Tina K. Russell

February 7, 2009

Partisanship

Filed under: Uncategorized — Tags: , , , , , , , , — Tina Russell @ 1:46 pm

David Brooks:

Op-Ed Columnist – The Gang System – NYTimes.com
Barack Obama is not initiating events (he’s had surprisingly little influence on the stimulus bills’ evolution). But circumstances now present him with a precedent-setting moment of decision. Does he embrace the Gang System and try to use it to create a new style of politics? Or does he remain an orthodox Democrat, deferring to the Old Bulls on legislation, enforcing party discipline and trying to pick off a Republican or two here and there to pass laws?

The liberals already are mobilizing against the Moderate Gangs. On Thursday, the liberal interest groups were intensively lobbying against the stimulus cuts. But there’s no way that Obama, who spent two years campaigning on postpartisan politics, can reject the single biggest manifestation of postpartisanship in the country today. If he does that, his credibility will be shot.

I really, really hate this idea, that it is somehow virtuous to compromise in every situation, at the exact midpoint of what each side is requesting. There’s no thought involved; you just declare yourself a moderate, step back, and feel righteous. It makes no allowance for the fact that, in a polarized political world, the center is itself subjective because it’s determined by the poles. It’s especially frustrating to those who support one side or the other, because the feeling is that you haven’t even looked at our ideas; you’ve just tarred us as “partisan,” dismissed us as “the liberals” or “the conservatives.”

It also perpetuates an irritating stalemate in American politics, where the party of good government and the party of small government compromise with a big government that doesn’t work. It’s everywhere in the government we have (and possibly deserve); it’s what you get with a longstanding mentality of “starve the beast.” If liberals aren’t willing to confront that head-on, then we aren’t worth our salt in politics. If conservatives were unwilling to defend their beliefs, I’m not sure why they would be in politics, either.

I’m also irritated whenever I hear the word “post-partisan.” I voted for Barack Obama largely because I saw shades of the Wellstone model of politics in him (after all, they both came from academia and mastered grassroots organizing). In the late Sen. Paul Wellstone’s method (described in The Conscience of a Liberal: Reclaiming the Compassionate Agenda, not to be confused with Paul Krugman’s book of a similar name), you don’t give up your principles; you hold strongly to them, but you also reach across the aisle to find where your strong beliefs intersect with others’, even those of your supposed ideological archenemies. Wellstone hopped from coffee shop to coffee shop both to campaign and to get feedback on what his potential constituents wanted; what he found was that people who identified as strongly liberal, strongly conservative, or anywhere in between were still mainly concerned with the same issues, like good schools and healthcare. If you get beyond those labels, you can get a lot more done.

So, to hear that the only way Barack Obama can get past the partisan gridlock of Washington is to abandon his principles makes my blood boil. We’ve suffered through decades of conservatives absolutely convinced in the most radical solutions to every problem, and liberals struggling to compromise and giving themselves a raw deal. Barack Obama can and should do what he feels is right, what is in his best judgment, exercising the faith we placed in him through election.

The difference between this and the Bush era needs to be listening and careful consideration. Barack Obama needs to communicate with Republicans, get their input, and address their concerns just as he must do with Democrats. He must treat them equally as governing partners in a system of checks and balances, and as duly elected representatives of their constituencies. He must respect their experience and value their opinion.

Congressional roll calls are a childish way of measuring this, however. If not a single Republican voted for the stimulus in the House, perhaps they were exercising their right not to agree with the President in the end. That is their right, and it doesn’t mean the President is dismissing their concerns, nor does it mean the bill isn’t better for their input. It certainly doesn’t mean we should hold our political process hostage, watering down the bill until the numbers look more “post-partisan.” Sometimes that merely means devoid of strong ideas.

Our political process works through vigorous debate, and it’s for good reason that nothing mandates that everyone agree. In addition, in some situations, a compromise can be worse than either original proposal. Bipartisanship and cooperation are worthy goals. Post-partisanship, silencing the voices of all those who have strength in their convictions, is not.

January 28, 2009

This might take you a moment

Filed under: Uncategorized — Tags: , , , , , — Tina Russell @ 12:18 pm

A Day of Layoffs, Across Industries and Continents – NYTimes.com
And Texas Instruments said after the market closed on Monday that it would cut 3,400 jobs or 12 percent of its work force through 1,800 layoffs and 1,600 buyouts or retirements.

Surely it should be 58,008 jobs cut, right? After all, to reduce costs, sometimes you need to turn the company upside-down.

January 1, 2009

Panopticonomics

Filed under: Uncategorized — Tags: , , , , , — Tina Russell @ 6:14 pm

Letters – 8th Annual Year in Ideas – NYTimes.com
Robert Skidelsky argues that the “failure” of the efficient-market hypothesis over the last year proves that laissez-faire economics is dead and Keynesian economics should be the foundation of a new economic structure. But the efficient-market hypothesis, as defined by its inventor, Prof. Eugene Fama of the University of Chicago, states an “efficient” securities market is one in which, given the available information, actual prices at every point in time represent very good estimates of intrinsic values.

What has become clear over the last months is that the market did not have all the information to correctly set prices. The government’s role should be to ensure that the markets are supplied all the information to ensure their efficiency — not to pursue its current path of eliminating the market function via subsidies and political meddling.

BOB RAYMOND
Stamford, Conn.

Hmm! As an admirer of Keynes I do tend to favor all that fancy government meddling when times are tough. That is an interesting viewpoint, though. Markets can’t function when information is terrible, and a good responsibility for government would be that of bursting obvious bubbles before they grow too big.

(By the way, next time we’re in such a bubble—oh, those days seem so quaint—remember not to believe anyone when they insist that this time is different…)

(Incidentally, how many of our recent crises began with naïvely believing information that was obviously bad but fitted what we wanted to hear? I’m going to guess all of them.)

(One more thought… perhaps the God that governs the universe has a counterpart in high finance, but he’s a highly vengeful, cynical god who’s kind of a cosmic con artist that we constantly need to stay ahead of. Oh! There I go, revealing my secrets…)

December 18, 2008

Dogbert economics

Filed under: Uncategorized — Tags: , , , , , , , , , — Tina Russell @ 2:22 pm

Dilbert comic strip for 12/13/2008 from the official Dilbert comic strips archive.
Dilbert.com

It’s rather scary when an entire global financial crisis can be so accurately represented by a snarky, three-panel Dilbert comic. Anyway, this comic inspired me to use the Dilbert.com strip editor to tell the rest of the story. The first link below is to the above strip, but with new dialogue by me in the last panel. The second link is to a different strip, but I’ve rewritten the whole thing to make it a “sequel” to this one. Please read!

AAA Rated

Dead Cow Crisis

December 12, 2008

The Physical Impossibility of Debt in the Mind of a Museum Curator

Filed under: Uncategorized — Tags: , — Tina Russell @ 10:10 pm

Museum of Contemporary Art in Los Angeles at Financial Turning Point – NYTimes.com
Yet by putting art ahead of the bottom line, the Museum of Contemporary Art has nearly killed itself. The museum has operated at a deficit in six of the last eight years, and its endowment has shrunk to about $6 million from nearly $50 million in 1999, according to people who have been briefed on the finances.

You know, I’d think cutbacks would be really easy at a postmodern art museum. Would anybody notice?

(And doesn’t an empty exhibit just make a big statement?)

December 5, 2008

The economic crisis, in sum

Filed under: Uncategorized — Tags: , , , , — Tina Russell @ 8:16 pm

Paul “Tails” Krugman:

Op-Ed Columnist – Lest We Forget – NYTimes.com
One answer to these questions is that nobody likes a party pooper. While the housing bubble was still inflating, lenders were making lots of money issuing mortgages to anyone who walked in the door; investment banks were making even more money repackaging those mortgages into shiny new securities; and money managers who booked big paper profits by buying those securities with borrowed funds looked like geniuses, and were paid accordingly. Who wanted to hear from dismal economists warning that the whole thing was, in effect, a giant Ponzi scheme?

November 27, 2008

Funny money

Filed under: Uncategorized — Tags: , , , , , — Tina Russell @ 11:36 am

The End of Wall Street’s Boom – National Business News – Portfolio.com
The funny thing, looking back on it, is how long it took for even someone who predicted the disaster to grasp its root causes. They were learning about this on the fly, shorting the bonds and then trying to figure out what they had done. Eisman knew subprime lenders could be scumbags. What he underestimated was the total unabashed complicity of the upper class of American capitalism. For instance, he knew that the big Wall Street investment banks took huge piles of loans that in and of themselves might be rated BBB, threw them into a trust, carved the trust into tranches, and wound up with 60 percent of the new total being rated AAA.

But he couldn’t figure out exactly how the rating agencies justified turning BBB loans into AAA-rated bonds. “I didn’t understand how they were turning all this garbage into gold,” he says. He brought some of the bond people from Goldman Sachs, Lehman Brothers, and UBS over for a visit. “We always asked the same question,” says Eisman. “Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.” He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S&P couldn’t say; its model for home prices had no ability to accept a negative number. “They were just assuming home prices would keep going up,” Eisman says.

I read this article after Thomas Friedman recommended it in a column. Anyway, I highly recommend the article. It’s a portrait of financial Cassandras, people who warned of and betted on doom and gloom and wouldn’t have minded being wrong. Moreover, by the end, these valiant wet blankets discover something horrifying: in a way that could only work in the surreal parallel universe of Wall Street, their very skepticism, their bets against the market, provided the money to fuel its downfall. It’s a story of gain and loss, of easy money, of repentance, of forgiveness, of survivors’ guilt, of wondering if you’re the crazy one and realizing it really was everybody else. It’s a story of taking a walk on Wall Street the day after the Apocalypse, and seeing the damage that you, in a perverse, roundabout way, helped wreak.

Four stars! A plus! That crazy GamePro excited head thing! Besides, the last time I read a cynical feature article about Wall Street in Condé Nast Portfolio, about a year ago, it was awesome. This is similarly awesome. It’s a must-read if you have time to kill.

November 21, 2008

Market failures

Filed under: Uncategorized — Tags: , , , , , , , , — Tina Russell @ 12:32 pm

UPDATE: The letter-writer responds in a comment below! How cool. Just so you know, people who are addressed, directly or indirectly, in my posts should totally leave a comment, because those comments are awesome.

Letters – Rescuing Detroit – The Great Debate – NYTimes.com
To the Editor:

I agree that letting the Big Three domestic automakers collapse would result in a catastrophic loss of jobs, but find the terms of your proposed bailout counterproductive (editorial, Nov. 15).

Companies as large and complex as automakers simply cannot afford to replace top management in the middle of a crisis. Doing so would also be pointless when the industry’s troubles stem primarily from the temporary spike in oil prices and the continuing financial crisis, not poor management.

After all, the Big Three did not specialize in trucks out of shortsightedness or social irresponsibility, but because that is what the market demanded.

Pah! I found that statement amazing. The trouble isn’t that they were following the market’s demands; the trouble is that they thought, arrogantly, that those demands would last forever. And, when the market stopped demanding SUVs and trucks the size of small moons, the automakers didn’t notice. Now they’re on the brink of collapse, and they want us to bail them out.

Forcing automakers that accept a bailout to produce only micro cars that get 50 miles per gallon would deprive Americans of the larger, sportier vehicles they prefer, while placing the rescued automakers at a competitive disadvantage when gas is cheap.

Oh, my Lord! Has this person seen an SUV dealership, lately? There’s one near my apartment, and its signs now shout loudly, “Fuel-efficient cars here!” (or somesuch) and hope the message is loud enough that you don’t notice row after row of gas-guzzling tanks. The SUV market is a disaster; nobody wants to buy a heavy car in this market. I give that SUV dealership six months, tops.

This brings me to the really depressing part of the bailout, and the whole act of legislating more fuel-efficient cars: it’s a failure of the market. No, not us; we want more fuel-efficient cars, we buy more fuel-efficient cars, and it just so happens that they’re made by foreign automakers (which, by the way, often have factories in the US). In a just world, in a world where the CEOs of the Big Three car companies had more than half a brain, we wouldn’t need fuel-efficiency standards; companies would simply compete on fuel efficiency until America produced cars that ran on little or—get this—no gasoline at all. It’s in vogue; everyone would want to buy a Chevrolet or a GM hybrid. It just so happens that they missed the boat; well, more accurately, they missed the boat, denied there was a boat, and are lobbying the government for their right to continue failing.

That’s the depressing part: we have to legislate that these companies make cars that people will buy. We have to demand that Detroit’s car magnates make money. Why are they so arrogant? Why not jump on the fuel-efficiency bandwagon when there’s so much money in it? I can only imagine it’s sheer obstinance, and if the jobs provided by these car companies are important enough for the government to step in and help the company out, they’re important enough for the government to step in, change the rules, and fire the management.

The federal government must help the Big Three weather the current financial crisis; they are truly too big to fail. But such assistance should not be used as an excuse to dictate the types of cars that Americans can drive.

Karl von Schriltz

Washington, Nov. 15, 2008

Ha! More like we have to force the automakers to make the cars Americans want.

November 13, 2008

An Apple car wouldn’t drive far from the tree

Filed under: Uncategorized — Tags: , , , , , — Tina Russell @ 3:47 pm

Thomas “Omega” Friedman ends a column on our auto industry’s failure to innovate with a rhetorical device that really bugs me.

Op-Ed Columnist – How to Fix a Flat – NYTimes.com
Lastly, somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.

Here’s what it would do: it would look shiny and new right when you got it, back when it was cool to have one. In five months, it would look scratched up and awful, but no fear; auto magazines will already be drooling over the next-generation iCar announced by Jobs at his CarWorld keynote.

You could only get your oil changed at iCar franchise dealerships, and if you run out of gas, you’ll have to send it back to California so that they can swap out the gas tank. Also, you can’t open the hood; that would violate the manufacturer’s rights!

November 9, 2008

Vermont’s Finest

Filed under: Uncategorized — Tags: , , , , — Tina Russell @ 1:01 pm

U.S. Senator Bernie Sanders
When the Senate reconvenes of November 17th, I intend to fight for an economic recovery program that is significant enough in size and scope to respond to the major economic crisis this country now faces.

If we can commit more than $1 trillion to rescue bankers and insurance companies from their reckless and irresponsible behavior, we certainly should be investing in millions of good-paying jobs that rebuild our nation and improve its economy.

Sen. Bernie Sanders (Independent of Vermont and an avowed socialist) is a hero of mine. Here, he describes an ideal economic rescue package.

I think liberals and conservatives have reason to get behind his ideas; we can best stimulate growth by embarking on a national project to revamp the basics, such as education, healthcare, and infrastructure. Those are the kinds of projects that create jobs immediately and, in time, pay for themselves many times over. In contrast, handing out money to banks, without placing terms upon its use, is risky in that you don’t know where the money will end up.

NGOs have found this long ago; you donate to developing-world governments, it’s anyone’s guess as to whether it will improve the lives of the people or end up in a government official’s patronage fund. If you give people handouts, it doesn’t solve the long-term problems. But if you invest in the people and the institutions they depend on, the people reach their full potential and will always pay back.

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