Falling stocks, rising fear

The New Neo Posted on by

Stocks are falling sharply today, and some of the cause is bad news from Europe. Many countries are having the same crises of benefits outstripping the financial resources to provide them, and populations grown accustomed to their perks and angry at the prospect of losing them. And the global economy is so intertwined that the bell tolls for us all.

It’s small comfort that the US is not alone in its travails—and, in fact, is by no means the closest to the brink. We all know about Greece’s troubles, and now Italy and Spain give special cause for concern. In the understatement of the week:

European Commission president Jose Manuel Barroso urged European Union officials to reassess the recent bailout funds, as “markets remain to be convinced that we are taking the appropriate steps to resolve the crisis.”

Yes indeed, “markets remain to be convinced.” And the “appropriate steps” are either too disputed or too painful for many to contemplate, or both.

The US has just been through a Congressional struggle over the debt ceiling that has left the markets “to be convinced” as well. Congress and the President took the easy way out and deferred the real decisions for manana and a committee. It’s a recipe for increasing anxiety and uncertainty—and those are not good things for markets.

But what would be a good thing for the market? To allow the debt to skyrocket, increase the spending, and postpone the day of reckoning? Even if that reassured the market temporarily in the short term (and I don’t think it would), it’s hard to dispute the fact that it is postponing the inevitable. Those who believe the deficit must be reined in would like to do it sooner rather than later, knowing that there will be pain in the short term. That’s called a “correction” by those who believe the temporary grief will forestall greater problems later.

Today’s stock market fall does not seem to be mainly about what has recently occurred in the US with respect to the deficit and the debt ceiling crisis. The consensus is that it primarily reflects events in Europe, as well as an expected dearth of good news in the US unemployment figures about to come out. But still, the debt ceiling crisis could hardly have reassured a single person, with its length and its wrangling and its ultimate “solution” that solves nothing except the immediate issue of raising the ceiling itself.

And then “fear itself” adds to the brew, as none other than FDR once said.

Keynes vs. Hayek: the fight continues

The New Neo Posted on by

I must confess to feeling a bit weary now that the debt ceiling negotiations have been concluded. And this is only the first of many bitter fights to come. What to cut? Who’s to decide? How much is enough? How much is too much? What to do about taxes? And what effect will the whole thing have on the struggling economy? I can’t say I have much faith in the ability and will of our elected officials to deal effectively with it all.

I’d also dearly love to be able to actually understand—I mean, really deeply understand, and in detail—what both Keynes and Hayek were saying, and why. That would probably take a couple of years of study; a crash course won’t do, and I’d probably never master the math. I doubt very much I’m going to invest the time and effort.

My preliminary opinion, based on what is admittedly very incomplete knowledge, is pro-Hayek. But that doesn’t mean Keynes didn’t make some good points.

Speaking of points, and of fights—here’s round #2 of the wonderfully clever (and hugely entertaining) Keynes/Hayek rap video that has been a sensation on YouTube:

[NOTE: I wrote about the first Keynes/Hayek rap video here, including photos of the real guys, who look quite a bit like their talented impersonators.]

Politicians bare all

The New Neo Posted on by

Memo to politicians: not a good idea to send naked photos of self to an online acquaintance.

Memo to people in general: not a good idea to take naked photos of self in the mirror while holding camera, standing in front of unmade bed.

Memo to everyone over 35 who’s not in fabulous shape: maybe naked photos of self are not the best way to go. Getting naked with your honey in real life is just fine, but photos (especially with the acuity of digital cameras) can be much less forgiving than the eye of a loved one.

Memo to men: women are not generally as keen on naked photos of men as men are of naked photos of women. Sending a woman one, unless it’s specifically requested, is a bit like gifting her with a power saw. It may be something you want. But she might be happier with some earrings.

The raid that got Osama

The New Neo Posted on by

It’s the sort of article the New Yorker often does well—a detailed description of something. In this case, the “something” is the planning and execution of the raid that killed Osama bin Laden.

There are few surprises there, but one of them (for me, at least) is the fact that Obama really did make a few tough calls prior to the raid. Another previously unknown (to me, at least) fact is that the designers of the operation had the presence of mind to include a native-speaking translator, who stood outside the compound and warned curious passers-by drawn by the sounds to move along:

“Go back to your houses,” [translator] Ahmed said, in Pashto, as Cairo [the dog] stood watch. “There is a security operation under way.”

Although the beginning of the raid was filmed by drone and watched live in the White House, there was a blackout period of about 20 to 25 minutes where there was no information transmitted. It must have been a long twenty minutes.

As you read the article, you can just picture the movie that will be made some day. Those SEALS are very tough cookies:

After a few minutes, the twelve SEALs inside helo one recovered their bearings and calmly relayed on the radio that they were proceeding with the raid. They had conducted so many operations over the past nine years that few things caught them off guard. In the months after the raid, the media have frequently suggested that the Abbottabad operation was as challenging as Operation Eagle Claw and the “Black Hawk Down” incident, but the senior Defense Department official told me that “this was not one of three missions. This was one of almost two thousand missions that have been conducted over the last couple of years, night after night.” He likened the routine of evening raids to “mowing the lawn.” On the night of May 1st alone, special-operations forces based in Afghanistan conducted twelve other missions; according to the official, those operations captured or killed between fifteen and twenty targets. “Most of the missions take off and go left,” he said. “This one took off and went right.”

Here is a description of the moment right before Bid Laden was killed:

The Americans hurried toward the bedroom door. The first SEAL pushed it open. Two of bin Laden’s wives had placed themselves in front of him. Amal al-Fatah, bin Laden’s fifth wife, was screaming in Arabic. She motioned as if she were going to charge; the SEAL lowered his sights and shot her once, in the calf. Fearing that one or both women were wearing suicide jackets, he stepped forward, wrapped them in a bear hug, and drove them aside. He would almost certainly have been killed had they blown themselves up, but by blanketing them he would have absorbed some of the blast and potentially saved the two SEALs behind him. In the end, neither woman was wearing an explosive vest.

It’s not that the operation went flawlessly. It did not, beginning with the crash of one of the helicopters as it descended into the compound. But the SEALS were fully up to the task of improvising when things did not go as planned—and in the end, they got their man.

From horseheads to war paint

The New Neo Posted on by

Ann Althouse wonders how those Mafioso managed to get that horse’s head into the bed with Jack Woltz:

In that scene in “The Godfather”… we just see the guy slowly waking up and finally noticing there’s a bleeding horse head in his bed. It’s great cinema. You never forget it. But what the hell kind of a heavy sleeper was Jack Woltz anyway? I’d love to see the missing part of the story, where guys holding a giant, dripping horse head open the bedroom door, walk across the room, peel back the covers ”” I guess they’d have to set the head down ”” put the head in the bed, gently replace the bed clothes, and sneak back out of there. All that time, Woltz is snoozing peacefully.

Well, I guess Althouse never slept with some of my bed companions, because if she had, she’d know there are a lot of sound sleepers in this world. It’s not necessarily a bad trait, especially if you want to make a statement, as did the guys in “The Godfather.”

Speaking of statements—the whole thing reminds me of the summer camp I went to as a child. The horses there were for riding (although not by me!), and mercifully they kept their heads on their bodies.

But at the camp we had an institution known as Color War. It had nothing to do with race and everything to do with the speed contests known as races. Every year, kids from the city came to the Berkshire establishment for the entire summer, and the attendees were divided into two competing factions that fought (in the metaphoric sense) the whole time for hegemony on land and lake. There were track meets, volleyball games, and war canoe demonstrations, and archery and tennis and singing competitions and battles on every camp front imaginable.

It was all very intense. One of the most exciting parts of the whole thing was the beginning (isn’t that often the case?), when Color War was said to “break”—meaning the entire camp was divided into two teams, and each camper learned what team she was on. This was always done in some surprise way on about the second week of camp. We knew it was coming, and the tension built and built. How would it happen this year? Could they outdo the last?

The Color War break I remember best—and one never to be surpassed—was the morning we all woke up to the usual grating sounds of a scratchy record playing reveille, and as we opened our sleepy eyes, each of us noticed that all the other girls in the bunk had paint on their faces (of course, we were each unaware of our own painted face). Some were bright green and some stark white, the colors of the camp and the colors and names of the teams. As we pointed, whooped, hollered, and raced to the single tiny mirror to see our own faces, we realized that Color War had broken and the teams had been announced.

We also realized that our counselors must have sneaked into the cabin in the middle of the night and painted us while we slept. This was exciting in a disturbing way. There was a sense of vague violation and, at least for me, the shock that I had completely slept through such a thing. Since I was not a heavy sleeper, I could not understand it; how could it be? But the undeniable evidence was there for all to see in my bright green face.

The painters must have had a light and deft touch, because there were several hundred girls at the camp that summer, and the report was that no one had woken up.

Who won that year? Can’t remember.

[NOTE: This comment at the Althouse thread is mean mean mean, but hysterical.]

[ADDENDUM: Another connection between movies, Al Pacino, and a horse’s head. But this one’s musical.]

Oh, that civility!

The New Neo Posted on by

Apparently it ends when talking about the Tea Partiers.

Joe Nocera of the NY Times writes:

You know what they say: Never negotiate with terrorists. It only encourages them.

Can’t really disagree with that. Except the next sentence is this:

These last few months, much of the country has watched in horror as the Tea Party Republicans have waged jihad on the American people.

It goes on in that vein. And on and on—extending the metaphor and ending with this:

For now, the Tea Party Republicans can put aside their suicide vests. But rest assured: They’ll have them on again soon enough. After all, they’ve gotten so much encouragement.

Ah, it’s just words, right?

[ADDENDUM: It seems to be the meme du jour, although Joe Biden denies ever saying it.

See also this. And Jonah Goldberg observes:

Tom Friedman ”” who knows a bit about Hezbollah ”” calls the tea partiers the “Hezbollah faction” of the GOP bent on taking the country on a “suicide mission.” All over the place, conservative Republicans are “hostage takers” and “terrorists,” “terrorists” and “traitors.” They want to “end life as we know it on this planet,” says Nancy Pelosi. ]

Christian terrorism?

The New Neo Posted on by

The logic of those who claim that Breivik was the Christian equivalent of a Muslim terrorist leaves a lot to be desired.

Are there Christian clerics clamoring for the murder of Young Socialists in Europe, in order to preserve the continent for Christiandom, and protect it from the Muslim invasion? If there are, I certainly haven’t heard of them. And Breivik himself wrote the following about his religious beliefs in his lengthy manifesto:

“A majority of so called agnostics and atheists in Europe are cultural conservative Christians without even knowing it,” [Breivik] wrote.

“If you have a personal relationship with Jesus Christ and God then you are a religious Christian. Myself and many more like me do not necessarily have a personal relationship with Jesus Christ and God. We do however believe in Christianity as a cultural, social, identity and moral platform. This makes us Christian,” he wrote.

Breivik’s initial explanation comes in a segment of the manifesto entitled “Distinguishing between cultural Christendom and religious Christendom – reforming our suicidal church.”

Later in the manifesto, when attempting to justify his “martyrdom operation” Breivik did not see himself as being religious.

“I’m not going to pretend I’m a very religious person as that would be a lie. I’ve always been very pragmatic and influenced by my secular surroundings and environment,” he wrote in a section of the manifesto.

“Religion is a crutch for many weak people and many embrace religion for self serving reasons as a source for drawing mental strength,” he wrote.

“I’ll say directly that this is my agenda as well,” he wrote.

So, Breivik seems to see Christianity as part of a Western culture he is interested in preserving, rather than being a Christian himself. His terrorist act was, of course, contrary to every teaching of Christianity and every statement of every Christian cleric—sanctioned by none, and condemned by all.

Compare and contrast this to Islam’s reaction to its own jihadis. It is split. All too many Muslim clerics sanction and glorify terrorists’ deeds and suicide bombers’ martyrdom—and encourage more of the same, all directly in the name of Islam. The contrast with Christianity could not be greater. But there are many people—and some of them are quoted in the article I linked to in the first paragraph of this post—who would like to argue otherwise, and hope that readers will be too stupid and/or ignorant to notice the difference.

The debt limit compromise

The New Neo Posted on by

If you look at today’s Memeorandum page, you’ll see that the debt ceiling compromise story totally dominates the news.

Most of the articles are of the “who won?” variety (even though the vote hasn’t occurred yet, everyone’s assuming it will pass). No need to link to them; just look at the page yourself and start clicking, if you’re interested. Most of them seem to think that the winners were the Republicans and the Tea Party. But I think most on the right would agree, instead, with commenter “J.J.,” who wrote here:

This deal does nothing about the spending problem. Just puts a bit of lipstick on the pig. Or as some might say ”“ kicks the can down the road. This is what I expected.

It’s hard to see that anyone “won,” especially if America’s credit might be downgraded anyway (see also this). The prolonged negotiations involved in making this especially stinky variety of sausage may have further shaken creditors’ already-waning faith in America’s ability and willingness to pay its bills.

The Tea Party wanted far deeper cuts than this. Liberals, the left, and Obama wanted tax hikes. And the public didn’t want the process of “negotiations” to go on this long, although politicians had reasons for believing the pressure involved in a down-to-the-wire dickering to be strategically advantageous.

This is just a first baby step. More must be done. What might it be?

I will go out on a small limb here and say that there’s nothing all that wrong (and even a few things right) with some manageable amount of deficit spending by the federal government. It’s the magnitude it has reached in the last few years that has become untenable and unsustainable, especially when projected only a short time into the future.

Somehow, and soon, entitlements must be reined in, or taxes raised, or both. There is no other way out. To accomplish these feats without undue hardship, and in an effective manner—to trim entitlements without harming people who have relied on them and paid into the system, and to do so for the next generations as well, and to raise taxes in a manner that doesn’t burden business and harm the recovery, and which actually takes in the amount of revenue needed rather than causing the overly-taxed to flee and/or become less productive—takes skill and wisdom that I’m afraid members of Congress do not possess (actually, I’m not sure who does).

So let’s not pretend it’s easy, although I defer to none in my contempt for Congress as a whole. But balancing (or at least getting into better balance) the budget of the federal government is nothing like balancing the budget of a household. Politicians must get elected and listen to the cries of constituents who want what they want when they want it. And cutting spending in the midst of an attempt to recover from a recession has its own dangers; it has the potential to put a damper on the economy itself.

It does no good to pretend that these problems don’t exist, and that solutions are simple. If the law of unintended consequences is any guide (and it usually is), any attempt to solve the problem will not go exactly as planned.

That doesn’t mean we shouldn’t try. Congress is going to have to tackle this, for real. This is what is contemplated:

Both Republicans and Democrats have proposed drumming up a committee of 12 legislators, handpicked by both parties, to deal with the most complicated issues involved in a likely debt-ceiling compromise. It will be up to this “super committee’’ to complete the epic task of cutting $2.8 trillion in spending from the federal budget.

According to the agreement reached yesterday, committee members would have only until the end of November to complete the job, and when they approve a final set of cuts, the rest of Congress would be given a simple choice: take them or leave them.

The first step in the process would take place immediately: raising the debt limit by nearly $1 trillion and cutting spending by a slightly larger amount over a decade.

That would be followed by creation of the super committee to recommend an additional $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid, and Social Security or overhauling the tax code.

Best of luck. As the article points out, the committee will be tasked to do what Congress couldn’t, and there’s no indication it would do any better.

The problem is not just that Democrats are stupid and Republicans are mean, or vice versa, or both—although in some cases that may indeed be true. The real problem is that the problems are real, and the disagreements are real, and that predicting what the economy will do as a result of government intervention is an iffy task. But doing nothing is not a viable option.

Debt compromise

The New Neo Posted on by

So, is this it?

And was it really Obama who stalled things all along?:

In many respects, the deal will, if approved by all parties, resemble the contours of a short-lived pact negotiated last weekend by House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev. Obama rejected that deal, forcing Congress to wrestle with other inferior legislative options throughout the week.

[NOTE: Here’s an interesting analysis of the compromise proposal.]