Today's [tattoos] are gargantuan, inevitably tacky, gauche and ugly. They bear little relationship to the skin that they're on. They don't represent an indelible experience or membership in some sort of group but an assertion that today's whim will be tomorrow's joy.
YRHT would like to point out that Cohen is a mook and that illustrated women are sexy.
Matt Yglesias does a little post primary housecleaning, and reminds us of something. He writes:
Back during the primaries, everyone kept formally admitting that it was wrong to engage in the form of inference "candidate X lost group A in a primary, and therefore he's likely to lose group A in a general election against candidate Y of the other party" but I often got the sense listening to and reading pundits that they didn't really believe that.
Hell, I wish "everyone formally admitted" that the (primaries= general election) inference was bogus. In fact, TalkLeft's Big Tent Democrat DIDN'T see the logical problem with the inference even at the very end of the primary season. He kept hammering out posts about why "demography is political destiny", and why everyone else were ostriches but he was Paul Revere... etc. [Btw, I think he actually means demographics, not "demography" but in either case he's wrong.] There's no such thing as "destiny" in politics, that's one of the few redeeming things about it. People say the winners were "destined" to win and the losers were "destined" to lose, but only after the results are in.
Saying "demographics is political destiny" is like saying "physics and geometry are billiards tournament destiny". It sounds impressive, but it's only mostly true. And it's "mostly true" in a superficial way that is often wrong when it matters most. "Surprises" occur in politics. Many of them are unpleasant. For example, was demographics "destiny" for Ray Nagin in 2002? What about 2006? Didn't strategy play a wee bit of a role in those contests.
Here, I'm just going to be lazy and cut and paste a draft I wrote on 1/10/08. For whatever reason, I never reworked and published it. Looking over it, it's still a bit rough, but I believe the general points apply.
as written on 1/10/08:
=== These days, successful presidential political campaigning is comparable to playing a marathon game of speed chess on a tilted game board with changing colors, trapdoors, and moving clown pieces. The "contest" is watched from the outside and judged in slow motion, and the stakes couldn't be higher. Despite billions of dollars, and millions of hours being poured into the contest, it's not entirely rigged. Surprises are possible.
But it is beyond absurd.
Campaigns are in the business of playing the absurd, theatrical, amoral game. Hunter S. Thompson's model of viewing such a "process" through a (drug-induced) surreal lens is one of the most profoundly revealing insights into modern American politics... ever. I'm serious. Nothing is more essentially accurate. The modern political game is surreal, always more than you think. And it has been for a long time.
the media has done its best to turn a once-promising race into an idiotic exchange of Nerf-insults, delivered at rah-rah campaign events utterly indistinguishable from scholastic pep rallies. "If there's policy in this race," one veteran campaign reporter tells me with a sad laugh, "I haven't noticed it."
And while it's tempting to blame the candidates, deep in my black journalist's heart I know it isn't all their fault.
We did this. The press. America tried to give us a real race, and we turned it into a bag of shit, just in the nick of time.
Taibbi recognizes that campaigning candidates are playing the absurd game, they're not creating it. Candidates are not blameless, but they are not the ones who will lead the way in de-absurdifying the process.
Are we still living in the "pretend place" where campaigns are viewed as contests of competing policy menus, from which discerning voters choose? Apparently, yes, weare.
Do you really think that's how most voters choose their candidates? By intellect? No. Most go on gut "feel", which is informed by (often trivial) narratives. They choose candidates intuitively. "Hope" and "Fear" still rule the day, and fear usually has the upper hand. Voters respond when candidates show an understanding of their circumstances and problems-- the demonstration of that understanding is the key; the specific policy proposal connected to that demonstration of understanding (in other words, the proposed "solution" to the problem) is almost beside the point. A detailed policy argument means nothing to most voters until it connects with them emotionally. Some voters say they like "specifics", but they don't. They actually like the fact that the candidate gave them specifics, rather than the specifics themselves. When a voter
A. I like candidate Hezekiah, he gave me specifics about my immigration question.
B. What were the implications of those 'specifics'?
A. I haven't the foggiest idea, but candidate Hezekiah obviously thinks I'm smart, and that made me feel good, so I nodded as he talked specifics until he rhetorically circled back to his campaign mantra "Fortress America for Prosperity".
Similarly, the media operates on stories and narratives that strike emotion-- that's what sells-- not policy distinctions and fact-checking.
Bill Clinton connected his wonkery to voters with empathy, that's how he won elections.
And Gore didn't lose because of a flawed policy platform. And Bush didn't win in 2004 because of his policies. Obama didn't win Iowa because of policy strength, nor did Edwards lose Iowa (after campaigning there for four years) because of policy weakness. Hillary didn't win New Hampshire because of policy.
But oyster, it shouldn't be like this. Policy should be more important than trivia fueled narratives pimped by biased media.
Yeah, no kidding.
I mean, I heartily agree. But if we want to fundamentally change the game, and make it less absurd, we shouldn't wait until an election year to do so. The exact wrong way to do it is blaming the candidates who are currently playing the game. They're hopelessly inside it right now. Expecting them to heroically alter the structure of the game right now is beyond naive. It would be like asking them to purposely lose. It almost assuredly won't work. Instead, such fundamental change will require years of effective activism working to change the primary process, the media coverage, the money involved, and persuading Americans to change their attitudes about how candidates should be judged. Doing all that will take a while. But don't think it will occur this cycle. This cycle was already "lost" many years ago, despite whatever Taibbi thinks suddenly happened to a "once promising race".
In the meantime, there is an absurd race for the Presidency. The stakes are rather high, too. ===
Adrastos has a fine review of the LA-02 race. It's profoundly disturbing that Dollar Bill Jefferson still has a decent chance to make the runoff and win, but I'm expecting and hoping that he'll lose. I'll discuss the race more at a later date, but for now I wanted to note this little factoid: State Rep. Cedric Richmond's LA-02 campaign office is located at 1631 Elysian Fields, which is also where Ike Spears' law firm is located (along with several other businesses). [Update: Christopher in the comments says Richmond's campaign office is on Franklin Ave. and that his campaign mailing address is at the UPS store at 1631 Elysian Fields. Richmond's FEC disclosure lists the address as "Suite 150", but oftentimes businesses and organizations do that to obscure the fact that they're using a box number, so Christopher is probably right but I'll endeavor to confirm this.]
Richmond is supposed to be an "up-and-comer" in New Orleans politics, but, despite all theendorsements he has collected, I think City Councilmember James Carter will be able to outflank him. (Who, if anyone, will outflank Carter is perhaps the more interesting question.) If things don't work out for Cedric, he could perhaps go to Germany and become a Barack Obama impersonator. Richmond doesn't look like Obama, but he does resemble the impersonator who Germans think looks like Obama. So maybe that would be enough.
--- Update:Dangerblond has a rundown on the candidates.
Here's how I might feel if I decided to skip out on FYYFF, and attend this Sound of Music "event", at the WWII museum.
I might feel exactly as I did in May 1991, as I was touring the gas chambers (with Medium Jim) at the Dachau concentration camp. When our tour group was literally in the gas chamber itself, listening to the guide explain the horrible history of the room, I had a very, VERY unfortunate series of gastro-intestinal expulsions-- silent but noxious. Jim was standing in front of me, and suddenly got a funny look on his face, and turned to me and said "You didn't."
Speaking of high camp and WWII, joejoejoe sent me a screenshot of McCain's campaign ads as they were featured on the Luftwaffle web site. What's "Luftwaffle"? Well, it's this site that weaves Lego men and waffles into a comedic alternate history of WWII. HI-freakin-larious. See for yourself (click to enlarge).
Doesn't the Luftwaffle site just kill you with comedy? Doesn't it? Do you get it? It should be Luftwaffe, but they spell it "Luftwaffle", and make a running joke out of it. It's incredibly fun to read, again and again. In fact, I haven't this much fun since Mary Jo's father greased the watermelon and threw it in the pool that one summer, and all the kids pretended it was a pig and tried to grab it. Then that bucktooth girl with pigtails accidentally brushed against my groin, and I spent the rest of the day thinking about it. ===
John "N. stands for Nonsense" Kennedy is going after Senator Landrieu for having N.Y.C. Mayor Michael Bloomberg do a fundraiser for her. The Politico notes that Sen. David Vitter's Reform Louisiana PAC has donated to Kennedy's campaign, and writes
... questioning Landrieu's association with Bloomberg raises an immediate question for Kennedy: If he's a conservative on social issues, will he accept the public assistance of Republican Senator David Vitter?
Asked if he would campaign with Vitter during a conference call yesterday, Kennedy didn't answer directly. "David hasn't offered, and so far I haven't asked," he said. "I don't have plans right now to campaign with anybody." Still, Kennedy said the junior senator had erred. "Senator Vitter made a very serious mistake, and I think he would be the first person to admit that. And David is still paying the price."
Kennedy saying that Senator Vitter wouldbe "the first person to admit [to his serious mistake]" is pretty funny.
First of all, it's amazing that we have to remind anyone in Louisiana that Vitter "admitted" to his "serious sin" only after it came out that he had called the DC Madam's escort service 5+ times while he was serving in Congress. Secondly, Vitter has never admitted to precisely anything other than a vague "sin" or "mistake". Third, Vitter denied very credible stories about him and former French Quarter prostitute Wendy Cortez at every point until he was caught. He denied them in 2002 to reporter Chris Tidmore (who Vitter later retaliated against). He denied them to the "Flaming Liberal" on a radio show in July 2002, and then did it again on a radio program in March 2004. Later that year, in November 2004, he met with a group of Christian pastors and denied the existence of any skeletons in his closet. Even after he admitted his "serious sin" in 2007, he said that the "New Orleans stories" were untrue. Perhaps one day those will be proven, and Vitter will apologize, and Kennedy can again say that Vitter would be the first to admit his mistake.
Just over an hour after finalizing plans to visit an oil rig tomorrow, the McCain campaign has cancelled the visit.
“The meeting with Governor Jindal has been postponed and we are cancelling the trip to the rig due to weather," said spokesman Michael Goldfarb.
They cancelled it because of the alleged oil spill in the Mississippi that occurred yesterday, not because of the weather. (Hell, they planned the trip while a hurricane was in the Gulf...[Update: to clarify, I'm saying they cancelled the event because the spill would have messed up their pro-drilling message. It was Rush Limbaugh's idea. Earlier Rush had said: "[W]ere I McCain, you know where I would be this week? I would be out on an oil rig. I would take the [media] with me, and I would point out how environmentally safe they are, and I would show how damned impressive they are, as well as the workers." (Yes, I understand that there's a difference between drilling oil and transporting it, but that doesn't mean that news stories with McCain saying "drilling is safe" juxtaposed with video of an oil-filled river was politically tolerable.)]
According to the liberal MSM, four hundred thousand (+) gallons of oil were spilled into the Mississippi River. The local paper described the alleged spill as "massive" and "catastrophic", but, using our trusty GOP/Big Oil talking points, and doing a little "McCain Math", we can properly classify this alleged spill as "not significant", or "nothing major", or... hell let's just tell everyone that there was no collision between ships, and "not one drop" of oil fouled our river. If we all say it together in coordinated fashion, then it might become true!
=== Over a month ago I cited the possibility of an oil spill as a reason why McCain's "Hail Mary in June" was so risky. So, if someone sees a picture of a dead, oil-choked pelican in the River, please take a digital picture of it and send me a copy to use for political purposes. Thanks.
Btw, Best Of New Orleans Blog is sort of cumbersome to write. But abbreviating it in a cheeky but affectionate manner-- calling the writers there BONOBos, for example-- might be viewed as disrespectful.
Right after I penned the post below, I see that Jindal has adopted (one of) McCain's latest talking points:
"One of the reasons I'm supporting (McCain) -- he has made it clear he would rather lose an election than lose a war. He's made it very clear -- let's listen to the commanders on the ground," Jindal said.
Apparently, Jindal and McCain are scheduled to actually meet Thursday instead of today (as I thought) and take a helicopter tour of oil rigs in the Gulf and marvel over how "not a single drop" of oil was spilled after Katrina and Rita. (Update: Or perhaps they will see some oil sheens. Update #2: Now Mac has cancelled the meeting, citing the weather.) And if other reports are to be believed, McCain will perhaps announce his Veep choice this week. Now, if he's meeting with Jindal on Thursday, that leaves precious little time left this week to meet with, say, Romney or Pawlenty for the big announcement.
Circumstances are forcing me to re-evaluate my long-held position that McCain won't pick Jindal to be Veep. Did I underestimate the political stupidity of the McCain campaign?
Sure, the national press will have a big fluffernutter over PBJ if and when McCain picks him to be Veep. But that will only last a few weeks. Then, before the Veep debate the "vetting" of Jindal will get serious and there will likely be a national discussion over Jindal's belief in teaching creationism and/or his youthful exorcism episode. How will that play? Moreover, how will Jindal's extreme youthfulness and foreign policy inexperience play? Can you imagine Jindal trying to use that dumb "[McCain and I] would rather lose an election than lose a war" line in a Veep debate against, say, Sen. James Webb? Can you imagine the response Webb would have to that crapola? (Not to mention the fact that back in November of 2007 Jindal was hopeful that Bush would listen to the Iraq Study Group's recommendations... but we'll get to that later. Also, there would be horror among Louisiana conservatives by the prospect of a Governor Mitch Landrieu. Knowing how "strategic" some of them are, I wouldn't be surprised to see a "Vote Obama/Keep Jindal in LA" movement occur.)
I hope I didn't give my faithful YRHT readers a bum steer by totallyunderestimating Jindal's chances to be Veep. Usually I have a damn good read on how these things will play out, and I have some pretty informed sources in GOP circles who have discounted the Jindal as Veep possibility from Day 1. ("Day 1", btw, was when Rush Limbaugh floated Jindal as his preferred VP choice.) But maybe I'm wrong on this. Being "wrong" would be embarrassing, of course, but if I'm going to be wrong about a political prognostication, I would SO LOVE for it to be this one.
I can't fathom how much fun this will be for me if McCain selects Jindal. Can't you see a dramatic Veep announcement staged on an oil rig in the Gulf? Bobby and Mac, standing out there in hardhats, a banner stretched over their heads reading "McCain/Jindal: We know the Drill"
=== (I would also love to be a fly on the wall if/when McCain tells Gov. Charlie Crist that he picked Jindal to be his Veep.)
"But I endorsed you, John! I flip flopped and supported oil drilling for you! I'm getting married to a woman for you! What more do you want?" ===
The internet tubes are buzzing over McCain's unpresidential rhetoric, and his attempt to rewrite the history of the surge.
McCain will be in town today to talk with Gov. Bobby Jindal. I'm assuming McCain will tell him face-to-face that he won't be Veep, but that he'll get the consolation prize of keynote address at the GOP convention. That's what Bobby wanted all along, in my opinion. However, as the McCain camp grows more desperate, far-flung scenarios seem more possible. The chances of a McCain/Romney ticket have grown. The two camps hate one another but Romney has electoral strength in the Mormon Mountain west, is a "businessman", and can dish out sharp attacks with a 1000 watt smile. Jindal simply... can't. (I'm not sure if Pawlenty can, either.)
All these things interest and amuse me, but not as much as the following item. Yesterday, the McCain campaign sent me an email with the following information:
The media is in love with Barack Obama. If it wasn't so serious, it would be funny.
That is truly rich. I mean, what were the wizards on the Str8 Tawlk Express thinking? It's like they were partying with Jermaine Stewart and drank too much cherry whine. (Uh huh)The WSJ already had an account of their maneuver which began
John McCain used to jokingly call the media "my base." Now, he and his aides are becoming increasingly frustrated with what they see as a growing press infatuation with his rival, Barack Obama.
In terms of "media love", the bias towards Obama is real, but it would certainly rank well below the orgy of swoon that took place in 1999 during McCain's Str8 Tawlk campaign. (After Bush defeated Mac in the despicable S. Carolina primary, the media swoon transferred to Dubya, albeit somewhat diminished. However, the "war on Gore" continued, unabated, with maximum prejudice.)
In the past decade, Bob Somerby has chronicled and analyzed the lovely media narratives that McCain cultivated in '99. These narratives continue in the present day, but they've been overshadowed by Barack Obama. (This dynamic was foreseeable, btw.) And now jilted McCain is whining about the treatment someone else is getting. That's very rich.
Below, I'll link to quotes and excerpts from Somerby's incomparable Daily Howler archives, to refresh some of our memories about the press and McCain.
During the Campaign 2000 affair, reporters clearly loved the fact that McCain let them ride around on his bus; answered their questions, including the dumb ones; gave them free doughnuts whenever they asked; and kept telling scribes they were smart.
Nancy Gibbs blurted an embarrassing truth, right in the pages of Time:
GIBBS (12/13/99): There is no entourage, no bubble of staff members around him...And then there are the stories he tells—to which, if there's a pattern, it's to exalt other people and deflate himself. A presidential candidate is not supposed to talk at length and on the record about the rules he broke or the strippers he dated, or the time he arrived so drunk that he fell through the screen door of the young lady he was wooing. The candor tells you more than the content, and reporters sometimes just decide to take him off the record because they don't want to see him flame out and burn up a great story.
KURTZ (12/8/99): "At one level, the press protects him," says Jacob Weisberg, political writer for Slate magazine. "He delivers these stupid lines all the time. The typical response from journalists is either not to report it or to congratulate him for being so blunt...”
...[T]his appalling press conduct worked quite well for McCain—until (in one example) a substitute New York Times scribe reported a few of his “candid” remarks, and the solon was forced to deal with public reaction to his wonderful “candor.” (To his use of the word “gooks,” for example—but that’s not the only example.)
KINSLEY: Journalists love him, of course. His frankness flatters us, and he flatters us more directly as well. Visiting a big convention of journalists last fall, McCain joined a group that was gambling at the hotel casino until the wee hours. In his speech the next morning, he cleverly nailed his audience and himself by declaring that he was happy to be among “my base.”
LEIBY (8/31/04): Sen. John McCain tended to his political base Sunday night: the entire national media. The maverick Arizona Republican, once (and future?) presidential aspirant and press secretary's dream hosted a hyper-exclusive 68th birthday party for himself at La Goulue on Madison Avenue, leaving no media icon behind. Guests included NBC's Tom Brokaw and Tim Russert, ABC's Peter Jennings, Barbara Walters, Ted Koppel and George Stephanopoulos, CBS's Mike Wallace, Dan Rather and Bob Schieffer, CBS News President Andrew Heyward, ABC News chief David Westin, Time Warner CEO Richard Parsons, CNN's Judy Woodruff and Jeff Greenfield, MSNBC's Chris Matthews, CNBC's Gloria Borger, PBS's Charlie Rose—pause here to exhale—and U.S. News & World Report publisher Mort Zuckerman, Washington Post Chairman Don Graham, New York Times columnists William Safire and David Brooks, author Michael Lewis and USA Today columnist Walter Shapiro. They and others dined on lobster salad, loin of lamb, assorted wines, creme brulee, lemon souffle and French tarts.
One guest, who asked not to be identified, described invitees as "the Journalistic Committee for a Government of National Unity." After singing "Happy Birthday" to McCain, many of the guests—Russert, Borger and Shapiro, among others—cabbed to Elaine's,where Zuckerman hosted a mob scene that included Fox's Bill O'Reilly, PBS's John McLaughlin and New York Gov. George Pataki, The Post's Mark Leibovich reports. By 11 p.m. the Second Avenue landmark—with red carpet outside—was elbow-to-elbow with martini-sipping guests. Thus commenced Campaign 2008 (we think).
Somehow, it was the singing of “Happy Birthday” which always struck us as most wrong: At any rate, free food! And plenty of pandering! And after they sang “Happy Birthday” to Mac, the gang cabbed it up to Elaine’s.
If you don’t understand the press corps’ coverage of McCain, perhaps you can find a hint or two in Leiby’s dispatch.
And Fred Barnes, in a recent Weekly Standard, paints a truly remarkable picture of press corps incompetence and immaturity:
BARNES: Gathered in a pack they can be cruel and unfeeling, but not when they're on their own. They're softies, easily schmoozed, ever susceptible to being fooled by appearances... At the moment, the likability award is shared by George W. Bush and John McCain, rivals for the Republican presidential nomination. Bush is fun to be around, gives everyone, including reporters, a nickname, and is something of a wise guy, which gets him in trouble from time to time but appeals to journalists.
One's cheeks rouge for the press corps to hear this account, of people "cruel and unfeeling in a pack" but willing to pander if given a nickname. Barnes offers this portrait as an amusing aside. But if his remarkable portrait of the press corps is accurate, it is a disturbing account of a massive fault line in our debased public discourse. ===
McCain and Bush took advantage of the media's friendly, insubstantial coverage in 1999. Bush and Mac were the fresh faces on the national scene then, unlike boring Gore, whom the press hated. Now the situation is different, and McCain's press coverage isn't uniformly glowing. The press isn't bending the rules for him quite like they did. They've found a better story in Obama, and probably shudder as the McCain campaign fashions itself more and more as Bush's third term.
The press still gives McCain too much of a pass on too many things. But they're being more critical of him this time around, and less critical of the Democratic opponent.
Times have changed, and McCain complains.
=== Update: this post was edited slightly for clarity.
In the coming days, we'll have more information about how you can register for Rising Tide 3. Please save the August 23 date, and email me if you want to register by snail mail. (Use contact link on sidebar to access my profile page which has my email info.)
Explanation of the "Cranes in the Skyline" reference here.
The indefatigable Noladder sent this video clip of WWL's recent news report on the Dems' visit to the area. There was a very embarrassing sequence during a press conference where Rep. Charlie Melancon demonstrated that he didn't have a clue about the 8/29 investigation that Levees.org has championed.
Below is a rushed YRHT transcript and description of the WWL video beginning at the 2 minute mark:
Lee Zurick: Those in attendance say they are well in tune with the many issues surrounding the recovery, but when we asked about efforts to create an investigation team to look into governmental failures after Katrina, the question prompted confusion.
WWL reporter Scott Satchfield: "What's the status of an 8/29 investigation... what's the hold up with that... and how can Congress get on track?"
Rep. Charlie Melancon looks quickly to Rep. James Clyburn, Clyburn looks back to Melancon and says "8/29, what's that?"
Melancon, who sponsored a bill calling for an 8/29 investigation echoes Clyburn's question, and asks the reporter "What's 8/29 investigation?"
=== Update: Please don't miss Lee Zurick's latest WWL Channel 4 investigation which will air tonight at 10pm. This one's going to be big.
"They’ve got a set of Republican waiters on one side and a set of Democratic waiters on the other side, but no matter which set of waiters brings you the dish, the legislative grub is all prepared in the same Wall Street kitchen." -- Huey Long
"We are going to take it out of the hides of Wall Street." -- Federal Reserve Bank of St. Louis, William Poole October 2007 [According to James Grant this was muttered into a live microphone. I guess Bernanke and the rest of the Fed didn't share Poole's view.]
"You people created this mess. And the headline on this is going to be: 'How Wall Street Ate Main Street.'" --New York Insurance Superintendent Eric Dinallo, 1/23/08, at an emergency meeting with 30 top Wall Street executives from Goldman Sachs, CitiGroup and Morgan Stanley.
"This madness is ripping the guts out of entire segments of society: wage earners, prudent savers, Social Security recipients and fixed-income retirees, independent truckers, mom and pop restaurants and retailers, the rural poor, long-distance middle class commuters -- basically anyone who doesn't own an oil well, corn field, or sit in front of a half-dozen trading screens in midtown Manhattan. Multiply the impact felt here and here many millions of times over." -- Cunning Realist 5/21/2008
=== America's reaction to the deflation of the housing/credit bubble, and to the Bush Administration and the Federal Reserve's attempts to sustain the economy by eviscerating the dollar's value (and freeing the inflation genie) has been, essentially: Gas Prices are TOO HIGH because environmentalists won't let us drill more!
While your tax dollars are bailing out reckless Wall St. firms and providing an unlimited backstop to cover Freddie's fannie, the talking heads are telling you to direct your anger at those who ... oppose oil drilling!
It's madness. It's blind madness. It's blind madness as a response to a previous bout of world-historic madness. Now's the time for sobriety and lucidity-- It's the morning after the bender and this is our wake-up call. Yet, we want to keep deluding ourselves.
Very powerful people want you to debate oil drilling during the current run-up in energy prices, instead of connecting the energy crisis to the incredibly serious financial crisis. They don't want you to internalize recent dollar/oil correlations like this one:
What's your response to this chart? If it's "We need to Drill more! Drilling is safe! Not one drop of oil was spilled after Katrina. Maybe if we approve drilling in ANWR, that will calm the markets"-- then I can't help you. Perhaps you should instead be asking "Why's the dollar cratering?" ===
I'm going to quote liberally from this wonderful piece by James Grant, entitled "Why No Outrage?" It gets so many things so right, and describes them so concisely, I'm going to generously excerpt it. Unfortunately, Grant offers a silly explanation for the things he so accurately describes-- he actually blames the populists and leftists from yesteryear for our current troubles. I think this theory is silly, but please read the article in full if you want to see his argument. I'm going to excerpt the other passages because I'm more interested in Grant's central question-- Where's the Outrage? It's a query that's well worth considering. Anyway, without further ado:
"Raise less corn and more hell," Mary Elizabeth Lease harangued Kansas farmers during America's Populist era, but no such voice cries out today. America's 21st-century financial victims make no protest against the Federal Reserve's policy of showering dollars on the people who would seem to need them least. ... Today, a three-month CD yields just 2.65%, or little more than half the measured rate of inflation. It wasn't the nation's small savers who brought down Bear Stearns, or tried to fob off subprime mortgages as "triple-A." Yet it's the savers who took a pay cut -- and the savers who, today, in the heat of a presidential election year, are holding their tongues.
Possibly, there aren't enough thrifty voters in the 50 states to constitute a respectable quorum. But what about the rest of us, the uncounted improvident? Have we, too, not suffered at the hands of what used to be called The Interests? Have the stewards of other people's money not made a hash of high finance? Did they not enrich themselves in boom times, only to pass the cup to us, the taxpayers, in the bust? Where is the people's wrath?
The American people are famously slow to anger, but they are outdoing themselves in long suffering today. In the wake of the "greatest failure of ratings and risk management ever," to quote the considered judgment of the mortgage-research department of UBS, Wall Street wears a political bullseye. Yet the politicians take no pot shots. ... Wall Street is off the political agenda in 2008 for reasons we may only guess about. Possibly, in this time of widespread public participation in the stock market, "Wall Street" is really "Main Street." Or maybe Wall Street, its old self, owns both major political parties and their candidates. Or, possibly, the $4.50 gasoline price has absorbed every available erg of populist anger, or -- yet another possibility -- today's financial failures are too complex to stick in everyman's craw.
I have another theory, and that is that the old populists actually won.
[Here Grant goes off on his cockamamie theory about how "the lefties carried the day" throughout the 20th century, and forced the government to create the Fed, paper money, Freddie/Fannie GSE's... and all that resulted in the current mess etc. I believe the truth is much closer to the highlighted possibilities he offers in the preceding paragraph dealing with Wall Street's ownership of the parties, the gas price/drilling distraction, and the complexity of the financial failures. ]
Since the credit crisis burst out into the open in June 2007, inflation has risen and economic growth has faltered. The dollar exchange rate has weakened, the unemployment rate has increased and commodity prices have soared. The gold price, that running straw poll of the world's confidence in paper money, has jumped. House prices have dropped, mortgage foreclosures spiked and share prices of America's biggest financial institutions tumbled. ... In 2002 and 2003, Ben S. Bernanke, then a Fed governor under Chairman Alan Greenspan, led a campaign to make dollars more plentiful. The object, he said, was to forestall any tendency toward what Wal-Mart shoppers call everyday low prices. Rather, the Fed would engineer a decent minimum of inflation.
In that vein, the central bank pushed the interest rate it controls, the so-called federal funds rate, all the way down to 1% and held it there for the 12 months ended June 2004. House prices levitated as mortgage underwriting standards collapsed. The credit markets went into speculative orbit, and an idea took hold. Risk, the bankers and brokers and professional investors decided, was yesteryear's problem.
Now began one of the wildest chapters in the history of lending and borrowing. In flush times, our financiers seemingly compete to do the craziest deal. They borrow to the eyes and pay themselves lordly bonuses. Naturally -- eventually -- they drive themselves, and the economy, into a crisis. And to the scene of this inevitable accident rush the government's first responders -- the Fed, the Treasury or the government-sponsored enterprises -- bearing the people's money. One might suppose that such a recurrent chain of blunders would gall a politically potent segment of the population. That it has evidently failed to do so in 2008 may be the only important unreported fact of this otherwise compulsively documented election season.
Mary Yellin would spit blood at the catalogue of the misdeeds of 21st-century Wall Street: the willful pretended ignorance over the triple-A ratings lavished on the flimsy contraptions of structured mortgage finance; the subsequent foreclosure blight; the refusal of Wall Street to honor its implied obligations to the holders of hundreds of billions of dollars worth of auction-rate securities, the auctions of which have stopped in their tracks; the government's attempt to prohibit short sales of the guilty institutions; and -- not least -- Wall Street's reckless love affair with heavy borrowing. ... "Leverage," as the laying-on of debt is known in the trade, is the Hamburger Helper of finance. It makes a little capital go a long way, often much farther than it safely should. Managing balance sheets as highly leveraged as Wall Street's requires a keen eye and superb judgment. The rub is that human beings err. ... Today's bear market in financial assets is as nothing compared to the preceding crash in human judgment. Never was a disaster better advertised than the one now washing over us. House prices stopped going up in 2005, and cracks in mortgage credit started appearing in 2006. Yet the big, ostensibly sophisticated banks only pushed harder. ... Huey Long, who rhetorically picked up where Lease left off, once compared John D. Rockefeller to the fat guy who ruins a good barbecue by taking too much. Wall Street habitually takes too much. It would not be so bad if the inevitable bout of indigestion were its alone to bear. The trouble is that, in a world so heavily leveraged as this one, we all get a stomach ache. Not that anyone seems to be complaining this election season.
The public at large still doesn't understand how badly they've been rooked and bamboozled.
Get ready, American taxpayer -- you may be called on to solve the credit crisis.
So far in this debacle, now more than a year old, the government response has been mainly designed to keep the markets and economy running, with the Federal Reserve slashing interest rates and pumping cash into the financial system. The fiscal response, similarly, has kept consumers spending with tax rebates.
The next stage of the crisis won't be solved by easy money. It involves not liquidity but the capital base of financial institutions that have warehouses full of mortgage debt, leveraged loans and other toxic assets fouling up their balance sheets. ... Potential losses in this crisis are far larger [than the 1980's S&L crisis], with estimates of $1 trillion or more being bandied about. Taxpayers won't be on the hook for anything close to that. But their bill could make the... S&L crisis seem a bargain. ... Any taxpayer solution will only worsen already troubling fiscal problems. But that's the price for a system that -- as New York University economist Nouriel Roubini and others put it -- privatizes profits and socializes losses.
Indeed. Back in August James Grant wrote that same sentiment in a quote that I'll keep repeating:
"Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich."