Obama and the disturbing influence of Frank Marshall Davis

The New Neo Posted on by

Much has been written about the fact that Frank Marshall Davis was a mentor to the young Barack Obama. But Davis was an unusual role model for a boy; not only may he have been a sometime pedophile, according to a book he wrote under a pseudonym, but he was also a Communist. Some have even speculated that Davis was Obama’s biological father, a fantasy for which I can find no evidence whatsoever and have dismissed as unlikely in the extreme.

I have also dismissed it as irrelevant. Because the truth is that Davis was already influential enough in Obama’s life without needing to be an actual blood relative. Living in Hawaii, he was a good friend of Obama’s grandfather Stanley Armour Dunham, the man who actually was a father figure to Obama, because he and his wife raised the young boy. Not only that, but Davis—who was a black man—was designated by his buddy, Obama’s grandfather (referred to as “gramps” in Obama’s memoir), as a guide for the very young Barack to instruct him on how to be an African-American man.

What a strange choice Davis was! Even forgetting the Communism and the possible pedophilia; Obama presents Davis as a seedy and dissipated figure [excerpt is from Dreams From My Father]:

…by the time I met Frank [Obama was around nine years old] he must have been pushing eighty, with a big dewlapped face and an ill-kempt gray Afro that made him look like an old, shaggy-maned lion. He would read us his poetry whenever we stopped by his house, sharing whiskey with gramps out of an emptied jelly jar. As the night wore on, the two of them would solicit my help in composing dirty limericks. Eventually, the conservation would turn to laments about women.

“They’ll drive you to drink, boy,” Frank would tell me soberly. “And if you let ”˜em, they’ll drive you into your grave.”

I was intrigued by the old Frank, with his books and whiskey breath and the hint of hard-earned knowledge behind the hooded eyes. The visits to his house always left me feeling vaguely uncomfortable, though, as if I were witnessing some complicated, unspoken transaction between the two men, a transaction I couldn’t fully understand….

No wonder Obama felt uncomfortable; in family therapy lingo, we’d say that both of the old men in Obama’s life—the two father-figures for the fatherless boy, “gramps” and Davis—had what’s known as a “boundary problem.” In other words, their behavior was inappropriate for a young boy to be witnessing. It’s not for nothing that Obama says he felt “vaguely uncomfortable” around them; most children would have felt that way.

Although Obama writes about Davis in his memoir, he only refers to him by the name “Frank.” This is interesting; whom was he protecting by not giving the man’s full name? After all, Davis was already deceased when the memoir was written in the 90s (it was published in 1995), and Obama’s grandfather had died in 1992.

Obama couldn’t leave out such an important father-figure as “Frank.” And he was quite candid about the seediness of his life and character. What he omits, as far as I can tell (disclaimer: I’ve only read excerpts from Dreams From My Father and therefore I’m not familiar with the entire work), is Davis’s Communism.

It is difficult to imagine that the man did not speak about this aspect of his life with Obama. He certainly didn’t seem to be the type to hold back for propriety’s sake—the word “frank” describes him as an adjective, as well as being his first name. So the omission would have to be Obama’s. How much Davis’s Communist ideology influenced Obama is unknown, and Obama isn’t telling.

But whatever the truth of Davis’s ideological influence on Obama, his relation to Obama was certainly profound in the psychological sense. The evidence for that is in Obama’s own words—and I’m not just talking about the prose in Dreams From My Father. Obama also wrote a poem in college called “Pop” that appears to be about Davis.

Some people have assumed this poem is about Obama’s grandfather because of the title, but there is little question in my mind that the subject is actually Davis. The description in the poem dovetails perfectly with the description in the book (poet, whiskey), and the black glasses at the end match this photo of Davis giving a public reading.

Take a look; it is quite a disturbing document on many levels:

Sitting in his seat, a seat broad and brokenӬ
In, sprinkled with ashesӬ
Pop switches channels, takes anotherӬ
Shot of Seagrams, neat, and asksӬ
What to do with me, a green young manӬ
Who fails to consider the
Flim and flam of the world, sinceӬ
Things have been easy for me; Ӭ
I stare hard at his face, a stareӬ
That deflects off his brow; Ӭ
I’m sure he’s unaware of his”¨
Dark, watery eyes, thatӬ
Glance in different directions,Ӭ
And his slow, unwelcome twitches,Ӭ
Fail to pass.ӬI listen, nod,Ӭ
Listen, open, till I cling to his pale, Ӭ
Beige T-shirt, yelling,Ӭ
Yelling in his ears, that hangӬ
With heavy lobes, but he’s still telling
His joke, so I ask why
He’s so unhappy, to which he replies…”¨
But I don’t care anymore, cause”¨
He took too damn long, and fromӬ
Under my seat, I pull out the
”¨Mirror I’ve been saving; I’m laughing, ”¨
Laughing loud, the blood rushing from his faceӬ
To mine, as he grows small,Ӭ
A spot in my brain, somethingӬ
That may be squeezed out, like a Ӭ
Watermelon seed betweenӬ
Two fingers.Ӭ
Pop takes another shot, neat,Ӭ
Points out the same amberӬ
Stain on his shorts that I’ve got on mine, and”¨
Makes me smell his smell, comingӬ
From me; he switches channels, recites an old poemӬ
He wrote before his mother died,Ӭ
Stands, shouts, and asksӬ
For a hug, as I shrink, my Ӭ
Arms barely reaching aroundӬ
His thick, oily neck, and his broad back; ’cause
ӬI see my face, framed within
Pop’s black-framed glasses”¨
And know he’s laughing too.

The lines that begin “points out the same amber stain…Makes me smell his smell, coming/”¨
From me” may be describing outright sexual abuse. But perhaps not; we don’t know, and we’ll never know. But there is no question that the poem is describing a boundary violation on several levels: this child feels invaded—perhaps even taken over—by this man, and is fighting against that sensation.

That is the subject matter of the poem, which Obama composed while in college. It seems—as do so many poems written in adolescence and young adulthood—to be an attempt to work out in poetry a deep psychological wound and an ongoing dilemma, something that probably could not be talked about as frankly (there’s that word again) in an ordinary and prosaic way. When, years later, Obama got around to writing his prose version in Dreams From My Father, it is apparent that he was already hiding the truth, and softening the depth of the violation he had felt.

The poem describes a boundary violation that is both physical and mental. The physical is obvious: he is forced to hug the man who repels him, and as he does so he feels himself shrinking. But the violation is mental, too; earlier in the poem, Obama has described “Pop” as a person who has actually gotten into his brain, and whom he wishes to eliminate from it:

as he grows small,Ӭ
A spot in my brain, somethingӬ
That may be squeezed out, like a Ӭ
Watermelon seed betweenӬ
Two fingers.

This mental and emotional usurption of the young Obama is echoed in the last image of the poem, in which the boy sees his own tiny image framed in “Pop’s” eyeglasses.”¨ The poem describes a struggle against an attempt at identity takeover, a rejection of being reduced to a reflection in the eyes of the stronger, older, more experienced mentor, who has tried to make Obama over in his own image:

I see my face, framed within
Pop’s black-framed glasses”¨…

The sight is chilling to Obama, who is trying to break free. One wonders if he ever fully succeeded.

[ADDENDUM: Those who argue that this poem is about Obama’s maternal grandfather, Stanley Armour Dunham, would have to explain the following lines in light of the fact that Dunham’s mother (Obama’s great-grandmother) died when Dunham (Obama’s grandfather) was only 8 years old:

…he switches channels, recites an old poem”¨
He wrote before his mother died,

It simply does not make sense if “Pop” is about Obama’s grandfather.]

Obama, his task force, and the auto industry: does anyone else find this especially chilling?

The New Neo Posted on by

When Obama took it on himself to fire GM CEO Rick Wagnoner, this is how it went down, according to someone who ought to know:

“The president said he had decided to do that. He wasn’t asking for opinions,” said U.S. Sen Carl Levin, a Michigan democrat. “There wasn’t much point in arguing whether it was fair or unfair, wise or unwise.”

Curious, isn’t it, coming from a president whose big skill was supposed to be his ability to dialogue with both sides and to hear them out? And remember, this is a man from Obama’s own party speaking, one who should have had something to say on the matter of the auto industry. After all, he’s not only the Senator from the state most deeply involved, Michigan, (and has held that office for a very long time), but he’s a liberal Democrat as well.

But it seems that the King has spoken, and it’s off with Wagoner’s head—metaphorically, that is. No questions asked.

Wagoner himself was blindsided, according to the Reuters article. It had been a few months since the cries for his resignation had been heard last fall and they had died down, although Wagoner had to have known his days were numbered. But the word that he was through came with great suddenness, at a meeting where he was presenting a plan to restructure GM to the Obama administration’s auto task force.

We all know that President Obama has no experience of business in general or the auto industry in particular, and virtually no management or executive background either. But what about the members of this shadowy “auto task force”? Surely they must have had something to do with the auto industry, right?

I didn’t find too much about them when I looked just now—except for this, which was written a week ago, before the Wagoner firing. Somehow, it’s no surprise to learn the following (note: as someone not registered with the WSJ, I can’t seem to access the WSJ article referred to here; no link to it is given, either):

A large part of the [WSJ] article is given over to a discussion of the absence of industry expertise among the members of the auto industry team.

In session after session in a warren of offices at the Treasury Department, the team has sat through tutorials on dealer financing, studied basic data and debated the future of U.S. car sales. They have spent days trying to understand the complexities of the hundreds of companies that supply the car companies with axles, seats and other parts.

Steven Rattner, a former journalist-turned-investment banker, was picked last month to head the team…[he says] “[W]e’ve learned a lot about how car dealers work, and how companies get paid when they sell a car to a dealer, and why there are a certain number of dealers more than are optimal. Have we learned everything? Of course not, but I think we are learning what we need to learn to do this job.”

Disquieting isn’t it. I can’t fault the members for trying to get their hands around the industry whose future they are deciding but I don’t understand why a few people with real industry expertise aren’t integral members of the panel. It’s one thing to get a crash course and quite another to apply the lessons in a cogent manner.

“Disquieting?” I’ll say. Oh, but of course this task force has learned in a month all they need to do the job. Much more than Mr. Wagoner, who had been in the auto industry for thirty-two years.

But what the hey, they’re smart guys, aren’t they? Smart people can cram for tests and learn enough to get an “A,” right?

Oh, and there’s another little detail that hasn’t gotten much attention: not only is Wagoner gone, but “a majority of GM’s board will also be replaced.” Oh, why not? Send them to all the Bastille.

Let’s learn some more about how the Obama auto task force has been operating:

The task force met with a committee representing GM’s bondholders on the same day it met with Fiat executives…The bondholders’ attorneys laid out the details of a plan to exchange debt for equity, which would reduce pressure on GM to repay the bondholders. As the lawyers walked through a litany of potential challenges, Messrs. Rattner and Bloom took notes, offering minimal commentary, according to people who attended the meeting. Since then, the bondholders committee has had little contact with the task force. Its lawyers say they were surprised two weeks later when Mr. Rattner publicly criticized them for not being flexible enough.

Mr. Rattner and the Treasury Department haven’t responded to requests for comment on the complaints by bondholders.

I can see a pattern starting to emerge, and it’s not a pretty one. This post isn’t about whether Wagnoner needed to go or not. I’ve read opinions on both sides; I really don’t know. It’s about the process by which that happened and Obama’s imperial style, and really astounding hubris.

This is the slippery slope on which businesses place themselves when they accept a bailout. Of course, in the case of GM, it seemed to be that or bankruptcy. But when you sell your soul to the government, the government becomes a dictator.

And we all know how well government is at managing businesses. Probably a good sight worse than Rick Wagoner and the Board of GM, despite those government task force wizards.

It is merely simple common sense to think that the task force should have been composed mainly of people with auto industry experience. But all of them seem to be too tainted to be considered by the Obama administration—tainted, that is, by the actual reality of doing business, and the inevitable compromises and hard decisions that need to be made.

This is part of a pattern I’ve noticed in the Obama administration, that of distrusting those with hands-on experience in a given field in favor of smarty-pants generalists with no track record—such as Obama himself.

[NOTE: Here’s task force head Rattner’s bio, from the NY Times:

Mr. Rattner started his career as a financial reporter for The New York Times. He has been active in New York’s Democratic Party, holding a variety of fund-raisers for candidates; he originally backed Hillary Clinton for president. Mr. Rattner’s wife, Maureen White, was a co-chairwoman of finance for Mrs. Clinton’s campaign.

He previously worked at Lehman Brothers, Morgan Stanley and Lazard as a mergers and acquisitions specialist.

So we have a dedicated Democrat (not that there’s anything wrong with that), a journalist (ditto, I’m sure), and a Wall Street money guy. Great background for his present job, don’t you think? Note also, in the comments section of the Times article, which appeared in late February, that at least the readers note the lack of auto industry (or any other industry) experience, even if Obama doesn’t.]

[ADDENDUM: I finally was able to locate the WSJ article. Here is some information on other task force members:

The team’s industrial expertise comes from Ron Bloom, a scrappy Harvard Business School graduate who gave up investment banking in 1996 to work as a top adviser to the United Steelworkers union…

Several team members, such as Brian Deese, a 31-year-old former Obama campaign aide, are on loan from the White House’s National Economic Council. Three others specialize in climate change. The rest come from agencies such as the Energy and Labor departments. Backing them up are about 30 accountants and advisers.

Great. Just great. Thirty-one-year old. Specialists in climate change.

There’s more, if you’ve got the stomach for it:

People on the Fiat team came away [from a meeting with the task force] thinking that the task force’s questions betrayed a limited understanding of the industry. “It’s fair to say we walked out of the meeting and were a little unsettled,” says one member of the Fiat team…

Several auto experts who’ve met with the panel say they’ve been struck by the group’s focus on trying to determine exactly when car sales will rebound. “They are absolutely concerned with the short-term, so it’s hard to see them grasping the medium or longer-term issues,” says Daniel Roos, an automotive expert at the Massachusetts Institute of Technology, who briefed the team in Washington on March 6.]

Feel overwhelmed? [continued]

The New Neo Posted on by

Here’s an excerpt from a comment by “Wolla Dalbo” on yesterday’s post that I thought made some points well worth highlighting:

I believe that in order to understand what is going on, we have to apply a model radically different from the one we usually apply to the actions of politicians and Presidents here in the U.S. Greed, stupidity or incompetence we can understand, ruthlessness is also a given and pandering is taken for granted, too, but a grab for power so great that it will result in true Tyranny; that we are not used to thinking about and being on the look out for. Except for the application of this model by the Left to create their alternate world of the Bush Presidency””and a fine piece of projection that was, we do not really look for the telltale signs left by someone trying to set himself up as a tyrant or dictator as a way to comprehend what it is our President is up to; in the case of Obama, that is what we must do, and I think a moment’s reflection will demonstrate how this model fits.

Just ask yourself, if you, as a new President, were plunged into the midst of a major financial crisis as soon as you took office, would you be trying, in every way you could, to douse the flames, to calm the situation, or would you be throwing gasoline on the fire to make it bigger and hotter; what ends of yours would best be served by a bigger crisis and more panic, rather than less; panic, haste and confusion rather than clear thinking and analysis and deliberate, well thought out actions?

Would you be making taking control of the upcoming Census one of your immediate priorities in the first few weeks of your new Presidency, would you be involved, as well, in trying to acquire the ability to take over the Internet and disconnect certain parts of it, would you be trying, over and over in those critical first few weeks, to fund ACORN””a corrupt leftist organization that you have close ties with”“with hundreds of millions of tax dollars, would you be concerned with changing obscure DOD procurement regulations so that ammunition supplies for civilians would start to dry up, or would you consider spending precious time to try to do any, much less all of these particular things in the midst of a crisis, a waste of precious time and a “distraction?”

I was certainly not seeking signs of tyranny in the Obama administration, nor am I a natural conspiracist. I tend to scoff at such things—after all, I was one of the few people in America who clung to the idea that Oswald acted alone.

Before Obama took office, I noticed some traits of his that concerned me (you can find the relevant posts under the category “Obama” on the right sidebar of this blog). His grandiosity and narcissism. His fostering of a trancelike hero-worship in his followers. His lack of humor. His complaints about being tired, used as an excuse for his errors. His ignorance of history. His hubris about his foreign policy background, based on his childhood and early adulthood sojourns and travels. His emphasis on “coolness” over substance. His breaking of his word on campaign finances. His associates, especially Wright and Ayers.

But I always maintained that the only way we would know Obama would be by his actions in office. There were worrisome indications that he would make poor judgments, or even that he would govern from the Left, but there were so many contradictory signals coming from him that one could not be sure of much of anything, especially what ideology might be driving him.

Right after the inauguration, I even wrote a piece for Pajamas Media cautioning against Obama Derangement Syndrome. In it I said:

Yes, there are reasons to fear that Obama has a far left agenda, based on his history, some of his own statements, and his associations. There are even reasons to believe that whether he does or doesn’t have such an agenda himself, he will lack the inclination (or perhaps the backbone) to stop the far left agenda of those with the power to pass bills ”” in other words, the hugely Democratic Congress and its leaders Reid and Pelosi.

But I suggest that everyone stand back, take a deep breath, and wait. Wait, and observe. It will become clear enough as Obama chooses a Cabinet and advisers. And then it will become even more clear as he takes office and begins the work of government. More clarity will come as he handles the inevitable crises and tests that will occur on his watch.

The goal of each of us should be to react only to evidence, not fear….It is necessary both for the sake of the country and our own well-being to give the man a chance to prove those fears wrong. And it is also necessary to hope that he will do so, and to believe that whatever happens, our Constitution and our form of government is not as fragile as all that.

Sounds fair, no? And I still fervently hope that that last phrase will prove true: …that whatever happens, our Constitution and our form of government is not as fragile as all that

But as far as the rest of it goes, I think the waiting is over; Obama has put enough cards on the table to see much of his hand. The reason I quoted Wolla Dalbo’s comment at such length at the beginning of this post is that I think it lays out quite succinctly some of the evidence that has amassed in the nearly ten weeks (has it only been that? How time doesn’t fly when one isn’t enjoying oneself) since Obama’s inauguration.

I didn’t expect evidence to accumulate so fast and to point at such a pessimistic conclusion. But it has. And, as the commenter points out, one of the biggest pieces in the “what does Obama want?” puzzle—perhaps the biggest—has been his upside-down priorities.

There’s his assertion that his shockingly expensive energy, education, health care budget is connected to the economic recovery when even a dim knowledge of financial realities dictates the exact opposite (this appears to be use of the time-honored technique of the Big Lie). There’s his outright fomenting of class war, his demonizing of Wall Street and the rich. His bait and switch on tax relief. His cavalier disregard for the huge additional stock market drop that has occurred on his watch. His favoritism towards ACORN. His attempt to create some sort of compulsory government service for young people. His push for card check and cap and trade, two proposals so far to the Left that even the Democrats in Congress are balking.

Obama came to office in the midst of a profound economic crisis, one that might even have been responsible for his winning the election. But it has taken his administration a surprisingly long time to get around to offering concrete and specific proposals to actually address it—for example, a scheme for evaluating the toxic assets. What’s more, the Treasury Department, which should have been his top priority, remains curiously vacant, with hapless Tim Geithner wandering all alone listening to the sound of his solitary footsteps in its echoing halls.

Although I remain open to evidence to the contrary, for now my working hypothesis is that Obama is a man of the Left, that he is insufficiently devoted to the age-old American idea of liberty but is instead a committed statist, and that the mind-numbing pace of his change is deliberate and has been effective so far.

I used the word “numbing” in the above paragraph, and I mean it. I noticed in the same comments section of yesterday’s post that another reader pointed out that “I am seeing the effect already amongst friends who have just stopped listening to any news.”

Oddly enough, this is what I have noticed among my liberal friends, Obama-supporters all. I cannot tell you how many times I have asked them what they think about Obama so far and they answer that they haven’t really had time to follow it all, and it’s all so very confusing.

Now it’s true that most of my liberal friends are not exactly newshounds, nor do they read blogs, even blogs on the Left. But it seems as though they are turning away from politics even more than usual, especially considering that they should be joyfully lapping up the wonderful news, now that their man Obama is in. I believe that their turning away is both an attempt at protecting themselves from the anxiety of hearing about the financial crisis, and a reaction to a feeling of “something just isn’t right with Obama” in the pits of their stomachs.

I am convinced that Obama is counting on this reaction. He knows the Left is behind him (except for a few details such as his Afghanistan policy, or those who think he’s not far enough to the Left in terms of his financial interventions). He knows those on the Right will despise him and what he’s doing. He knows both of those groups will be paying attention to the details.

But he also knows that those more in the middle will not be noticing much, until the deeds are done. And he is counting on them to look away and hope for the best. The question is whether his pace is fast enough, and whether they will catch on—and whether they will then understand what is happening, or care. Or will the predictions of the Grand Inquisitor come to pass in this country, as they have in so many others?

[NOTE: In case you missed it, here’s the “Grand Inquisitor” quote from Dostoevsky’s “The Brothers Karamazov” once again:

Oh, never, never can [people] feed themselves without us [the Inquisitors and controllers]! No science will give them bread so long as they remain free. In the end they will lay their freedom at our feet, and say to us, “Make us your slaves, but feed us.” They will understand themselves, at last, that freedom and bread enough for all are inconceivable together, for never, never will they be able to share between them! They will be convinced, too, that they can never be free, for they are weak, vicious, worthless, and rebellious. Thou didst promise them the bread of Heaven, but, I repeat again, can it compare with earthly bread in the eyes of the weak, ever sinful and ignoble race of man? ]

Feel overwhelmed? Maybe you’re supposed to

The New Neo Posted on by

I’ve noticed that, more than at any time since I began to blog about four years ago, there are too many compelling topics to write about rather than too few. Each day I have to drop dozens that interest me, in the name of having a life.

It hasn’t always been so frenetic, but it is now. Things are happening so fast and so furiously that people have no time to process the amazingly complex issues involved, and the radical changes being proposed and in many cases implemented.

The frantic pace is supposedly happening because we are in crisis mode. But I’m certainly not the only one to wonder whether the sense of crisis is being purposely escalated in order to speed up the passage of controversial and “transformative” legislation. And to be very wary of where this “change” is really leading us.

Glass Steagall: looking backwards, looking forwards

The New Neo Posted on by

Most of us are unfamiliar with the details of the world of finance that led us into the current crisis. Except for those in the business, whoever heard of tranches and derivatives, of the uptick rule and the quants, until recently?

Certainly not me. And not most of us, either. So how are we voters to evaluate whether any of the Obama administration’s solutions are likely to help or hurt? Especially when the supposed experts disagree?

As with all complex systems, the worldwide economy is difficult to understand and virtually impossible to control. We try to intervene in certain ways and come up against the fact that we probably haven’t identified most of the variables involved. The law of unintended consequences continues to rear its ugly little head.

And yet it’s crisis, crisis, crisis, so something must be done—right? The option of doing nothing—or doing less—and letting matters run their course seems so very passive.

In this crisis, people tend to see what they’re looking to see. Those who are laissez-faire capitalists can point to government regulation that backfired and helped lead to the current problems. Those who want government to intervene more can point to areas where uncontrolled profit-hungry capitalists chose short-term gain and sacrificed long-term stability.

Ever since September, I’ve had to give myself a crash course in finance. My knowledge of these things is still rather spotty to say the least, but I have come to the conclusion that the problem is not too much or too little regulation per se, but regulation of the wrong type, plus the difficulty of figuring out what the right type would be.

For example, take Glass-Steagall. When it was repealed in 1999, I certainly didn’t notice—did you? I only first learned a bit about it this September, right at the beginning of the crisis, when people said that the bill’s repeal was part of the reason the current meltdown happened. Many said that if the Glass-Steagall firewall between investment and commercial banks enacted during the Great Depression had remained in place, it would have protected us from the magnitude of the crisis.

I hadn’t heard much about Glass-Steagall since, and I was wondering what had happened to the idea of putting some version of it back in place. When I Googled “bring back Glass-Steagall,” I discovered that Paul Volcker had recently suggested doing just that.

Who was in favor of repealing Glass-Steagall in the first place, and why? It turns out that it was a hugely popular and bipartisan decision, although there was a small minority against it. That minority happened to have been mostly, although not entirely, composed of Democrats.

The votes were as follows: 90 to 8 in the Senate and 362 to 57 in the House. The bill’s passage was highly praised by none other than Larry Summers, who was then Clinton’s Treasury Secretary. It was considered to be a move for modernization, a casting off of old shackles that were no longer needed.

There were a few voices of warning. But there was no reason to believe they were anything but fearmongering by those too backward-thinking to enter the Brave New World of modern finance (the following is from a NY Times article written in 1999):

The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.

”I think we will look back in 10 years’ time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930’s is true in 2010,” said Senator Byron L. Dorgan, Democrat of North Dakota. ”I wasn’t around during the 1930’s or the debate over Glass-Steagall. But I was here in the early 1980’s when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.”

Note that Senator Dorgan even gets the time-frame eerily right: “I think we will look back in ten years’ time…”. It doesn’t sound so very backward-looking today, does it?—unless looking at history can be considered backward-looking. If so, count me in as being backwards.

Ah, but if only it were so simple. Many people, Volcker included, think that Glass-Steagall should be reinstated in some manner. But there’s by no means agreement on that, even today, and the details of what might be necessary are unclear as well. You see, there were valid reasons the bill was repealed and that it had such strong bipartisan support. Here are a few, from the same contemporaneous Times article (note that the people talking it up are Democrats, as well):

Supporters of the legislation rejected those arguments. They responded that historians and economists have concluded that the Glass-Steagall Act was not the correct response to the banking crisis because it was the failure of the Federal Reserve in carrying out monetary policy, not speculation in the stock market, that caused the collapse of 11,000 banks. If anything, the supporters said, the new law will give financial companies the ability to diversify and therefore reduce their risks. The new law, they said, will also give regulators new tools to supervise shaky institutions.

”The concerns that we will have a meltdown like 1929 are dramatically overblown,” said Senator Bob Kerrey, Democrat of Nebraska.

Others said the legislation was essential for the future leadership of the American banking system.

”If we don’t pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,” said Senator Charles E. Schumer, Democrat of New York. ”There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.”

Kerrey’s statement seems laughable today, of course, but that’s only with the benefit of hindsight. It is Schumer’s that is more important: the bill was seen as necessary to keep up with the rest of the world. Perhaps it was, at the time.

The real question for us today—probably as unanswerable as ever—is whether the repeal of Glass-Steagall really was instrumental in causing the current crisis, and whether its reinstatement would help to prevent future ones from occurring. Here’s one “expert” who disagrees with Volcker and says it wouldn’t make a bit of difference:

Glass-Steagall would not have stopped the current crisis. For starters, many institutions that have had trouble were not commercial banks. Lehman Brothers, Bear Stearns and Merrill Lynch were investment banks; the American International Group is an insurance company…Any institution that is too big to fail, even if it is not in the utility end of banking, requires some sort of regulation.

Now, of course, lots of commercial banks have also gotten into trouble…So it is appealing to think that they would have been safe if only they had not mingled the casino with the utility.

This again oversimplifies the issue. True, these “universal” banks lost money in the casino. But they also lost lots of cash through bad lending…What the current crisis has shown is that the management of risk has been woeful across the board.

So the solution is not to pick on one particular banking activity ”” like proprietary trading ”” label it as risky and quarantine it in some half-regulated purgatory. The better approach is to improve risk management across the industry.

I’m no banker, but it seems to me it’s not an either/or proposition. Why not reinstate some form of Glass-Steagall, and also change the leverage requirements so that they resemble the more stringent ones of yesteryear? After all, since most of the world has gone down with us, the competition is no longer as fierce.

Yes, the result would be that we wouldn’t have the astronomical growth we had during the last decade. But since that growth has turned out to be a bubble, wouldn’t that be a good thing?

The loathsome cartoon

The New Neo Posted on by

Please take a look and a read, and see what passes for acceptable political cartoons these days.

This quote seems to me to be the most important:

[The mentality this cartoon represents] is part of the merging of much Western fashionable intellectual and cultural thinking with that of extremist Third World, and especially radical Islamist, propaganda.

The cartoonist doesn’t hate Jews; he probably doesn’t even hate Israelis. What is involved here is a lack of understanding so enormous that it will both incite hatred; cause violence and death; and block policies needed to help people””including Palestinians who, are supposedly the object of its sympathy but thus doomed to suffer under a repressive regime with a permanent war policy.

Antisemitism? Ask not for whom the bell tolls because Israel, the canary in the mine””the one who first they came for””can tell you that you are all next.

Obaminous

The New Neo Posted on by

Here’s an ominous (Obaminous?) video I first saw over at Atlas Shrugs:

This, of course, is standard community organizing methodology. Note also the name of the group: “Organizing for America.”

In the past, however, community organizing was limited to just that: something local to a community, energizing people to push the authorities to institute some very specific policy they want, or to redress some wrong. The authorities themselves didn’t “organize,” and certainly not on a national scale.

Some of the most disturbing things about this video are its vagueness, its focus on Obama himself in what I can only call his cult of personality, and its use of the word “pledge” (at minute :56, note the words, under “The Pledge” and next to a check box, “I support President Obama’s bold plan….”)

The vagueness comes from the fact that whatever people are pledging to support is never described in any detail whatsoever. The petition, or pledge sheet, or loyalty oath, or whatever you want to call it, is very short. It appears that each policy area—energy, health care, education—has but a single sentence describing it.

Think about this for a moment: people are blindly pledging loyalty to policies about which they know virtually nothing except the fact that Obama is behind them, and he says it’s for our own good.

(Of course, come to think of it, does that really differ very much from the way Congress signed the bailout bill or the stimulus package? But I digress.)

The trainer gives only one reason that “the establishment in Washington” would oppose this: opposition to change. Never mind principled opposition; there is no such thing where Obama is concerned. Never mind the cost of these policies in a recession.

Never mind; just sign on the dotted line. And is anyone else as perturbed as I am by this statement: For anyone who questions why the President has offered this plan, these pledges will be the answer.

When Obama created his computer network of supporters during the election it was not only innovative, it gave him a remarkable ability to raise unprecedented amounts of money. Friends were encouraged to recruit friends, and the whole thing snowballed in an exponential way.

It’s understood why this worked so well and might have been appropriate for a campaign. Yes, Obama seems to have launched the eternal campaign, but he is President now. We don’t govern by petition, or even by referendum; we have a representative government. At least we used to when last I checked.

What meaning could these support lists possibly have, and what will they be used for? First of all, they make supporters feel connected to Obama and as though he cares about them, and this will help continue the adulation he stirred up in so many people during his campaign. The administration can also email these people (note the emphasis on getting their email addresses even if they “forget” to fill out that part) and tell them to flood their representatives’ office with emails and calls pressuring them to vote for Obama’s policies.

But doesn’t Obama already have plenty of names of supporters on hand from his campaign? This isn’t just people coming to Obama, it’s Obama coming to your door, welcome or not.

The trainer in the film is vague, but he indicates that this is just the beginning of something-or-other:

The pledge canvass will also be the first step to growing our movement and building a national network to support our agenda for change. This is just the beginning for us.

Thanks for the warning.

My future as an non-accountant

The New Neo Posted on by

I noticed—in this piece that purports to tell us what jobs are probably not going to go out of style in the near (or even distant) future—that “accountant” led the list.

Well, that’s awfully nice—for accountants. But having been up last night till the wee hours of the morning (and even the not-so-wee hours) doing my taxes, I know that, despite the advantages and the job security, an accountant I’ll never be.

What a headache-inducing, cold-sweat-creating, frustration-inspiring chore! Of course, I was more emotionally involved in last night’s endeavor than an accountant would be for a client because, after all, it was my taxes, and my ever-dwindling store of money, that were being taken away. But I also know that doing taxes is an activity I utterly loathe, and I’m not sure you could pay me enough money to take it up as a profession. And I suspect (actually, I know) that I am hardly alone.

My father was a CPA, and I well remember the drill. My parents would go away in mid-February in an attempt to store up some relaxation for the coming assault. But from the time of their return in late February until that long-awaited date in the middle of April, my father would sit at a small table in our living room every night when he came home from work, filling out large sheets of checkered paper and stacks of tax returns. He did this till bedtime, and then got up in the morning and set out to do it again.

Nowadays this is all computerized. But in my father’s era it was a matter of his own brainpower doing the computations and then entering everything by hand. I don’t think he trusted calculators anyway; he trusted himself.

We children tiptoed around him even more than usual because we knew it was tax time. After the magic Ides of April things improved, but till then you stayed away and stayed quiet.

I think my father enjoyed the neatness of math, and took pride in his reputation as one of the best accountants around. He also was a lawyer, and so he didn’t do this all year, although for a few months it seemed to take over everything.

I think some people have an affinity for seizing the messiness of life and trying to impose order on it through numbers, and some of those people are called accountants. The rest of us can either pay them to do our taxes, or gnash our teeth every April as we do our own—and reflect in awe on those for whom this is an everyday event.

accountantpaper.jpg

The garages of New England

The New Neo Posted on by

A garage is a wonderful thing to have, especially in New England. The reason seems obvious: it snows a lot here, and without a garage you have to dig your car out regularly.

An attached garage is even better; whether it’s snowing or raining or sleeting or icy outside (or some combination of all four), you can keep warm and dry as you carry in your groceries.

Oh, how I’ve loved my attached garages! I appreciated them all the more because of the considerable time I’ve spent living in New England without a garage at all.

But I appear to be in the minority. It’s not that a lot of people don’t have garages here—they do. It’s just that they rarely use them for cars.

Oh, they use them, all right. They’re stuffed to the rafters with goods: lawnmowers and saws and lumber and bicycles and hockey skates and garbage cans and paint cans and old furniture and whatever it is that most people put in an attic or a basement or a toolshed. And this despite the fact that most people in New England actually have attics and basements and toolsheds.

But even the relatively empty garages seem to remain empty of their owners’ cars.

I think perhaps it’s a macho thing, a show of Yankee toughness: only wimps or people “from away” (is that redundant?) consider the garage to be the proper resting place for a car. The best analogy I can think of is to umbrellas in Seattle—have you ever seen a native using one, despite the constant damp dank dripping drizzle alternating with the drenching drowning deluges of the downpours?