If Marx was a great historian but a lousy economist, Caldwell sucks at both

The execrable Caldwell: so pathetic, if well read:

The high point in The Gallery of Antiquities, Balzac’s great novel of debt, comes when gendarmes are arresting the young Count d’Esgrignons for a forgery committed to cover his borrowing. The loyal notary Chesnel, attached to the d’Esgrignons family by generations of service, has already spent his own modest fortune to get the young count out of such scrapes, but he is at the end of his resources. “If I don’t manage to smother this story,” he tells the count matter-of-factly, “you’ll have to kill yourself before the indictment is read out.” The count realises in a flash that people have lent him money not because they have more than they know what to do with, or because he’s a nice guy, or because his privileges are the natural order of things. They have lent him money because they have made certain assumptions about his honour – misplaced assumptions, as it turns out.

The great irony of Caldwell's literary allusion is that - while evidently trying to impress with his grasp of eternal truths about debt and honour (or something like that) - he succeeds only in impressing us with his utter cluelessness about any economic history that might be considered actually relevant to the dire situation facing us now. More telling, perhaps, is the fact that he has looked to an unrepentant reactionary and royalist (Balzac) for inspiration.

Sadly, Caldwell's brand of simple-mindedness is holding policy-making sway in Washington and London. Will Hutton, in today's Observer, is distraught, and rightly so:

In Washington, a resurgent Republican party took the American government to within two hours of being closed down for lack of politically authorised funds as it battled for swingeing cuts in federal spending. Across the Atlantic, an army of hedge funds and investment banks forced a lame-duck Portuguese government to turn to the IMF and European Union for a multibillion euro bail out. In Britain, George Osborne championed the breathtaking speed of his budget reduction plan by saying he would not play Russian roulette with British economic sovereignty. Everywhere are the echoes of the language Keynes tried to dispel at Bretton Woods.

Keynes: he always looms large in times like these. As Hutton observes, it is the spectre of Keynes who should be haunting us now, not some count in a Balzac novel.

At this critical juncture, it is worth remembering that today's red-faced crusaders for fiscal austerity were yesterday's sudden converts to Keynes (albeit without bothering trying to grasp what Keynes had actually intended) when Bush busily squandered U.S. budget surpluses on tax cuts and wars. These are many of the same people who are now (conveniently) rounding on America's supposedly bloated entitlements programs as the main deficit culprits. Keeping this kind of a scorecard is helpful when trying to decide who should be taken seriously when the chips are down, and who should not be.

This is not to say, of course, that long-term fiscal imbalances need not be redressed. Of course they do. The question is when, and how. William Keegan explains:

. . . having worked at a central bank myself, I am aware of that institutional desire to act "pre-emptively", in the words of a former head of the US Federal Reserve (not Alan Greenspan); that it is important to take the punchbowl away once the party gets going.

But the party has not got going in the UK.

The same might be said of the U.S. The current mess is a classic Keynes moment. Now is when we should be dusting off the manual, not talking about Balzac. Keegan points out:

Every day we read of the consequences of excessive austerity in countries such as Greece, Ireland and Portugal.

These would be the consequences that Keynes was trying to avoid. The fact that we seem to need to repeat past mistakes, including in the U.S. and the UK, is somewhat depressing.

Hutton concludes:

Economists and business leaders should not let the chancellor get away with Tea party-style statements about Britain risking bankruptcy and having no choices but to suffer. Keynes dedicated his life to challenge that thinking and for some years kept it at bay. The bad news is that it may only be disasters, like the one Keynes lived through, that will make people change their minds. The good news is that there are a lot of a very good and iconoclastic economists – many here – from many countries who want to take up the fight again. It's a race against conventional thinking – and time.

It's nice to see the police do their job . . .

. . . even if it happens after Murdoch already got what he wanted. Still, beggars can't be choosy. I had feared this one might go down the memory hole.

Late update: The FT weighs in - this scandal has legs: it may be the kind that causes governments to fall and applications for media domination (all part of the Murdoch plan to ensure the "plurality and independence of news provision") to be rejected faster than a police chief's dinner.

The big fish just need to be reeled in.

Later update: It's today's headline in the Observer. Hard to believe James Murdoch would be quite so stupid as to brag about "putting this problem in a box." Funny, I was reading about how Madoff only was able to carry on for so long only by compartmentalising, too. In any case, the chorus is growing louder: the Murdochs are not to be trusted with power.

Ben Bernanke . . .

. . . hot or not?

It figures

From judicial train-wrecks to literal car-wrecks. Next thing we'll hear he's on the lam, holed up in some fleabag Arizona motel.

There he goes again

Oh, shut up already, Mr. Smarty-Pants!

"And then there’s the British experience. Like America, Britain is still perceived as solvent by financial markets, giving it room to pursue a strategy of jobs first, deficits later. But the government of Prime Minister David Cameron chose instead to move to immediate, unforced austerity, in the belief that private spending would more than make up for the government’s pullback. As I like to put it, the Cameron plan was based on belief that the confidence fairy would make everything all right.

"But she hasn’t: British growth has stalled, and the government has marked up its deficit projections as a result.

"Which brings me back to what passes for budget debate in Washington these days.

"A serious fiscal plan for America would address the long-run drivers of spending, above all health care costs, and it would almost certainly include some kind of tax increase. But we’re not serious: any talk of using Medicare funds effectively is met with shrieks of “death panels,” and the official G.O.P. position — barely challenged by Democrats — appears to be that nobody should ever pay higher taxes. Instead, all the talk is about short-run spending cuts."

Perhaps Krugman should try a different tactic: perhaps he should advise in favour of the opposite of what he really thinks should be done. Maybe that's where he's going wrong.

A helpful flowchart

It may not help you understand what to do about Libya, but it will help you understand . . . Republicans.

Does not compute

If there is one thing I understand less than people who lie to get us into a war it's the wilful delusion of those who are determined to keep us out of one.

I've lost count of the number of lefty-types on my tee-vee who just don't seem to give a shit what would have happened to the people of Benghazi had we not intervened. Strike that - I might understand if they just admitted they didn't give a shit - but it's worse than that: they continue to insist the people of Benghazi would have been better off without us.

One guy on 'beeb recommended we should leave Libyans to get on with their demonstratin' and remonstratin' unencumbered by our no-fly zone. I can only assume this is so they might present easier targets for Gaddafi's goons.

Makes my head spin.

Hitting bottom

I've seen little point in blathering about Japan. Anything I might say would be redundant, reductive or derivative.

Until now.

Certain aspects of the wall-to-wall media hysteria did have me wondering if predictions of the impending nuclear apocalypse were over-hyped. Now that the crisis seems to be have been rationalised, with nuclear genie back in the bottle, a little hindsight clearly shows that the western media seems to have performed as expected: woefully. From a TPM reader and putative "student of Japan":

"Of course fear sells newspapers, but in unfortunate cases, the coverage is rooted in long-standing prejudices held by some Westerners against the non-West: for instance, a superiority complex that feels only the West and its media have real access to the truth, which led to a downplaying of Japanese media reports. In the worst cases, there has been simple racism, as some reporters when viewing how calm the Japanese are, seem to think the Japanese are mere robots who cannot grasp the immensity of the crisis or, as one colleague reports when a Spanish reporter interviewed her, think that the Japanese are genetically tuned to accept disaster. It is ironic that such reports assume such an attitude when, at the same time through their own inaccuracies, they show how much better the Japanese coverage is."

I would prefer to be wrong

But I fear I won't be. It's already looking perilously late to get our collective asses, whom the Guardian is correctly exhorting to action, in gear.

Rawnsley is more pointed about the west's predicament:

Some of these dilations are a legacy of the Iraq war. Eight years on from the invasion, the calamitous errors after the toppling of Saddam continue to poison the cause of liberal interventionism. The shadow of Iraq makes it harder to win the argument that both self-interest and our moral values demand a response when a dictator is brutalising his people on our doorstep. In fear of another Iraq, the west risks repeating a different, earlier mistake: the divided and impotent European response to the slaughter in the Balkans in the 1990s.

If it weren't for Iraq, we would have been in there by now.

The process is what was supposed to protect us. The abasement of our former leaders becomes our abasement, and others will suffer and die needlessly as a result.

The circle is complete.

The hits keep coming

Whatever one thinks of whatever political philosophy he seems to think he espouses, you can't deny the fact that Scalia is a mean-spirited prick. This provides meaningful insight on the quality of his writing.

Late update: From a commenter -

. . . having read many Scalia decisions, I am not as convinced of his supposed 'brilliance' as generally claimed. His opinions were clearly unprincipled, results driven, and often overturned even recent S.Ct precedent. He is one of the most hypocritical on the big bench; when he likes precedent, he waxes on about stability and precedent. When he wants to advance his political agenda - he bulldoze over decades of established precedent.

I remain completely unimpressed by his principles and his mind.

Not such an Inside Job?

Following up on an earlier post, after the Oscars comes the inevitable nitpickers. They have a point: the film is simplistic. Yes, lots of blame to go around. No, it wasn't just the bankers.

It's probably true that perfidy and greed distributed across a broad enough spectrum will have a dilutive effect on accountability with a net result that no one is guilty. Not sure we still shouldn't try to determine who was naughty and who was nice.

Obama needs to rethink this

From the former chief prosecutor at Gitmo. I wonder if he has to resort to finding some inches in a UK paper because U.S. papers still don't give a damn. Pithy statements like this tend not to go over well in the Homeland:

The United States cannot stand up for justice and the rule of law when it sits idly on its own record of torture. It diminishes the weight of its moral authority to influence others around the world when it treats its binding legal obligations as options it can choose to exercise or ignore. If President Obama is sincere about standing up for fundamental values, then America's actions must live up to its rhetoric.

The specific examples of torture referenced by Davis of course are the tip of the iceberg and don't even include our outsourcing of torture under the rendition programme.

Trying to summon the eloquence appropriate to the occasion . . .

This guy is such a dick.

How will we know when to vote Republican?

I just noticed the terrorists have won. The DHS has decided to scrap the colour-coded alert scheme, effective 27th April. It's a good thing for me because I always confused it with London Underground status updates:

BTW, we never did get to the bottom of the conspiracy.

Annoying

He's really pissing me off - being right the way he is all the time:

"The clear and present danger to recovery, however, comes from politics — specifically, the demand from House Republicans that the government immediately slash spending on infant nutrition, disease control, clean water and more. Quite aside from their negative long-run consequences, these cuts would lead, directly and indirectly, to the elimination of hundreds of thousands of jobs — and this could short-circuit the virtuous circle of rising incomes and improving finances."

Annoying. Of course, this doesn't mean Republicans will listen. If anything, you can bet on the opposite

Chicken

Things looking to turn ugly in Libya. The west's powerlessness to do anything - even as little as impose a no-fly zone with or without U.N. backing - is an emasculation of will, borne of choices made in Iraq and not made in Palestine. The chickens are coming home to roost - with unfortunate consequences for the people of Libya.

Had the responsible parties been held accountable, had we not allowed them to prevaricate at will, we might not be in this place.

Late update: Really ugly.

Great news!

. . . for Rupert Murdoch. Soon he can put all that unpleasantness behind him.

The "plurality and independence of news provision" is assured!

Late update: looks like the Sky News spin-off might actually prevent total consolidation of independent news under the great god Murdoch. Maybe I'm naive but it's possible someone's heart is in the right place on this. We can only hope.

Later update: damn funny post from the Daily Mash. Yes, in a way I will be disappointed if Murdoch actually and truly divests himself of SkyNews so that Britain is spared the Fox Effect. And, yes, I do believe Murdoch is the avatar for Sauron so this must be just a ruse to trick us into laying down our arms to embrace the Orcs. Must be the PTSDs. Guilty as charged.

Even Later update: not so sure it's quite this bad.

Even LATER update: what, us worry?

The Realpolitik of Naïve

Okay – I really don’t know how sensible or horrible the “Deal in the Desert” was. Maybe on some level it made sense at the time. For the sake of argument we might grant Tony Blair this much. Its crude realpolitik sensibility made you grudgingly accept it for what it was. There was an odd dignity to Tony's unflinching prostitution: he was better playing the honest whore than the sancitmonious crusader.

Even if you accept that people in the west generally understood it was always really about the oil and just fuck the rest, it is striking how quickly we convinced ourselves - or allowed ourselves to be convinced - that 9/11 made for some kind of post-realpolitik paradigm, which our minders in government exploited to the fullest to launch their wars unhindered and unquestioned. Maybe Atrios is right: maybe Egypt has reintroduced us back to reality.

In any case, it seems likely the clock has long since run out for any distinction that would make a difference.

How it's done

An excellent dissection on a random day of how NewSpeak works.

It's a time-honoured tradition.

If you haven't, you should book-mark David Niewart: the man is a saint.

Finance is too important to be left to the financiers

An excellent film - a must see.

By and large, Inside Job accurately portrays the conflicts of interest inherent in the political, academic and financial regulatory systems. It should make anyone with a soul angry: it is especially aggravating, bordering on hilarious, to watch some high-falutin' academic-types squirm heroically, even become angry, as their whorin' ways are laid bare for all to see.

My own two cents: there was a time when the SEC listed as its core responsibilities ensuring market integrity and investor protection. If you check the SEC's current mission statement, these seems downplayed.

It used to be recognised that market integrity was important not only to facilitate the free flow of capital, but also to maintain confidence in the U.S. securities markets. It's as if there was recognition that the country's strength was tied to its reputation for observance of the rules - the rule of law. There was a geo-strategic dimension to America's reputation for the probity of its markets - sort of like respect for human rights (again - the rule of law).

It might just be a coincidence that both of these priorities - market integrity and human rights - began to founder contemporaneously on the rocks of the Reagan revolution. Perhaps it's just an accident that both culminated roughly contemporaneously with the financial crisis and Guantanamo and Abu Ghraib.

As for investor protection, the following is now emphasised on the SEC's website:

The world of investing is fascinating and complex, and it can be very fruitful. But unlike the banking world, where deposits are guaranteed by the federal government, stocks, bonds and other securities can lose value. There are no guarantees. That's why investing is not a spectator sport. By far the best way for investors to protect the money they put into the securities markets is to do research and ask questions.

You know what that means!

The Fed, meanwhile, seems to give a shit about the public - well, officially, at least. Their mission statement is slightly more reassuring. Among other things, they emote:

Today, the Federal Reserve's duties fall into four general areas[, among them]:

• . . . supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets . . .

That's more like it!

But this guy, a self-professed acolyte of Ayn Rand, was at the helm:

"Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices. It is this superlatively moral system that the welfare statists propose to improve upon by means of preventative law, snooping bureaucrats, and the chronic goad of fear."

I blame Ayn Rand!

Meanwhile, Obama shows no signs of doing anything meaningful about any of the above.

Late update: as Artios notes, this just in: no indictments forthcoming. It seems, so sayeth the good Professor Coffee, there are simply too many un-indicted co-conspirators.