Hillary Clinton is Destroying America

Reality might not be so melodramatic, but the truth is that she has no chance of winning and by staying in the race she is fragmenting the democratic party (deliberately), alienating independents, and allowing John McCain to look increasingly responsible as the Democrats bicker their way to the party’s nomination.

Unless Clinton is able to at least win the primary popular vote — which also would take nothing less than an electoral miracle — and use that achievement to pressure superdelegates, she has only one scenario for victory. An African-American opponent and his backers would be told that, even though he won the contest with voters, the prize is going to someone else…

Journalists have become partners with the Clinton campaign in pretending that the contest is closer than it really is. Most coverage breathlessly portrays the race as a down-to-the-wire sprint between two well-matched candidates, one only slightly better situated than the other to win in August at the national convention in Denver.

The fact that she is even staying in the race makes me like her less-and-less. She is running a scorched-earth, win-at-any-cost campaign which not only reflects poorly on American democracy in general (can we really afford a worse international reputation?), but also is quickly grinding away the chance of a Democratic victory which, 8 months ago, seemed incredibly inevitable.

I’ll give this to Hillary: had she won the primary, he would have made a tolerable president (she would have looked positively outstanding compared to the current administration), but she isn’t going to win the primary without some kind of political legerdemain which will disgust huge swaths of the Democratic party. I planned on voting against the Republicans no matter what this election, but if Hillary Clinton steals this campaign from Barack Obama, I’ll be in a quite a bind.

Obama Understands Credit

From Obama’s speech today, he makes a few good points.

“Our capital markets have helped us build the strongest economy in the world. They are a source of competitive advantage for our country. But they cannot succeed without the public’s trust. The details of regulatory reform should be developed through sound analysis and public debate. But there are several core principles for reform that I will pursue as President.

First, if you can borrow from the government, you should be subject to government oversight and supervision. Secretary Paulson admitted this in his remarks yesterday. The Federal Reserve should have basic supervisory authority over any institution to which it may make credit available as a lender of last resort. When the Fed steps in, it is providing lenders an insurance policy underwritten by the American taxpayer. In return, taxpayers have every right to expect that these institutions are not taking excessive risks. The nature of regulation should depend on the degree and extent of the Fed’s exposure. But at the very least, these new regulations should include liquidity and capital requirements.

Second, there needs to be general reform of the requirements to which all regulated financial institutions are subjected. Capital requirements should be strengthened, particularly for complex financial instruments like some of the mortgage securities that led to our current crisis. We must develop and rigorously manage liquidity risk. We must investigate rating agencies and potential conflicts of interest with the people they are rating. And transparency requirements must demand full disclosure by financial institutions to shareholders and counterparties.”

Overall he makes some good points and exhibits a pretty good understanding of capital markets and the general causes of the credit crisis, but he also seems to be regulation-happy, planning loads of new commissions to help oversee the capital markets. Like most of the Democratic party, Obama is trying to toe the line between the fact that economic growth is spurred by innovation (the opposite of regulation), and that sometimes these innovations behave in ways that aren’t expected and some people end up getting hurt…there’s no such thing as a free lunch, or a free law.

Scandinavians do it better

Again, Via Economist’s View.

In this Op-Ed Monica Prasad discusses the merits of a carbon tax.

The very thought of new tax revenue has a way of changing the priorities of the most hard-headed politicians… But if we want lower emissions, the goal of a carbon tax is to prompt producers to change their behavior, not to allow them to continue polluting while handing over cash to the government.

How do you get them to change? First, you prevent policy makers from turning the tax into a cash cow. Carbon tax discussions always seem to devolve into gleeful suggestions for ways to spend the revenue. …

Denmark avoids the temptation to maximize the tax revenue by giving the proceeds back to industry, earmarking much of it to subsidize environmental innovation. Danish firms are pushed away from carbon and pulled into environmental innovation, and the country’s economy isn’t put at a competitive disadvantage.

This is precisely what I would advise for the US. Tax carbon. All of it. The price of everything should reflect the externalities caused by it’s production. Take the tax money and invest it in R&D for efficient energy use.

It just feels so easy!

Those Mexicans Exploiting Our Welfare System!

Or not… Via Mark Thoma

Kevin Drum expresses what I try to tell people when they complain about illegal immigrants exploiting the benefits of living in this nation while we pay the taxes….Funny story, they pay taxes too.

 [L]ast year the trustees estimated that Social Security had an overall 75-year deficit of 1.95% of taxable payroll. …This year it’s 1.70%. That’s a pretty substantial improvement. What caused it? [...]

• Illegal immigrants tend to skew young. This benefits the system.
• Young people have more children than older people. This benefits the system.
• Some illegal immigrants pay taxes for a few years and then leave. This benefits the system.

Bottom line: “This year’s report results in [...] a substantial increase in the number of working-age individuals contributing payroll taxes, but a relatively smaller increase in the number of retirement-age individuals receiving benefits in the latter half of the long-range period.” Give or take a bit, it turns out that this shores up the Social Security system to the tune of around $13 billion per year. Thanks, illegal immigrants!

Only the Good Die Young

Foreign Policy has an excellent summary of John McCain’s views on military expansionism from his first term as a congressman to his opinions on the current situation in Iraq.

“An examination of McCain’s stances on intervention, however, reveals not mixed signals but a steady transformation of worldview. The young Vietnam vet who once vocally opposed military overreach has become the elder statesman who passionately advocates the need for military action.”

This quote seems disgustingly prescient and unfortunately true:

“If you get involved in a major ground war in the Saudi desert, I think support will erode significantly. Nor should it be supported. We cannot even contemplate, in my view, trading American blood for Iraqi blood.” Aug. 19, 1990

I can’t imagine what made him change his mind…the situation in 1990 wasn’t considerably different than the situation in 2003. Iraq was still an Arab nation defined by its dictatorship and ethnic tensions. The United States wasn’t wildly popular nor was there a good reason for war.

Here’s another one, this time regarding the conflict in Kosovo:

“If we lose this war, the entire country and the world will suffer the consequences. Yes, the President would leave office with yet another mark against him. But he will not suffer that indignity alone. We will all be less secure. We will all be dishonored.” May 9, 1999

Fresh from his own military service in Vietnam, the horrors of warfare must have still been excruciatingly present in his mind. Back then he made the right decision for the right reasons: sending troops into foreign countries is a lot more complex than just military strategy. Their culture is different, their views of democracy are different, and no one is going to react too kindly to an extended occupation by a foreign power who looks different, speaks a different language, and dominates all interaction with a tangible air of superiority.

Putting troops on the ground is inherently destabilizing, warfare necessarily breaks down the normal structures of society and the greatest care should be taken to prevent such catastrophic destabilization as we’ve seen in Iraq. America’s foreign policy has operated far too long believing that we can bring about a worldwide Ameritopia solely by the power of freedom and democracy, consistently failing to appreciate the complexities of culture which lie hidden deep beneath the conflicts which on the surface seem so black and white. Sure, Americans tend to value freedom very highly (though this, regrettably, is becoming less and less true), but that doesn’t mean that everyone values liberty to the same degree.

When the pain, and the horror, and the confusion of a foreign war were still fresh in his mind Senator McCain had a much more distinct appreciation for the complexities of ground fighting…it seems that old age and time have withered away his palpable grasp on violent death and he has put ideology ahead of realism.

Why?

“In great despair, for example, when all weight tends to dwindle way from things and the sense of things grows dark, the question looms. Perhaps it only strikes once, like the muffled tolling of a bell that resounds into Dasein and gradually fades away. The question is there in heartfelt joy, for then all things are transformed and surround us as if for the first time, as if it were easier to grasp that they were not, rather than that they are, and are as they are. The question is there in a spell of boredom, when we are equally distant from despair and joy, but when the stubborn ordinariness of beings lays open a wasteland in which it makes no difference to us whether beings are or are not – and then, in a distinctive form, the question resonates once again: Why are there beings at all instead of nothing?”

~Martin Heidegger

Vote for Obama

At the very least, he’s a decent human being.

Bill Richardson tells a nice story:

“I had just been asked a question — I don’t remember which one — and Obama was sitting right next to me. Then the moderator went across the room, I think to Chris Dodd, so I thought I was home free for a while. I wasn’t going to listen to the next question. I was about to say something to Obama when the moderator turned to me and said, ‘So, Gov. Richardson, what do you think of that?’ But I wasn’t paying any attention! I was about to say, ‘Could you repeat the question? I wasn’t listening.’ But I wasn’t about to say I wasn’t listening. I looked at Obama. I was just horrified. And Obama whispered, ‘Katrina. Katrina.’ The question was on Katrina! So I said, ‘On Katrina, my policy…’ Obama could have just thrown me under the bus. So I said, ‘Obama, that was good of you to do that.’”

Via The Economist

Understanding Credit

Via Economist’s View, here is a simple explanation of how credit works in our economy:

Alice, Bob, and Sue have ten marbles between them. Whenever one kid wants another kid to take over a chore, she promises a marble in exchange. Alice doesn’t like setting the table, so she promises Bob a marble if he will do it for her. Bob hates mowing the lawn, but Sue will do it for a marble. Sue doesn’t like broccoli, but if she says pretty please and promises a marble, Bob will eat it off her plate when Mom isn’t looking.

One day, the kids get together to brag about all the marbles they soon will have. It turns out that, between them, they are promised 40 marbles! Now that is pretty exciting. They’ve each promised to give away some marbles too, but they don’t think about that, they can keep their promises later, after they’ve had time to play with what’s coming. For now, each is eager to hold all the marbles they’ve been promised in their own hands, and to show off their collections to friends.

But then Alice, who is smart and foolish all at the same time, points out a curious fact. There are only 10 marbles! Sue says, “That cannot be. I have earned 20 marbles, and I have only promised to give away three! There must be 17 just for me.”

But there are still only 10 marbles.

The important thing to note is that the system works really well until everyone wants to collect. The collapse of the housing market meant that a lot of banks wanted to “call-in” on their credit. The funny thing about credit is that it is most expensive when everyone needs it most.

One Man: One Vote

But things are different in Texas

Seriously, watch this video.

Obama’s Speech on Race

Read along here. It starts getting really good at the end of page four:

“In fact, a similar anger exists within segments of the white community. Most working- and middle-class white Americans don’t feel that they have been particularly privileged by their race. Their experience is the immigrant experience – as far as they’re concerned, no one’s handed them anything, they’ve built it from scratch. They’ve worked hard all their lives, many times only to see their jobs shipped overseas or their pension dumped after a lifetime of labor. They are anxious about their futures, and feel their dreams slipping away; in an era of stagnant wages and global competition, opportunity comes to be seen as a zero sum game, in which your dreams come at my expense. So when they are told to bus their children to a school across town; when they hear that an African American is getting an advantage in landing a good job or a spot in a good college because of an injustice that they themselves never committed; when they’re told that their fears about crime in urban neighborhoods are somehow prejudiced, resentment builds over time.

Like the anger within the black community, these resentments aren’t always expressed in polite company. But they have helped shape the political landscape for at least a generation. Anger over welfare and affirmative action helped forge the Reagan Coalition. Politicians routinely exploited fears of crime for their own electoral ends. Talk show hosts and conservative commentators built entire careers unmasking bogus claims of racism while dismissing legitimate discussions of racial injustice and inequality as mere political correctness or reverse racism”

You can compare that to this dud, given by Mitt Romney on the issue which defined him as a candidate.