HOPE

I have written a lot about policy and in particular, about economic policy. While I think we need to consider what types of policy decisions a candidate stands for and will make, I am realizing that is only half of the reason why we might vote for a candidate. The other half rests upon a candidates ability to inspire, upon their ability to give us hope that no matter what may come a better future awaits us.

While I tend to agree with Obama on policy, I am also realizing that what gets me so excited about him has nothing to do with any particular position on taxation, health care, or foreign policy. Whether one disagrees with Senator Obama or not, there are substantial arguments to be made for all of his positions. So if it is not policy, what is it?

It is hope.

A recent opinion piece in the Christian Science Monitor entitled My wife made me canvass for Obama; Here's what I learned states,

I've learned that this election is about the heart of America. It's about the young people who are losing hope and the old people who have been forgotten. It's about those who have worked all their lives and never fully realized the promise of America, but see that promise for their grandchildren in Barack Obama. The poor see a chance, when they often have few. I saw hope in the eyes and faces in those doorways.

While I've respected and even admired John McCain at times, he simply does not embody this sense of hope. While I may not agree with all of his policy positions, I recognize that substantial arguments can be made for them. Yet this is not enough. John McCain simply does not have the same ability to inspire, to unite, and to provide hope in the same way Obama does.

While some may argue that such a feeling (yes it is an emotional response) ought not to be a reason to vote for a candidate, I think we're being naive if can't admit that our emotions play a role. Moreover, I think we're being naive if we can't see the importance of that role. Just imagine a nation that cannot unite itself in common purpose in times of great tragedy and challenge. Just imagine a nation whose people cannot be summoned to aim for a greater good, for the common good. Self-interest, after all, has its limits.

As this is likely one of my last posts on this blog I find myself reflecting on why I am voting for Obama. I do indeed agree with many of his policies and I opine that they are well crafted and thoroughly thought out. I do indeed value his experience as a professor of Constitutional Law, as the president of the Harvard Law Review, his time spent in the Economics department at the University of Chicago, and his time working as a community organizer. I also appreciate his pragmatism and his interest in looking at what research says actually works. In addition, his ability to assemble an impressive team of experts, something which David Brooks event commented upon, is something I value.

Yet with all this substance, I have to admit the biggest reason I'm voting for Obama is hope. Hope that despite our differences we can still come together. Hope that all the rhetoric in the Declaration of Independence and the Constitution is indeed more than mere words. Hope that America will remain the greatest nation on earth, not because of our military or economic might, but because of the ideals we aspire to. Moreover, I think Obama inspires an active form of hope. A hope that we are the ones who will live up to those ideals. A hope that does not look to someone else to bring change, but rather a hope that empowers, a hope that we are the ones who will change this world.

If artist endorsements ever account for much, it is their ability to capture the emotions that a candidate inspires. The song Yes We Can by will.i.am should not be taken in and of itself as a reason to vote for Obama, but as an embodiment of the hope that Obama inspires. Whether one likes this or not, agrees with it or not, this ability to inspire hope ought to be taken seriously.



It is for many reasons that I am voting for Obama, but above all, it is hope.

Mr. Greenspan

I highly recommend reading any article about Mr. Greenspan's Congressional hearing. A few highlights as quoted by J. Chait of The New Republic:

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.

“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

Is this the end of the free market as we know it? I doubt it. While regulation is clearly needed and proposed by both candidates, what will it look like? As I've said numerous times, this crisis is so complex that I'm not sure anyone really knows whats going on. I highly recommend reading the recent Economist article, Link by Link: A short history of modern finance. What's clear is the deregulation has been on the rise since Milton Friedman's arguments finally defeated Keynesian ideas in the 1970s. Friedman emphasized the free market whereas Keynes emphasized government intervention.

As the pendulum swings back and forth between ideological poles, my hope is that it comes to rest in the middle. Perhaps this is one of the reasons I like Obama more and more. McCain seems to be bent on the free market, despite populist outcries at the greed and excess of wall street (can anyone explain how you can be whipping mad at big business yet still want to give them a huge tax break? not to mention the data simply doesn't show that supply side policies will really benefit or "trickle down" to everyone else).

Ironically it is the home of Milton Friedman, the University of Chicago, where Obama has formed his economic thought. This has given him an understanding of the value of the free market and its potential for growth. After all, you can't deny that deregulation has had some very positive outcomes. On the other hand, I think Obama also understands the limits of deregulation and free markets. While this might lead one to believe that soon the government will be back in control, I doubt it. Most impressively, I think Obama is unlikely to see government as the only solution to the problems of the market and will look for market solutions to market problems. I suppose only time will tell, but this is a major reason why Mr. Obama will receive my vote.

On a lighter note, I have been reading a number of endorsements for Obama lately. I have a great affinity for endorsements that are given almost grudgingly, pointing out both flaws and strengths. I respected and admired Colin Powell's greatly. I also had to chuckle when Leon Wieseltier wrote in his endorsement entitled Washington Diarist,

. . . McCain's sense of reality seems to be narrowing. The financial crisis harshly exposed these limitations: it made McCain more dogmatic and more doctrinaire, with his wild refrain about tax cuts and his unmaverick-like refusal to examine his party's cult of corporations. His economics refuted his compassion. McCain feels with his heart, but he thinks with his base. And when he picked Sarah Palin, he told the United States of America to go fuck itself.

Only 11 more days!

Greenspan concedes error on regulation

Spreading the wealth

It would seem that a new four letter word has been added to the political lexicon. That word is "socialist." It's hard for me to understand why this is seen as an automatic insult. Like all systems, it has its merits and its faults. Or perhaps after living in Norway, one of those Scandinavian varieties of "socialist" countries, I am a bit more willing to accept some of its tenets as viable options.

The most recent discussion/controversy revolves around the idea of "spreading the wealth," a notion that is anathema to many. While I think there are many arguments to be made from a social justice and fairness standpoint in favor of a progressive tax structure that "spreads the wealth," this is not the strongest argument.

Moreover, I think the simplest point to be made is that "spreading the wealth" is something that happens irregardless of whatever approach a government takes. The question is really, how will wealth be spread about?

I think its fair to consider regressive and progressive tax policies, in their various extremes, as opposite poles on a spectrum of wealth re/distribution. Flat taxes are for all intents and purposes regressive. While on paper everyone may pay the same percentage, that percentage is a much larger chunk of a lower income than a higher one. In any case, my basic premise is that regressive policies simply spread the wealth upwards while progressive tax policies help to spread the wealth downwards. I might also add that the lower the tax rate the more wealth stays distributed on the top end while higher tax rates are dependent upon what the government decides to do with it.

One might argue that there is no such thing as spreading the wealth upward. By definition a tax is taking money away from one group for the government to spend for either the benefit of the whole or a more specific group. If one ignores the reality of market conditions, this might be true. However, in any competitive market there will be winners and losers. The winners will continue to earn and the losers, well they lost. We currently have the largest income disparity since the 1920s with the richest 10 percent earning an average of $93,000 a year and the poorest 10 percent earning only $5,800 a year*. If such a trend continues the end result gets closer and closer to a monopoly with a few oligarchs perched high above the rest. Clearly such a situation promotes the accumulation of wealth at the top.

Furthermore, I would argue that the market for many laborers, especially the unskilled, is imperfect. This means that supply and demand models simply do not hold for such a group. They do not have the luxury to reject certain jobs and force competition to raise their wages. In fact, competition nearly always favors businesses and pushes their wages down. This is in part because the opportunity costs for the poor are always higher, often exponentially higher than they are for the wealthy.

Consider the value of $150 in forgone income to a family making $800 a month compared to a family making $3,000. For the poor family, losing $150 could mean eviction or not being able to put food on the table. For the wealthier family, it probably only means putting off a luxury purchase of some type until next month. As such, retraining or additional education are often simply not an option for families struggling to put food on the table. This further limits their opportunity for any type of real economic growth along with any meaningful accumulation of wealth.

As I said above, while there are strong social justice arguments to be made for a "fair" system of re/distribution of wealth, the strongest argument revolves around the health of the economy. While I am no expert on this topic, I think a balance needs to be kept between moving wealth up and down to help benefit as many as possible and ultimately, to maintain the healthy competition that allows the invisible hand to work.

On the one hand, spreading the wealth up (tax cuts to businesses, etc.) does help promote economic growth through the creation of new jobs. This can be good provided those jobs actually improve the lives of people. It is problematic if those jobs don't really improve people's lives and they might as well be called a hand-out to big business. We've witnessed this in the last 10+ years. While GDP has grown and executive salaries have risen, the majority of Americans have not seen any real growth in their standard of living.

On the other hand, consumer spending also has the potential to drive the economy and indeed has in recent years. You can have all the jobs you want, but if people can't afford your goods and services it doesn't matter. Moreover, helping those out at the bottom helps to lower their opportunity costs and begin to accumulate meaningful wealth (probably the biggest reason the poor stay poor and the rich stay rich).

Thus, this is not an either or issue. The major reason I think government should be actively involved in spreading the wealth is to keep the free market working. Every game needs a referee to maintain fair competition and the free market is no different. Without competition the indivisible hand starts throwing rights and lefts. With competition it helps out, maybe even gives a nice back rub. When those at the top start earning disproportionately, they effectively limit the opportunities of those below.

What we need to understand is that wealth re/distribution does not and should not mean the extreme of the government making everyone equal. That is indeed anathema to our freedoms and basic rights. However, it does mean that we need to promote fair and continual competition. There will still be winners and losers. Yet it doesn't help anyone if we don't find a way to help those who have fallen to get back in the game. You can call it wealth redistribution if you like, I'd simply prefer to call it pragmatic economic policy.

* Spreading the wealth? US already does it
Also see Spreading the wealth

Joe McCarthy, meet Michelle Bachman

I have a couple of posts in the works (re/distribution of wealth, Ayers, more on "anti-Americanism," etc.) but had to put up a quick post regarding the comments of Michelle Bachman. For one, I can't believe we have not moved passed this type of divisive politics. In so many words, Bachman basically said all liberals are anti-American and that an expose should be undertaken on all members of congress to see who is pro-American and who is anti-American. While Chris Mathews gave her the rope to hang herself, it is unbelievable that such opinions are still alive and well.

Here's a brief passage from an article by Michael Tomasky entitled, "The Republicans have lifted the lid off their rightwing id"

This point was proved most dramatically by a woman named Michele Bachmann, a member of Congress from Minnesota. In an interview last Friday on Hardball, a leading US cable talk show, host Chris Matthews asked Bachmann whether Obama worried her. "Absolutely. I'm very concerned that he may have anti-American views," she said. He asked her what she thought distinguished liberal from hard left from anti-American. If she maintains such distinctions in her mind, she refused to acknowledge them. Then, finally, Matthews - who deftly fed her the rope to hang herself - asked her how many members of the US Congress held, in her view, anti-American views.

It's been almost a two-year campaign. There have been moments we've thought of as memorable, only to see the tide of events erase their mark from the sand. Bachmann's answer, however, will live imperishably: "What I would say - what I would say is that the news media should do a penetrating exposé and take a look. I wish they would. I wish the American media would take a great look at the views of the people in Congress and find out, are they pro-America or anti-America? I think people would love to see an exposé like that."

. . . .

The call for an investigation into the beliefs of every federal lawmaker, and an exposé of those found wanting in their patriotism, certainly takes us into deeply creepy territory. I would not call Bachmann herself a fascist. Odd as it sounds, to do so would be to grant her far too much credit. For one to embrace an -ism, even a repugnant one, one needs to have read a certain amount of history and political philosophy. Bachmann is just an idiot. She wouldn't know Edmund Burke from Billie Burke (she played the good witch in the Wizard of Oz), and she obviously has no idea that, in her rejection of the two bedrock American principles of separation of church and state and freedom of thought, she is the one who is as anti-American as they come.

What's next?

Tonight's debate brought nothing new or at least very little. I will say I think it was McCain's worst debate by far. The first 20 minutes or so I thought were absolutely terrible for McCain. He recovered somewhat, but poorly. My impressions have been wrong about the last two, so we'll see what the polls say.

I still think what to do about the economy was a missed opportunity for both candidates. I also think what to do about the deficit was also a missed opportunity.

I was very impressed with Obama's ability to counter some of McCain's best punches, especially in regards to his voting record and Ayers.

I think McCain dug himself a hole on the personal attacks piece. I almost got the feeling he was trying to play the victim and the "poor me" card.

One observation I have is about their tax policies. I wonder how McCain reconciles the anger for those in wall street (i.e. the rich) yet his insistence on supply side economics. Whatever the merits of supply side economics, do they really square with perceptions of fairness, especially now. I don't think he is selling his position very well.

I still wish Obama would highlight the failure of supply side economics to benefit the majority of Americans. If you look at real income (adjusted for inflation) over the last 20 years, the top 1% has grown by ~11% while the remaining 99% has only grown by ~1-2% (see July 26th, 2008 Economist articles Unhappy America and Workingman's Blues). Perhaps the argument is too hard to make and this is why he sticks to his tax cuts and predominantly demand side economics rather than critiquing supply side policies.

I think there are arguments for both demand side and supply side economics but ultimately this is not an either or question. I think demand side tends to benefit the vast majority of people while supply side is more effective at economic growth (think GDP). The problem is both are needed. The real question to me seems to be: How do you balance these to get the best of both? Which candidate is more likely to find this balance? While I don't think either (or anyone for that matter) is likely to get it perfectly, Obama seems far more likely to do so than McCain.

Whatever your thoughts on tonight's debate the bottom line is - this was no "game changer."

The Last Debate

The final debate is about to start. Here's my bullet points

• The economy is likely to dominate
• Each candidate is likely to expound on new plans to get the economy back on track
• Look for McCain to try and score points, maybe even by taking big risks
• McCain has to change the tone if he's going to stand a chance - I don't think he can afford to go negative

If this debate is anything like the first two, it's likely to be a snoozer.

The Fall of the West

It's official, we are in a recession that is likely to get worse before it gets better. Moreover, this recession may have consequences far greater than our pocket books. The collapse of the US and European financial institutions is likely to herald in a changing of the guard. The sun is rising in the East.

A number of recent articles are starting to address the global nature of this financial crisis, something that I think neither most Americans nor the presidential candidates have come to grips with. Or at least they certainly are not talking about the global reality of the collapse of the financial markets.

John Lipsky states, "The tectonic plates of the global financial system are shifting." This is essential to understand as a global crisis demands a global solution. Lipsky goes on to state, "What is novel is that global and regional responses are necessary for success in the current circumstances, not just national responses -- however bold."

The International Monetary Fund (IMF), an organization that is supposed to be the watchdog for global economic crises, has been in the hot seat lately. Moreover, the free market ideology or the Western consensus of the IMF, which has dominated its policies, often to the chagrin of developing and emerging economies, is experiencing a dramatic role reversal. The West has become the cause of this crisis, not the solution. The emerging economies of the world have become the victims, rather than the culprits.

What is clear is that stability within the financial markets is sorely needed. If credit markets were hell they have indeed, frozen over. No one is lending to anyone, creating the ultimate "mood killer." As I've said before, I don't think anyone has any real clue what's happening here, the problem is simply too big. However, I think Lipsky's point that "a new multilateral framework for macro-financial stability" in order to "break the negative feedback loop between dysfunctional financial markets and a weakening global economy" is heading in the right direction.

This however, is easier said than done. It is important to understand that as a response to some of the IMF's former bullying (or advice depending on one's point of view), developing nations such as China are not to keen to get in line with its policies. Moreover, these nations turned to foreign assets to help protect themselves against future foreign shocks and not be left holding the bag as the IMF pushed them to do in the past*. Currently those reserves make up more than $4,000 billion (yes that's 4 trillion dollars).

It is these very same reserves which has financed much of America's credit**. Philip Stevens quotes a Chinese official as saying, "America drowned itself in Asian liquidity." Moreover, these reserves could provide some much needed help, perhaps even the stimulus needed to get credit markets moving again. Katie Hunt quotes Oxford economist Ngaire Woods as saying, "These countries are sitting on large stockpiles of dollar reserves and their dollars could keep [the] 'world economy afloat.'"

Think about this for a moment. The West is in the midst of financial crisis and the beginning of what could be a major recession. The West is indebted to developing economies, especially China. These developing economies have massive stockpiles of dollar reserves. The West is fiending for an infusion of dollars - lots of dollars. While this is quite the role reversal, we should also remind ourselves that the writing has been on the wall. China's 10%+ growth rate has been the distant drumbeat of an emerging economic empire.

As the IMF and other global institutions work to unravel the financial mess we are in, it is highly unlikely that China and other developing economies are going to play by their rules, especially considering they are already underrepresented in such organizations. Thus, an effective global solution to this financial crisis is not only likely to restructure the global economic order, it is required.

While our next President must and should fight to keep America as one of the central powers in the world, the days of Western dominance would seem to be coming to a close. Whether we like it or not, our next President is going to have to navigate a world in which the American economy may no longer be top dog and we're going to have to get used to the idea.

*The IMF opposed moves by Asain governments to bail out their financial institutions in 1997-98.
**These reserves bear little if any responsibility for the crisis - the triple A rating giving to mortgages as securities for these loans definitely was!

Crisis marks out a new geopolitcal order - Philip Stevens
Navigating the Storm - John Lipsky
Time to Reform the IMF - Katie Hunt

Thank you!

Thankfully, the focus of tonight's debate was on policy and no gloves came off. While a few jabs were thrown, we saw the better sides of the candidates rather than the worst in them. I would give tonight's debate a slight edge to Obama, although I think it was pretty even. By no means do I think this debate will have any impact on the current trends. While McCain did just fine, he didn't do enough to change the game.

However, I think both candidates have yet to realize the opportunity inherent in the financial mess. I think Obama does a far better job connecting with the issues most of us face, but I think the major opportunity lies in a larger plan to get things moving again. McCain may have come closest by offering something new tonight, namely the government buying mortgages and allowing people to keep their homes. As I mentioned in an earlier post, I thought this should have been a key element of the bailout package. In any case, it will be interesting to see how this idea plays out for McCain, especially as an ardent supporter of small government.

I also think part of the issue here is that no one really knows whats going on. The financial system might as well be the mythical Gordian knot. While Alexander the Great may have untied the knot by simply cutting it in two with a sword, I doubt such a simple solution exists for the current mess we're in. Moreover, any solution will likely be nuanced, complex, and detailed, something that simply does not fit with a campaign message.

I am interested to see what Obama comes up with on this. I do believe he has far more economic expertise than McCain. His 12 years at the University of Chicago, the home of Milton Friedman and the Chicago School of Economics, and the interactions he had with the economics department is a pretty big stick. What I especially like about Obama is that he supports the free market, yet with an understanding that it is not perfect, that it needs a referee. Moreover, I like his interest in using market solutions to solve market problems. I wish we'd here more about these, although they might just be too wonkish for the campaign trail. I highly recommend David Leonhardt's article, Obamanomics.

I was also surprised that McCain didn't get called out for the ridiculous amount of pork in the bailout bill. For someone so anti-pork that must have been a hard pill to swallow. But perhaps that is a double edged sword and is simply not worth the political risk for Obama to bring up, especially considering he voted for it too.

The big question is, what happens next? Will the next days be filled with discussions of policy or will we revisit ghosts of the past?

postscript: After writing this, insta-polls gave Obama the clear victory in tonight's debate.

Who?

I am entirely disappointed with the current state of affairs in this presidential race. If trends continue, we are about to introduced to a whole slew of individuals few of us (at least of my generation) have ever heard of. We've already heard of William Ayers and now Charles Keating.

Here's a list of potentials we may here more about (some of whom have already been brought up):
Jeremiah Wright
John Hagee
Rod Parsley
G. Gordon Liddy
Antoin Rezko
Phil Gramm

It is sad that it has come to this. Politically, it is clear that McCain needed to do something to change the trends. Politically, it is also clear that the Democrats will not allow what happened to Dukakis and Kerry happen again - they will fight back hard and fast. I don't think either side can argue that this kind of trash is helpful for the country, in fact they argued against it just a few months ago. Whatever one's political persuasion, I also think it's hard to deny that McCain is responsible for heading down this road (a move which I think is likely to backfire as it does not support his "character" argument). While political necessity can never justify these attacks, it does offer an explanation, however disappointing.

Mathew Yglesias, in an article entitled, Obama, Ayers, and Guilt by Association, does a great job highlighting the perils of such attacks along with the faulty logic of guilt by association. I also think he makes a great point about those who were active during the Vietnam Era,

The truth is that the Vietnam era was a time of political extremism in the United States. And part of the way that era was brought to a close was by turning away from efforts to banish the extremists from public life. Segregationist politicians went on chairing their congressional committees. Black Panthers ran for congress and won. Liddy got a radio show and Ayers became a professor.

If the blast from the past continues, many will once again feel the Presidential election is a choice between the lesser of two evils. Lets hope tomorrow's debate will return to the issues and that Americans might actually have a chance of choosing the "better of two goods."

For McCain's sake, I hope he chooses to take the high road. The recent Rolling Stone article, Make-Believe Maverick, does not paint a pretty picture of John Sidney McCain III. I don't expect perfection in a Presidential candidate and I for one wouldn't hold his past flaws against him. However, there is always a choice to put your best foot forward or your worst. It would seem McCain is choosing the latter as his decision to start these attacks is far too similar to the worst parts of his character and history.

Whatever the case, it will be very interesting to see how tomorrow night's debate plays out.

Is the worst yet to come . . .

I had hoped the worst of this election was behind us - evidently not. Governor Palin today accused Barrack Obama of "palling around with terrorists." This is in reference to Obama's connection with Bill Ayers, a founding member of the Weather Underground. A more accurate statement might be about a lack of connection. The very same New York Time's article Palin quotes from points out that there is no substantial connection between Ayers and Obama and that Obama has denounced the radical actions of Ayers. More importantly, one should remember that when Ayers was a part of this radical group, Obama was eight years old.

It is interesting to note that this is not new news. Hillary Clinton brought this connection up in the primaries and it was shown to be nothing. So why now?

I think there is something in the wind. If you look at what the polls are saying, this is an act of desperation. A quick look at RealClear Politics shows that if today's polls are accurate, Obama has 353 electoral votes. Remember you need 270 to win. When you categorize states as either solid or leaning, Obama has 264 electoral votes whereas McCain only has 163 with 111 still up for grabs. While you can't always believe the polls, this is clearly a substantial lead for Obama.

Sadly, perhaps the worst is yet to come. McCain's pull-out of Michigan may be an admission that the polls aren't far off. It may also be the reason for the start of what could be some of the nastiest attacks we've seen yet. I wouldn't be the first to say that the Republicans may go extremely negative in order to try and reel this election back in. Moreover, I have to wonder if Palin isn't going to become the sacrificial lamb. If the attacks don't work, she'll be the one to take the fall while McCain stays above the fray.

In either case, it's a sad day for American politics, especially in an election that at first, seemed that it might actually be different. So much for country first.

Palin doesn't bomb

Immediate reflections on the debate:

Palin did much better than I and probably most expected. Whether or not this was because the expectations were so low or not, I'm not sure. Whatever the case, I think you have to admit that she held her own. My impression was that her rhetoric was good, but I don't think her answers had the same depth as Biden's. Whether that matters to the average voter or not remains to be seen.

Biden did just fine as well, but this was no knockout. My guess is he'll get the credit with the victory, based on the substance of his answers. In my opinion his answers were able to give more specifics, but again, whether that resonates or not remains to be seen.

Questions - reflection points:

An interesting critique of Palin that caught my eye after the debate was her simplification of complex problems that only need some common sense. Was this Palin's stance? Is this something that is effective either with voters or in reality?

We're Palin's answers canned? One reviewer said Palin seemed to be hanging on for dear life, that the points she made would have been made irregardless of the questions. Agree/disagree?

How about Biden - on debating points he won, but on perception?

Lastly, was this a game changer? (my two cents: no)

More to come - hopefully I'll have time for some substance on their policy. As always, comments welcome!

The VP Debate: Much Ado About . . .

The much anticipated Vice Presidential debate is set to take place tomorrow night. You can bet we'll be watching and hope to offer some immediate reflections post debate.

So what will tomorrow night bring? All of Palin's recent interviews have not gone well, and that's giving her the benefit of the doubt. At the same time, Biden seems to have a fondness for verbosity and stretching the truth a bit. I almost wonder if we couldn't call this debate Barbie vs. Paul Bunyan. No matter what happens, it is bound to be entertaining and I for one will already be looking forward to Tina Fey's next SNL skit.

Yet in all seriousness, this debate could be a potential game changer, with big risks for both sides. As far as Biden is concerned, there are some who say that he will have to tread very lightly, that he cannot afford to "take off the gloves" and let her have it. I'm not so sure about this, but we'll see. My guess is Biden will let Palin dig her own grave, we'll see. Biden also needs to be careful not to make any more gaffes (my personal favorite being FDR talking about the stock market crash in 1929 on TV!).

That said, at least Biden can give a coherent answer. Try and make sense of Palin's answer in regards to a question about the 700bn bailout:

That’s why I say, I, like every American I’m speaking with, we’re ill about this position that we have been put in, where it is the taxpayers looking to bailout. But ultimately, what the bailout does is help those who are concerned about the healthcare reform that is needed to help shore up our economy, helping the—oh, it’s got to be all about job creation, too, shoring up our economy and putting it back on the right track. So, healthcare reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans. And trade, we have—we’ve got to see trade as opportunity, not as a competitive, scary thing, but one in five jobs being created in the trade sector today. We’ve got to look at that as more opportunity. All those things under the umbrella of job creation. This bailout is a part of that.

Clearly, the expectations for Palin are extremely low and some have even stated that as long as she doesn't look like a total idiot she'll be ok. It will be very interesting to see what she comes up with. Will it be rambling sound bites thrown together that make absolutely no sense? Will it be memorized sound bites that she sticks to despite the question? Will she actually try to answer questions? I predict that she'll be working on damage control rather than trying to hit one out of the park.

My favorite headline about what Palin needs to do is: "Palin must avoid 'embarrassing massacre' in VP debate."

Whatever the case, it is sure to be entertaining!

1st Debate Reflections

I’ve compiled some reflections on a few key points from Friday night’s debate. I missed the first section on the economy so left that out. I will say that I really liked this debate and the nature of it. It is refreshing to have two candidates who, while they have different positions, have positions that one can present credible arguments for. We may still disagree, but at least we have something of substance to disagree about*. Also, it looks like I was wrong in my assessment of the debate. While many gave the result a tie, polls tended to show that most felt Obama won. As always, comments welcome.

The Iraq War
McCain’s position: don’t let our troops die in vain. While this oversimplifies it, it is the clear message of his bracelet story. I wish McCain would have made a stronger argument about the fact that whatever your opinion of the war, whether you think it was a good idea or not, is almost irrelevant when considering what to do today. It is undeniable that we have changed the face of Iraq and I think he’s right in saying we have a responsibility to get the job done. I think it’s a strength that he is willing to commit the necessary resources and troops, despite politics, to finish what we’ve started, to fix the mess we made. McCain argued for victory in Iraq both for the honor of America and those who served along with the idea that a stable Iraq is central to a peaceful Middle East. The argument to not let our troops die in vain has both strengths and weaknesses. While I think we all want victory (who wants to lose?), fighting for the honor of our troops can also be a very slippery slope. If this plan doesn’t succeed will even more troops be needed to not let these die in vain, how about after that, and after that, etc. Honor can become hubris and we will indeed end up in Iraq for 100 years**.

Obama’s position: don’t let anymore of our troops die. His bracelet story represents the other half of McCain’s. Again, his position is more complex than this, but I think Obama is right to hammer the poor judgment of the Iraq war in the first place. This argument also has strengths and weaknesses. Beginning with the latter, the original poor judgment in going to war in Iraq does not solve the current problem of being there and it is not that simple to simply leave. I think Obama could be stronger in making the case that it is time to leave and that leaving is not defeat. He also needs to deal with the question of what leaving would do to the Middle East, something I don’t think anyone can predict. However, I think the real strength of this argument is in regards to future judgments. Whatever successes the war in Iraq may be having now (something we should all be guarded about as they are indeed very fragile – so much so that no one knows if staying would even have a major impact on them) it is clear that the decision to go to war was made on false premises. It is clear that we (America) got this one wrong. I think Obama was far more reassuring that such a mistake (poor judgment if you like) won’t happen again.

Diplomatic talks without preconditions
I think McCain failed to convince people that Obama was parsing words on this one. Ultimately, McCain should have focused more on the arguments to have preconditions rather than not to, especially considering their track record. I think his argument that you legitimize a leader’s position when you talk to them is hog wash. If I talk to the KKK I'm not legitimizing racism or white power - talk about ridiculous. I think there are far stronger arguments for preconditions than that - increased leverage for example.

Obama made a strong case for the need to talks without preconditions, citing support for such talks from Kissinger and even Bush. I think he made the case that no preconditions does not mean no preparation and more importantly, that not talking to someone is not likely to get you anywhere. The strongest evidence is simply what has happened to Iran and North Korea. I think you could make this even stronger by simply thinking of how people tend to react when they are isolate or pushed into a corner – usually not very well.

Russia
I was surprised by both McCain and Obama’s stance towards Russia – very forceful and strong. I wonder why there was little talk about working with Russia and seeking to strengthen our relationship rather than defend our influence in the world. While neither was outright aggressive towards Russia, there were echoes of the Cold War. Did anyone else sense this? I hope I’m proven wrong on this and we hear about more ways to work with Russia in the future. I do think Russia is the sleeping giant. While communism may have led to the collapse of their economy, they still have a huge amount of resources and I think you’ll see a boom in Russia (if we haven’t already) similar to China once they get up and really running.

Israel
Both showed strong support, not much else.

Globalization
While neither candidate mentioned this word, at least not that I can remember, I thought Obama was the only candidate that seemed to grasp what this means in today’s world. I think Obama’s urge to restore America’s standing in the world is paramount. Perhaps 100 years ago, maybe even only 50 years ago, we could afford to say we’ll do whatever we want, we don’t care what you think. However, that is simply not true today. Just think of the financial meltdown. Nearly all of those companies were transnational. The amount of capital that flows between countries is astronomical and more and more companies are no longer located in only one nation. International treaties become the only effective tool to regulate such companies and thus relationships between countries is all the more important. When one considers national security and terrorism issues, the abilities for countries to work well with one another only furthers the need for America to be well respected in the world. This is not just some “feel good” message, it is essential for America’s future. I did not think McCain did a good job in showing that he understood the importance of relationships in today’s global world.

*Palin not included.
**One should also consider the history of Iraq. T.E. Lawrence, yes that’s Lawrence of Arabia, said that the public had been led, “into a trap from which it will be hard to escape with dignity and honor” regarding British control of Iraq. The British maintained their colonial rule of Iraq with intense brutality, in many ways the precursor of the Baath party and Saddam Hussein.

Debate Coverage

My two cents (very quick review here). Who won? I don’t think there was a clear winner. I’d probably have to give McCain the edge. To me, his strength was with Iraq, with dealing with the here and now. While I think Obama is right about the war, McCain comes off stronger by dealing with it the way it is. I think Obama's strength was trying to broaden the vision of what the executive needs to do in terms of global conflicts.

Both were very knowledgeable. Both represented their ideas well. I don’t know how well McCain’s “he doesn’t understand” remarks will go over. I’m not sure if the debate about what to do in Iraq was really settled or at least no clear winner. The same would go for direct diplomacy without preconditions.

I thought it was interesting how both took a very tough stance with Russia.

More in depth comments to come later – thoughts are welcome.

Quick poll of those watching with us:
Ron: I thought Barack held his own very well. I think Barack has a wider vision of how to conduct foreign policy, much more in tune with the 20th century which involves engagement, conversation and seeing the interconnectedness between issues. Whereas John McCain, essentially focused on military. John McCain is a warrior so his international perspective is narrower and much riskier.

Linda: I think that he [Obama] held his own. I appreciated that he would acknowledge when McCain was correct whereas there was a meanness with McCain. So spirit wise, people might be attracted to Obama - people vote with how they feel, not with how they think.

Foreign Policy

With the first debate set to start in a little under an hour, here's a preview of what is on tap for tonight. The topic is foreign policy, although Jim Lehrer has said he'll ask questions about the economy. There are so good overviews on the web so I'll spare a recap of those.

Here is what I am curious about.

• The war on Iraq - how will recent developments (an election law was finally passed) play out? How will this war be defended as part of the larger war on terror, or will it? Will the candidates discuss ideas of spreading our military too thin?
• Iran - How will Obama defend meeting with Iranian leaders without preconditions? How will McCain respond? Note: I think I'm more curious if we'll see any surprises on this topic.
• Israel - How will recent comments about not second guessing Israel's efforts to defend themselves play out, especially considering the potential ripple effects throughout the Middle East with such action.
• North Korea - the wild card? especially now that they've kicked out nuclear inspectors?
• Russia - the sleeping giant is waking back up, what will be the new relationship between the US and the Russian Bear? Will McCain mention that Sarah Palin is the executive of a state that borders Russia?
• Trade agreements - will this come up? If so, how will McCain balance free market ideology with populist rhetoric? I suppose a similar question could be asked for Obama?
• Globalization - will it come up? How will the candidates define it and how will they position America within it?
• Pre-emptive war - How will this be defined (especially in relation to Bush's ideas) and what will their positions be.
  
• Last but not least, the financial crisis (crater). Can McCain recover on this one? Will anyone provide (or at least appear to) a solution on this one?
  

While I've never been a huge fan of the debate formats for Presidential elections, I have to admit I like the format for tonight's debate a lot more. A full nine minutes will be given to each issue. Each candidate will have two minutes to respond followed by five minutes where they are allowed to ask each other questions.


http://www.npr.org/templates/story/story.php?storyId=95059878&ft=1&f=1012

The debate is on!

John McCain announced he will be at tonight's debate in Mississippi.

Folkelighed will be blogging live during the debate - check in tonight for reflections and analysis.

Predictions anyone?

Politically, I think this could be a turning point of the election (if this past week hasn't already been one). While the expectation game is being played by both sides, I think it's pretty clear McCain needs to do well tonight. We'll see!

Another 700 billion?

I am all for keeping the economy afloat. I have no problems with loans to these corporations to keep them on their feet, especially because I think this is likely to lead to some serious restructuring and more importantly, it avoids a total financial meltdown. In principle, I like the idea of addressing the root cause of the current debacles in the financial markets, namely the mortgage crisis. However, the current plan for the Fed to take on an additional 700 billion dollars in “bad” mortgages is going beyond a bailout, it’s a keep you on your feet and cookin’ plan.

A bailout loan is still a loan. It is not a free ride or at least not a total free ride (even if the companies deserve worse). Taking over a mortgage is in essence, buying the loan. It is providing a way out for these corporations with minimal losses. Now, at least the Fed is proposing to use an auction style to buy up these loans, likely to push the price down as no corporation wants to be left holding the bag. However, where is the justice in this, especially considering that the brunt of the mortgage crisis is the fault of these corporations themselves! If you take advantage of someone’s poor financial skills or even stupidity, I don’t care what you say- you’re still taking advantage of them.

While asking for justice now might seem hypocritical considering my support for the previous bailout loans, I believe government must always strike a balance between maintaining a healthy business environment and protecting individuals. I think the bailouts, while not perfect, were enacted with that balance in mind. Some may disagree, but I think keeping the companies afloat was with the common good in mind. An additional 700 billion, however, has lost this balance.

I agree with addressing the root cause of this problem, namely all the bad mortgages and concomitant foreclosures. However, I do not agree with the solution as this is now truly a total bailout of the financial market and one that has very few strings, if any attached (at least now that I’m aware of). Now, I might be ok with it provided there were some serious strings attached, but I don’t understand why they don’t find a better solution that actually helps people (beyond just keeping the market afloat) who were taken advantage of in the first place – especially when we’re talking about 700 billion.

Here is what I would suggest. Rather than only deal with the financial corporations, why not go to individuals who are in foreclosure or in danger of foreclosure (you might even provide an option for those who recently lost their homes – it wouldn’t be perfect no matter what the case). The Fed could provide a two month window or something like that and then negotiate with individuals to restructure their loan(s) on a case by case basis. If we are willing to bail out companies for their bad decisions, there is no reason not to bail out individuals for theirs (although I would argue that many were taken advantage of more than their own greed biting them in the rear). If the Fed provides a way for individuals to restructure their mortgage, corporations get rid of their bad loans and people find a way to keep their homes. Such a plan seems only like a win-win!

Will this happen? Who knows – as in all crises bad plans often get pushed through because no one wants to look like they don’t care or are in any way obstructionists. Remember the Patriot Act?

Economic "Crisis"

I for one am relieved that economics and policy issues have returned to center stage in this debate (despite a few jabs from both sides). From Black Monday (or Sunday) to today, much has been said about the status and the fate of our economy. Obama has said we’re in crisis. Biden has criticized McCain for not saying we’re in crisis to emphasize the crisis. McCain has seen the light and said we are in crisis after he said the economy was fundamentally strong, by which he actually meant the workers – it’s easy to get the economy and the American workers confused, I know. And Palin has said, oh wait, she’s not allowed to talk to reporters.

The bailouts of Bear Stearns, Fannie Mae, Freddie Mac, and now AIG, however ugly they might be, are I think, necessary. The collapse of these financial institutions would have meant the collapse of the lives of many (think bye-bye retirement plan, etc.). Worse yet, the problems of these banks are exposing the problems of the entire system which is beginning to resemble the illegitimate lovechild of the Gordian knot and a house of cards.

All loans are backed by some form of collateral, which in the case of these financial institutions tended to be in some type of securities or equities (i.e. shares of stock). If those stock prices fall, so does the collateral. Consider the stock prices of Lehman brothers which are now around a whopping 20 cents*. As your collateral disappears or is devalued, you now have less capital to leverage your old loans, let alone any future lending. You also risk a shockwave of bad news for others as a default on your own loans, now without collateral, leaves them holding the bag.

Ultimately the Federal Reserve has been bailing everyone out, mainly through a variety of loans. My favorite is a 40-85 billion dollar bridge loan to AIG, which is kind of like helping them out until next month’s paycheck arrives. As an added incentive, the Fed levied a 12% interest rate to push AIG to sell off parts of its company quickly. Now with all these loans, can you guess what the collateral is? That’s right, equities of those very same companies. There is nothing like giving loans to shaky companies with the same shaky companies as collateral – did I mention house of cards?

For Bear Stearns these equities included assets believed to be tied up in the sub-prime mortgage debacles and for AIG, this entails the wonderful world of CDSs, or credit default swaps, basically an insurance policy for a loan**. Luckily for AIG and the Fed there haven’t been many bad loans lately, oh wait . . .

However ugly this may be, I think the alternative would likely have been far worse. With the fate of these corporations being knotted to everything else, it’s far better to untangle the knot before you start cutting out pieces of rope.

Are we in crisis? I think the answer is yes, but I’d rather say we’re on the precipice of true crisis. I think the next few weeks will give us a better indication. More on the economy to come . . .

*The 52 week high was over $67.
**A third party, like AIG, agrees to insure a loan for someone else in return for a quarterly fee. If the loan goes bad, AIG covers the losses of the lender.

Drill baby drill! . . . Divide baby divide!

I'm a big Thomas Friedman fan and I think he hit the nail on the head in his op/ed piece, "Making America Stupid." I also thinks this speaks directly to my previous post and may help understand why many (not just die hard environmentalists) are against drilling. While oil will likely remain a primary source of energy for the next 10-20 years, I have to agree it seems terribly short sighted to make drilling for oil a cornerstone of your energy policy. It's also just passing the problem to the next generation as at some point, we're going to have to develop a new energy source. Not to mention the numbers game makes drilling for oil domestically highly unlikely to remove our dependence on foreign energy.

I'm curious if Friedman is also correct that the McCain/Palin ticket have decided to turn this election into a "culture war." Palin is clearly a divisive figure, people either seem to love her or hate her. While I'm not sure if I would describe it as a "culture war," the election has certainly taken a nasty turn, at least in my opinion.

Of all the election coverage I think PBS is by far the best. On NOW, David Brancaccio talked to psychologist Drew Weston about how people make their decision about candidates. It was interesting to me how he outlined the difference between Democrats and Republicans. In speeches, Democrats tend to begin with an appeal to the mind, then the heart, then close with the mind. Republicans, do just the opposite, they appeal to the heart, then the mind, then close with an appeal to the heart.

There seems to be a bit of truth in this and I think the Republicans definitely seem to be staying away from any policy issues lately. Some of their attacks I think should be called what they are, downright lies (has anyone seen the McCain add accusing Obama of teaching about sex before being able to read - see it here and the factcheck here or here), but their purpose must be to keep the issues emotional, rather than intellectua, to focus on the heart rather than the mind. While I have no doubt this is meant to divide, to create an us against them image, I'm not sure I I'd go as far as culture war.

Will it work? Should it work? I for one, hope not as I think this type of politics reduces American democracy to something between a popularity contest and mob rule.

Energy Independence the key...?

Is anyone else scratching their head? While I've only been able to read the transcripts available online along with a few clips of the Palin interview, I think its an understatement that she could have done better. While a lack of experience is troubling, I don't think it is a make or break issue. As has been said by others, the only thing you can probably say about experience is that it makes a candidate better. A bigger concern for me would be the new ideas one brings and the potential experience was has in that area - after all, new blood can be good.

In terms of national security, Palin chose energy (energy independence) as her hallmark contribution.

"Let me speak specifically about a credential that I do bring to this table, Charlie, and that's with the energy independence that I've been working on for these years as the governor of this state that produces nearly 20 percent of the U.S. domestic supply of energy that I worked on as chairman of the Alaska Oil and Gas Conservation Commission, overseeing the oil and gas development in our state to produce more for the United States."

While I would agree that energy independence could ease a lot of security worries, it is no silver bullet. Even more dismaying, is the fact while Alaska may produce 20% of the U.S. supply, the key word is domestic supply. As a percentage of our total energy production, Alaska weighs in at a mere 3.5%.

To be fair, Alaska ranks a bit better when you only look at crude oil, making up 12.8%. Even still, 12.8% does not make one a power player in the energy game. In 2007, oil imports totaled 3,661,404 thousand barrels while Alaska made up 263,595 thousand barrels (the numbers from the EIA are in thousand-barrels). In this game, Alaska is 3,397,809 thousand barrels short.

So, if I understand this correctly, Palin, former chairman of the Alaska Oil Conservation Commission (Feb. 2003 - Jan. 2004) which produced only 3.5% of the nations energy is going to solve the energy problem as a key element of a national security plan?

I am the only one scratching my head on this one?

Even if one looks at all crude oil production in the U.S., imports are still nearly double our domestic production. From what I know, there is no amount of domestic drilling that can erase that gap.

The Media: What do they do again?

I hate pundits. Ok, so hate may be a bit strong, I’m simply struggling to understand their role along with that of what is considered to be “the media.” Case in point: the word “lipstick.” While I am astonished that McCain would make a big deal of this, especially considering he used the exact same phrase when discussing Hillary Clinton’s ideas, I am more astonished that the media is taking it at face value rather than scraping away the thick layer of spin.

I think Chris Rovzar’s article ’Lipstick on a pig’ Comment forces McCain, Obama camps to switch roles describes this situation the best.

In the end I can’t help wondering how we should take comments like this. And again, how do our character judgments color our perceptions? Are these mere distractions, political tactics meant to keep the debate about character rather than policy? I for one highly doubt there is any substance here and am left wondering, so what does one do? Is it worth calling McCain out on this? Is Obama wrong here? If so, is "community organizer" a similar thinly veiled substitute for "black?" Are we seriously talking about this?

At the same time, perhaps we expect too much from the media. We want them to be the last bastion of truth, to sort through the muck and find the shining sword of truth. Yet, when they remain neutral, they don’t take things far enough, leaving a thick layer of sludge for us to wipe away.

What is interesting is that most analysts are fully aware of the intent, purpose, and the potential success of such attacks. John Heilemann, in an article entitled The Sixty-Day War, states, “But there is a reason the Republicans keep falling back, again and again, on such hoary tropes. The reason is that, from the age of Nixon to the era of Lee Atwater to our current (yes, apparently, it’s not dead yet) epoch of Rove, they have all too often worked. Us versus them is a potent message—and one tailor-made to a candidate with the name Barack Hussein Obama.”

Whether Republicans or Democrats are guilty of this (while both sides are I do think the Republicans get the bragging rights on this one), why doesn’t the media seek to move beyond this? The cynic in me also has to admit there is far more entertainment value to a good insult or zinger, so why bother moving past them? Whatever the case, perhaps this is the media's greatest failing. When politicians get to control the debate (or sidestep it), which both sides will fervently work to do, the public only gets talking points, the party line, and he said she said – we never actually get to a debate.

While access to candidates certainly would help, if this continues we should just switch to a parliamentary system and get it over with. Then at least we’d just be voting for the party message without the distraction of individual identities.

Emotions and "character"

It is easy for our emotions and gut feelings to take center stage when considering political candidates. For better or worse, both Shana and I have used words like “smug,” “snide,” and “sarcastic” to describe Sarah Palin. In an article today by Karen Mathews, former New York mayor Ed Koch said, “she scares the hell out of me.” While many others have made similar observations, there are others who consider Palin to be “down to earth” and just an everyday mom. So who is right? I don’t doubt that good intelligent people have come to the exact opposite conclusions, but how? (I’m sure the same assessments of McCain, Obama, and Biden have been made.)

Whatever the case may be, it is clear that judgments concerning character will color everything else about a candidate. I think this is something that we all need to be aware of, otherwise it is likely that we’ll never actually get to anything of substance, we’ll never even be able to ask how we’re going to work together.

At the same time, I have to wonder how much of a candidate’s character we can really know. Palin did not write her own speech, she was carefully prepped and she continues to be shielded from any questions. While all politicians strive to stay on message, whether you wrote your speech or not, it does seem a bit odd that Palin isn’t allowed to speak freely, especially considering the GOP’s focus on character. Are they trying to say she’s a puppet, a “member of the herd” to borrow one of her own, I mean Mathew Scully’s lines.

If nothing else, I would hope that the last eight years has shown us the dangers of a Presidency that is carefully scripted, where information is carefully controlled, questions are screened and preselected, and image (i.e. character) is created. While Palin may scare the hell out of some, another four years of this type of information control scares me even more. (On a related note, one of the single biggest reason I would not support Sarah Palin is that she tried to censor certain books at the library during her stint as Mayor - what does that say about character?)

No questions, please; Palin sticks to her script

Koch: Palin "Scares the hell out of me" - or -
Former NY mayor: Palin 'scares the hell out of me'

Folkelighed

Folkelighed is a Danish concept originated by N.F.S. Grundtvig. Grundtvig was a prolific writer who was, among other things, a poet, scholar, philosopher, bishop, composer, and educational thinker. It was Grundtvig who is credited with the folk high school movement in Scandinavia.

The notion of folkelighed was born during the transition in Denmark from an absolute monarchy to democracy. In many ways the idea was Grundtvig's attempt to reconcile the ideas of equality and freedom. After all, how does one maintain an equitable society when freedom allows there to be winners and losers. An important aspect of Grundtvig's thought was the notion that freedom only exists in reciprocity. One cannot truly be free unless one's neighbor is also free. Thus, the notion of freedom was paramount, but always with regard to the common good.

Perhaps Uffe Østergård put it best when he said, folkelighed "refers to enlightened, responsible and tolerant participation in the exercise of power." It is in this spirit that this blog is created and in which I hope thoughtful discussions will ensue.

The impetus for this blog also stems from what I see as a need to transcend the knee-jerk reactions, pundits, slogans, and labeling that passes for thoughtful criticism and reflection. It aims to understand how we perceive truth in politics and the role our emotions play on our beliefs and political positions. Ultimately, this blog will likely pose more questions than answers.

Please feel free to leave thoughts, comments, and questions.