spinline.net: The Blog

From:

• The American Conservative
• The Ludwig von Mises Institute

Struggling neocon broadsheet The New York Sun is closing up shop after tomorrow.

I guess it’s too bad in a way. Their arts, sports, and local coverage was supposed to be very good. And it’s sad when any newspaper goes under, especially one that stood against the dumbing-down trend in news coverage.

But then again, who needs it? AmConMag’s Daniel McCarthy:

The Sun was an attempt to re-establish a neocon perch in New York City’s broadsheet press. But the project was superfluous — who needs a “right-wing” social-democratic paper like the Sun, when the New York Times is ready to present David Brooks and Bill Kristol as the voices of acceptable conservatism?

I’m sure Eli Lake will find a job beating the war drums somewhere else.

Here’s a good timewaster–the complete catalog of ACME products.

Along with Detroit’s Big Three, no corporation is as closely woven into the American consciousness.  So where are the loan guarantees?

OK, so Congress is about to pass the Paulson plan. If you believe the folks at mises.org, this $700 billion culmination of a string of massive government interventions will only increase the chances of “the next great depression.”

On the other hand, the House just passed a bill on music royalty rates that would help keep Internet radio outfits like Pandora alive. Nice work.

But you still suck, Congress!

It’s all McCotter, all the time here at spinline.net: The Blog. Unfortunately, the audio seems to cut out at around the 3:30 mark. It must be the Elite Conspiracy, extending its malign tentacles to YouTube to silence dissent!

Daniel Larison with some sober thoughts on the financial crisis and the bailout, on which our wise and esteemed party leaders and president are purportedly nearing a deal. Silver lining: if a bailout agreement is reached before John McCain even arrives on the scene, then his ludicrous and embarassing stunt will look even stupider. (Update: whoops, I guess he got there in time to mug for the cameras, dang.)

Larison:

Something that I have noticed over the last decade or so is the insistence, usually but not always by Boomers, that such-and-such a crisis or threat is the greatest we have ever faced.  Put it down to generational self-absorption or self-importance, or put it down to wanting to outdo the experience of their parents, but at several points in the last decade there have been hysterical reactions on both sides of the political spectrum to events that some large part of the population deems the greatest, most important or worst thing to have ever happened.  The threat of jihadism, we have been regularly told, is greater than any threat we have faced before, which is objectively absurd.  Some of the more excitable antiwar activists have repeatedly said that the war in Iraq is the greatest blunder in U.S. history (not so–entry into WWI was), as if to invest the conflict and opposition to it with a kind of world-historical importance that it will remarkably probably not have in retrospect.  As with opposing jihadism without hysterics, it is possible to oppose the war and recognize it as deeply wrong without these theatrics.   Now we are in the midst of a financial crisis, and it is very serious, but it is as if one cannot recognize something to be serious and very worrisome without engaging in neocon-like hyperbole.  If there is a danger of economic contraction, it can’t just be like any old recession.  No, it must be a second Depression, and if you don’t accept this fearmongering you are not to be taken seriously.  When people are trying to scare you like this, it is because they are covering over some weakness in their argument.  They make it seem as if they are trying to get you to focus on real dangers, but they are more often distracting you from their abuses or errors.

Daniel Larison with some sober thoughts on the financial crisis and the bailout, on which our wise and esteemed party leaders and president are purportedly nearing a deal. Silver lining: if a bailout agreement is reached before John McCain even arrives on the scene, then his ludicrous and embarassing stunt will look even stupider. (Update: whoops, I guess he got there in time to mug for the cameras, dang.)

Larison:

Something that I have noticed over the last decade or so is the insistence, usually but not always by Boomers, that such-and-such a crisis or threat is the greatest we have ever faced.  Put it down to generational self-absorption or self-importance, or put it down to wanting to outdo the experience of their parents, but at several points in the last decade there have been hysterical reactions on both sides of the political spectrum to events that some large part of the population deems the greatest, most important or worst thing to have ever happened.  The threat of jihadism, we have been regularly told, is greater than any threat we have faced before, which is objectively absurd.  Some of the more excitable antiwar activists have repeatedly said that the war in Iraq is the greatest blunder in U.S. history (not so–entry into WWI was), as if to invest the conflict and opposition to it with a kind of world-historical importance that it will remarkably probably not have in retrospect.  As with opposing jihadism without hysterics, it is possible to oppose the war and recognize it as deeply wrong without these theatrics.   Now we are in the midst of a financial crisis, and it is very serious, but it is as if one cannot recognize something to be serious and very worrisome without engaging in neocon-like hyperbole.  If there is a danger of economic contraction, it can’t just be like any old recession.  No, it must be a second Depression, and if you don’t accept this fearmongering you are not to be taken seriously.  When people are trying to scare you like this, it is because they are covering over some weakness in their argument.  They make it seem as if they are trying to get you to focus on real dangers, but they are more often distracting you from their abuses or errors.

Required reading for today is this excellent post by Megan McArdle on the financial crisis. As they say, read the whole thing.

I find it extraordinarily easy to sympathize with the bankers who genuinely believed that they had gotten better at pricing credit risk.  I also find it extraordinarily easy to sympathize with people who dropped out of college to start a band.  In neither case, however, do I wish to reward this behavior with large stacks of unearned money.

The Dodd plan has better oversight, but no better outline for how this money is to be spent, which is the core problem with the Paulson plan.  This morning I listened to Pete Domenici, who is on both the budget and appropriations committees, explain to his colleagues, in tones of wonder, that Ben Bernanke had done his academic work on the Great Depression.  These are the people who were in charge of approving Bernanke’s appointment to the Federal Reserve chair, mind you, a task to which they seemingly gave less attention than they do to applying their television makeup.

At that, he’s a massive improvement over the Democrats; as I write this I am enjoying the site of Byron Dorgan simultaneously illustrating that he knows nothing about financial history, and also lecturing us on how we should regulate the industry.  At least the other things Pete Domenici said were factually accurate and logically coherent, even if that logic cohered around a not-very-well-thought-out endorsement of the Paulson plan.

This does not exactly fill me with soaring confidence in Congress’s ability to allocate the money.  I’d rather trust Paulson.

Half of the Republicans seem to have turned over their consciences to Hank Paulson in the name of party solidarity.  Meanwhile, many Democrats seem to be more interested in discussing Wall Street bonuses and struggling homeowners than what to, y’know, do about the banking system.

Rep. Thad McCotter has put forward a plan to facilitate the recapitalization of the banking system without spending significant public dollars. (My earlier comments regarding a McCotter talk I attended a couple of days ago can be found here.)

Good luck to him. I guess we’ll probably be stuck with some version of the Paulson plan, but on the other hand, things are beginning to feel a little bit similar to the situation we had with comprehensive immigration reform: another bipartisan conspiracy against the interests of the middle class, planned behind closed doors, and nearly forced down our throats, but eventually beaten back due to a surge of populist resistance. Here’s hoping!

UPDATE, 9/25: McCotter appeared on Fox today, the video is here, and here’s a partial transcript:

I think what we need to do is shift the debate from the public bailout as the first resort, and try to find ways to incentivize a private recapitalization with a last-resort appropriate government backstop. … There are alternatives out there, that are not being allowed to be explored. … We need to be responsible about this. … The market right now is trying to correct the housing bubble. What we’re trying to is make sure that that does not exacerbate a credit crunch but instead becomes a way in which the deflationary period, which is requisite, does not impact main street, freeze up credit, and so what you have to do in our mind is change appropriate laws to incentivize private recapitalization by making the toxic asset less toxic, and leaving the government as a last resort backstop should that process not first occur…

End of update.

McCotter’s press release reads:

I was not elected to abet American socialism.

Thus, I am opposing the Bush administration’s taxpayer funded, trillion dollar Wall Street bailout; and, alternatively, proposing a pro-taxpayer, free market, private recapitalization plan for the banking system; ending financial chaos; and preventing the advent of Wall Street Socialism.

Drawn from the free-market ideas of the public and our members, this proposal is premised upon the following principle: Our prosperity is from the private sector not the public sector.

True, some will still assert the administration’s support of Wall Street’s leveraged bailout at taxpayers’ expense is the only answer to this crisis of confidence. They are dead wrong.

First, we must never punish the innocent to profit the guilty.

Secondly, a taxpayer bailout is never the first or only resort. If it is claimed to be so, the object of the bailout is already too far gone to be saved.

Thirdly, this trillion dollar taxpayer bailout will not prevent a Great Depression. It will promote a Greater Depression. [ME: whoa, is he reading mises.org or something?]

While there exist a host of other reasons, for the sake of brevity let me reiterate: The Paulson Plan is premised upon a public bailout. A better plan is premised upon private recapitalization. Thus, I oppose the Paulson Plan’s raid on the taxpayers; and I will continue fighting to ensure the Wall Street crowd who made this mess pay to clean it up.

And here’s the plan, below the jump:

(more…)

No joke. A new study in the Journal of the American Medical Association finds that exposure to the chemical bisphenol A (BPA) is linked to a 40% increased incidence of heart disease, heart attacks, and diabetes among 18-74 year olds. Unfortunately, this substance is ubiquitous in food packaging, and BPA can be detected in the blood of over 90% of Americans. It’s present in microwaveable food containers, some plastic packaging, and the lining of food and soda cans. Note that these findings come from an epidemiological study, and a controlled trial would be preferable for drawing firm conclusions. Nevertheless this seems like a big deal. Get the whole story at the Heart Scan Blog, here.

This study, piled on top of the worrisome literature that precede it, is enough for me: No more tin cans (which are lined with BPA), no more hard plastics labeled with recycling code #7 or #3, no more polycarbonate water bottles (the hard ones, often brightly colored). Microwaveable-safe may also mean human-unsafe, as highlighted by this damning assurance from the Tupperware people that BPA is not a health hazard.

An associated JAMA editorial can be found here. A WaPo article on reducing exposure is here. This news really pisses me off because canned sodas are provided for free at my job, a perk that I’ve been taking advantage of to the tune of four or more cans a day. Mmmmmmmm, Diet coke…

Buchanan’s latest:

The great myth is that these 1990s bailouts were models of U.S. financial statesmanship and great successes. The reality is the U.S. workers took it in the neck.

For the countries bailed out, like Mexico, Thailand, Indonesia and South Korea, were forced to devalue. This radically reduced the wages of their workers relative to American workers, creating incentives for U.S. manufacturers to shut plants here and move them abroad. The devaluations also slashed the price of foreign goods relative to U.S. goods. Imports flooded in.

Who ultimately paid for the Mexican bailout? Florida tomato growers wiped out by Mexican producers, the price of whose tomatoes was chopped two-thirds by the devaluation. U.S. autoworkers who saw Ford and Delphi plants shuttered as new Ford and Delphi plants opened in Mexico. U.S. textile workers whose mills closed and jobs vanished.

Middle-class American families have paid and paid—in lost jobs, lower wages, a falling median income—to save the big banks from the consequences of their follies.

… About one thing we may be sure. The U.S. deficit and national debt are going to soar. The credit rating of the United States, as this nation of non-savers has to borrow abroad to save its banks, and their banks, is going to fall. We are going to be a poorer nation and people.

The Gmail logo is a travesty. Was it designed by a committee of seven-year-olds?

I attended an ISI lecture today featuring Rep. Thad McCotter of Michigan. The talk was mostly Q&A and the issue on most peoples’ minds, including McCotter’s, was the financial crisis.

(Disclaimer: I didn’t take notes, so I’m working from memory and all this could be a bunch of nonsense. In fact, I might have dreamt everything, I’m not sure, OK?)

There was some interesting inside baseball stuff, like how the Bush administration is triangulating by negotiating directly with a Democratic leadership that’s not at all hostile to the essence of the Paulson bailout plan, while leaving the Republican minority, including those dissenters from the Paulson plan like McCotter, on the outside looking in. Therefore, for the main players–the Bushies and the Democratic leadership–the Paulson plan itself is not really a matter of negotiation; the real question is how many concessions such as provisions on executive pay the administration throws in to get the Dems to come on board.

This makes the Paulson bailout plan sound like a virtual certainty but McCotter refused to call it inevitable. He disagrees with the Paulson plan and prefers the approach of University of Chicago finance professor Luigi Zingales, available here (pdf), a plan which McCotter discussed in some detail. It’s worth reading the whole thing—and it’s pretty short—but here’s a taste:

… Since we do not have time for a Chapter 11 and we do not want to bail out all the creditors, the lesser evil is to do what judges do in contentious and overextended bankruptcy processes: to cram down a restructuring plan on creditors, where part of the debt is forgiven in exchange for some equity or some warrants. …

… The decisions that will be made this weekend matter not just to the prospects of the U.S. economy in the year to come; they will shape the type of capitalism we will live in for the next fifty years. Do we want to live in a system where profits are private, but losses are socialized? Where taxpayer money is used to prop up failed firms? Or do we want to live in a system where people are held responsible for their decisions, where imprudent behavior is penalized and prudent behavior rewarded? …

More interesting to me than the discussion of the financial crisis were McCotter’s comments about broader economic issues. He seems to dissent from the free-trade orthodoxy and spoke of the imprudence of letting our manufaturing base erode away. He criticized the mentality that globalization is an unstoppable, inevitable force and stressed that human beings with the capacity to choose are still in control of the process. He expressed concern about wage stagnation and spoke of the need to restore a balance of trade. He questioned the sustainability of an economy based on ever-expanding credit and ever-increasing consumption. He also managed to get in a couple of references to Russell Kirk and Wilhelm Röpke, both of whom have obviously influenced his thinking—in fact, the theme of the talk was to be on “an agenda for a human global economy” (following on Röpke) but it seems that the original plan got a bit derailed by the financial crisis.

McCotter is an interesting dissenter from the neoliberal-neoconservative consensus on economics and trade, and is worth watching. It’s heartening that someone who displays some originality of thought can have a leadership role in the Republican party—he chairs something called the “Republican House Policy Committee,” whose function is a mystery to me but it sounds kind of important. (Unfortunately, McCotter is distressingly neocon-ish on foreign policy, but you can’t have everything.)

What endeared me most to McCotter was the end of his talk, just before he left, when he notified us that his schedule was forcing him to return to work and, he mumbled laconically, “do terrible things.”‘

UPDATE: McCotter has unveiled his own proposal, the details are here.

Who would do this!? (It’s supposed to say “passes.”) So immature.

(Tee-hee!)

My thanks to Peter Suderman for warning me off seeing the apparently horrifying movie Towelhead with his excellent review in Culture11. Well, it’s actually a bad review, but well-written, dig?

On an unrelated note I would like to warn the entire world off the Bloggingheads diavlog with Jim Pinkerton and Jane Hamsher. Do not watch it under any circumstances! I always enjoy watching Pinkerton but this Jane Hamsher person could not be more rude and unpleasant. This is a non-partisan complaint. The Corn-Pinkerton matchups always sparkle!