I will blog more about the economic crisis later, but for the moment I want to agree wholeheartedly with Clive Crook on why Obama's style has been more appropriate to the situation than McCain's:
I do think Obama is handling the crisis much better than McCain--not because he is suggesting better remedies (he continues to say little), but because his instinct to reflect before opening his mouth and his impeccable taste in [economic, I assume--vp] advisers are both working to his advantage.
I don't plan to vote in the presidential race, barring a last-minute lurch to Bob Barr, but if you held a gun to my head and made me pick one of the two major party contenders this week I'd have to go with Obama. He scares me, but not as much as McCain.
On substance rather than style, there's lots of good stuff at MarginalRevolution, including a couple of comments from Professor Postrel (a.k.a. srp here), basic points repeated below:
I have a different idea to throw out. If the urgency of an intervention supposedly stems from contagion to the commercial paper market, and the government is now going to play hedge fund anyway, why don't we dedicate the $700 billion facility to guaranteeing the commercial paper of high-quality borrowers for the next six months or so. We could even charge the borrowers a couple of basis points for the service. I'll bet that the taxpayer is a lot less likely to have to pay out much of that $700 billion with this strategy, and then we can use the appropriate tough tactics to flush out any insolvencies in the MBS and CDO markets at our leisure....
I get that Bernanke and Paulson are scared, but what are they scared of? Presumably, a shutdown of short-term commercial lending that would destroy non-financial firms' working capital and lead to a huge downward spiraling contraction as everybody hoards cash at the same time. It seems to me that dealing with the "root causes" is more indirect and less likely to solve the CP problem than propping up the CP market to lower spreads. In addition, the B&P plan has all the obvious drawbacks that everyone else has already identified, e.g. prolonging the recognition of insolvency, delaying the correction of real-estate prices, creating moral hazard, and so on.
There's an old story about operations research, perhaps apocryphal, that occurs during WWII. It seems a flight of our B17 Flying Fortresses had a very tough mission over Germany and many were shot down. An operations research team and a group of generals convened to come up with ways to reduce casualties on future missions. The generals displayed pictures of the shot-up survivors, many with gaping holes, and suggested increasing the armor at those points. The OR guys said "Wait a minute, these are the survivors--we should armor up the places where there AREN'T ANY HOLES."
My suggestion is in this spirit.
Posted by Virginia Postrel on September 26, 2008 • Comments
John McCain is a demagogic lunatic. Imagining him as president in a crisis is terrifying.
UPDATE: Stephen Bainbridge saves me the trouble of explaining [via Megan McArdle, who has more.] I will also note that private equity funds and hedge funds, which aren't subject to all this wonderful regulation, appear to be doing better than the rest of the financial world.
UPDATE 2: McCain is even crazier and more clueless than I thought, as Robert George explains.
Posted by Virginia Postrel on September 19, 2008 • Comments
A new Field Poll shows growing opposition to Proposition 8, the ban on same-sex marriage. The poll of likely California voters finds 55 percent against, 38 percent in favor, and 7 percent undecided. Although the poll shows that the ballot language has a small effect, I suspect that experience is the major factor. As more and more gay weddings take place, Californians have a chance to see that, far from a parodying traditional marriage, single-sex unions honor its value. Or maybe it just doesn't seem to be a big deal.
On a lighter note, don't miss the Diaries of a Groomzilla, beginning this week on DeepGlamour.net.
Posted by Virginia Postrel on September 18, 2008 • Comments
Is fear of expropriation deterring the private capital infusions that might rescue failing financial firms without involving the taxpayers? This passage, buried in Eric Dash and Andrew Ross Sorkin's detailed NYT account of the scramble to save AIG, suggests that might just be the case.
By Sunday, K.K.R. and the Texas Pacific Group made it clear they would not come to the rescue, worried that A.I.G. might be taken over by the government, wiping out their investments. Goldman Sachs also balked.
Posted by Virginia Postrel on September 18, 2008 • Comments
An archive of the strange and strangely beautiful, courtesy of science blogger Carl Zimmer and his readers.
Posted by Virginia Postrel on September 15, 2008 • Comments
The WaPost's Binyamin Appelbaum, Carol D. Leonnig and David S. Hilzenrath have a very good article on how Fannie and Freddie avoided oversight, despite ample warning that they were headed for trouble. Money graf:
Blessed with the advantages of a government agency and a private company at the same time, Fannie Mae and Freddie Mac used their windfall profits to co-opt the politicians who were supposed to control them. The companies fought successfully against increased regulation by cultivating their friends and hounding their enemies.
Of course, anyone who's been reading the WSJ editorial page for the past decade knew this.
Posted by Virginia Postrel on September 14, 2008 • Comments
In 2006, Salman Rushdie gave an interview to Der Spiegel in which he was asked about the causes of terrorism. After first demurring, he suggested a few: "a misconceived sense of mission," a "herd mentality," the desire to become "a historic figure," an attraction to violence, and--shocking the interview--glamour.
Posted by Virginia Postrel on September 11, 2008 • Comments
"Detailing" the NYT report on how China cleaned up its Olympic image. [Via Forbes.com.]
Posted by Virginia Postrel on September 08, 2008 • Comments
Diego Rodriguez explains at DeepGlamour.net.
Posted by Virginia Postrel on September 08, 2008 • Comments
Will Wilkinson explains why he finds her sexy and what that says about female leadership.
Ross Douthat is on fire on the subject.
And I connect her to cowgirl glamour. (But I largely agree with Megan about what I don't like.)
Posted by Virginia Postrel on September 04, 2008 • Comments