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Self-interest is not self-regulation 17 Jan 2008

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From the comments thread at Balloon Juice on the ongoing housing market collapse, caused by the sub-prime collapse, which was caused in no small part by banks giving loans to people they knew were risky investments and then turning around and selling options and derivatives on those risky loans—thus ensuring that a default on those loans would cause a cascading effect throughout the financial market:

AkaDad: If we want to stop this from happening again, we need to provide less oversight through deregulation.

Dennis: And make the Bush tax cuts permanent.

AkaDad: Exactly. That way we have less money to provide the oversight. It’s really just common sense.

Dennis: Oversight of the financial markets is just a holdover from the days of that Depression-prolonging FDR. It’s obvious from recent events that the titans of finances are so clever that they require not oversight but freedom from all government fetters.

The whole thread’s worth reading for real explanations of what derivatives are and what leads to this, but I found this exchange particularly amusing due to how often we’ve heard arguments that are pretty much like this.

This does lead to a dispiriting cynicism, though, doesn’t it? Free market libertarians argue that government regulation interferes with market efficiency, and that if you simply trust producers to act in their own self-interest, any given market will work better. Keynesian-leaning liberals argue that businesses will frequently take actions that harm not only their own long-term interests but everyone else’s long-term interests, and that it’s better to have an inefficient but steady market than one that runs itself off the rails every so often.

I’d really rather believe the libertarian view, because it really is arrogant to say, “We don’t trust you not to screw up massively without oversight.” But when it comes to most businesses, I don’t trust them not to screw up massively without oversight. The track record of regulatory agencies hasn’t been much better, but I’ve seen little historical evidence that makes me believe that no market regulation is better than haphazard and inconsistent market regulation—and nothing that convinces me that consistent regulation wouldn’t be better still.

Boring wins the race? 16 Jan 2008

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While CNN’s election article is breathlessly titled “Romney’s Michigan win shakes up GOP race,” does it? He’s placed second twice and first twice (if you didn’t live in Wyoming, you’ll be forgiven for not knowing they had a Republican primary already). But more astonishingly, as Matthew Yglesias notes, Romney has 51% of the committed Republican delegates so far.

I think the appearance of shake-up comes from the fact that, not to put too fine a point on it, Romney is boring. He lacks the Southern preacher charisma of Huckabee, the thundering pugnaciousness of Guiliani, the amiable moderate realism of McCain. All right, one might argue that McCain is neither particularly moderate nor particularly realistic, but in terms of coverage, you know what I mean, right? In New Hampshire, McCain successfully sold himself as the independent choice.

Well, you know, I think Romney may have a pretty good chance at the Republican nomination. Here’s why.

In the recent past, the Democrats have always been the fractious party, with multiple competing interests failing to decide on who the best candidate is to represent them. Howard Dean? John Edwards? Joe Lieberman? The perception doesn’t quite match reality—Dean’s more conservative and Lieberman’s more liberal than common wisdom holds, for instance—but generally speaking a primary vote for one of these candidates made a statement: Dean a rebuke of DLC left-centrism, Edwards a return to economic populism, Lieberman an endorsement of hawkish foreign policy.

So we ended up with: John Kerry.

Don’t get me wrong. I liked a fair amount of things about Kerry. He seems to be an extremely smart guy, pretty honest given how long his political career has been, and willing to stand up and fight when necessary. And unlike everybody else in the 2000 race save McCain, he actually was a decorated war hero, and the attacks against him from the Swift Boat group represented one of the most disgraceful smear campaigns I’ve seen since I’ve been aware of politics.

But in the Democratic primary, a vote for Kerry made only one possible statement: I have no statement to make at this time. It’s as if the various competing interests on the left coalesced around the least offensive guy, somebody who few Dems could get excited about, yet few would say “anybody but him!” about. It’s also perhaps the strongest circumstantial evidence you could present to make the case that it’s the party bosses who still anoint the nominees.

I think what we’re seeing now on the Republican side is that they’ve become just as fractious as the Democrats. And without anyone obvious to line up behind—nobody from the current administration stepped into the race—they’ve ended up with a lot of candidates who want to make statements. And those candidates are going to excite some Republicans, but make other Repubs cry, “anybody but him!”

Which just may be why Mitt Romney, the most boring big name candidate in the field, the one who makes the statement I have no statement to make at this time, is leading the pack—and might keep doing so.

Serious ugly 11 Jan 2008

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Some years ago I spent a lot of time listening to the far-left Pacifica radio, and I’ve spent some time poking around paleo-libertarian parts of the internet recently. Both groups share a common affliction: if a given politico isn’t pretty much 100% in line with their ideals, they’re no better than the rest of the (fascists|communists|corporate stooges) in Washington. The perfect is the enemy of the good does not play out well in these parts.

Which brings me to Ron Paul.

Let me be up front: I like the guy. I don’t think Paul is quite as sui generis as his supporters imagine him to be; he’s certainly not the only anti-war candidate, isn’t the only one who’s expressed grave concern about the size and reach of the Federal government, and isn’t even the only one who’s framed these concerns in explicitly constitutional terms (now ex-candidate Chris Dodd goes so far as to carry a pocket-sized copy of the Constitution around with him). Even so, it’s hard to find one candidate who embodies all those things. Combine that with the amazing buzz Paul’s gotten over the last year on the internet, driven by all those techno-libertarians, and it’s easy to believe there really is a Ron Paul Revolution.

I think my interest in Paul comes from the perception that he’s the 2008 equivalent of Ralph Nader in 2000. I know both Paul and Nader supporters might rip their hair out at the comparison. But but but look at all the policy differences! Diametrically opposed! Yes, but as Ezra Klein aptly noted, the positions aren’t the point. “It’s a movement united behind Howard Beale: They’re mad as hell at politics, and not going to take it anymore. Paul’s candidacy is an indictment of the system, not an argument for who would best administer it.”

The problem, of course, is that when you’re running for the highest office in the land and start polling—let alone receiving votes—in sufficient numbers to no longer be a “fringe” candidate, people will, as inconvenient as it may be, start asking questions about whether you are the best person to administer said system.

A racist article or two from Paul’s past had gotten blogosphere mention months ago; it was countered with “Dr. Paul didn’t write that, it was just published under his name,” Paul issued a statement taking full responsibility for it and apologizing, and it didn’t really make that much press. (At the time, a couple journalists who latched onto the story made comment on how difficult it was to find back issues of these newsletters, hinting darkly that perhaps there was a reason the Paul campaign wanted them out of the spotlight.) And, when the reports about support from white nationalists, including quasi-endorsements from David Duke and actual money donated from founders of the notorious racist web site “Stormfront” bubbled up a bit later, that was met with, “but Dr. Paul can use the money for better purposes, and just because racists endorse him doesn’t mean he endorses them!” In other words, by not rejecting the money and the endorsements, the claim is that Paul behaved in a more principled fashion than all those other politicians who would have returned the money and denounced the wackos.

But it seems it wasn’t an article or two. Paul supporters are now pointing fingers at TNR and accusing them of overstating things, making it sound like it was consistent over a decade when it was just a few times. Maybe so, but if it happened multiple times over multiple issues, it’s no longer an isolated incident, something that just happened to slip through. It’s a pattern. Paul’s newsletter was publishing things that were explicitly targeted at racist wackos and the “black helicopter” crowd. As blogger Wirkman Virkkala writes, “The issue is not that [Paul] wrote these things, but that he let them go out under his name for years. What does that say about his sense of justice, rhetoric, or even self-image?” Virkkala concludes that he would still vote for Paul, “for whereas he is morally compromised, his opponents should be so lucky—their main points of ideology are morally compromised in far more dangerous ways.”

Spoken (well, written) like a true libertarian, but as Jim Henley notes, Ron Paul had an unprecedented national contributor base for his House races, and he asks:

How did Paul develop and maintain a national contributor base? Through the newsletters. […] the various newsletters over the years weren’t trivial pursuits. They were central to Paul’s political success. During Paul’s early, dicey contests for the 14th District seat, the early 90s numbers with the most racist items were fresh, not ancient history, and the donors Paul was drawing on would have included people who liked what they were reading.

But while Virkkala sees the newsletter as a sign that Paul allowed himself to be used, it looks to me uncomfortably like the reverse. The wackos his newsletter was courting in the 1990s showed up during his presidential campaign in 2007 to offer money and wave banners. One has to at least ask if the reason we didn’t see a strong repudiation of them now has little to do with libertarian ideals and a lot to do with not alienating a known support base.

In the final analysis, Ron Paul probably isn’t a racist. Instead—and this may be the most serious ugly of all—he may just be a politician.

Opening salvo: a coyote creed 10 Jan 2008

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(I originally wrote this in October 2006 over at my LiveJournal, but it still seems relevant, and it makes a great introduction to a more political blog.)

I’ve joked once or twice that I seem to be somewhere between Green and Libertarian, which averages out to Democrat—but I don’t think of my positions as too radical. I suspect in an earlier time I’d be a liberal Republican, but there’s simply no room in the modern Republican party for such an animal. What’s led me more toward the Democratic position, though, has simply been watching the world.

I grew up with oft-repeated talking points that I did internalize, at least in high school. Democrats love big government. Democrats are fiscally irresponsible. Democrats are soft on the military. Yet, when you actually look behind the common wisdom catechisms, it seems it was Clinton who zeroed out Reagan’s immense federal deficit, Clinton who made the most headway in reducing the size of government in any post-Vietnam administration, Clinton who declared “the era of big government is over” and made at least modest feints at keeping true to that. And it’s our current president who’s done the most to expand government spending including non-military discretionary budget items, like the welfare programs conservatives love to hate.

Pointing this out to folks who like to believe Democrats are the Party Of All Evil tends to earn you hostility. But to paraphrase Don Rumsfeld, you extrapolate from the facts you have, not the facts you wish for.

Conservatives weren’t intrinsically anti-government earlier in the last century, but post-Vietnam, healthy skepticism turned to not-so-healthy outright hatred. The Republicans have spent three decades very successfully promulgating the idea that the proper attitude toward your government is cynicism and contempt: nothing the government can try to do to help citizens will help them, regulation is explicitly designed to harm you, no politician ever seeks higher office in the interest of public service. This has been so successful, in fact, that it’s not only been the animating force of the “Republican revolution,” it’s taken as clear-as-day gospel truth by nearly every third party. There are aspects of standard Green rhetoric which are just about interchangeable with standard Libertarian rhetoric.

But here’s the rub. While there’s a very good case to be made that the Bush administration is not conservative in the way Barry Goldwater, the ostensible father of the modern “Conservative Movement,” meant it, I think there’s an equally good case to be made that we’re seeing modern conservatism’s logical end result. Why? Because campaigns became centered around candidates convincing you that they hate government more than their opponent does. If that actually starts winning offices, which it did, sincerely believing in public service becomes a liability for a candidate.

So what happens if that model wins—if government ends up being controlled by people who really do, in fact, hate government? According to them, and I think the vast majority of those who say this do sincerely believe it, you get a small-government, low-tax, free-market paradise.

Well, the model did win. The Republicans have been campaigning on that model for three decades and it brought them to complete power. What did we get from this? Let’s quickly review:

  • The average Iraqi citizen is at measurably more risk and suffering measurably greater poverty than he was before American intervention, and Iraq is far more open to terrorists, not less;
  • We have declared war (albeit not in the Constitutional sense) not on a state nor even a stateless entity but a tactic, ensuring there is no clear victory condition;
  • We have used that state of war to justify a marked shift of power to the executive branch and infringements on civil rights whose precedents—Lincoln’s suspension of habeas corpus, Japanese internment camps, COINTELPRO—have, with no exception, been judged by history as illegal, shameful or both;
  • Our relationship with long-standing allies is fragile (to put it mildly);
  • In the Federal government’s response to Katrina, we have seen incompetence on a scale one has to go back quite some distance in history to equal.

And I think that last one is the clearest illustration of my point. It’s easy to write it off as an example of why government can’t help people, but it’s not. It’s an example of why a government committed to an ideology that says government can’t help people can’t help people. Even the incredible corruption we see in the Abramoff scandal is in part a byproduct of this. If you sincerely believe that (a) big government is actively evil and (b) the major opposition party wants to expand government, it is absolutely necessary that you keep that opposition party out of power, and that means creating a de facto one-party state.

The problem is that once you’re in power, you learn that government does have a role that its citizens expect of it, even all those citizens who think that government sucks and that it needs to be drowned in the tub and so on and so forth. And you can’t do it. You just can’t. Your ideology is really stirring rhetoric, but it doesn’t actually work in practice.

Radical leftists still wistfully insist that the divergence between the reality of the Soviet Union and Marx’s worker paradise was due to the Soviets just not getting communism right, but I suspect the USSR was, like it or not, what communism collapses into in practice. As I watch conservatives break rank with the Bush team and contend that the divergence between what we have now and what Goldwater preached is due to the Republicans in power just not getting it right, I can’t help but have rather similar suspicions. The problem isn’t that Bush and his team didn’t hold fast to anti-government principles; it’s that you can’t govern with anti-government principles.

I don’t harbor any illusions that a government completely run by Democrats would be its own kind of paradise, and I tend to vote for candidates rather than parties anyway. I suspect that splitting the executive and legislative branches between parties makes for the best government, simply because one side will tend to dig in their heels at the excesses of the other and what does get passed will follow the principle of the Mutually Unacceptable Compromise. But here’s what I do think, and I guess it really is radical, because it’s so far away from what’s become the common wisdom of today:

Let’s start electing politicians to political office again.

By “politicians,” I mean people who actually like politics. People who want to be in public service. They’re still out there, you know—every race has at least one (usually not the incumbent, sadly). They might be Green or Libertarian; they might well be Republican or Democrat. They can write their own speeches. Most of all, they understand what the office they’re running for actually means. They want to do that job. They want to do it better than the guy they’re running against and better than the last guy in the office. Maybe better than anyone else who’s ever done it.

But they don’t want to tell us how much that job just doesn’t matter, because hey, it’s only government. They don’t want to dismantle their office for the benefit of the company or organization that they came to office from and plan to go back to after their term expires.

They may believe government should be a lot smaller, that a lot of regulation should be repealed, that taxes are too high. But ultimately they believe government is necessary, and not just a necessary evil—a necessary good.

That kind of ideology, I’d like to see.