Not even trying to be principled

I’ve posted a couple links on the sidebar about New York’s new tax frenzy, but hadn’t felt compelled to dedicate a post to it until I saw this:

If the proposed budget were to be approved, New York cigar smokers would be forced to pay 50 cents per cigar. The current tax is about 34 cents.

It used to be that we could have an argument about whether there’s any justification for the tax, whether each cigar really is somehow causing 50 cents worth of external harm. But as Rogier van Bakel notes, this is just one of 137 new or increased taxes proposed by Governor David Paterson and there’s no rhyme or reason to the list. Among the other targeted products and services:

MP3s and other downloads
Haircuts, manicures, and beauty services
Movies, concerts and sporting events
Non-diet sodas
Clothing and shoes under $500

And many more. When the government abandons all pretense at rationale and just taxes things willy-nilly, I don’t even know how I’m supposed to respond. Luckily, New Yorkers do, and I can guess which finger they’ll be holding up to the governor this year.

[As with most cigar stories, hat tip to the Stogie Guys.]


Vilsack, for reals this time

On November 13 I lamented speculation that Obama would name corn-loving former Iowa Governor Tom Vilsack as Secretary of Agriculture. On November 25 I mentioned that Vilsack said no, actually, that’s not going to happen. So for the sake of completeness, here’s today’s news:

President-elect Barack Obama, a backer of tighter farm subsidy rules and new-generation biofuels, selected Tom Vilsack from the major U.S. farm state of Iowa to be agriculture secretary, said a Democratic official on Tuesday.

I guess we can take comfort in the fact that subsidies will only go to “new-generation biofuels,” which won’t be wasteful and counterproductive like the old-generation biofuels of, say, right now.

[Via Maureen Ogle.]


Just give it to the Lizard People

Writing in The New York Times, mathematics writer Charles Seife says the Minnesota Senate race is too close to call:

So in some precincts, we have not just a recount but a re-recount. Both auditors and recounters were hypervigilant to possible sources of error, and yet they disagree on their tallies by about 20 thousandths of a percent.

In an ordinary race, errors this tiny wouldn’t be a problem. But the Coleman-Franken race is so close that this error rate is more than double the margin between the two camps. And that’s just taking into account the precincts where there are no challenges. Throw in the weirdo ballots with lizard people, stray marks and indecipherable dots, and the error rate grows even more. Throw in the missing ballots, and the situation is hopeless. In truth, the counting errors dwarf the tiny numerical difference in votes between the two candidates. If, at the end of the recount, Mr. Coleman or Mr. Franken is ahead by a few dozen or a few hundred votes, that would be because of errors rather than voter preference.

Seife notes that MN law allows for ties to be decided by lot. I’m not sure if the election board can declare a statistical tie though. Here’s the section of the law I’ve found:

In case of a tie vote for nomination or election to an office, the canvassing board with the responsibility for declaring the results for that office shall determine the tie by lot.

Perhaps it’s too late to do so in this election, but I still think deciding extremely close races by chance could prove more legitimate than endlessly contested recounts.


Recounts of no significance?

It’s been more than a week since the polls closed and we still don’t know who the winner is in three Senate races. Georgia is headed to a runoff. Minnesota is going to have a potentially ugly recount, with only 206 votes out of nearly 3 million separating Coleman and Franken. Alaska is still counting and the difference there could also be small enough to trigger a state-funded recount. Supposedly these new tallies in Minnesota and Alaska will tell us who “really” won the elections. But will they actually mean anything?

Leonard Mlodinow writes about an election strikingly similar to Minnesota’s in his excellent book The Drunkard’s Walk:

In the 2004 governor’s race in the state of Washington, for example, the Democratic candidate was eventually declared the winner although the original tally had the Republican winning by 261 votes out of about 3 million. Since the original vote count was so close, state law required a recount. In that count the Republican won again, but by only 42 votes. It is not known whether anyone thought it was a bad sign that the 219-vote difference between the first and second vote counts was several times larger than the new margin of victory, but the upshot was a third vote count, this one “entirely by hand.” The 42-vote victory amounted to an edge of just 1 vote out of every 70,000 cast, so the hand-counting effort could be compared to asking 42 people to count from 1 to 70,000 and then hoping they averaged less than 1 mistake each. Not surprisingly, the result changed again. This time it favored the Democrat by 10 votes. That number was later changed to 129 when 700 newly discovered “lost votes” were included.

Neither the vote-counting process nor the voting process is perfect… Elections, like all measurements, are imprecise, and so are the recounts, so when elections come out extremely close, perhaps we ought to accept them as is, or flip a coin, rather than conducting recount after recount.

It might be true that, for procedural reasons, later vote counts really are more accurate than the initial one. For example, running the ballots through a counting machine a second time picks up votes that were missed due to infamous hanging chads. In that case a recount could be worthwhile (see a discussion here as it relates to Florida in 2000). Even so, there’s some level at which the difference ceases to tell you anything reliable about who actually received more votes. There’s appeal in this idea of choosing an acceptable level of statistical significance and, when it’s not met, simply letting the original count stand or deciding the election by a random process.

Replacing recounts with with a random selection process would be a tough sell though. One objection is that potential voters may not participate unless we make sure that “every vote counts.” That’s a nice ideal, but we know it’s not achievable in practice. That’s why we have recounts in the first place — we don’t know how to make every count. The best we can hope for is that the recounting process will be more accurate than the initial tally. If we instead accepted the chance that a random event would decide the outcome, people would still have an incentive to vote for their candidate; the baseline would simply be moved from winning by at least one vote to winning by a significant margin. In either case a single vote has a vanishingly small chance of making a difference and voters will presumably be motivated by the same things that motivate them now, such as civic duty, the desire to express their beliefs, or showing support for their party.

Another objection is that deciding a hotly contested election by a coin toss would decrease faith in the democratic process. That might be true, but so do recounts and other tight races. Many Democrats complained throughout the Bush presidency that he stole the 2000 election in Florida and the 2004 election in Ohio. Similarly, Republicans suspected voter fraud long after the resolution of the Washington governor’s race described above. The opposing camps in Minnesota are already gearing up to follow a similar path, with lawyers ready to take their arguments to court when the counting’s through. Regardless of who is declared the winner, we can be sure that the other side will doubt the result and allege wrongdoing. None of this would happen if the winner were decided randomly. He would go to office with the knowledge that he didn’t win a clear mandate from the state’s voters and the voters would know that he at least was given the position through a transparent and fair procedure.

And then there’s the fiscal savings. Minnesota’s Secretary of State Mark Ritchie pegs the cost of the recount at 3 cents per ballot, or a little over $86,000. That’s small change in government terms, but the lawyers’ fees, court challenges, and time consumed add up too. And for what? A result that will likely remain disputed and may not tell us anything about Minnesota voters that we didn’t already know. (Hint: They’re closely divided.) A coin toss costs only a quarter, which can then be given to the loser as a consolation prize.

Regardless, proposals like this aren’t going to gain any traction. That’s partly because people don’t understand statistics, but perhaps more so because they enjoy a good spectacle — and that’s one thing our system of recounts provides with absolute certainty.


And out of hope, cynicism

Ezra Klein notes disapprovingly that Obama will likely appoint former Iowa governor Tom Vilsack to Agriculture Secretary:

If the Department of Agriculture sees large farmers and farm producing states (like Iowa), rather than individual eaters, as their primary constituency, then we’ll have a farm policy geared towards those interests. But eaters have interests here too, as do taxpayers, and parents, and energy advocates, and the public health community. They, however, are not well represented in Iowa politics. The fact that Obama is already signaling that his chief agricultural appointment will hail from the land of corn, and whose agricultural experience will mainly have been keeping powerful corn interests happy with him, is not a good sign. Vilsack could surprise, of course. But the indication here is that Obama will not upend the ag subsidy apple cart.

This is not surprising. All you had to do was look at Obama’s consistent support for subsidies, his campaigning in the Midwest, or the prominent New York Times article discussing his advisors’ ties to the ethanol industry to know that his mantra of change is not going to extend to our wasteful agricultural policies. Klein, to his credit, was not unaware of this, though he hoped for better once the pressures of the election were removed. But why? The fact that Obama reads Michael Pollan and buys arugula at Whole Foods doesn’t mean he’s going to pursue the kinds of policies preferred by people who also read Michael Pollan and buy arugula at Whole Foods.

If Vilsack is indeed the nominee, that doesn’t bode well for Obama’s willingness to challenge conventional politics. A week after the election we’ve already seen signs of continued subsidies to corn growers, support for corporate welfare for automakers, and a more conservative approach to halting intelligence and civil liberties abuses than many were hoping for. I never had high hopes for Obama, but even I’m surprised at how quickly he’s managing to show that, however inspiring he may be, he’s still just another damn politician.

That said, I’ll forgive the rocky start if he throws us civil libertarians a big bone to chew on sometime soon.


Blue state bartender

A few months ago I was fighting for liberty at the Cato Institute. Tonight I’ll be tending bar for the Oregon Democratic Party’s election celebration. Oh, how far I have fallen. If IHS finds out I’ll never be invited to another seminar.

Will tonight’s crowd be filled with tears of joy or disillusionment? Meh, I don’t really care anymore. As long as the ruling party falls short of a filibuster-proof majority in the Senate and Prop. 8 fails in California, that’ll be good enough for me. As you revel or mourn, just remember to tip your bartender. His drinks may be less intoxicating than an Obama rally, but he’s honest and he delivers. We’ll see if we can say the same about the president in four years.

I’ll be back tomorrow at the dawn of a new age of hope and change and ponies. Enjoy the evening, and come the morning let’s tear down the posters and start showing a little skepticism toward the guy you just made the most powerful man in the world, ok?


Rigging the system

Whenever I tell people that I support scrapping practically all of our campaign finance laws, they say that I must have a ridiculous amount of trust in politicians and private donors. Nothing could be further from the truth, which is one reason that disclosure for large donations is one regulation I could potentially still support. It takes much greater faith in human nature to believe that allowing incumbent politicians to write the laws governing their own elections will lead to a healthy democracy. In his most recent column, Radley Balko summarizes the many ways the ruling parties have rigged the system to keep challengers at bay:

Consider these two figures: Congress’ approval rating right now is a dismal 19 percent. Clearly, we aren’t happy with the people who are governing us. Yet 90-95 percent of the incumbents running for re-election to Congress will be victorious on election night. Many will run unopposed. Between gerrymandering their districts to ensure a friendly electorate, campaign finance legislation, debate rules that effectively bar third-party participants, onerous ballot access rules, and the privileges of office, the Democrats and Republicans have ensured that the vast majority of the country will chose only between one of two candidates this year — candidates who, when it comes right down to it, really aren’t all that different.

Whole thing here. For a more in-depth look at campaign finance, John Samples’ The Fallacy of Campaign Finance Reform is well worth reading.


Struggling to identify the lesser evil

I’m not going to endorse anyone in this election. As with the previous two presidential races in which I’ve been eligible to vote, I’ll be throwing my ballot to the Libertarians on the theory that my vote has a vanishingly small chance of affecting the outcome and its marginal value is greater for a small third party than for the Big Two. I’m also glad to have a respectable candidate on the LP ticket this year; I won’t have to hold my nose voting for Bob Barr as I did voting for the insane Michael Badnarik. I expect McCain and Obama both have the potential to be disastrously bad presidents and I won’t take an affirmative act in favor of either of them. The question then isn’t so much which of them I’d rather see in office as it is whose victory will drive me to the fewest shots of bourbon on election night and beyond.

One of my friends recently pointed out that this site has an anti-Obama bias. He’s right, but it’s not because I think Obama is substantially worse than McCain. It’s because so many intelligent people seem to be under Obama’s spell, taking it on faith that he’s going to be a fantastically transformational president. The few McCain supporters I know are more grounded. They don’t particularly like the guy or what he stands for, but they soberly think him the lesser of two evils, especially given Democrats’ control of Congress. (There are plenty of stupidly enthusiastic McCain supporters as well, but I don’t think they read this blog.)

Throughout this campaign I’ve wavered about which of the two I think would be least destructive in office. I initially favored Obama, if for no other reason than to kick the reigning bastards out. I later drifted toward McCain based on the superiority of many of his policy ideas. Then he nominated Palin for VP and it got really hard to be a self-respecting McCain defender. Ever since the convention the McCain campaign has been an intellectual disaster. Perhaps there is no way McCain could have won this election, but he could have at least forced Obama into a more substantive discussion. If he had, he could have made a respectable play for the politically secular, socially tolerant, economically literate voter. It’s extremely disappointing that he didn’t, because he could have made a good case for himself on a number of issues:

Trade: McCain boasts an admirably long career of promoting free trade. According to Cato’s trade vote tracker, since 1997 he’s voted 88% of the time against trade barriers (35 of 40 votes) and against subsidies 80% (8 out of 10 votes). Obama has a thinner record, but it’s consistently anti-trade: Out of 18 opportunities to vote in favor of free trade, he did so only 4 times. This matches his rhetoric on the campaign trail, where he stokes resentment toward foreign trade by blaming outsourcing for our economic woes. McCain’s the clear favorite here.

The popular line among Obama-leaning libertarians right now is that Obama is only appearing anti-trade to get elected and that he’s clever enough to implement better policies once he’s in office. Maybe, but that’s not the way his record points. It strikes me as equally likely that he’ll be true to his word on restricting trade and waver in his support of civil liberties, as he in fact has a record of doing. Counting on Obama to stand up against his own rhetoric, Democratic interest groups, and an anti-trade, pro-regulation Congress is a thin reed on which to place one’s hopes.

Climate change: The best way to cut carbon emissions is to tax them directly or institute a system of cap-and-trade. Ideally no candidate would propose anything besides these ideas and some highly targeted grants to basic research. In the real world politicians invariably support handouts to special interests, too.

Obama and McCain both support cap-and-trade, though Obama’s targets are slightly more ambitious and therefore more costly. They both support subsidies to coal and renewable power. Obama has his own grab bag of other subsidies and handouts to promote. Though you won’t hear them say much about it now, Obama and Biden both have a long history of boosting ethanol, subsidies McCain has had the guts to call out as wasteful sops to farm states that don’t actually help the environment. McCain would advocate subsidies for the construction of nuclear plants and offer prizes for research; there are reasons to be dubious of the nuclear idea and thankfully he may not be able to win support for it.

On an issue where both candidates spout a lot of nonsense, McCain’s plan has an edge for likely being less expensive. If you’re against throwing money at reducing carbon emissions, McCain’s your man. If you’re in favor of doing that, he’s still your man because he’ll waste less money in the process. A major obstacle to addressing climate change is getting the system of cap-and-trade instituted in the first place; if McCain doesn’t reduce emissions to the degree you prefer you can tighten the restrictions four years later. Whatever reasonable position you may have on climate change, there’s a good argument for McCain being the smarter pick.

Subsidies and spending: Speaking of subsidies, remember that $300 billion farm bill from this past spring? McCain has consistently opposed farm subsidies, preferring to defend the interests of US farmers by opening foreign markets to trade. Obama staunchly supports the handouts, with the exception of opposing our notorious sugar protectionism. Until he had to win the Florida vote, that is. Now he supports that too.

Predictably neither candidate is addressing the true causes of uncontrolled government spending: entitlements and the military budget. They both want to expand the military and neither is likely to meaningfully reform entitlements, though McCain does have a decent fiscal record. McCain at least will be better at resisting new government largesse. I worry about the new entitlements a liberal Democratic supermajority will put into place — spending programs that will be practically impossible to reverse once they’ve been implemented.

Health care: I don’t pretend to know how to “fix” the US health care system. I am convinced that decoupling health insurance from employment and bringing more market pressures to bear on health care costs would be worthwhile approaches to reform. McCain’s plan would transfer the tax credit from employers to individuals, free up the insurance market by allowing plans to compete across state lines, and open group plans to new kinds of associations. These all strike me as steps in the right direction.

Taxes: Making sense of tax policies is a struggle even for experts and I don’t pretend to be one. Neither candidate is pushing comprehensive reform. Clive Crook argues that McCain has undersold his plan since after accounting for his refundable health insurance credit it will arguably make middle class Americans better off than they’d be under Obama’s. This issue, along with long-term deficits, has received too little attention in the campaign.

Foreign policy: No, McCain doesn’t have an advantage here, but Obama’s not as superior as people think. He is not principally opposed to committing US troops to foreign intervention; he’ll just commit troops to presumably nicer, smarter wars than McCain would. He may prove dangerously hawkish on Iran if diplomacy fails to prevent it from moving forward with nuclear projects. He and McCain seem equally reckless regarding Georgia. But a key difference is this: When a President McCain proposes sending our troops into a new arena, he’ll face skepticism from the media and a Democratic Congress who will accuse him of continuing failed policies from the Bush years. President Obama will get a free pass since he’s by definition smart and nice and doesn’t fight stupid wars like Bush did. When Obama proposes deploying US troops, who will step up to counter his ambitions? And why does he want to add 90,000 troops to the military unless he foresees a use for them?

Divided government: The most compelling reason to vote for McCain is that he’ll face a Democratic Congress. Though it’s hard to run a pro-gridlock campaign, for advocates of limited government it’s the best thing McCain’s got going for him. If we have learned one thing from the post-9/11 Bush Administration, it is that we should be wary of trusting a charismatic president whose party controls both houses of Congress in time of perceived crisis. This year the crisis is financial rather than military, the presumptive president even more charismatic than before, and Congress potentially even beyond the reach of filibuster by the minority party. That’s a hell of a lot power to trust in one man. Would President McCain, or even President Palin, be so terrible as to make this the preferred alternative?

A counter to this argument is that Republicans need to spend some time in the wilderness to renew their small government credentials. I agree, and for that reason I’m glad to see that they’ll lose even more seats in Congress and that they’re sweeping George Bush under the rug as thoroughly as possible. But I’m not sure that handing the levers of power entirely to the Democrats is worth the long-term cost or that exiled Republicans wouldn’t look instead to culture warriors like Palin to redefine the GOP. Hoping they’ll return with a new Goldwater or Reagan or Gingrich is taking a big risk for a very uncertain payoff.

On a related note, a last argument in McCain’s favor is that there’s a decent chance he’d be a one-term man. He even flirted with the idea of making a one-term pledge. Obama will likely enjoy two. Except in the unlikely event that there’s been no economic recovery or a foreign policy disaster four years from now, he’ll be in a position to win re-election. So what’s worse, eight years of Obama, or four of McCain followed by a potentially open contest?

That’s the best case I can make for McCain. I don’t find it compelling; the specter of McCain-Palin foreign policy looms too large over any prospect of them assuming office, especially in the worst possible scenarios. If McCain hadn’t chosen such an obscenely unqualified vice presidential nominee I could feel more confident in preferring him. If Republicans could maintain control over just one house of Congress I could rest easier about Obama’s big government ambitions. We’re left instead with two atrocious choices. For all the reasons given above, I can’t join in the chorus of libertarians half-heartedly rooting for Obama. I can’t root for McCain either, but I confess I’ll feel more relief than I perhaps should if by some miracle he wins on Tuesday. Luckily, it appears there’s little chance he’ll have the opportunity to prove me wrong.


My fantasy election

After a long conversation with several oh-so-earnest Portland Obama supporters last night — the kind of group in which predicting the existential end of the United States within 20 years if he loses doesn’t cause anyone to bat an eye — I was reminded of my fantasy election. As much as I dislike Hillary Clinton, I harbor a secret wish that she were the Democratic nominee. She has no cult of personality. She’s not fooling anybody. Most normally intelligent people’s brains don’t turn to mush when they envision her in office. Even with Democratic control of Congress, another President Clinton would have at least ensured that the partisan rancor and distrust of government Bush has worked so hard to achieve would not be squandered.

And on the Republican side, as long as they’re going to tank the election anyway, couldn’t they have thrown Ron Paul on the ticket? Never mind that he’d be crushed, at least the debates would have been interesting.


Conservatives and coffee

J. P. Freire reports on a new “Conservative Cafe” in Crowne Point, Indiana:

“No, we don’t carry the New York Times,” [owner David Beckham — not that David Beckham] assures me. They do, however, carry the Wall Street Journal and the Chicago Tribune. Meanwhile, café televisions are tuned to Fox News from open to close. As he describes his year-old venture, it’s clear that no fan of Starbucks would feel much at home in the Conservative Café. Then again, for Mr. Beckham, that’s the point.

“Nobody’s thought of starting a coffee shop that caters to more conservative thinking,” he stresses. But it’s not the thinking that seems to be at the center of his coffee shop’s experience. It’s the lifestyle. “We get a lot of curious people, but the majority of our clientele are conservatives. We’re in an area of Reagan Democrats. They’re over 30. They come with their families.”

Mr. Beckham’s coffeeshop sells t-shirts that use classic conservative shock-and-awe rhetoric, such as, “Silly Liberal: Paychecks are for workers,” and “Peace through superior firepower.” This comes despite his wife’s initial concerns that he would alienate half of all potential customers. “I told her that beauticians alienate half of their potential customers and they get by just fine.”

I’m all for letting a thousand flowers bloom, ideological diversity, small business, etc., but I’ve got to say: this sounds like an awful place. Just having TVs on in a coffee shop isn’t exactly a sign of vibrant intellectual life. But TVs tuned in constantly to FOX News? Ugh. As J. P. says, “There are no tomes of great philosophical or academic literature in the shop… Indeed, the portrait of TR pretty much precludes it.”

Left-wing shops like DC’s Busboys and Poets might not be much better; oddly, I never made it in. But at least they don’t exhibit this kind of anti-intellectualism. Selling the Wall Street Journal is great, but there’s no need to proudly shut out the New York Times. Sure, its editorials can be terrible, but the paper offers some of the best reporting in the country. A well-informed person ought to read it from time to time, not wear one’s dismissal of it as a badge of honor. (Today’s Republicans learn from the top, I guess.)

If conservatives would look into the soft lefty concern for the world’s poor expressed by many independent coffee companies, they’d see some intelligent commentary bubbling up. You know who offers the smartest critiques of Fair Trade? It’s not the conservatives and libertarians sneering at the label without a clue as to how coffee markets actually work. It’s the bean buyers who can tell you how Fair Trade is often an obstacle to improving farmers’ lives and how their own entrepreneurship has found better ways to reward farmers and raise standards of quality. They’re liberals, but they’re liberal capitalists. Their customers increasingly know this too.

And speaking of coffee, for a coffee shop owner Beckham says little about it. There’s no detail about his beans in the article and the cafe’s website isn’t very descriptive. It says they have four blends and that they are all roasted in Indiana. But the blends all come from individual countries: a Colombian, a Guatemalan, a Kenyan, and a Sumatran. So are they “blends” or are they single origins? And what do the “strength” ratings mean? Beckham doesn’t exactly sound like a coffee lover here: “We know what coffee is for. It’s to start your day. It’s not for sitting on a couch for 8 hours and looking for a friend on MySpace.” Or perhaps it’s for enjoying. Once again, this doesn’t sound like a place for the intellectually curious, in either its politics or its product.

I don’t want to slag this cafe too much. Coffee shops could use more diversity and I like to see small businesses succeed. For all I know, their coffee’s fantastic. Yet what I love about the best coffee shops is that they’re home to lively exchanges of ideas, not walled-off ideological conformity. If conservatives seem under-represented in them, that perhaps says more about conservatives than it does about coffee shops.


The case against re-regulation

At the Freakonomics blog, Justin Wolfers invites Erik Hurst to offer a much-needed counterpoint to calls for re-regulation of the financial sector:

The past decade saw enormous financial innovation and the development of a liquid market to sell mortgage securities for unconventional mortgages (Fannie Mae and Freddie Mac had been securitizing “conventional” mortgages for a long time). Some of these new loans were issued to subprime borrowers: folks with little equity in their homes and lower credit scores.

Yet even as we recognize the costs of the subprime meltdown, we need to recognize the benefits of this innovation.

The homeownership rate in the U.S. increased by 3 percentage points over the past decade — a clear break from the two previous decades of stagnation. Around one-third of these households may ultimately default on their mortgages, but this also means that two-thirds of those who were previously excluded from mortgage markets now own a home.

Access to credit for this historically denied group is a clear benefit of financial innovation. Likewise, even if excessive lending landed us in this mess, the extra investment projects that were funded contributed heavily to economic growth over the past decade and supported the economy during the technology “bust.”

Where to Next?

Knowing what we know now, what is the optimal approach to regulating the subprime sector? Some argue that we should outlaw subprime lending completely. But do we really want to return to the world where the well-off have access to credit, but the historically denied (the poor, the young, African-Americans) can’t access the housing market or other credit markets? Is it really O.K. for only some households to use credit to help them ride out bad times, while others must just do without?

It’s a strange reversal of the usual ideologies, but those of us who care deeply about the poor must care deeply about cultivating a vibrant financial sector to service the subprime market. Otherwise, we truly risk two Americas: the credit-worthy who enjoy the benefits of the capitalist system and a highly developed financial system, and the less credit-worthy, who must live with a level of financial development that we suspect keeps so many third-world nations poor.

I don’t claim to know the best response to the current financial problems, but ten minutes into tonight’s debate it’s clear that we need economists like Hurst keeping regulation in check.


Losing the cynic vote

It was reported earlier this week that the McCain campaign negotiated a deal to reduce the Q&A time in the vice presidential debate because they were worried about Palin’s inexperience. How little confidence in your nominee do you need to have, I thought, that you would rather silence her than give the famously gaffe-prone Joe Biden more time to put his foot in his mouth?

After watching clips from Palin’s interview with Katie Couric, I’d say this was a good call:

Jason Kuznicki, bless him, took the trouble to transcribe that parade of non-sequiturs:

COURIC: Why isn’t it better, Governor Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries? Allow them to spend more, and put more money into the economy, instead of helping these big financial institutions that played a role in creating this mess?

PALIN: 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 bail out. But ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up our economy. Um, helping, oh, it’s got to be about job creation, too. Shoring up our economy, and putting it back on the right track. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions, and tax relief for Americans, and trade — we have got to see trade as opportunity, not as, uh, competitive, um, 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 of those things under the umbrella of job creation.

This is worse than wrong. It’s complete nonsense, in response to a question about the biggest current issue in politics. There’s no excuse for being unprepared. And while this clip is cherry-picked from the interview, the rest isn’t much better. See here and here, for example.

I’ve been cynically hoping for a McCain win in November, in part because many of his policy ideas are legitimately superior to Obama’s, but primarily because the idea of pairing a President Obama with a supportive Democratic Congress in a down economy gives me shivers. I was also initially warm to the Palin nomination. But after her performance here and McCain’s antics this week, I’m having second thoughts. Divided government is one thing; gross incompetence and incoherence another. Lately even I feel unable to muster enough cynicism to tolerate seeing these two in the White House.


Pick your pickpocket

My friend David Donadio takes on the bailout and our disappointing crop of candidates in the Baltimore Sun:

The case for action is clear: Things look bad, so we have to do something – and that, we’re told, means spending lots of money. But if the big bailout goes through, how will we know we’re not just putting the entire economy on stilts?

Sen. Barack Obama seems to have no problem with this, and neither does Sen. John McCain. It brings the grand total in new government spending to around $1 trillion: a $700 billion rescue plan for Wall Street, a $100 billion to $200 billion bailout for mortgage giants Fannie Mae and Freddie Mac, and an $85 billion bridge loan for American International Group. To say nothing of the $1 trillion war in Iraq or the $1 trillion Medicare drug entitlement.

It doesn’t matter if we’ve never bought a house; we’ll pay for it. It doesn’t matter if we’ve never bought stock; we’ll bear its costs without its benefits. It doesn’t matter if we’ve never heard of AIG, or if the idea of financing a bridge loan sounds curiously like being knocked to the ground and robbed blind….

The sad truth is that when you consider what’s at stake for people our age this November, there’s little hope, little change and little straight talk to be had – just a choice of which suit gets to reach into our pockets and tell us it’s for our own good.

Whole thing here.