The Worm Will Turn Here in Barackistan, But Who Cares?

The admirable Daniel Larison explains the eclipse of the GOP as follows: Of the three GOP factions he identifies, social, economic and national security conservatives, he blames the national security conservatives. The GOP in power under Bush did little or nothing for the social conservatives, and followed corporate welfare policies, not economic conservatism or libertarianism. It did, however, follow hawkish policies--war in Iraq and Afghanistan, worldwide interventionism, heavy spending on defense, and so forth. These led to its decline in popularity, the election of Obama, and the fall of the Congressional GOP.

As an aspiration, Larison’s hope that the GOP will “break with the aggressive pursuit of hegemony that has so ill-served American interests” is admirable but probably vain.

The truth is that for all the sound, fury and hatred that abounds, we have two political parties that peddle what Huey P. Long called “high populorum” and “low popahirum.” The former was taken from the bark of a tree from the top down, the latter from the bottom up. As Huey said, “The only difference I’ve found in Congress between the Republican and Democratic leadership is that one of them is skinning us from the ankle up and the other from the ear down.”

Indeed, the political boundaries that seemed to have grown wider between Reagan and Bush 43, have now been thoroughly fudged. During last Fall’s financial hysteria, Bush and the Democrats joined to promote the ill-considered and disastrous TARP bailout. Initially, the House Republicans, closer to the grass roots, resisted. After the market tanked for a few ways and major arm-twisting, they caved. We now have government control of the world’s largest insurer and its largest banks, whose profligate leaderships remain largely intact. Socialism? Well, when enterprises lose money, hell yes!

Bush’s predecessor, the “centrist” Clinton, had Robert Rubin, formerly of Goldman Sachs, and afterwards of Citigroup, as his Treasury Secretary. Bush ended up with Henry Paulson, alumnus of Goldman, Sachs. Obama, the “leftist,” has as his advisers Boy Geithner, protégé of the same crowd, and the aging boy wonder, Larry Summers, grown fat with speaking and consulting fees gobbled at the Wall Street trough.

Nevertheless, some people still think Obama is a Bolshevik and Bush a conservative paragon. Obama may be more of a statist on a few matters, and appeases different constituencies from the GOP on the sexual issues, abortion and the gay agenda. He’s more urban and bicoastal than the old white guys in the GOP, but if there are differences they are more of diction and dress than on anything fundamental.

Where does this leave the GOP? At the moment, stymied.

However, the worm will turn, as it always does. The Great Recession may be entering a phase of greater decline, but the recovery, if it comes at all, will not come soon and will not be pretty. Bonds, upon which the whole stimulus and rescue program depends, will get harder to peddle, and inflation will come out of the jungle roaring as a lion. We are still up to our necks in Af-Pak, as the pundits now call it, with no particular end in sight, and things in Iraq are touch-and-go. Zionism continues its peculiar brand of vileness, when only several sharp jerks of the chain will prevent a disastrous Israeli assault on Iran, with unpredictable and dangerous consequences.

The Democrats in Congress, meanwhile, are a sorry bunch of hacks, and that fraction of the public that follows such matters can see that for itself.

All of this suggests that peace and joy will not reign forever in Barackistan, and the GOP will have a revival, not because of its virtues, but because it’s out of power and the public wants to throw the rascals out. The dearth of talent evident at the moment is unimportant. The GOP always finds a standard-bearer somewhere--a victorious general, an eloquent over-the-hill actor, the simpering scion of a transplanted New England dynasty.

The sad part is that so far the Stupid Party has learned nothing. To shackle itself to fiscal probity after the Reagan and Bush deficits is sheer deception. There appears to be no appetite for anti-corporate populism. The party has never had much stomach for the sexual issues, riddled as it is with closet cases and serial adulterers. Patrioteering is mother’s milk to the GOP.

Thus, although the political worm will turn so long as the poor Republic persists, we can expect nothing particularly new or improved.

I wish I liked politics less. I could learn a language, read a classic, take a hike, and cultivate my garden. Each of these pursuits seems more promising than hoping someone will remake the GOP into something that might offer a bit of hope to the Republic.

Song of the Week

The Banks are Made of Marble
A Song by Les Rice©Stormking Music 1950

I've traveled round this country
From shore to shining shore
It really made me wonder
The things I heard and saw.

I saw the weary farmer
Plowing sod and loam
l heard the auction hammer
A knocking down his home

But the banks are made of marble
With a guard at every door
And the vaults are stuffed with silver
That the farmer sweated for

l saw the seaman standing
Idly by the shore
l heard the bosses saying
Got no work for you no more

But the banks are made of marble
With a guard at every door
And the vaults are stuffed with silver
That the seaman sweated for

I saw the weary miner
Scrubbing coal dust from his back
I heard his children cryin
Got no coal to heat the shack

But the banks are made of marble
With a guard at every door
And the vaults are stuffed with silver
That the miner sweated for

I've seen my brothers working
Throughout this mighty land
l prayed we'd get together
And together make a stand

Final Chorus
Then we'd own those banks of marble
With a guard at every door
And we'd share those vaults of silver
That we have sweated for

Yeah, I know, it's a Bolshevik song. But somehow it resonates.

Strange New World

I was never a Krugman fan. TARP blew up the right/left distinction, though.

Timmy's Folly

After six months and two administrations, it appears that Treasury Secretary Tim Geithner has come up with a bank rescue plan that rather resembles the one that Bush's Treasury Secretar Paulson proposed and then abandoned.

Rather than reorganize zombie and failed banks, the Feds will subsidize the purchase of "toxic" assets by investors, presumably hedge funds and sovereign funds. The Feds will insure them against downside risk.

The fundamental problem remains the same. If the assets are sold at current market value, providing another buyer will do the banks no good. If the assets are set above market value, the taxpayers are rewarding the banks for betting on the wrong horses. Of course, it's conceivable that these assets will turn out to be worth more than the current market price, but then, so might that swampland in Florida and that bridge over the East River.

I have said to my liberal sister, but not written here, that TARP, proposed by George Bush, puts the final nail in the liberal/conservative distinction as it has been understood in this country. If Bush was prepared to nationalize AIG and run a huge deficit for this purpose and to bail out the banks, the traditional notion that the GOP resisted government interference in the economy and deficit spending had become non-operational. The same for resistance to the expansion of executive power. Thus I feel justified in linking to Paul Krugman's piece today, in which he announces his "despair" over this plan:

The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive.

But the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.

You might say, why not try the plan and see what happens? One answer is that time is wasting: every month that we fail to come to grips with the economic crisis another 600,000 jobs are lost.

Even more important, however, is the way Mr. Obama is squandering his credibility. If this plan fails — as it almost surely will — it’s unlikely that he’ll be able to persuade Congress to come up with more funds to do what he should have done in the first place.

I never thought I'd be agreeing with this man, but he's right. Put the zombie banks out of their misery rather than throw good money after bad.

As an anthropologist, I think you have to look at the real connections between people, not just at economic theory. What links Robert Rubin (Clinton's Treasury Secreary), Paulson, and Obama gurus Geithner and Summers, are personal ties of patrons and clients over time. The institutional link is Goldman, Sachs. In short, the same inmates are running the asylum, whether "D" or "R" is after their name.

Obama, of course, can't fire Geithner because he has no Plan B and losing Geithner so soon would discredit Obama.

In short, we are stuck.

The Bush Internationale

The old Internationale, the anthem of international communism and socialism, began thus (at least in the US version):

Arise, ye prisoners of starvation!
Arise, ye wretched of the earth!
For justice thunders condemnation:
A better world's in birth!

Now that George Bush is doing more for socialism than anyone since Chairman Mao, I offer the following:

Arise ye fearful of deflation,

Arise ye victims of the crunch!

Your paper suffers condemnation,

You don't have time to go to lunch!

No more the market's tides shall drown us,

Arise ye bankers, one and all;

Our bonds shall rest on new foundations--

The government will pay them all!

'Tis a right fine bailout,

Line up now for your pie,

The international rentier class

Has George Bush as its ally!

Another Casualty

Mother's Cookies--you know, those super-sweet ones with pink and white frosting--is kaputt.

Where are the sugar highs of yesteryear?

Just Askin'

Will the next depression bring us anything as good as Fred Astaire?

Will mass unemployment solve the servant problem?

What will the moonbats do if there are not enough Republicans to kick around?

Question

The Dow is down 348 points today. 

How does that gibe with the alleged magnificence of the Bailout?  

The 777 fall was supposedly due to the House's failure to pass the abomination.

Economic analysts want things both ways, methinks.

Bailout Mini-Rant

The bandit says to the farmer, "I'm taking your cow,  your goat, and the chickens. To win your assent, you may keep the cat."

As I find it hard to stay on one foot for long, all the rest is commentary.

The Dark Lord Has Spoken

Larison:

Few on the right are more hostile to the perverse appeal to “creative destruction” than I am when it is used to justify de-industrialization, the displacement of people, the transformation of local communities or demographic upheaval through mass immigration, but what we are faced with this week is the victory of Hamiltonian collusion between finance and government to use the latter’s apparatus of power to shore up the former’s wealth. Central government is robbing the people to prop up concentrated wealth, and claiming in the process that it is doing us a favor. Never mind that the government’s alarmism may well be wrong.

People have been cajoled into submission through fear and intimidation, and above all by the threat that life might become less comfortable. In other words, advocates of the bailout are quite happy to say that liberty has a price and they are very happy to pay it so long as it avoids most of the unpleasantness. “Give me liberty or give me a comfy retirement!” is not exactly a phrase that will live forever. Thus an abject abandonment of liberty is here being implausibly dressed up as a defense of liberty. Burke and Kirk would, I suspect, feel like retching if they had lived to see their understandings of constitutional government and social order used in this way.

It is easy to talk about principle when there is no crisis happening and no risk attached to standing on principle. The real test comes when holding fast may actually cost something. Holding to a principle, if it means anything, means that you value it more than mere self-interest, satisfaction or comfort. A lot of Americans want to have it all–the pretense that they are free, with none of the responsibilities or dangers that go with it. In reality, you can either have the latter and remain free, or you can cease being free and then be kept free (temporarily) from responsibility and danger.

Marcy Kaptur Says It All

Marcy Kaptur's usually too "progressive" for my reactionary tastes, but here she's on a roll!

HT: Juan Cole, another strange bedfellow.

Bailout Haiku

Government, they said--
A problem, not solution.
Now they lick its shoes.

Man from Goldman Sachs
Says he can cure the crisis
He's rich from causing.

Give away the store
Investment bankers care less
If your children starve.

The Republic's dead.
Laugh, then set yourself ablaze;
Nothing left to do.

Bailout Rant No. 2: Ten Reasons to Oppose the Bailout

Some talking points on the bailout:

1. Moral hazard. The prattle from the economic punditocracy was that bailing out the poor slobs that borrowed on teaser terms would create a "moral hazard," that is, reward the grasshoppers, not the ants. All this has been forgotten. When the grasshoppers are powerful enough, forget about moral hazard.
2. True prices.  If the gummint buys this paper at the market price, it's no help to the paper holders--they could sell the paper on the market. If the gummint buys the paper above market price, we're nationalizing the losses. The market provides feedback, we are instead politicizing the determination of values. We are entering a permanent economic fantasy world.
3. Precedent.  If we start rescuing failed enterprises, where does it end?  With a nation of Amtraks?
4. Fairness. In the Jewish and Christian moral traditions, we are supposed to care for the widow and the orphan. Apparently we are caring first for the rich, and let the devil take the hindmost.
5. Universal Subsidy. The underlying fallacy of the welfare state is that everybody cannot subsidize everybody, while the gummint takes its cut. Someone must be productive. The Chinese will not be productivity surrogates for us forever.
6. Short-stopping Recession.  It's political poison to acknowledge, but recessions have their uses. They tend to eliminate badly managed businesses and illusory valuations of goods. If we try to head off a recession whose origin is founded on poor management and misallocation of resources, we are preventing the system from self-correcting. 
7. Our Children. We're borrowing the money for this exercise. Guess who's paying? 
8. Opportunity Cost. The more money we spend on this exercise, the less is available for everyone's pet projects. When it comes to welfare state programs, it's just as well. When it comes to fixing our crumbling infrastructure, think again.
   
9. Shattered Hegemonic Dreams. Some may not regret it, but spending this much money on the economic crisis will make the notion of American hegemony even more impractical. Bail out a bank, scratch a weapons program.
10. Constitutional Destruction. We are building an ever-more centralized, unaccountable gummint. Remember "gummint isn't the solution, it's the problem." Once we has a constitution. Fuggedabadit. The man from Goldman, Sachs, with minimal oversight, is guarding the henhouse.

In short, my gentle friends, this is larceny and folly on a Herculean scale. 

Another bailout haiku:

Give away the store

Investment bankers care less

If your children starve.

Bailout Rant No. 1

I actually emailed my Congressman--not a bad guy, John Campbell--to tell him, 'No bailout."

Until they pardon every shoplifter and chicken thief in this country, not a penny for the Masters of the Universe. OK, maybe food stamps.

Remember all the prattle about “moral hazard” if we help out the poor slobs who bit on the hook of teaser mortgage rates? Sauce for the ganders, sez I.

I grew up in New York and live in California, but I remember with nostalgia the bumper stickers from the Carter oil shortage days–”Let the Yankees freeze in the dark.” Let the investment bankers get real jobs cutting grass and stocking shelves at Wal-Mart.

“Once I built a railroad, I made it run
I made it run against time
Once I built a railroad, and now it’s done
Buddy, can you spare a dime?

“Once I built a tower way up to the sun
Of bricks and mortar and lime
Once I built a tower, and now it’s done
Buddy can you spare a dime?”

Of course, if I remember my history, the Great Depression ended when a patrician demagogue led us into a war.

One more song that’s been running through my head:

“This is the end
Beautiful friend
This is the end
My only friend, the end

“Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
Ill never look into your eyes…again

“Can you picture what will be
So limitless and free
Desperately in need . . .of some . .  . stranger's hand
In a . . . desperate land . . .”

Let us end by quoting the Boy Orator of the Platte: "You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold."

Financial Advice

When blood is running in the streets, buy.

What Price Controls Do

An eerie report from Zimbabwe.

It appears, however, that not even an unchallenged autocrat can repeal the laws of supply and demand.

One month after Mr. Mugabe decreed just that, commanding merchants nationwide to counter 10,000-percent-a-year hyperinflation by slashing prices in half and more, Zimbabwe’s economy is at a halt.

Bread, sugar and cornmeal, staples of every Zimbabwean’s diet, have vanished, seized by mobs who denuded stores like locusts in wheat fields. Meat is virtually nonexistent, even for members of the middle class who have money to buy it on the black market. Gasoline is nearly unobtainable. Hospital patients are dying for lack of basic medical supplies. Power blackouts and water cutoffs are endemic.

So-called "advanced democracies" don't do much better. Their economic folly is just not so extreme or so widespread. Think rent control. Think minimum wage. Think gasoline price controls in times of shortages.

Entrusting Health Care To . . . Idiots?

Mitt "Headroom" Romney boasts of his healthcare plan in Massachusetts.

There's a swarm of flies in Mitt's ointment--doctors aren't signing up to treat patients under the plan. Here's why:

In Massachusetts, the state-subsidized plans, collectively called Commonwealth Care, are provided by private insurance companies. Patients can choose from among six options. Residents who make between one and three times the poverty level ($48,000 for a family of three) are now eligible for coverage under the plan. Doctors are reimbursed by insurance providers -- at below-market rates comparable with Medicaid reimbursements.

Imagine that. We could have government-sponsored steak at $ 1.59 per pound, or gasoline at $ 1.00 a gallon, but Exxon and Safeway won't play.

Would you trust your child's health to a doctor who was stupid enough to sign up for such a plan?

Mitt's supposed to have been a successful businessman. He must be lucky, because he sure don't know economics.

HT: Dr. Bob.

A New Urban Jungle

This post shows that Detroit, having lost more than half its population in just a few short years, is now being taken over by forest (including trees on the roofs of derelict skyscrapers), and like the demilitarized zone in Korea, turning into something of a wildlife sancturary.

It was Bryan who orated about grass growing in the the streets of every city in America. Bryan predicted the cause as the destruction of our farms. In fact, race and the incompetence of our auto magnates appear to have been the major factors.

You'd Be Sad and Cross, Too

the honeybee is sad and cross
and wicked as a weasel
and when he perches on you boss
he leaves a little measle

--archy the cockroach, according to don marquis

Really they are:

In 24 states throughout the country, beekeepers have gone through similar shocks as their bees have been disappearing inexplicably at an alarming rate, threatening not only their livelihoods but also the production of numerous crops, including California almonds, one of the nation’s most profitable.

As with barnyard animals like pigs and chickens, agribusiness has led to the creation of factories with organic parts. The bees are trucked from coast to coast, put to work earlier and earlier in the season, and it's getting harder to find places where the bees on their days off are permitted to forage.

It's no mystery, although the details are unknown. It's classic monoculture. Rather than local varieties of bees that adapt to the ecosystem, we are dealing with masses of bees, presumably genetically alike, on an industrial scale, fed strange concoctions developed in laboratories, and subject to maximal exploitation. Cost-effective enough when it works to drive the small guys out of the business, and fantastically vulnerable.

Old MacDonald is b.k., ee-i-ee-i-o, his chickens live in giant avian concentration camps. If one sneezes, they slaughter them all. Might be bird flu.

No wonder the bees have flown the coop. Wouldn't you, if you could?

Babel Resurgent

The big new thing in up-and-coming Asian economies is building absurdly tall office towers.

I don't get it. Are the economics there?