions are nice.

Citi

The potential sale of Citigroup was more than a mild shock.

Is nothing safe?

The Periphery

Iraq, Afghanistan, Israel, Iran, Russia, terrorism, global warming, PIRATES just aren't getting me fired up like they used to. Something about the threat of even higher unemployment has me focused (like a laser beam) on only the economy. I continue to read other topics, but mainly to distract me from the absolute horror of our economic situation.

Interregnum

Paul Krugman is worried about economic policy going on vacation during the transition of power.

The Wilderness

Editorials about the collapse of the Republican coalition are all beginning to sound alike, but they aren't getting old yet.

I say that as a Republican (for now) hoping.

Super Obama World

I didn't play this more than once. I promise.

Dow 6000

I told one of my brothers about two months ago to expect to see Dow 7500. I was too optimistic.

To cheer you up, I've brought you interactive joy (about a depressing topic, but it's INTERACTIVE!).

Unsolicited

I love unsolicited advice. I'm sure President-elect Obama does as well (from The Financial Times - how to fix the economy (what else)).

Mitt

Says to let the Big Three go into bankruptcy. No details on how the restructuring should be paid for, but hey, I'm sure he has an idea or two up there in that giant noggin of his.

Commodities

The RGE Monitor reviews the 50% drop in commodity prices over the past six months.

Obamarama

The Chief Moonbat is pissed. "Elections have consequences." Post-partisanship be damned.

I'm viewing this development in a positive light.

Argh!

I've been following the piracy story for a couple of years now for two reasons. One, I read an outstanding article in The Atlantic in 2003, titled "Anarchy at Sea" and two, once when I was reading CNN, I saw a story on Somali pirates and told Liz. She proceeded to imitate Captain Barbossa and the rest is history. I now regularly read about modern day pirates.

Chatham House recently came out with a new report on "Piracy in Somalia". Worth reading if you'd like a break from the doom and gloom present day life and want to read about how shipping $100M of oil ain't what it used to be.

A Knife's Edge

Stratfor comments on why the meeting of the G20 did NOT bring about a complete restructuring of the global financial system a la Bretton Woods.

A View From The Other Side

Andrew Sullivan at The Atlantic on why he views the LDS Church's stance on homosexuality and gay marriage as a war.

I told Liz when Prop 8 passed that this was only the end of the beginning. My trip back to San Francisco last week only confirmed that this issue is going to be THE issue (religiously, culturally, and legally) for quite some time.

Here is a very good pro-Prop 8 blog I found when I was reading a post on Mormanity on how we should respond to the attacks on our faith.

Train Wreck

I don't know why I even bother reading Nouriel Roubini any more. Here are his latest 20 reasons why our economy really, really sucks and will for a long time.

Happy Monday!

Kumbaya

I don't speak hieroglyphics. Could someone please tell me straight up what ya'll are gonna do?

Here's the formal press release from the weekend's G20 photo op.

Commentary on the meeting:

- From The Australian

- From The Christian Science Monitor

The Auto Bailout

Cato unsurprisingly says "No!" and "Hell no!"

The UAW, Detroit, the Big Three, and of course Obama say "Yes" and whimper, whimper "please".

This article in The WSJ on how GM is trying to set the terms of the bailout really blew me away. Yes, it's a good negotiating strategy to ask for the moon, simply hoping for a pebble or two, but I was hoping for a bit more humility.

There aren't any good answers. Encourage moral hazard by bailing out an industry that will only need another bailout if the economy doesn't turn around quickly or watch millions of real people lose their jobs. I have the feeling that the public will only accept a bailout where the terms are so in favor of the government (similar to the first AIG bailout) that it'd be tempting for the car makers to just declare Chapter 11 (followed quickly by Chapter 7). Or Obama could just do whatever he wants to do and everyone will love it.

Nielson's

I can't believe I haven't reviewed this place yet. I went there again last night and while I was sitting there enjoying my black raspberry concrete with cold fudge, it dawned on me that I had a hole in my local Yelp ratings.

I'd like to give this place five stars, just to drive my favorite Floridian more bananas than he already is, but alas, I cannot. It's very good and worth the 20 minute drive, but the service can be uneven and sometimes the custard is a little too melted. That being said, did I mention that I'll drive 20 minutes to go here and that I pass two Dairy Queens, one Baskin Robbins, and more of those tart yogurt places than I can count? So yes, it is creamy and delicious and very far from Florida.

Pro 44 Fly

Maybe we're just all (52% of the all) hoping after all. Peggy Noonan in The WSJ on how America is "Throwing Long" with Obama.

Bretton Wo...

A preview and roadmap of this weekend's meeting of the G20 from the RGE Monitor. It's being billed as the next Bretton Woods (either II or III depending on how going off the gold standard in the early 70s is viewed). I don't care what they call it. I do care about a coordinated response from the 20 countries that account for ~90% of global GNP. Defusing the $600T derivatives time bomb would be nice too.

Good Is Bad

Am I not allowed to think anything is good at this point? Inflation, deflation, no investment, inflation again?

Thank you CFR for ruining my cup of creamy, delicious hot cocoa.

Paulson

Paulson's remarks this morning.

I watched it live this morning before walking over to the office. Looks like we are changing course. Forget buying toxic assets. Boosting balance sheets and preventing foreclosures are the new priorities.

Wingnuts and Moonbats

Upon stumbling into my hotel room each evening, I always turn the television on. If nothing interesting is on and CNN is boring, I will flip back and forth between MSNBC (Olberman, Maddow) and Fox News (O'Reilly, H&C) purely for entertainment purposes. These talking heads are crack for their 100% partisan audiences. I don't trust anything they say, but they can sometimes get a chuckle or two out of me and that can be worth it in and of itself (particularly when Colmes looks like he is about to implode - a nightly event).

Last night was such a night. MSNBC, commercial break, Fox News, commercial break, back and forth. But, last night topped all previous nights in ridiculousness. Hannity called our current recession "The Obama Recession". He fumbled around trying to explain how the market is reacting to things that Obama might do, yada yada, but still. Really?

The sad thing is that somewhere out there, there are a lot of people who believe him.

Black Hole

I hope that the auto industry bailout comes with many, very tightly monitored strings attached. GM is the worst offender, but Chrysler and Ford are not far behind. Too many brands, too many unattractive cars, too fuel inefficient, too much cost.

Post-Partisan

More on a pragmatic Obama in The New Yorker.

Iran

The U.S.'s changed stance on Iran since the Russia-Georgia War from Stratfor.

The idea of Bush paving the way and taking the hit from the right by opening relations with Iran before he leaves office slightly increases my respect for the man.

Too Big

Another gem. This time in the RGE Monitor.

“Every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China.”

In the end, the U.S. will be considered too big to fail. Holders of U.S. debt will suck it up and accept a much depreciated dollar fresh off the printing press and will thank us for repaying them.

And then turn around and buy rupees.

Change

Reform

Please read this article on reforming big government from The Claremont Institute. I rarely ask you to read something. It's more of a shotgun approach over here at VTOLing, but this is as good a summary of the conservative/progressive fiscal struggle as I have seen. You will be stunned by Chart A, Table A, and Table B. For some background on The Claremont Institute, click here.

This is where I hope Obama is headed. Pragmatic government. Lowering taxes, cutting waste, reforming entitlements, and truly fighting poverty for those who have nowhere else to turn.

Still Selling It

Rahm Emanuel is still selling pragmatism. It's what they ran on. They had better.

Favorite Links

The top 10 sites I visited 7 - 10 years ago:

Front Page Magazine
Xbox Forums
National Review
Red State
Obsidian Wings
Daily Kos
Andrew Sullivan
Atrios
The Guardian
AZ Central

One of these kids is not like the other.

Delayed

I can't stand being gone Monday through Friday. Thankfully it is rare, but this week was one of those five day travelling weeks. So I get to the airport early thinking I can catch the earlier flight. Full. A big thank you to all of the airlines for all of the flight cuts. Ok. I'll just take my normal flight. Uh-oh, what's that? It's delayed?? I'm going to be at the airport for three hours with the heartburn I have from lunch AND having to look forward to sitting in coach?? DON'T YOU KNOW I'M MVP GOLD!!!!!!!!!!!!!

Well, at least I have at least two years to look forward to. The Republicans have a dangerous game to play with the new President-elect. Filibuster and look like obstructionists in a time of extreme crisis or roll over? To be in those back rooms...

Sobering

Now back to our regular fare of doom and gloom. Economists react to the latest jobs report in The WSJ.

Unimaginable

Stratfor discusses the security threat to President-elect Obama.

Africa

It continues to be beyond outrageous that Sarah Palin could have been our vice-president. From Fox News:

"The Enforcer"

Rolling Stone took a look at Obama's new chief of staff in 2005.

"He's got this big old pair of brass balls, and you can just hear 'em clanking when he walks down the halls of Congress".

The Polls

Were extremely accurage this time around as reported in The WSJ today. Poll aggregators such as Pollster, RealClearPolitics, and FiveThirtyEight were even moreso.

I'm happy that I wasn't completely wasting my time pouring over state and county data.

"Obama's Challenge"

From Stratfor.

Looks like this is going to take more than 100 days.

Powell

Post-Mortem

The WSJ nicely summarizes and evaluates the last six weeks of each campaign.

Keynesian

Now that the election is over, you're going to hear the phrases Keynesian economics and fiscal stimulus repeated over and over. My favorite economist, Nouriel Roubini, has proposed a $400B stimulus package (that's borrowing $400B from our future incomes to put people to work today building roads, bridges, buildings to house giant bureacracies, etc). It's the classic deficit spending today to drive the recession away play. And usually it works. Something tells me this isn't a usual time.

Edmund Phelps (a Nobel winning economist from Columbia) isn't so sure in this piece in The Financial Times. Apparently Keynes himself wasn't so sure.

I'm not smart enough by any means to know what the answer is. However, looking at basic economic indicators and our projected fiscal situation over the next several years, I'm not sure that a $1T deficit is that great of an idea. It might be time for a new economic theory.

Progressive Pragmatism

Obama's speech was unifying, non-triumphalist, and a call to work. I mulled over the title of this entry for a few minutes. Progressive Pragmatism or Pragmatic Progressivism. The emphasis is important to me. Will Obama's emphasis be on doing what is best for the country, regardless of which label (progressive or conservative) is attached to a particular solution? Or will he emphasize progressive solutions that he thinks he will be able to actually implement?

Obama is a progressive. America has chosen a progressive path. I agree with much of the progressive agenda. I am also hopeful that labels begin to not mean as much as they have in the past and that we are entering an era in which pragmatism rules the day.

What Now?

Two great pieces on what's next for America and for Conservatives.

David Brooks in the NYT

and

Ross Douthat in The Atlantic

How are we going to (using McCain's phrase) teach government to live on a budget when the demands on the welfare state are greater than they've ever been? How is the Republican Party going to remain relevant (if Palin and her anti-intellectualism and far right social conservatism are the future of the party, it's doomed)?

Here's hoping for intelligence and pragmatism for both America and the Republicans.

Auto Sales

Seeing as we have a resident auto industry expert, I'd like to hear from him first hand what is going on. Anecdotal, yes. Interesting and enlightening, also yes.

I thought about buying a car last month (with kid #3 on the way (and yes, that is my formal announcement), it seemed like we probably should get a car that could fit three car seats) and the dealers seemed a little too desperate. Why not wait a month and see how much more desperate they will get?

So my good friend, what say ye to this from the WSJ?

"Lunch is Free"

The quote John used on my equality post prodded me to poke around FARMS a bit. I found this gem from Hugh Nibley a couple of weeks ago and have been slowly digesting it. I think it nicely sums up the thoughts and feelings I've been having over the past couple of years regarding not only my own perception of work, money, poverty, and equality, but where my own priorities should be.

Money quotes:

"Therefore, if any man shall take of the abundance which I have made and impart not his portion, according to the law of my gospel, unto the poor and the needy, he shall, with the wicked, lift up his eyes in hell, being in torment."

and

"To serve the classes that are living on them, the poor, the laboring men and women are toiling, working their lives out to earn that which will keep a little life in them [lunch is what they get out of it, and no more]. Is this equality? No! What is going to be done? The Latter–day Saints will never accomplish their mission until this inequality shall cease on the earth."

If You

Do not vote tomorrow, then any political argument we have over the next four years, you automatically lose.

Anonymous (non-voter): "I think that we should take a closer look at the progressive tax system and entitlements such as Medicare and Social Security. I'm worried about the next generation and their ability to pay off the mounting debt."

Me (voter): "Well, you didn't vote, so STFU! The moon is made of cheese $#^$#&^%$%&^^*&^$%#$%@#!"

Niccolo

Regardless of what you think about his policies, rhetoric, leadership style, etc, the man is a master politician. And that matters.

I read this piece on his political ascent in The New Yorker a few months ago.

October

A summary of just how bad October was from The RGE Monitor.

The Piper

When are we going to pay him? Taxes will eventually need to be raised. The political will required to cut spending, especially non-discretionary spending (entitlements such as Social Security and Medicare) does not exist. The BE Press summarizes the two candidates' tax plans and asks when somebody is going to seriously address both sides of the fiscal question.

Maybe somebody has a magic recipe for double digit growth (any way for the American worker to live in dormitories?)

National Security

Frederick W. Kagan suggests that it should be the top priority in voters' minds in The WSJ.

That's a difficult thing to do when you're worried about putting food on the table. I don't see Mexico invading us any time soon.

The W - Westwood

I don't normally review hotels, but I had to make an exception for this one.

I've stayed at many a hotel. I've stayed at other Ws. I've never experienced anything quite like the W in Westwood. All Ws have the wannabe rave/nightclub thing going on, but this was extreme. I sat by the pool eating my cheeseburger and sweet potato fries (to the horror of the wannabe actresses/models/porn stars nearby) and just watched the slow roll of hipsters, yupsters, gansters, and "My new work just needs to be seen because I'm 53, but I look like I'm 27 (unless you look too closely - which I didn't) and please somebody rich take me home tonight" types walk by with their enormous and overpriced alcoholic beverages while I waited for my penthouse suite to be prepared.

And by penthouse suite, I mean the elevator button I pressed was "PH". Apparently platinum status means something at the W (unlike the Westin, which disturbs me a little).

The people watching was definitely entertaining, but what bumped the W up to four stars was the suite I stayed in. Kitchen, dining room, two bedrooms (the master is larger than my master) and at last count four giant plasmas. AND the decor. My interior design sister would have been in contemporary heaven. It was that sweet. I only wish my wife had been there to enjoy the mirror above the bed. Hi honey!

Farcical

Going through airport security two to three times a week has caused me to lessen my appreciation for the TSA. From The Atlantic: I'm going to start carrying my PLO, Islamic Jihad, Hezbollah flags through airport security. I could probably borrow them from Obama.

“The whole system is designed to catch stupid terrorists,” Schnei­er told me. A smart terrorist, he says, won’t try to bring a knife aboard a plane, as I had been doing; he’ll make his own, in the airplane bathroom. Schnei­er told me the recipe: “Get some steel epoxy glue at a hardware store. It comes in two tubes, one with steel dust and then a hardener. You make the mold by folding a piece of cardboard in two, and then you mix the two tubes together. You can use a metal spoon for the handle. It hardens in 15 minutes.”

Negative 0.3%

Third quarter GDP results from RGE. Consumers aren't spending, but governments are!

Another One

The Economist endorses Obama. Palin continues to be a dealbreaker for many on the center/right.

Fed Funds Rate

I'm going to be travelling most of the day, but I fully expect a 50 point rate cut. The only reason they wouldn't go with a 100 point rate cut is because then what? You're at a Fed Funds rate of .5%. When things get worse, what would you do? Oh, yea, I keep forgetting about that pernicious/blessed printing press. Print, baby, print.

From the WSJ in anticipation of today's 50 point rate cut.

Boom Noodle

My review of Boom Noodle here in Seattle. I went there last night with a good friend that I haven't seen in about six years.

Nicely done BN. The okonomiyaki was very good (although not quite what I'm used to) and the Tokyo ramen was definitely above average (a little too salty and not enough fat). The only disappointment was the omakase (chef's choice) pickle plate. A little stale. I wasn't aware that pickles could even be stale, but they were.

Would I go back? Yes. Would I take my Japanese friends here? No.

For all of my Yelp reviews, go here or click on the link on my sidebar.

Jumping Ship

First The National Review and now The American Conservative. The conservatives' long knives are out. Francis Fukuyama endorses Obama.

Not Very Good

The National Review's Rich Lowry rates McCain's campaign.

Stag-Deflation

I'll admit. I've never heard that word used before. Inflation, yes. Recession, yes. Stagflation, yes. Stag-deflation, no. From our favorite, very pessimistic, but usually right Nouriel Roubini: "The Coming Global Stag-Deflation".

I'm still not sure we're headed for deflation though. How can we be with the $10T debt and everyone promising to lower taxes? Oh, yea, the printing press.

Deflation rocks. As long as you have a job.

Zimbabwe

Make sure you have some time for this one. A fascinating look at Robert Mugabe from The New Yorker.

I recently watched The Last King of Scotland and was struck by the similarities between the current actions of Mugabe and Amin (minus Mugabe's very formal education) in the 70s.

The Return

Of state power and the weakness of multi-national organizations from Stratfor.

In the end, only the hand holding the gun to our heads matters.

Chicken or ...

David Sedaris writes a funny piece in The New Yorker on the undecided voter.

The Carry Trade

A three hour flight means lots of interesting reading. Why the yen is appreciating against all other currencies from Stratfor.

W.P.E.

Mr. Laffer (of Laffer Curve fame) offers his insights into "The End of Prosperity" on the Opinion page of the WSJ.

I still can't believe I voted twice for one of the worst presidents ever. Fool me once... Ouch, I can't even finish it.

Taxes

The candidates only seem to be speaking about income taxes. I thought I'd list a few more taxes and whether they are progressive (rich pay a greater % of their income), regressive (poor pay a greater % of their income), or neutral.

Income tax = progressive
Payroll tax (paid by both individuals and corporations) = neutral to progressive

Property tax = regressive
Sales tax = regressive
Inflation tax = regressive

"One of the greatest mysteries of our time is how the GOP convinced the poor and middle class to vote against their self-interest."

Prop 8 (CA) and Prop 102 (AZ)

Andrew is dead wrong.

The LDS Church supports these constitutional amendments to define marriage as being between a man and a woman because it believes that marriage is not just a word. Marriage is an eternal principle. A principle which modern day prophets have revealed to be strictly between a man and a woman (see The Family: A Proclamation to the World). In our view (and I know there are alternative views - I used to have one of them), defining it as anything else would be mocking God. And that is not something we(I) are prepared to do.

Today's Testimony

From Alan Greenspan. He has some 'splaining to do. Cheap money. Cheap money. Cheap money.

Equality

I've been thinking about equality and inequality lately. The above graph (generated from CIA Factbook data and posted on Wikipedia) represents income disparity by country using the Gini Index from the last 50 years. The fact that income disparity has been rising and that we are on par with China disturbs me. Income begets wealth (usually) and wealth begets wealth which begets sick amounts of wealth forever.

This rising gap between rich and poor is not just a moral issue (although in my mind, this is the more important of the two arguments for greater equality), it's a stability issue. The greater the gap between rich and poor, the less stable a society you have. Now I understand that inequality is an incentive for the poor to work harder to become rich (and they will work exponentially harder than the rich do to stay rich), but if economic mobility is not a reality for the majority of people, which I believe it isn't, then you have a huge French Revolution-like stability problem.

But back to morality. Is it right for the poor, not just in our country, but in the world, to be stuck in this poverty trap? (And it is a trap. I've lived in Brooklyn. I've lived next to the Bronx. I've driven very quickly through terrible parts of Oakland. I've been to places in South Phoenix that I never should have gone to. There is little hope and the likelihood of someone escaping is extremely low. There is no such thing as a level playing field.)

It's not right. It's not just. It's not merciful. It's not charitable.

US$

The rise of the US$ is really interesting. When you think of the awful state of the U.S. economy, the $ should not be rising, but it is, which means currency traders think that the $ is relatively safer than the Euro, the BP, the Yen.

The U.S. sneezes and the world gets a cold. Globalization. Gotta love it.

Air

$50T (as in trillion) spent on air, vapor, trust.

Cornered

Is this going to be another 1984 election or can McCain actually turn this thing around?

"...dumb Populist-in-Chief..." from The Economist! That's saying something.

"Real Responsibilities"

Being a mayor in Wasilla is pretty intense:

Don't Read This

If you want to remain in a good mood today. Bernanke's statement to Congress yesterday.

A 20% increase in unemployment this year. Nice.

Bernanke's life work has been a study of The Great Depression. Let's hope he learned something. More fiscal stimulus is on its way.

And if you're not depressed enough, from Nouriel Roubini:

...need traditional Keynesian spending of $300B to boost private consumption so that an unavoidable 2-yr recession doesn't become a decade long stagnation by hitting Main Street given that the private sector is not spending and the first stimulus was ineffective...

Bretton Woods III

Stratfor looks at the upcoming meeting of the U.S. and Europe in what could be the next Bretton Woods.

Tinny Tin Tin

From the Opinion page of the Wall Street Journal: Conservatives Against Conservatives.

European Vacation

Honey, pack the bags, it's time for a Royale with Cheese.

Contagion

A nice summary of the insanity from CASE.

SF

I come to San Francisco every couple of months just to make sure that the people in my office know that I have not yet been sacked. And to eat at the best sushi restaurant in America. Because I am not here on a regular basis, I sometimes forget what a unique city SF really is, which lasts about five minutes until the protest/parade inevitably rolls past my office window.

Early Exit Poll

"I got a decent sample anyway: half men, half women, half white; a third were over 50, and I'm pretty sure 12% were gay, even if 4% were probably denying it to themselves."

From The Treasury

This month's Treasury Report.

Page 5 shows you which departments are eating up the budget (in descending order Social Security, Defense, Health and Human Services (i.e., Medicare/Medicaid)).

Page 20 makes me physically ill.

Joe The Rich Freaking Plumber

I chose the wrong profession. A plumber makes more than $250K? Are you kidding me?

Great debate. If I was only listening, I would give it to McCain, especially the first 30 minutes. The Senator was a bulldog. Unfortunately this is television. McCain's pallor and grimacing reminded me of Nixon in 1960.

"I am not President Bush." was a great line from McCain.

Energy, education, and judges brought it back into Obama's court. Obama had a better closing.

The one issue that I completely disagree with Obama on is abortion. It's troubling.

Neither choice is perfect. Both pass the intellect test, although Obama has the edge here. Obama clearly wins the temperament test. Judgment. The key issue for me is Palin. Lest he die, lest he die, lest he die. Unacceptable.

The Final Debate - Factcheck.org

Is he really a plumber?

Fed Beige Book

The October Report.

High Lights
- International travellers continue to increase. Yea, Minnesota. It's awesome!
- Kansas City, Chicago, and St. Louis are offering higher incentives on automobile purchases. What? My worthless credit score is actually worthless?
- Kansas City and Chicago are still buying heavy machinery. With what? BBQ and nasty ass pizza?
- Consulting firms experienced reduced demand. Shit.
- Credit conditions are creating a heightened sense of concern about the economy. I need the Fed to tell me this??
- The prices of homes are declining and the supply is increasing. WTF??
- Businesses report difficulty in obtaining credit. How much did generating this report cost exactly? I'd like to undercut them by 50%. I'll have the next report ready by tonight.
- Conditions for energy and mining are positive. Is that why the Exxon guy down the street has three new cars and a boat?
- Higher retail prices are expected over the next few months. Merry Christmas to you too!

The Imperial Presidency

From Cato on how both candidates view extraconstitutional presidential authority and how they will wield The Magic Scepter of Inherent Authority. Where is that Constitution thing again?

"Debating the Debates"

In anticipation of tonight's debate, The Economist walks us briefly through the history of presidential debates.

My favorite line was, "Sarah Palin, meanwhile, avoided difficult questions by asking her own and then answering them."

I expect more of the same. Same questions. Same answers. No real interaction between the candidates.

But I can hope for a bloodbath. Politics is afterall just another form of entertainment.

Power

The Monday meeting between the government and the bankers.

To be a fly on that wall.

Thinking of the power being wielded in that room makes me a little giddy.

May I?

I think I am dreaming CNBC at this point. I've always enjoyed it, but travelling as much as I do gives me many more hours of evening and morning CNBC viewing. Mad Money, Squawk Box, Squawk on the Street, and of course Kudlow and Company. It's required viewing at the Westin these days.

The Treasury unveiled it's latest plan this morning. Click here for the full Treasury memo.

My favorite part is that if a corporation wants to increase its common stock dividend, it must ask the government for permission. Seriously, capitalism is dead.

It's Far From Over

Stratfor's look at Europe's and the U.S.'s current solutions to the financial crisis.

Why

Ever since I became politically conscious (~15 years old on the speech and debate and mock congress teams), I've been a self-described libertarian, realist, free market Republican. Ideologically, it is extremely appealing. Everyone looks out for his or herself, is self-sufficient, rises to his/her level of incompetence, and allows everyone else the same freedom. It's an extremely empowering ideology. All of your success is due to your hard work. Any failure is due to you not wanting to work harder. Having been born and raised in the Southwest, with all of its cowboy independence, it was a natural fit. I voted Republican down the line (with the exception of Bill Clinton in '96 - who was I to turn away from peace and prosperity?).

Last week, I voted for Barack Obama for President (early voting, as I'll be out of state on Election Day).

Up until a month ago, I was going to vote for John McCain. I voted for Senator McCain in the 2000 Republican primary (and how I wish he had been President the past eight years. And for full disclosure, I did not vote for him in the Republican primary this year. I voted for Ron Paul.). However, events over the past four weeks have convinced me that I cannot vote for him again.

First and foremost was his selection of Governor Palin. I wasn't immediately opposed to her because I knew nothing about her. I took a wait and see approach. Well, I've waited and I've seen. In my opinion, she lacks the intellect, the judgment, and the temperament to be a heartbeat away from the Presidency. I won't YouTube you to death, as I'm sure you've seen the interviews and debate (no press conferences though??), but I expect more from my leaders, especially after the past eight years.

McCain's political selection of her reflects poorly on his own judgment. Yes, it made sense politically. He did need to fire up his social conservative base, a base extremely wary of some of his more liberal tendencies (see campaign finance reform and immigration), but his selection of her as his running mate demonstrated that he was not putting 'Country First'. McCain selects Lieberman or Romney and I might not be writing this.

Which brings me to reason number two. The Republican social conservative base. I refuse to be affiliated with a group of people that hates/despises/thinks I am bound for eternal damnation and is pretty vocal about it due to my religion. The Republican base despises The Church of Jesus Christ of Latter-day Saints. I used to ignore it. I will not ignore it any longer.

Reason number three: The Republicans are no longer the party of small government. The romantic allure of Barry Goldwater's Republicanism no longer exists. In today's globalized environment of multi-national corporations and interdependent economies and governments, and as evidenced by the global financial meltdown now occurring, I'm not sure a small government approach is even possible.

Over the past thirty years, Republican administrations have increased the size of government in real dollars and as a percentage of spending year on year more than Democratic administrations have. We have a party that says government has a role to play and then spends pragmatically (relatively speaking) and another party that says government should get out of the way and then does the opposite and drives spending (the size of government) up.

If I don't have my romantic and possibly infeasible option any longer, I'll go with the pragmatic. Senator Obama is no messiah. He will not change our current situation with a wave or clap of his hands. However, I believe Senator Obama has the intellect, the judgment, and the temperament to do what is best for our country. My instincts tell me that he will put pragmatism over dogmatism. Could I be wrong? Absolutely. Only time will tell, but for now, this could be the end of my own personal history (see Francis Fukuyama). Ideology from both the left and right has demonstrated that what ideology is really good at is getting in the way of doing what is right.

Credit

"Part of the reason this crisis occurred is that everyone was living beyond their means – from Wall Street to Washington to even some on Main Street. CEOs got greedy. Politicians spent money they didn't have. Lenders tricked people into buying home they couldn't afford and some folks knew they couldn't afford them and bought them anyway.

We've lived through an era of easy money, in which we were allowed and even encouraged to spend without limits; to borrow instead of save."

For the full text of Obama's speech today, click here.

Plan B

How to save Wall Street AND Main Street (lots and lots of cash).

The G7

And I thought the past two weeks were interesting. What is the G7 going to do this weekend? Coordinated rate cuts down to 0%, insure all deposits, nationalize the banks, revalue all mortgages, suspend all foreclosures, massive public/international works? Or something even more drastic (Central World Bank anyone with a single new currency?)?

Two Years

Can't I just go to sleep and wake up in two years with everything all better? A Global meltdown is at hand. Here's hoping for effective coordination among governments and central banks.

Three-Headed Monster

And what can be done about it. From The Economist.

I bet we see another coordinated rate cut in three weeks (maybe a full 100 basis points from the Fed).

Spending Freeze?

He was just kidding. McCain's mortgage restructuring would put $300B immediately into the hands of shareholders and bank managers (via economist Brad DeLong). Seriously what happened to the John McCain that I knew a year ago? A month ago?

Passion

Donna Brazile - CNN contributor, Democratic superdelegate, and Obama supporter at The New Yorker Festival last weekend.

A Collection

Of thoughts from conservative bloggers on last night's debate.

The writing is on the wall.

Not So Doomy

An Op-Ed from a UCLA professor in the WSJ.

Immigration will save us. I thought I said that a couple of years ago.

CFR Debate

Dr. Doom at the Council on Foreign Relations.

You can watch it here. I'd recommend watching it if you can. The transcript doesn't convey the interplay between the panel very well.

Unprecedented

A coordinated rate cut. Thank you Sweden.

More money, more money, more money. Where's my $500 loaf of gluten-free bread?

Debate v3

- Obama started out weak and unclear. He had to warm up to his talking points. McCain was on point from the get go.

- Point/counterpoint with the Fannie Mae/Obama connection and the deregulation/Bush/McCain connection

- McCain is going to actually buy the loans? Not just the securities? Wow, I never thought I'd hear a Republican talk about nationalizing home ownership. Socialism with a capital S (and probably a good political move - he needs something radical at this point).

- Obama is for a net spending cut (balanced budget or just smaller deficits? Tax Policy Center shows that Obama balances the budget.)

- Health care, entitlements, energy - McCain is going to do all three at once? Really? You're going to take on the third rail of politics at the same time as solving the energy and health care crisis? Now that's ambitious.

- Of course Obama puts entitlements last. He is a Democrat. Also politically smart to prioritize in this way.

- McCain links Obama to Hoover. Now that's a neat trick.

- Brokaw is an excellent moderator. The best of the three so far and heads and shoulders above Iffel.

- Starting to get nasty with the responses to each other. Brokaw is clearly frustrated, but still some semblance of control.

- Obama just talked about his mother's death and health care. Health care is a right. IT IS!!

- Foreign policy - what, no "naivete" tonight Senator McCain?

- Obama - McCain - "Bomb, bomb, bomb Iran" Low blow and effective.

- And the rest...

Again, no gaffes. More nastiness, but that only solidifies positions, (see Sean Hannity's ravings preaching to the right wing choir). I think the 2% of undecideds are waiting for something spectacular and if that something spectacular does not happen, they'll go with what they perceive as either intellect and judgment or experience and judgment.

This election is Obama's to lose and he's doing a very good job at not losing it so far. FactCheck.org is up.

The German Question

From Stratfor. Germany's position on Ukraine/Georgia and Russia. Particularly interesting in light of McCain's and Obama's stances on foreign policy.

Only the Third Inning?

An IMF working paper written in August on recessions, credit crunches, and asset bubbles. Pages 17 through 33 contain the real meat.

Personal Plea

I'm too big to fail.

Senator Kyl

I wrote Senator Kyl twice over the past several weeks (along with Senator McCain and Congressman Jeff Flake). Today I received a reply from him that I'm sure several thousand other Arizonans received as well. The gist of it was:

- Our economy is in shambles
- We had to do something
- We talked to a lot of smart people
- We abandoned our free market principles
- This is the best we could do in the short term
- Let's cross our fingers and hope it works

Today's meltdown indicates to me that not enough of us were crossing our fingers.

FL

Holy Florida Batman! and a Transformed Election.

Talk about one of the worst three week stretches in American political history.

Will Work For Food

From the RGE Monitor: Something we are all concerned about (employment).

We Are All Socialists Now?

Or just socialism for the rich yet again?

I'm proud that my Congressman voted against this travesty.

Choked Up

Modern debates are not won on arguments. They are won on emotion. This was the moment of the debate:



Palin did surprisingly well, meaning expectations were so low that unless she had totally wigged out or said that she was Jesus, she was going to be perceived as having done a good job. Biden won the actual debate (pretty easy as Palin didn't really answer any questions posed to her by Iffel, only those questions written on her note cards, which once in a while corresponded to the question being asked).

FactCheck.org just for kicks.

From the WSJ

More on Moral Hazard

and

Lessons from the last 9 months for investors.

More from Dr. Doom

Coordinated 100 basis points reduction across all central banks globally. And that's just for starters. The man predicted this event two years ago. Maybe more people in Washington should start listening to him.

Deposit Insurance

Haven't our legislators ever heard of moral hazard? Deposit insurance is a terrible idea to begin with. It's not even insurance. It's a guarantee to the banks that they will not be held accountable for "insured" deposits if they engage in risky behavior that causes them to fail (think S&L crisis). Raising the limit to $250K simply means that cash strapped banks will need to put more of their cash into federal hands to meet their reserve requirements, which leads to higher fees from the banks and higher taxes from the government to cover the failures. Talk about these guys not understanding basic economics and only playing to their constituencies. Nanny state indeed.

The FDIC should be dissolved and we should be forced to invest our money with banks the same way we do with stocks, bonds, etc. Risk vs. return.

And yes, I realize that I suggested that moving money to insured and nearly insured (Treasuries) short to medium term investments would be a good idea. I don't make the rules, but I do play by them. Call me an idealistic pragmatist.

Politics and the Economy

"Political Nature of the Economic Crisis" from Stratfor.

As usual, excellent.

One Hit Wonder?

Daily podcast from Cato

I suspect it was. Some sort of debt funded bail-out is inevitable.

I Can Do That

Just to lighten it up a bit:

Sublime

Sometimes the Opinion page in the WSJ leaves me speechless. This is one such article.

Inflation is a tax. Deficits are a tax. Public debt is a tax. There is no free ride.

Advice

Save, save, save!. I'm going through every single expense to figure out what can be cut.

FDIC insured and Treasuries for all non-tax deductible short to medium term investments is where I am headed.

NH and VA

New Hampshire and Virginia have become battleground states? Talk about a demographic change. (Click on each state for details)

Now What?

This is insane.

Maybe I won't be reading those 110 pages tonight.

Full Text

All 110 pages of it. I'm going to read it when I have time tonight. I read the summary on the plane this morning and while I'm still pissed that we are funding this with debt, this is probably as good a deal as the taxpayer is going to get. Let's hope it actually works.

Nouriel Roubini, who I just found out is the economist that Glenn Beck uses (props to Glenn Beck for tracking him down at NYU), is beyond pessimistic. And that scares the hell out of me. The man is brilliant and has been predicting this exact situation for a couple of years. They don't call him Dr. Doom for nothing.

Does anyone else find it a little odd that our entire economy is wrapped around credit? I understand why it works, but maybe we need to rethink the credit paradigm.

I'll comment more tomorrow after I read the details.

3%

That's the percentage of the electorate that the debate was targeting, meaning voters that were using the debate to help them decide who to vote for.

Stratfor's Part 4 of its foreign policy debate series.

As I stated previously, I didn't see a clear tactical winner. From what I'm reading in punditland (both sides), it seems that there is a perception that Obama won strategically because he appeared presidential, thus alleviating any concerns of any fence sitters.

Not Quite Inspiring

But at least it wasn't concrete. 9 mile run this morning, with only about 1/2 mile of it being on concrete. I found my canal bank! My favorite parts were the amazing sunrise as the sun comes over the Superstition Mountains, the roadrunner that ran across my path, and the two floppy eared hound dogs that were sharing the yard with about five broken down vehicles baying at me. Not a bad way to start the weekend.

Debate Notes

My comments in bold:

McCain's opening statement was a little weird. "We Republicans" – out of control spending and corruption (uh, you're a Republican John)

McCain – Obama wants to increase spending by $300B (nice jab)

Obama – focus spending on health care and education – spend money wisely – help middle class instead of the rich

McCain – 11% business tax in Ireland vs 35% tax in U.S. means we need to cut taxes on businesses (great point until Obama follows up)

McCain – raise taxes slows down business

Obama – tax loopholes for businesses mean that businesses have lowest tax rates in the world (and a left hook)

Obama – have to have energy independence (10 years), environment, health care (didn't like that he didn't answer the question about what he would give up)

McCain – cut spending, eliminate ethanol subsidies, do away with cost plus contracts in the military (direct answer to the question)

McCain – saved taxpayer $6.6B (Boeing and DOD)

McCain – spending freeze except for Defense, veterans, entitlements (that's what I'm talking about)

Obama – hatchet instead of a scalpel(nice one)

McCain – nuclear power (700,000 new jobs)(double whammy - energy independence and jobs)

Obama – have to trust the values of the candidate (amen and he's shown better overall judgment)

McCain – doesn’t want to hand health care over to the federal government (talking point)

McCain - $800B in new spending via Obama (whoa nelly!)

Obama – McCain agreed with Bush 90% of the time, presided over deficits and increase in spending – (keeps slamming this home)

Obama – against Iraq from the beginning, spent $1T, lost 4000 troops, Al Qaeda is resurgent in Afghanistan, spending $10B a month, when Iraq has $79B surplus, borrowing money for basic functions

McCain – Obama said surge wouldn’t work, but Obama recently said that surge worked (it sucks when you're wrong)

Obama – better judgment based upon 2003, McCain pretends war started in 2007 (one of the top three lines of the night)

McCain – Obama doesn’t understand difference between tactic and a strategy (that's gotta hurt)

Obama – better judgment. McCain took eye off the ball and said we could muddle through Afghanistan (another top three line of the night)

McCain - Obama's initial reaction to the Georgia/Russia crisis showed inexperience (major foreign policy point in McCain's favor. why won't McCain look Obama in the eye?)

After that, it started to get slow and less interesting. McCain's focus on pork was nice until you realize that pork is only $18B out of a $3T plus budget. Peanuts in the grand scheme of things.

McCain's reference to Obama's naivety and his experience was his driving theme. Obama's was his judgment. McCain was better than expected on the economy, until Obama started hammering him on tax cuts for the rich.

McCain had the tactical advantage on foreign affairs with his knowledge of everything foreign and hammered him on the "no preconditions" before talks with axis of evil heads of state, but Obama's better judgment on Iraq in 2003 and Afghanistan (the muddle comment was brilliant) makes it about even for me.

Both had good poise. I liked the format. Obama took the initiative by talking to McCain first. McCain's creepy smile and using his nickname to refer to himself was a little odd. He obviously despises Obama.

Both appeared presidential and no major gaffes. Maybe next time.

Economists' Voice

Some questions for Paulson and Bernanke.

A better way?

Cato

Some history and a minimalist approach.

And an interesting podcast with Arnold Kling("Bailouts and Uncertainty").

"The day after the bail-out passes, the market is going to grind to a halt."

Deficits and Debt

You've seen me rail against debt lately. The problem is that during prosperous times (the last 6 or 7 years), the government has been running massive deficits (spending more than it takes in). This is due to three major items: the Bush tax cuts (yea!), the enlargement of Medicare(BOO!), and Iraq (DOUBLE BOO!). Where did the money come from then? We borrowed it from China (and other countries) by issuing debt (i.e., Treasuries). A lot of it. Almost $5 trillion, effectively doubling the debt and increasing the debt as a % of GDP (domestic productivity) from just below 60% to almost 70%.

Now deficits are not always bad. In bad times, deficit spending can help jump start the economy (see The New Deal) by injecting cash into the economy. However, we were deficit spending in good times. Unprecedented deficit spending.

Which leads us to today. We can't deficit spend our way out of this mess without long term negative ramifications to the dollar, inflation, and GDP. Pardon my French, but it's truly f*&$ed up. We're already in a serious hole and now we're going to dig it deeper.

Our options will be to raise taxes to pay for the debt (which will slow down growth) or just throw caution to the wind and let the dogs of hyperinflation loose (just print more money) in order to make the debt cheaper to pay off (which completely screws us over - just think Zimbabwe today or Germany in the 20s).

I honestly have no idea how we are going to get out of this mess. We need to see massive GDP growth (highly unlikely anytime soon) or cut both discretionary (things like defense and farm aid) and non-discretionary spending (things like Social Security and Medicare) off at the knees (a sure political loser).

Here's hoping for people much higher than my pay grade to solve this. Now I need a drink.

Here IT Is

The Mother of All Bail-outs.

Where are the details?

Equity sharing: How much? What type?

Profits to pay back the debt: How much? By when?

The debt sickens me. Unless the government is going to increase my income to pay for the inflation tax that it is about to laid at my feet via the printing press and more debt, this should not pass (I'm picturing myself as Gandalf shouting at the Balrog in Moria). We're heading for Zimbabwe territory.

I'm calling and emailing all of my elected representatives again.

The Bail-Out

What if one of the presidential candidates votes against the bail-out? Another game changer.

Discretion

Interesting little post on Volokh regarding the amount of distribution discretion (i.e., equity warrants, executive compensation, and help for homeowners) Dodd's and Paulson's plans have.

Part 3 - McCain

McCain's foreign policy stance via Stratfor.

The history lessons that this series is providing are exceptional. Rather than just looking at stated positions from each candidate, Friedman is looking at each party's foreign policy traditions and what that potentially means for each candidate.

Friday Debate

Some of you might not like the direction I'm headed, but Senator McCain's political stunt in refusing to debate Senator Obama Friday evening is an utter joke. Now IS exactly the time for a debate. Let us see the choices before us. Let us understand what they are thinking in the heat of the moment without their scripted and vetted talking points.

As if the past two weeks haven't provided enough evidence of McCain's lack of knowledge of economics and finance, this cancellation for the benefit of the country trumps his populism/socialism/or whatever flavor of the dayism that he keeps coming up with. I predict that this little gimmick will help speed up the erosion of his support. Although with more than a month to go, who knows what else could happen. Afghanistan could erupt or we could invade Iran.

At the end of the day, we're all going to need to have a gut check when we go to the voting booth. That gut check for me will be all about judgement and pragmatism in moments of both peace and crisis. It's becoming clear to me who that person is.

Bailout Necessary?

Some think not. The summary on RGE here.

Other alternatives via the Washington Post.

The trillion dollar question is, what happens without a bailout? Will credit markets really completely fail? Will all of the institutions that are currently holding these securities go the way of Lehman? How many bankruptcies is too many?

Ok, that was more than one. Shoot me.

Getting It Right?

From the WSJ Opinion page.

This is an interesting idea. Use the bail-out to buy homes, and in some cases neighborhoods, and demolish them. Get rid of the toxic supply. NIMBY of course.

I'm still wondering why I haven't seen many people talking or pressing on the issue of how we are funding this bail-out (increasing the public debt by ~10%).

Devotion

I have always been a political junkie. Few things get my mind and heart racing more than politics. It's fun, entertaining, and helps prevent brain atrophy. Most of the time, aside from my favorite P&E (Politics and Economics) links over to the left, I keep these topics off my blog. I do this for several reasons:

1. There is already a glut of high quality content out there.
2. I hate parroting back simply what I've read or heard.
3. I usually have nothing original to say regarding the topic (see #2).
4. My audience of two just isn't into politics the same way that I am and I'd hate to drive my readership away (i.e., it would be a bad marketing decision).
5. Running in Arizona just isn't as inspiring as running in NorCal or Westchester or even NYC.

However, as you have seen, I've recently begun changing my self-imposed policy. My ardor for politics has not changed, but the events that are taking place right now are too important for me not to express what I'm thinking and feeling (yes, I do feel).

I will continue to sporadically post about my running adventures, as they happen and as they inspire me, but for the immediate future, expect to see more links to political and economic articles that contain topics and opinions that I believe are important. I know that many of you ignore these topics, but (and here is where the editorialist in me escapes), you do so at your own peril. The events and decisions that we as friends, family, communities, and as a nation are faced with today will affect your day to day lives for a generation. It is that important.

Part 2 - Obama

Stratfor's Part 2 of 4: Obama's Foreign Policy Stance.

Beyond Outrage

The size of this potential bail-out (all funded by debt - that means we'll (and I'm including your children in that we) be paying for it for the next 50 years through our taxes) is making me physically ill.

Privatized profit and socialized losses are what we are looking at. And that is clearly unacceptable. The only way to do this is to swap this terrible debt (at prices well below book value) for majority equity stakes (i.e., control).

Write your Representatives and your Senators and voice your opinion.

An Open Letter to Secretary Paulson.

Virtue

"A virtuous leader is one who is clever, cunning, decisive, ruthless and, above all, effective." - Machiavelli

In preparation for the debates beginning this Friday: Part 1 of 4 presented by Stratfor, a top (in my opinion, the top) independent foreign policy think tank.

This is a non-partisan series. The editors of Stratfor have staffers who ardently support each candidate and who are standing by "...to crush" any perceived unfairness toward either candidate. Great reading.

The Socialist Bailout

Led by our favorite Republican.

My favorite line is from Gary Hart:

"I know why you are conservatives -- you favor private enterprise for the poor and socialism for the rich."

Summary of a Crisis

Very good read on the current financial mess. Yes, it's on Kos, but it's the best I've read so far.

And another on the potential cost of doing nothing.

For The Record

I get really angry when I run here in Arizona. Concrete drives me batty.

269

Please let this scenario happen. According to the Poll of Polls, I can see it.

Only look at the toss-up states.

For Obama:
CO
PA
MI
WI
MN

For McCain:
NV
MT
IN
OH
WV
VA
NH

Although with the economy on the forefront of everyones' minds (with the Republicans having been at the helm) and with the majority of Americans scared to death of a potential President Palin, this is probably unlikely (meaning Obama probably wins OH, IN, and/or VA).

Go Chaos!

In Keeping With The Season

Very interesting reading (open the PDF) that only looks at the tax side of the equation (nothing about spending, which is rarely cut anyway - cue the great sucking sound).

Tax Policy Center estimates of each candidates' tax plans.

For general tax/spending projections:

Congressional Budget Office

And just for giggles, one of my favorite Flash creations ever:

Death and Taxes

And for a state by state electoral map look (forget national polling, it is irrelevant):

Pollster

In Honor of Marvin

Liz recently posted about moving mountains. The genesis of this post was our watching Sicko. We both enjoy Michael Moore and even though we(i.e., I) don't always agree with his politics, he sure does know how to make an entertaining movie. My favorite part of Sicko was when he wrote a check to cover one of his critic's wife's medical bills. Like I said, if nothing else (and I do think there is something else), Moore is an entertainer. One of my favorite moments is his Charleton Heston (may he rest in peace) ambush in Bowling for Columbine. It's not often that a movie makes me squirm.

But I digress. Moving Mountains. The day after we watched Sicko, we were driving (we always seem to be driving in Az.) and Liz was doing her communication thing, which I stand in awe of, and I couldn't find anything to say (which wasn't that surprising). We talked about our passions and using those to build the foundation of some tool that we would then use to build a better world.

Liz's task is easy (to me). She has so many passions and more importantly talent that she just needs to pick and do. Me, that's a different story.

My passions (in no particular order and excluding family):

- Running
- Politics
- Um
- I swear I have another one
- Still thinking

It's interesting. People have commented to myself and Liz that I am difficult to decipher because I don't say much and that I must be thinking about really heady stuff. Well, let me clear that up. Here's a sample of my brain activity when I'm not speaking.

"--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------."

It's that exciting.

So here I am, approaching the peak of my intellectual powers, with two passions and without an extraordinary amount of talent in either one (this is NOT a not so silent plea for affirmation), and I have nothing interesting to use them on. Even worse might be the realization that my powers are unfortunately, not super. All I've ever wanted to do was to turn into a pterodactyl (why did the girl always get to turn into cool creatures and the boy was always stuck being a pail of water?)

In other news, twice this past week on separate flights, I thought for an instant that I was going to die. Flying does not freak me out. I've logged too many miles. However, there are occasions when something happens that hasn't happened the other 80 times I've flown this year and death does cross the mind. The weird part is what I thought about in those two instances.

"Well, this will be interesting. Or not" I probably would have been bored two minutes after dying anyway.

What To Do

when the client has taken away all of your resources and is still requiring the same amount of work?

Download NIN and make angry faces across the hall. A little fist pump doesn't hurt either.

It does wonders for business case and Powerpoint productivity.

And if angry, whiney Trent doesn't do it, Paul O. just might.

Reading

As with most things that have to do with this blog, my Reading Now section has been sorely in need of an update. I can't even remember when I read "A Swiftly Tilting Planet". I do know that I've read many books since then. One of my favorites was March. You'll notice that I continue to be on my novel kick.

I'm currently reading (and have been for quite a while)The Brothers Karamazov. I knew that this book was about a murder. I just didn't know that it would take 400+ pages to get to the murder. Don't get me wrong. Those 400 very dense pages were very entertaining, especially Father Zosima's musings on his youth and Fyodor's buffoon act at the monastery. However, I just didn't expect a book that revolves around a murder to have that murder take place more than halfway through the book.

That might have been Dostoevsky's intent. When it finally became apparent that something was going to happen, the crescendo building up to the murder was overpowering and I couldn't put the book down. It's a good thing that I have lots of hotel and flight time because there is no way I could have gone that last 100 pages uninterrupted at home.

So now poor Dmitri is being questioned by the police and it again appears that something strange is going on between himself and his two (three?) brothers. I'm looking forward to my flight home tomorrow night for more than one reason it appears.