The Last Blog

I almost forgot to blog tonight. In fact if I hadn't reflexively checked my e-mail and found Katie's blog, I would've forgotten. I admit I'm sad school's just about over and now the dominant preoccupation has become figuring out what to do next. Worrying about homework already seems quaint.

Whatever the future holds, I'm going to miss this class even though, one of the several important things it's taught me is that I don’t really have a future as a blogger.

Defying high hopes, my Sunday night blog turned out to be predictably bad. Despite spending hours and trying really hard, I never got the hang of it. I actually seem to be getting worse as time goes by.

Almost always, I'd have been nurturing an idea during the week, only to toss it at the last minute after writing the first few lines. For some reason, when I nurture an idea over a whole week, it becomes complicated, idiosyncratic and unintelligible. For me it's better to begin from scratch about an issue that I identify as worthy of discussion, but from which I'm personally detached.

That isn't a promising method, I know. Bloggers are supposed to blog about thing's they're passionate about. But I've come to realize, during the last two semesters that most of my passionately held political and social beliefs, which seem very clear and straightforward to me initially, actually turn into personal, unsupportable vendettas and hunches, when examined critically.

Try as I might, I just can't think in terms of, and then craft persuasive arguments… even when I absolutely feel their correctness. Maybe I don’t have the patience. I don't know. But, without fail the more deeply I believe something, the more my writing becomes shrill and presumptuous.

I'm pretty convinced that it's hopeless, the other day I actually googled technical writer jobs…thinking, at least I might be able to write technical manuals… I could persuade people how to navigate their integrated home entertainment systems. That's a worthwhile service to humanity.

But as frustrating as realizing that I suck at blogging has been, it's been really good to be in this class. It's been very satisfying to experience discussion, disagreement and exploration of ideas beyond conventional conversational boundaries. I’ve thoroughly enjoyed interrupting folks in the middle of a thought, and being interrupted and proven wrong.

So, I'm using this last blog to say goodbye and good luck… and admit that I hope that I run into old classmates in the future and have the chance to interrupt them a few more times.

The Republicans should leave the FED alone

Lately the Republicans could more aptly be called The Opposite of the Democratic Party. They so often seem to define themselves by what they stand against, rather than what they stand for. Some examples:

When the Democrats wanted to extend unemployment benefits because of record breaking long-term unemployment, the Republicans decided that was a bad idea and came up with the notion that extending unemployment benefits somehow causes unemployment.

When the Democrats pursued a policy to protect American depositors from hidden fees and sudden arbitrary rule changes by consumer banks, the Republicans posited that Democrats were forcing banks to raise fees, because now they could no longer make money by punishing careless customers.

When the Democrats attempted to cut taxes for the economic groups most affected by the recession, Republicans claimed that only by additionally cutting taxes for those more or less unaffected by the recession could tax cuts spur investment.

For every move the Democrats have made, Republicans have seen fit to make a diametrically opposed countermove, whether it squares with their stated goal of lowering the deficit or not.

This contrariness can mostly be put down to everyday sleazy politics, but among the latest stances by prominent congressional Republicans lies one of the strangest counterintuitive policy declarations yet.

Senator Bob Corker (R., Tennessee), and Representatives Paul Ryan (R., Wisconsin) and Michael Pence (R., Indiana) have decided that because unemployment remains at record highs and inflation at record lows it is time for the Congress to change the mandate of the Federal Reserve. They want Federal Reserve Chairman Ben Bernanke to concern himself only with combating inflation and let unemployment take care of itself.

This is apparently a reaction to the Fed purchasing (with printed rather than borrowed money) $600 billion in U.S. Treasury securities in a quest to add monetary stimulus to the anemic economy (since with a Republican House of Representatives, more fiscal stimulus seems out of the question).

The three claim to be worried about inflation that might emerge later on. They obliquely site stagflation in the 1970s.

While the 70s are not remembered as the most prosperous time, America and the world in which it operates are in a very different place than they were in the disco decade.

In the 70s as Detroit pumped out unreliable, gas guzzling cars, an OPEC oil embargo raised the price of everything transported, heated, powered and made from oil. Wages remained stuck as prices rose.

But currently, the price of oil has risen and fallen and risen again without a demonstrable effect on inflation. The government has spent $700 billion in fiscal stimulus and unemployment has remained stubbornly high. Since the Fed began adding some of its newly printed $600 billion, the dollar has actually risen in value against other major currencies and inflation has remained at record lows, as have interest rates. As of yet there are no predictions of high inflation by major economists. Actually many economists fear deflation, or falling prices. This is because the usual reason for rising prices, is rising wages and unless you’re a CEO or an investment banker your paycheck has probably not risen for several years. That is if you're lucky enough to have a paycheck.

Which brings us back to the Republican suggestion that it's time to stop worrying about employment and start worrying about inflation, if the Republicans in question are sure of their convictions, they must be very deep economic thinkers to be able to see evidence for inflation that is somehow invisible to other economists.

One wonders what experience in macroeconomic policy the three legislators bring to bear in making such a weighty proposal for fundamental change at the largest and most important central banking institution in the world.

Well…

Senator Bob Corker was a real estate developer in Chattanooga Tennessee, with a degree in industrial management.

Representative Mike Pence was an attorney and talk show host prior to being elected.

Of the three only Paul Ryan has a college-level degree in economics and political science, but his only professional experience after college, besides interning for conservative politicians was three years working in one of the Koch Brother’s libertarian “think tanks.” No investors or businessmen seeking to forecast economic trends has ever sought his advice.

So I think it's appropriate for the Federal Reserve chairman and the American people to ignore their advice.

The Point of Pointlessness or Why I guess I’m guessing

I think I accurately imagine that I’m not being factual in this blog. Not that I think I’m any less factual than anyone else, just that I have no way of relating what I know to be facts. Actually, what I know to be facts are an indescribable, unstructured, confusing mass of impressions…beyond the scope of telling.

Telling, or writing (in this example), has, since its recorded beginning, been linear. One word follows the previous in order to create a meaning.

But my observations are not really linear. How could they be? A building is not linear. Cyberspace is not linear.

This linearity gives writing a slightly dishonest certainty. In writing, one thought must necessarily follow the other, in order to create sense. In the world one moment follows the next, but many hundreds of causes may or may not lie behind each occurrence, each circumstance.

Actually, a person has to choose to believe what they think they observe.

And actually, with the same mechanism one can choose to believe any number of things…like another person's money should belong to oneself, or that another person really deserves to be punched in the face or executed, people act on beliefs like this every day.

The truth is that any observable happenstance is likely to be connected with every other observable happenstance, caused by all the remaining observable happenstances…any interpretation of special important connections, necessarily depends on a personal opinion.

Not to mention the fact that the syntax of each sentence also imposes an unrealistic structure on spoken and written statements: a subject must take an action which sometimes affects an object, but causes and effects in the world are much more uncertain. When an abortion occurs, did the mother kill the fetus? Did the doctor kill the fetus? Did the disapproving parents kill the fetus? Did the person who impregnated the mother and refuse support kill the fetus? Or did the fetus just die? Or was he or she never alive, and therefore never killed? Choice of subject, and object are biased, personal, political decisions.

So ultimately, in order to write this blog, I admit I simply dreamed up, a set of connections, among phenomenon that I guess I observed. And so, right now, probably, is everyone else, who is bothering to make a sentence.

The point of this nearly pointless blog is that I don't have an opinion today, but that's okay and I guess I wish other people would occasionally consider not having an opinion either, based on the probability that their opinions are, in the end, just guesses anyway.

What If the flight to Security has a Crash Landing?

Could absurd prices, unreasonably low returns and hints of inflation finally burst the bond bubble?

Investors apparently seem to think that America is turning into Japan with long periods of no inflation or even deflation, but what if it isn't?

What if Fed policies designed to stimulate investment and fight deflation succeed enough to create just a small amount of inflation, what happens to bond investors paying through the teeth for inflation adjusted returns of around 1%?

Investors may not trust stocks after the flash crash, but the bigger worry should be bonds. A plunging bond market would erase billions and billions of net worth for Americans overnight.

James Montier, a blogger who works in asset allocation for asset manager GMO, is pointing out that the current state of the bond market resembles other bubbly periods with lemming-like investor behavior.

Last week Reuters reported that he warned a group of financial advisors at a conference in Copenhagen that bonds were no longer a safe investment.

“Everyone loves government bonds at the moment because they have just delivered some incredible 10 year returns, but flows into bond funds are now higher than equity fund flows at the height of the TMT bubble,” he said.

A chart from his blog illustrates his point.

The latest reports from Morningstar confirm this trend continues:

" Taxable-bond funds had solid inflows overall of $20.6 billion, but short-term bond funds have been supplanted in the rankings by world-bond and multisector bond funds, which absorbed $3.7 billion and $3.1 billion, respectively, in October."

According to this article by a director at the research department of Charles Schwab, intermediate bond funds tend to lose 4.5% for every percentage point rise in the fed funds rate. So if rates return to 5% (where they were just three and a half years ago), bond funds would lose about 23% of their value.

While high inflation is admittedly nowhere in sight right now, things could change quickly, after all the US is no stranger to low employment and high inflation caused by say...a spike in commodity prices.

Don't say you weren't warned.

Backlash to QE2 threatens Free Flow of Global Capital

Former Wharton Professor John M. Mason sees ominous signs at the recent Meeting of the G20, that restrictions on the freedom of capital could arise as developing nations react to the Fed's $600 billion quantitative easing. Countries fear QE2 will flood the world with American Money in search of higher returns and create bubbles in local economies. here's what he writes on Seeking Alpha:

"The foundation for the economic health of the world for the last fifty years has been the relatively free flow of capital begun in the 1960s. That consensus is being threatened now.

The extent of the problem is captured in the New York Times article by Landon Thomas, “Countries See Hazards in Free Flow of Capital.”

In China and Taiwan, regulators are imposing fresh restrictions on stock market investments by foreigners. In Brazil, officials have twice raised taxes on foreign investors. Even South Korea…pressure is building on the government to take similar steps.

As the leaders of the 20 major economic powers gather in Seoul, an increasing number of them have either imposed curbs or are in the process of doing so to slow the torrent of hot money into their markets…

Once a core policy commandment of the so-called Washing consensus and held dear by the United States Treasury, the International Monetary Fund, and global investment banks, the belief that unfettered capital flows are a boon for everyone—including the country on the receiving end—has been dealt a major blow."

read the whole article here

What Campaign Contributions Tell Us About the GOP’s Legislative Priorities

Beyond the obvious signature Republican issue of indefinitely perpetuating deficit-causing tax cuts for top tax-bracket Americans, John Boehner is laying out his priorities for his term as Speaker of the House and three issues are emerging as apparent centerpieces of his platform.

Lately he's spoken a lot about repealing health-care reform. Though it's unlikely that he will be able to accomplish this, recently he made a point of calling “ObamaCare” a “monstrosity.” Also he's made it very clear that he wants to undermine regulation of the financial industry, as passed by the current Congress and last but not least he's proclaimed that cap and trade, will die on the vine if he has anything to say about it.

His website explains his priorities nicely:

"He has been an ardent opponent of jobs killing "cap and trade" national energy tax, and is fighting to repeat repeal ObamaCare and replace it with reforms that will lower costs for families and small businesses, and protect jobs.

Earlier this year, Boehner--who opposed the trillion-dollar "stimulus" that didn't work--crafted an alternative "no-cost" plan to help create new jobs.

As John sees it, one of the biggest threats to the economy right now is uncertainty-uncertainty over taxes, over regulations, over the future. John's plans will help provide job creators with the certainty they need to invest, grow, and hire new workers.”

Boehner has also suggested that his good fortune in the midterm elections happened because the voters had issued "a repudiation of politicians who refuse to listen to the American people.”

This presumably means that Boehner regards himself as a politician who listens to the American people.

I thought would be interesting to see exactly which American people were supporting John Boehner's candidacy financially.

Of course, it turns out that, though Congressman Boehner prides himself on listening to the American people, the vast majority of his $3.7 million campaign war chest comes not from individuals but from various industry sponsored political action committees. While acknowledging that those industry-sponsored political action committees are probably staffed by American people, it seems important to note which PACS have an interest in his legislative initiatives.

It seems PACs that might be interested in health care legislation such as insurance, pharmaceuticals/health products, health professional organizations, hospitals/nursing homes, health services/HMOs seem to represent the largest portion of his contributors, having collectively given Representative Boehner $1,248,440 this year... 34% of his total war chest.

The next "most interested" group of political action committees seem to come from industries affected by financial reform, these include: securities and investment, commercial banking, finance and accounting. Collectively they contributed $706,966 or 19% of the total.

Finally the third most supportive group of political action committees seems to represent industries that would be affected by environmental and energy legislation. These included electrical utilities and oil and gas companies who collectively contributed 9% of the total or $356,850 to the House majority leader's campaign this year.

I know this blog is not going to surprise anyone, but somehow, it seems worthwhile to explicitly confirm what one suspects.

Election Nite 2010: Catch the action with Breitbart on ABC

ABC News is reaching out to Andrew Breitbart.

For anyone unfamiliar with who that is, he’s the right-wing blogger that got Shirley Sherrod fired with misleading, edited video. He made her appear to be a racist, so she lost her job.

Once upon a time he was a researcher for Arianna Huffington. For sometime now, however, he’s been less a journalist than a sort of impresario. He promotes and manages staged acts of journalistic theater that are gauged to generate distrust and nihilism about the media and politics.

According a statement by Andrew Morse, an ABC executive producer, “He (Breitbart) has been invited as one of several guests, from a variety of political persuasions to engage with a live studio audience that will be closely following the election results.”

In the same statement, which Mr. Morse released in order to placate his own outraged staff, he pointed out that Breitbart “is not being paid by ABC news. He has not been asked to analyze the results of the election.”

I’m sorry Mr. Morse, but that is just, not, good enough.

Decisions like this are apt to make observers wonder if ABC News has been taken-over, in secret, by skeptical philosophers for whom the possibility of truth is ultimately a false proposition.

I say this, because Andrew Breitbart is an unapologetic, serial fabricator. By his own admission, he holds conventional journalism and journalistic standards in utter contempt.

An example: On September 21^st of 2009, out of perverse curiosity, I read one of his habitual rants against the credibility of “mainstream media.” I was amazed. In the blog, he bragged about a sort of collaboration with Glenn Beck. Together they used the Acorn under-cover, fake-hooker video scandal to undermine the credibility of major news outlets like ABC that refused, at first, to report the deceptively edited video “sting” as hard news.

“Thus was born the multimedia, multi-platform strategy designed to force the reluctant hands of ABC, CBS, NBC, The New York Times and the Washington Post,” he crowed.

In the blog, Breitbart admitted that he had coached, the “activist” who made the video, put it on YouTube, told Beck and Fox about the “viral” clip, and come up with the plan to have Fox start reporting “a mainstream media cover-up” within 24 hours of the video appearing on the web. Then he bragged about his strategic sagacity on his blog.

Given this open antipathy towards the “mainstream media,” one has to wonder why he’s been given an opportunity to gain a wider audience by a news organization that has been the target of his manipulation and ridicule?

Is ABC News foolhardy, sleazy or clueless? Is the editorial staff unable to recognize the difference between passionate conservative advocacy and the calculated, strategic deception of Andrew Breitbart?

The unfortunate probability is that they have come to a decision that Breitbart’s likely contribution to conflict, drama and ratings is all that matters. There are just too many experienced editors in that newsroom for Breitbart’s inclusion to have been an oversight.

So now...If that is the way ABC intends to roll, I've got a pitch for Andrew Morse, Andrew Breitbart and any ABC executives that might be reading.

Why not double-down on spicy and innovative, political content?

My idea is for ABC to import a group of unemployed pot smoking teens to camp-out in a camera-ready Washington squat... The teens would have sex, fight, make-up and go on road trips to political rallies to rumble with Tea Partiers. I would call it “Real World: Liberal Activists.”

Think about it Andrew and Andrew, it’s genius… Political coverage might finally make money, and a new, lucrative, reality TV genre would come into being! It could even freshen up ABC’s stale weekday line-up!

Don't worry if a few wholly-invented, negative stereotypes get smuggled into the national discourse...that's actually the best part, because it would probably help ABC sell space for tons of secretly funded political ads!

It's time to get paid ABC, after all, it's only entertainment.