Archive for March, 2009

A Bad Hair Day?

March 31, 2009

Sullivan just isn’t having a very good day.  Something seems to have exercised his latent paleoconservative ire, but those old instincts are a bit out of shape, intellectually speaking, leading him to write thusly:

I understand why conservatives balk at the notion of a politician running a car company. Obama hasn’t done much with GM yet, but if he is not careful, he could easily get trapped, as David Brooks notes, in a hell of a pickle. He will face political pressure to hang in, even as the company continues to fail. And he has no expertise of the kind needed to run a car company. And this is the core conservative insight here: success is hard; it requires close attention to the details of a business or an enterprise; it takes experience and judgment and practical knowledge that no politician or economist or analyst has. Now I know GM’s management has sucked as well – but that doesn’t mean that government won’t suck a lot more. This is a classic case of a mismatch between what a politician can do and what he is trying to do: an over-reach, a categorical error.

Let’s see.  “Success is hard” is a core conservative insight?  Really?  I thought that was something pretty much everybody learns sometime around the age they start trying to walk.  Nope.  Turns out nobody would know success is hard if the political philosophy known as “conservatism” hadn’t come along and developed this core insight.  Who knew?

He then tops that bit of silliness by declaring that another core conservative insight is that business managers are categorically unique creatures, possessing a categorically unique combination of “experience and judgment and practical knowledge” such that “no politician or economist or analyst” could be one.  Apparently, like homosexuality, being a business manager is not a choice; you’re just born that way.  If that weren’t the case, Sullivan obviously wouldn’t be arguing that business managers are categorically different creatures, such that no person could possibly have what it takes to be a business manager and yet choose some other career, like politics or economics, etc.

Evidently, though, it is, in fact, a core conservative insight that that’s not possible.  So I guess no business manager has ever gone into politics.  I mean, if one had, then there would be a politician who had the skills and know-how to be a business manager, and that’s categorically impossible.  Likewise, no politician has ever become a business manager after leaving politics.

So if you’re Mitt Romney or Fred Thompson or Eric Cantor, stop running around telling people you ran successful businesses.  You’re making a category error.  (And, being conservatives, you really should be aware of this core conservative insight.  Didn’t you guys read the charter when you joined?)

Sullivan continues:

There is at present a massive disconnect between conservative economics and conservative foreign policy. The first is all about the wisdom of markets, or local knowledge, of irreplaceable specific expertise. The second is all about empire, control, liberal hubris and abstract ideology.

Starting an unprovoked war to remake a Middle Eastern country into a democracy is the fault of “liberal hubris”?  Those liberals.  You have to feel sorry for them.  All these years, we’ve been mad at them for criticizing that war, and now we’re mad at them for starting it.  Bless their hearts.

And then:

At some point, conservatives will have to pick. I fear it will only happen when they have learned the lesson of why liberalism always fails.

Liberalism always fails?  That’s bad.  Really bad.  Hide your children, because Stalin and Hitler and Mussolini and Franco will be making a comeback any day now, when the liberalism that temporarily defeated them fails, as it always does.  And I guess we know why it seems like the Great Depression is coming ’round again; the liberalism that seemed to end it actually failed.  And capitalism.  That’s on its way out, too, because Adam Smith was a liberal in the 18th century.  Oh, and the U.S. Constitution?  Epic fail.  Science, too, but you already knew that.

In fact, conservatism itself will soon fail.  Why?  Because conservatism (Anglo-American conservatism, anyway) is nothing but yesterday’s liberalism.  Free markets?  Old liberal idea.  Democracy?  Old liberal idea.  Bringing “enlightenment” to other people at the point of a gun?  Old, abandoned liberal idea.

Every time liberalism comes up with one of these innovations, the conservatives of the time hate it and defend the way things are as the best we could possibly do.  A generation or a century later, when one of those innovations has worked (which, of course, never happens, since liberalism always fails), conservatives defend that as the best we could possibly do and criticize the current innovation liberalism is pushing.

If liberalism were a band, Anglo-American conservatism would be that fan who loves their old stuff but hates every new album.  (Hence Lionel Trilling’s remark that conservatism is nothing but “a series of irritable mental gestures.”)  It’s liberalism’s “Greatest Hits” collection.  And since even the greatest hits of liberalism are doomed to fail, so is conservatism.

This is especially true of the Oakeshottian brand of conservatism Sullivan subscribes to.  Poor Andrew.  He’s going to be so bummed.

Makers vs. Takers, in the World Series of Love

March 31, 2009

Andrew Sullivan cogitates on the middle-distant future of conservatism:

The new cultural divide will not be on guns, gays and God. It will be between the makers and the takers, the producers of wealth and the recipients of redistribution.

Seriously?  I certainly hope so, as does every liberal, progressive, and Democrat across our great land.  Because if that’s the divide, conservatism and the GOP is going to find itself very, very marginalized and unhappy.

Sullivan is falling back into hoary conservative tropes with this “makers vs. takers” business.  His problem is that the great wizard’s curtain has been very publicly pulled away.  It’s now spectacularly clear to everyone that, contrary to equally hoary conservative doctrine:

makers ≠ the wealthy

I’m aware that by Sullivan’s definition of “makers” — the makers of money — that makes no sense.  Of course the wealthy are the makers.

But that’s Sullivan’s problem.  The meanings of the terms have shifted.  Thanks in no small part to this banking crisis, Sullivan’s definitions of “makers” and “takers” are not widely shared by Americans.  To most of us, “makers” are the makers of things.  That is, the people who actually do work, who actually produce goods and services that are actually of value.  Those folks are not wealthy and would be the beneficiaries of redistribution.

People who sit at a trading terminal and game the markets are not makers.  They are, in fact, takers.  Those folks are wealthy, and would see their wealth decline in a more redistributive system.

Everyone is now painfully aware of those facts, and I don’t think they’ll forget again for a good long while.  So if Sullivan is counting on making conservative political hay off a “makers vs. takers” redistribution debate, I think he’s in for a rude surprise.

He continues:

And it will be about tempering the over-reach that the Democrats will be unable to resist. But that means the critique should not be undermined by mindless partisanship now, and it should be based upon clear and constructive policy proposals to advance individual liberty and restrain the cold, clammy hand of the state.

I could imagine him being right if he were looking for this argument to happen way off in the far, far distant future, because there’s absolutely no doubt the Dems will overreach or otherwise royally screw up the task of governance, just like the GOP has just done.  It’s the nature of things.  But Sullivan doesn’t seem to be thinking of the far, far distant future.  He seems to be thinking of a 3-5 year time frame.

To which I can only say: if this Shiny Happy Laissez-Faire vs. Cold Clammy State debate happens that soon, I’m pretty sure he’s not going to like the outcome.

How to Defeat Terrorism, In 3 Easy Lessons

March 31, 2009
  1. Don’t be terrified.
  2. Don’t panic.
  3. Don’t overreact.

Everything else is beside the point.

According to multiple reports, in the wake of 9/11 and the anthrax attacks, key figures in the Bush administration failed on all 3 counts.  They were terrified by the attacks — terrified for the nation’s safety, and terrified of the political consequences for them, personally, if there were more attacks.  So they panicked.  Having panicked, they overreacted in almost every dimension of their response.

Frankly, that’s perfectly understandable.  They were, after all, confronted with something abjectly terrifying.

Where they failed was in being afraid to admit they had overreacted.  As evidence mounted that they were responding wrongly, all they could do was insist that they weren’t, and “prove” it by doubling down — pushing ever further in the wrong direction.

That’s why Dick Cheney is behaving the way he is, even now.  He can’t do otherwise.  To do otherwise would be to admit he was wrong, which would be to admit he overreacted in the first place, which would be to admit he panicked, which would be to admit he was terrified by 9/11 and the anthrax attacks, which would be to admit the terrorists got the better of him.  He’s a man who lives in fear not just of people realizing that, but of admitting it to himself.

Besides, in raw political terms, Cheney — and the entire GOP — can’t afford to admit they panicked.  (And they’re certainly never going to admit that, having done so, they’ve been afraid to admit it.  Because, while the first reaction is understandable and forgivable, the second is naked cowardice.) The tough guy is who they are [supposed to be].  It’s their whole identity.  It’s the thing the GOP has staked its entire political life to, ever since the Cold War.  Without it, they can’t win.

To badly paraphrase Justice Cardozo (I think), the nuanced, provisional ideas of one generation become the black-and-white, absolute dogmas of the next.  The panicked overreactions of the early days and months after 9/11 have hardened into absolute dogmas.

Unfortunately for the nation, we’re never going to defeat any terrorists until we stop perpetuating those overreactions; and, the next time they attack, refuse to repeat the mistake.  That’s going to be hard to do as a nation when half our political system has invested its entire identity in overreacting.

Update (3/31/2009 7:23pm):

Matt Yglesias quotes COIN expert Andrew Exum on one of the issues that my own efforts to think through led to the ideas in this post.  As Exum puts it:

Even if we succeed in spreading effective governance to southern Afghanistan and western Pakistan, are we then prepared to go to wherever the transnational terror groups relocate?

You can’t defeat terror groups by invading territory.  They’ll just move.  You can only defeat them by refusing to play their game — don’t be terrified, don’t panic, don’t overreact.  (This also, btw, calls attention to why war — as in “global war on terror” — is the wrong way think about this problem.  This is an organized transnational crime problem, and should be dealt with as such.)

Knights Who Say…

March 30, 2009

TPM’s Josh Marshall catches up with me, Bernanke, Yglesias, Paulson, Spitzer, Klein, Volcker, Johnson, Bair, Kwak, and A New Way Forward:

When do we downsize these banks? A key part of the crisis, perhaps the key part of the crisis is that these banks were so big that we could not let them endure the normal fate of failed businesses, which is to fail. So when do we break them up into more smaller entities? Yes, we’ve got our hands full now. But companies always fight being broken up. So it’ll be much harder if and when these companies struggle back to some level of health. So when does that happen?

They’re baaaaack.

March 27, 2009

Not that they ever really went away.  The neoconservatives, that is.  I mean, Richard Perle tried to declare they never existed, but nobody took it seriously.  So now they’re back in the news because 3 of them — Bill Kristol, Bob Kagan, and Dan Senor — have started a spanking new think-tank called the Foreign Policy Initiative.

Allow me to give you the dime tour of neoconservative history.

It all started back before the war.  No, no, not that war; the big one.  Back in the 1930s, there was this group of mostly Jewish students at the City College of New York who were very cerebral and took themselves very, very seriously.

These folks were all communists.

Trotskyites, specifically, but they were big supporters of the USSR in general.  They studied philosophy and read Karl Marx and thought he was right.  Communism was going to save the world.  They were sure of it.

There were 3 of them who were really the leaders: Irving Kristol (Bill’s dad), Gertrude Himmelfarb (Bill’s mom), and Norman Podhoretz (no relation).

They stayed ardent communists — and the ardence of their belief, their absolute certainty, is key –until enough news escaped the USSR about what Joe Stalin was really doing in “the workers’ paradise” that they became disillusioned with communism.

Disillusioned is really too weak a word.  Embittered.  They felt betrayed and, as ardent and certain as they had been in their support of communism, they became just as ardent and certain in their belief that communism was the ultimate evil and must be defeated at all costs.

As newly hatched anti-communist zealots, the company they kept influenced them, and they gradually became ardent, certain conservatives.

They still had vestiges of their old leftism, though.  They favored fairly liberal domestic policies.  It was mostly on foreign policy and cultural issues that they were conservatives.  Ardent, absolutely certain conservatives, and the thing they were most ardent and certain about was that the US could save the world through its military might (backed by its economic might); just as they had once been ardent and certain that the USSR would save the world through its military might (backed by the might of communist economics).

That — the combination of center-left domestic policy, cultural conservatism, and avidly hawkish foreign policy is neoconservatism.

Let’s review, shall we?  First they were communist zealots, then they were anti-communist zealots, and now they’re just zealots about militarism in general.

In short, these people are not that bright.  Enthusiastic as heck, but not too bright.  And that’s a dangerous combination.

Knights Who Say… (Twofer Edition)

March 27, 2009

James Kwak, highly respected economics blogger, catches up with me, Bernanke, Yglesias, Paulson, Spitzer, Klein, Volcker, Johnson, Bair, and A New Way Forward.  First he rues the fact, as I did, that the Obama administration seems fixated on the “to fail” part instead of the “too big” part:

Given the existence of “systemically important firms,” I agree they need careful regulation. But why does Geithner assume that they have to exist at all?

Then he provides a longish and quite detailed argument, including:

Clearly some financial institutions reached a level of scale and complexity where they simply could not even understand what they were doing, let alone manage their risks appropriately; they were too big, looked at just from their own perspective (and excluding the implicit Too Big To Fail subsidy). To this equation, we now need to add the social costs (negative externalities) of being Too Big To Fail: moral hazard, socialized losses, and so on . . .

When you are designing regulation, you have to bear in mind that the world will change. But this is another reason why simpler is better, and the simplest solution is simply to prevent firms from becoming Too Big To Fail in the first place. First, you have to expect that no matter how clever your regulatory scheme, some firms will be even more clever in finding ways to evade the system and blow themselves up. You are far better off if they are small when they blow up than if they are big.

And Sir Yglesias catches up with my analogy to anti-trust legislation.

Weirdness Happens

March 26, 2009

—  When was the last time you heard Dems angry that a company is paying its workers too much, and the GOP defending the workers?  What happened to the halcyon days of yore, when the auto makers were the ones under the gun, blue-collar workers were the employees in question, and the 2 political parties stayed on their own sides of the car?  AIG: it’s freaky.

—  Many Dems don’t like the idea that we’re turning to the Wall Streeters who got us into this mess to also get us out of it.  I don’t either.  So why is Larry Summers in the White House again?  He’s the Mark Penn of Democratic economists.

And that’s why the Greeks invented hubris.

March 26, 2009

When VH1 does its nostalgia show for the decade of the Twentysies (which will cover the years 1998-2008, sorta like “the Sixties” actually means roughly 1967-1975), its theme will be hubris.  Lotsa people getting too big for their britches, thinking they know something nobody else knows, and that that knowledge means the normal rules don’t apply to them; in the end, they flame out, sometimes destroying themselves in the process, but always destroying lots of innocent by-standers.

It starts off in the late Clinton years, when Sen. Phil Gramm and a guy in the White House named Lawrence Summers (I wonder what ever happened to that dude . . . hmmmm) decided they and their Wall Street confreres suddenly understood America’s financial system better than anybody else ever had.  This special knowledge informed them that the usual rules didn’t apply anymore; that huge, multifarious financial institutions no longer presented a threat to the American economy, and the 70-year-old rules preventing banks and insurance companies from spreading into each others’ industries were no longer needed.  Pres. Clinton agreed, and bye-bye Glass-Steagall Act.

Next comes Enron.  That was basically a case of some guys who thought they had a deeper understanding of energy markets than anybody else.  Ever.  First they convinced their peers that their nonsense was real, but too complex for anybody but “the smartest guys in the room” to understand.  Next they used that social leverage to build a wall of secrecy around what they were doing.  And last they ran their company straight into the ground, in the process throwing hundreds of people out of work and causing rolling blackouts all up and down the West Coast.

The next example is Dick Cheney.  First he convinced himself that he and his inner circle were the only ones who really knew how the world worked, the only ones who really knew what Saddam Hussein was up to, the only ones who really understood what was necessary to interrogate terrorism suspects, the only ones who really knew how to keep the country safe.  Next he built a wall of secrecy around what he was doing.  And last he ran the country into the ground in Iraq.  He walks away with a limp, but for the rest of us it cost trillions of dollars, thousands of American lives, tens of thousands of Iraqi lives, millions of Iraqi refugees, and lost ground in our other war (the one where the people who attacked us actually are) and in America’s global influence.

Then there’s Karl Rove, another big fan of secrecy who thought he knew more than anybody else, thought he understood America better than anybody else, thought there was such a thing in America as a “permanent majority” and he knew how to build it.  That I-have-special-secret-knowledge attitude is how he drove his party into the ground.  As he famously said the night before the 2006 elections, all those polling companies had “their math,” but he had “THE math.”  Oops.  He walked away relatively unscathed, though with his reputation for brilliance diminished.  The rest of us have to deal with the mess he created — a fouled Justice Department and a two-party political system with only one functioning party.

Now, at the end of the Decade of Hubris (we hope), we have pretty much everybody in the financial industry, who all convinced themselves they alone had special insight into how securities markets worked, insight that seemed to lift the normal rules of supply and demand and no free lunches.  They’ve all made out like bandits, but pretty well sunk the rest of us.

That’s a nice bookend to the beginning of the Decade of Hubris, and . . . hey! there’s that Larry Summers guy in the White House again!  Seems he walked away unscathed.  So did Phil Gramm, who left the senate and became vice chairman of UBS, a huge Swiss bank.  He was in charge of . . . wait for it . . . lobbying the U.S. government on mortgage issues.  And, of course, Bill Clinton walked away from this unharmed, too, and now is worth millions.

So here are a few lessons I’ve learned from America’s last 10 years:

  1. If you find yourself thinking, “Nobody gets this but me,” you’re the one who doesn’t get it.
  2. Secret knowledge is not knowledge.  It’s cultivated ignorance.
  3. If you screw up, make it huge.  That way, everybody has to pay but you.
  4. Taking regulatory advice from Larry Summers or Phil Gramm is right up there with getting involved in a land war in Asia.  (A perfectly symmetrical irony, since a) Summers is Obama’s lead economic adviser and Gramm was John McCain’s; and b) we’re currently involved in 2 land wars in Asia.)

Pop Culture Round-Up

March 23, 2009

Best Movie I Saw: I’m sad to report there is not a Best Movie this installment, simply because the only movie I’ve seen at the theater recently was Watchmen. Which leads me to…

Worse Movie I Saw: Watchmen. We’ve seen so many superhero movies done right recently, I was shocked at how very wrong they got this one. True, I haven’t read the book, so I’m not a rabid Watchmen fan to start with. But when the greatest part of your movie is the opening credits, then something has gone horribly wrong. The biggest low point to me was the soft core scene b/t Plasticy Girl and That Other Guy in the weird owl ship with Leonard Cohen’s “Hallelujah” providing the background music. Ugh. The real tragedy is that Rorschach was such an interesting character played fabulously by Jackie Earle Haley. He needed more screen time. Any Watchmen lovers out there who feel the need to defend the film?

Best TV Show I Watched: LOST. It’s always LOST.  I’ve also been enjoying this season of… wait for it… American Idol. I’m not typically a viewer, but I actually voted last week. For the guy who did the bizarre Indian version of “Ring of Fire.” Crazy, I know. He’s like a gay version of Satan. I love it.

Best Thing I Heard: Everything at the Ryan Adams & the Cardinals concert. This was possibly the best sound I’ve ever heard live. The set included super old favorites (Lucy, my Gal!) and great newbies (the opener, Let It Ride). The problem with any Ryan Adams concert is that I want to hand pick every tune. This one didn’t have enough oldies for me, but I’ll take what I can get any time.

Best Thing I Read: I’ve been in the process of packing/unpacking everything I own, so I’m currently reading the first thing I pulled out of the book box. It’s written for pre-teen/ young teen girls, and it’s called “Princess Academy.” Not great literature by any means, but it’s fun to remember what everything felt like at 13.

Knights Who Say…

March 21, 2009

The Knights are getting organized up in here.  The new political organization A New Way Forward has as one of its 3 central principles:

DECENTRALIZE: Banks must be broken up and sold back to the private market with new antitrust rules in place– new banks, managed by new people. Any bank that’s “too big to fail” means that it’s too big for a free market to function.

Preach it!  Your efforts are very welcome to me, Bernanke, Yglesias, Paulson, Spitzer, Klein, Volcker, Simon Johnson, and Sheila Bair.

(Their other 2 principles are almost as good: Nationalize and Reorganize.)