The Politics of the Economic Crisis

Paul Krugman, Brad DeLong, Mark Thoma, and Simon Johnson are all pretty much in agreement over the economics of the Geithner Plan, but differ on the politics.

DeLong believes the plan brings in 3/8ths replacement money for the toxic assets on the banks books and believes the administration feels it's bringing in 6/8ths of the money. Krugman doesn't believe it will be enough to turn things around. DeLong doesn't say or doesn't know but feels it's better than nothing.

He thinks the Senate won't go along with a bank reorganization plan at this time, but might later on. Will it be too late? We'll find out.

What we won't know is if brinkmanship with the dead-enders in the Senate over pre-privatization would have worked. Two things stand out for me: 1) the conservative Swedish minister who implemented the Swedish model said bipartisanship and confidence is the key and war in the Senate wouldn't inspire confidence 2) info on the "stress tests" should already be coming in, even though no one is discussing them, so the administration should know the lay of the land.

The Microcosm of the Macro

Obama gave an impressive performance again trying to redirect the conversation - not all Wall Streeters are criminals or immoral - and answering the media's question during a live press conference tonight. I thought it was interesting that he called on Univision, Starts and Stripes and Ebony, outlets not normally called upon. The Fox guy's question was couched in typically misconstrued terms. He tried to be ironic about "Communist" China questioning the dollar as reserve currency and "Socialist" Europe's pushback on a spending stimulus, but it just reflected the typical Fox viewer's cramped view of the situation. He also gave a firm but respectful answer to the Washington Times' questioner about embryonic stem cell research.

Oh No, Performers Coming Into Audience

PITTSBURGH - Audience members at the Benedum Center for the Performing Arts are reporting that, oh God, no, approximately 20 extremely enthusiastic actors are approaching the edge of the stage and appear determined to continue their current musical number in the main seating area.

"Oh, man, are they? Shit," one audience member was overheard saying as the energetic ensemble began filing down previously unseen stairs and past the front row. "Shit, shit, shit."

Increasingly uncomfortable audience sources have also confirmed that the performers are proceeding down the aisle with crisp, larger-than-normal steps timed perfectly to the music. Even more shocking, some appear intent on interacting with non-cast members.

I caught Will Ferrell's live show George W. Bush: You're Welcome America and it was hilarious. Surprised at how much audience interaction there was. At one point he'd ask audience members their name and occupation and give them a nickname. One guy had a big beard so Ferrell nicknamed him China Grove.

Lindsay Beyerstein profiled by Normblog.

Michael Bérubé discusses a rarely known moment in rock and roll's history where it underwent a paradigm shift. (see video below. Note the bassist's groovy shuffling dance moves.)

Admittedly I'm an Obamabot infused with Obamamania,* but even I winced when I heard that Obama told Jay Leno on air that his experience bowling during the primaries was "like the Special Olympics."

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*In other words I've set myself up to have a loss of innocence, a disillusionment so traumatizing my politics would swing wildly to the right and I'd transform into a cartoonish, younger, skinnier David Horowitz** figure. In my defense, growing up in the Chicago area and living in Chicago as in other cities but especially in Chicago it seems you're indoctrinated to pull for the home team like the Bears, the Blackhawks, the Bulls, the Sox and Cubs which is especially persuasive during good years.
** No relation to Adam Horovitz, (note the "v") the King Ad-Rock, member of the post-S&L recession version of Juicebox Mafia.

Death Penalty repealed in New Mexico

In The Watchmen, Rorschach becomes a Dirty Harry-like vigilante after stumbling across a child killer who pleads guilty and pleads insanity and asks to be taken in to the authoritites in a mocking tone. No doubt some of the audience will agree with Rorschach's decision to execute the criminal on the spot, but the reality of the death penalty is mistakes are made in its application by fallible humans and they aren't worth it. Perhaps Bill Richardson is trying to gain favor in fighting off corruption charges as George Ryan did in Illinois, but it was the right decision none of the less.

(On the international front, though, Rorschach is right and psychopathic regimes need to be taken down. Unfortunately most won't go down without a fight.)

What we've got here is a failure to communicate

(which is what Obama and Geithner should tell AIG about the bonuses.)

If the Ongoing Clusterfuck (in the economy) had a soundtrack it should include Lily Allen tunes, like her song about schadenfreude, Smile, and new song The Fear.

A Post-Capitalist Future is Possible by Doug Henwood.

The Revenge of Karl Marx by Hitchens.

I caught Obama's point man on the economy (or "political economy"* as Marx, Hitchens and probably Henwood would say) Larry Summers on Charlie Rose and when Rose asked him which economist or thinker is most relevant to understanding the crisis, Summers didn't hesitate to respond with "Keynes."

But Keynesian economics took a hit in the late 1970s when welfare states and relatively strong unions came up against high inflation. Central Banks raised interest rates to unprecedented high level and brought on a crash, which tamed inflation but the Right took advantage and won the political battle. (There was stagflation thought to be caused by Nixon's wage and price controls which were followed by cost-push shocks in commodities and the oil crisis of '73 which was a result of another Arab-Israeli war and OPEC's limiting of supply.)

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*The main political question now is to what extent the administration will take on the banking/financial institution lobby - as former IMFer Simon Johnson among others has been pointing out - and demand "clawbacks" and recompense for the taxpayer. There's also the question of the future regulatory environment.

What do you see?









What do you see?

Lorrie Moore writes about Donald Barthelme.

Podcast about her review.

Moore has a new book coming out in September.









Would be strange to have a book titled "Understanding (Insert Your Name Here)." Mine would be short. He's charming. Funny. Intelligent. Honest. Self-deprecating. Respectful of elders. A Roschachian crank about foreign dictatorships and despots. Not a realist in other words.

Neko Case's new album came in 3rd on the Billboard charts last week, after Taylor Swift and U2. She's also in the New Pornographers.

Lovecraftian School Board Member Wants Madness Added To Curriculum












West says the school inadequately prepares
students for the black seas of infinity.

Don't make him angry, you wouldn't like him when he's angry.

The Rock/Dwayne Johnson is staring in a new movie, The Race To Witch Mountain, with my favorite 15-year-old actress/celebrity (weird, I know), AnnaSophia Robb. I checked her website again to see if she added anything in support of the movie, and there was a little holiday in my heart because she had. She's noted some magazine interviews she's done and added some photos of her at an Obama rally. Robb also updated her list of favorite movies: Slumdog Millionare, Batman: The Dark Knight, Blood Diamond, Zoolander and Best in Show. Again, great taste. And she has another movie coming out in November with the girl from Little Miss Sunshine.

Too Many Dicks on the Dancefloor*

Looking over my blog links, I noticed there are too many guys and the ratio is way off. So I added Majikthise, who is Canadian also so that makes a twofer as the tactless say. I also added Michael Bérubé who is blogging again and is very funny, especially about the raging stupidity and hubris in politics. Yes he plays hockey. Yes his name looks suspiciously French. No he's not Canadian.** I've also added A Fistful of Euros which provides a European perspective on the Ongoing Clusterfuck*** in the financial markets and wider economy.

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* Doesn't one of the dancers in the video look like a Village Person, specifically Randy the Cowboy?
** Actually, yes he is of French-Canadian ancestry, though. (Added this note after I was corrected in the comments. Reminds me of what Alexander Cockburn once said about the corrections section newspapers tuck away on page 2 or 3, admitting mistakes in previous edtions. The real purpose is to convince the reader everything else in the paper is true.
*** I believe Tom Tomorrow coined this. William Safire recently had a contest in his Language column to name the current situation in the economy and this would be my nomination.

Cocooning
(or Blast from the Past/Back to the Future)

The Vatican and Pope Benedict are cocooning hard these day, but I'd like to think a group of wronged people have hired a 21st Century Robin Hood team, like the one from the cable show Leverage, to subvert "Popery"* from within.

First you had the Pope rehabilitating extreme right wing bishops and in some cases Holocaust-deniers. They backpedaled after an uproar but the damage was done.

Also, the church is bringing back the sale of indulgences which is a good way to raise money, but also a potentially alienating move.

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*Popery and Papist were slurs common in the 18th and 19th centuries. JFK's election symbolized a more tolerant attitude in the 20th. Who might have hired possible agent provocateurs who are advising Benedict? Could be disgruntled scientists, feminists, gay rights advocates or perhaps some men who were molested in their youth by priests have funneled their legal reward money back into attacking the church.

Trailer and video from Whit Stillman's Barcelona.

Strange to be cheering on White House economists, but I really do hope these people are successful. Most people admit they don't know what will happen, which on one hand is unnerving, but on another it means they will be willing to try different approaches. It's also good to hear they understand speed is of the essence. Reagan and Clinton didn't fully enact their big economic packages until August. Obama and his propellerheads got it done in a month. From the New York Times:

Sometimes, during the 30-minute briefings that Mr. Summers delivers in the Oval Office nearly every day, Mr. Obama addresses him as Professor, as in, "What do you think, Professor Summers?" Sometimes, as he did in the Roosevelt Room one recent afternoon, Mr. Obama tweaks him and his fellow policy wonks, dubbing them "the propeller-heads."

This, senior White House officials say, is the president’s way of ribbing Mr. Summers, who is back in Washington - he served as Treasury secretary under President Bill Clinton - in the role of what his new boss calls a "thought leader."


...
"The irony is that Summers and Geithner wrote the textbook on how to manage these crises, and they lectured countries all over the world on what to do," said Adam S. Posen, deputy director of the Peterson Institute for International Economics, lamenting that they did not "follow through with their own prescriptions."

Mr. Summers dismissed the criticism, maintaining that the bailout plan, for which he said Mr. Geithner would announce details in due time, was "tough and ambitious."

In the meantime, Mr. Obama’s chief propeller-head is on to other matters, like housing and huddling in the Roosevelt Room to plan the budget with the president, as he did on Friday, when Peter R. Orszag, the White House budget director, passed out propeller-head hats.

Ian McEwan writes about John Updike.

What I like about Obama going around the country promoting the Stimulus bill is that it shows he's not afraid. Here's the very funny Dave Chappelle joking about being the first black President.