The problems we face will not be solved by the minds that created them.An aphorism usually attributed to Einstein. The utterly brilliant Newton could not have conceived of relativity. It is possible he could have conceived of field theory, but not relativity.
Obama's linguistic syntax has been great up to now. But fix conveys the wrong concept and perception of the problem.(See Benjamin Lee Whorf.) We are facing the abyss and it is paradigm change or disaster.
It's time to continue our look at the Cabinet in the upcoming Obama administration. Second - Secretary of the Treasury, perhaps the most important appointment President-elect Obama will make, given the current economic circumstances.
There are several excellent options - some who served in the Clinton Administration - some outsiders - and even some paradigm breaking choices. For convenience, I've taken the list from a betting site (yes, it is in the order of the oddsmakers' favorite).
There were Republicans on the list, and I've left out the "I don't believe it" names still on the betting lines such as Phil Gramm and Bob Zoellick. There's also some chatter about keeping Paulson on, temporarily to administer the bailout. So as distasteful as it seems, I kept his name on the list.
Perhaps one key criteria (which you're free to throw to the side of the road) is whether the candidate would inspire confidence in the markets.
(X posted at MyDD - will X post at DK, as soon as the clock allows me to post another diary there)
God, could I be a physical conservative? Yesterday I had an urge to hug Bill O'Reilly. While Krugman is saying we must bailout the richest people in the country from their mismanaged pillaging of the poor, that venerated economist Bill O'Reilly is saying that these rich ruffians should be left to a demise of their own creation.
Forget for just a minute that O'Reilly also says that the impoverished victims who were duped into buying the snake oil of subprime mortgages should be left to their own demise. What is important, and to me this is significant, is that, in speaking about this crisis, Bill O'Reilly has more directly spoken to my sentiments about how the CEO's of the investment banking industry should be treated than any of the mainstream left pendants I've heard.
While the thought of agreeing with O'Reilly could be seen as very scary, this common ground can also be seen as a bridge to better understanding. While the gun slingers of the free market are unlikely to concede that regulation may have been a legitimate means of avoiding this mess, they do have to recognize that deregulation played a part in the debacle. By the same token there are those on the left who may recognize that market forces are somewhat like a force of nature. While we can build a surfboard to better harness this force, it is unrealistic to think that there will not be occasional wipeouts. And maybe the idea of a force five hurricane may play into this analogy, as could the idea of a tidal generator.
The market is a powerful force that can be harnessed for the good of all humanity. It can also be a destructive force that can destroy whole cultures in a single event. Similarly government is a powerful force that can be harnessed for the good of all humanity. It can also be a destructive force that can destroy whole cultures in a single event.
Think about it, the likes of George Bush and John McCain are talking about the need for oversight in the financial sector. Quick, hug them before it's too late and we just want to go back to smacking them.
Jonathan Gruber of MIT has a new NBER working paper on health insurance coverage, based largely on a simulation model. Krugman cites the paper as evidence that making coverage mandatory makes a big difference for the number actually covered.
However, if you read the whole paper (unfortunately only available to subscribers), you find that Gruber sidesteps the crucial question of how a mandate will be enforced and just assumes a mandate will work.
Krugman recently argued that populism is the right campaign strategy for the Democratic candidate:
There's a strong populist tide running in America right now. For example, a recent Democracy Corps survey of voter discontent found that the most commonly chosen phrase explaining what's wrong with the country was "Big businesses get whatever they want in Washington."
And there's every reason to believe that the Democrats can win big next year if they run with that populist tide.
The "every reason" that Krugman cites amounts to two focus groups that declared Edwards the winner of a single debate.
While with the Dean campaign in 2003-04, I became convinced that "populism" as Krugman uses the term here, meaning blaming big business for the country's woes, was a loser campaign strategy. The reason is due to phenomena of identity, a concept that has recently gained currency in economics. People identify very strongly with their employers, and many people work for big businesses. Consequently, many perceive attacks on business as attacks on themselves.
I don't have any hard evidence for the second part of the argument, but evidence for the fact that people identify strongly with their employers can be found in a 2005 Journal of Economic Perspectives paper, "Identity and the Economics of Organizations," by George Akerlof (a Nobel laureate) and Rachel Kranton. Here's a working paper version.
The paper describes the following findings from an analysis of the General Social Survey:
Employees were asked their degree of agreement or disagreement with the following statements: "I feel very little loyalty to this organization"; "my values and the organization's values are very similar"; and "I am proud to be working for this organization."
In the Survey, 82 percent of employees disagree, weakly or strongly, with having little loyalty toward their work organization; 78 percent agree that their values and those of their organization are similar; 90 percent say they are proud to be working for their organization; and 86 percent are very satisfied or moderately satisfied with their jobs.
These fractions differ only marginally across such divisions as gender, race, and blue collar vs. white collar occupation.
These results are from GSS in 1991. It's of course possible that things have changed, but my guess is that it people identify even more strongly with their employers now than they did before.
Our campaign finance system is a vile, oozing swamp of legalized corruption which needs to be drained and scrubbed clean. Nearly everything that is wrong about the U.S. government ultimately grows out of the manure from this swamp. The system persists because people in position to potentially push for reform are precisely those who have so mastered its dark arts that they can't imagine changing it (think Bill Clinton). Expecting a politician to spend 15+ years in DC and then attack the campaign finance beast is like hoping the Pope will renounce Catholicism. For longtime DC pols, raising gobs of corporate money is what they do.
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