Why Libertarians Should Vote for Obama (1)

First, war.  War is the antithesis of the libertarian philosophy of
consent, voluntarism and trade.  With every war in American history
Leviathan has grown larger and our liberties have withered.  War is the
health of the state. And now, fulfilling the dreams of Big Brother, we are
in a perpetual war.

A country cannot long combine unlimited government abroad and limited
government at home. The Republican party
has become the party of war and thus the party of unlimited government.

With war has come FEAR, magnified many times over by the governing party. Fear is pulling Americans into the arms of
the state. If only we were better at
resisting. Alas, we Americans say that
we love liberty but we are fair-weather lovers.  Liberty will flourish only with peace. 

Have libertarians gained on other margins in the past eight years? Not at all. Under the Republicans we have been sailing due South-West on the Nolan
Chart
– fewer civil liberties and more government, including the largest new
government program in a generation, the Medicare prescription drug plan, and
the biggest nationalization since the Great Depression. Tax cuts, the summum bonum of Republican
economic policy, are a sham. The only
way to cut taxes is to cut spending and that has not happened.

The libertarian voice has not been listened to in Republican politics for a
long time. The Republicans take the libertarian wing of the party for granted
and with phony rhetoric and empty phrases have bought our support on the
cheap. Thus – since voice has failed – it is  time for exit.  Remember that if
a political party can count on you then you cannot count on it.

Exit is the right strategy because if there is any hope for reform it is by
casting the Republicans out of power and into the wilderness where they may
relearn virtue. Libertarians understand better
than anyone that power corrupts. The
Republican party illustrates. Lack of
power is no guarantee of virtue but Republicans are a far better – more libertarian –
party out-of-power than they are in power. When in the wilderness, Republicans turn naturally to a critique of
power and they ratchet up libertarian rhetoric about free trade, free
enterprise, abuse of government power and even the defense of civil liberties.  We can hope that new leaders will arise in
this libertarian milieu.

Sports figures favor Republicans

Or so it seems (original source here):

  • “Professional athletes and executives have given $445,334 to the
    two nominees – 55.8 percent to McCain and 44.2 percent to Obama,
    according to ESPN analysis of figures from the Center for Responsive
    Politics, a nonpartisan research group.”
  • “The difference this election is that pro sports donors are more
    divided. In the past two presidential elections, the Democratic nominee
    has struggled to muster at most 16 percent of pro sports donations.”…
  • “McCain has lots of friends in the dugout, but his biggest fans are
    in football. Six of McCain’s top 10 pro sports donors are with NFL
    teams, led by the San Diego Chargers, Dallas Cowboys and Houston
    Texans.”
  • “NBA staff topped Obama’s list of pro sports donors at $24,360.”

I can think of a few hypotheses to explain these results:

1. Sports figures don’t want high marginal tax rates for the upper income brackets.

2. Currently the disproportionate representation of African-Americans in sports is throwing more support to Obama than a Democratic candidate normally would receive.

3. Perhaps athletes are less likely to come from coastal elites, who are becoming increasingly Democratic.

4. Republicans have historically shown less interest in regulating professional sports than have Democrats.

5. The sport of football most embodies the ethic of martial virtue and so football players and executives are especially drawn to McCain.

Is there more?

Markets in everything, China edition

Stir Fried Wikipedia.

Or so the translation goes.  Here is the explanation (with photos):

It’s not entirely clear how this error came about but it seems likely that someone did a search for the Chinese word for a type of edible fungus and its translation into English. The most relevant and accurate page very well might have been an article on the fungus on Wikipedia.
Unfamiliar with Wikipedia, the user then confused the name of the article with the name of the website. There have been several distinct
citings
of "wikipedia" on Chinese menus.

That’s from the Revealing Errors blog and I thank Kat for the pointer.  The blog is very good; here is an interesting post on "the Cupertino effect."

China incentive of the day

A handsome teacher in China is offering pupils autographed photos of himself to encourage them to work harder.

Ji Feng, also vice principal of Zhiyuan Foreign Language Elementary School, is so popular among students that a lot of them were asking him for pictures.

"I came up with the idea of giving them my signed pictures as a reward," he told the Nanjing Morning Post.

Students who put in exemplary work can now pose for a picture with Ji who then signs the printed photograph.

Ji added: "It absolutely is not narcissism, but a way of encouragement. And only the students who perform the best can get such a reward."

Here is the story, the pointer is from Allison Kasic.

The paradox of deleveraging

As Paul McCulley of Pimco, the bond investor, put it in a recent essay titled “The Paradox of Deleveraging,” lately just about every financial institution has been trying to reduce its leverage – but the plunge in asset values has nonetheless left these institutions with more debt relative to their assets than before.

That’s from Paul Krugman, who cites Irving Fisher as well.  Arnold Kling asks for 20 percent down.  Here is Arnold’s exit strategy.  Here is John McCain, up to 48.5 on InTrade or is that just because of the recent Gallup poll?

Alaskan state politics, circa 1976

"You were against statehood?"

"Oh, sure.  Oh, sure.  Before then, three-quarters of the people here weren’t here.  Eight or nine hundred people ran the Territory.  Ten thousand now run the state.  Where it used to take one person to investigate you, it now takes two to four.  The state spends too much.  If a tree blows down, two guys from the state come with a chain saw.  The state has sold the state out.  To the unions.  To the oil companies.  The oil companies have more power than the legislature.  The capital move [away from Juneau] is a lot of talk.  That’s all it is, a lot of talk.  What we need is not a new capital but better legislators than we have.  I’d say leave the capital where it’s at.  The state can’t afford it.  There is no economy.  They’re dreaming about all this oil money.

That is from John McPhee’s excellent Coming into the Country, a study of Alaska recommended to me by several MR readers.  Here is a short 2002 piece on switching the capital of Alaska and the oddity of putting it in Juneau.  Here is a useful map.  Here is a picture of Juneau and from the air.  Googling "Juneau traffic report" does not in fact bring up any traffic reports.

The Fall Season

1. The new Pamuk novel, right now in German and Turkish only.

2. The new Miyazaki movie: Ponyo on the Cliff by the Sea.  Trailer (sort of) here.  It’s at film festivals now, the full U.S. release date is 2009.

3. The next Malcolm Gladwell book.

4. Jose Saramago, Death at Intervals (the other title is Death With Interruptions).  I snagged an advance copy from the UK; sadly he is past his vital powers.

5. Here is a broader fall books preview.

6. The Clash Live at Shea Stadium, coming on disc.  I am lucky enough to have seen them at the Passaic Theatre before they became truly famous.

7. Ashes of Time Redux, due out October 10th.  Maybe the re-edited version of this classic (but in my view unwatchable) Wong Kar-Wai film will finally make sense.

What am I missing?

The median voter theorem

John A. Courson, chief operating officer of the Mortgage Bankers
Association, a trade group, also pointed with relief to the statement
by the Treasury secretary, Henry M. Paulson Jr. on Sunday morning that Fannie and Freddie would examine the fees they
charge banks for loan securitization services, “with an eye toward
mortgage affordability.”

Don’t they…um…"need the money"?  And:

“The government doesn’t have a great deal of interest in foreclosing on
a ton of homes,” said Kurt Eggert, a law professor at Chapman
University in Orange, Calif., and a former member of the Federal
Reserve Board’s Consumer Advisory Council.

And:

While it is not yet clear whether stockholders in Fannie Mae and
Freddie Mac will be wiped out entirely, Mr. Paulson did say on Sunday
that the entities “will no longer be managed with a strategy to
maximize common shareholder returns.”

That’s some theorem.  Here is the article.

World’s biggest bail-out: update

Arnold Kling wonders: what is the exit plan?  Brad DeLong and John Hempton think the Bush Administration showed some courage.  Brad thinks the preferred stock can do OK.  Here’s what forced Paulson’s hand.  All lobbying from the agencies has been eliminated.  WSJ reports: "House Financial Services Committee Chairman Barney Frank (D., Mass.)
said in an interview that the near-term effects of the conservatorship
will be to "strengthen the public mission of what they do" to prop up
the housing market."  Preferred shareholders lose dividends.  CalculatedRisk has the clearest bottom line so far.

What if we didn’t bail out the creditors?

"Could you clarify just how far on the hook I should be for someone else’s frauds?"

That’s MR commentator CK and the answer is "lots."  Here’s more detail on the bail out, by the way.  Not good.

But let’s say that the Treasury did not support the debt of the mortgage agencies.  The Chinese bought over $300 billion of that stuff and they were told that it is essentially riskless.  The flow of capital from them and from other central banks, sovereign wealth funds, and plain old ordinary investors would shut down very quickly.  The dollar would fall say 30-40 percent in a week, there would be payments system gridlock, margin calls at the clearinghouses would go unmet, and only a trading shutdown would stop the Dow from shedding half its value.  Most of the U.S. banking system would be insolvent.  Emergency Fed/Treasury action would recapitalize the FDIC but we would lose an independent central bank and setting the money supply would be a crapshoot.  The rate of unemployment would climb into double digits and stay there.  Many Americans would not have access to their savings.  The future supply of foreign investment would be noticeably lower.  The Federal government would lose its AAA rating and we would pay much more in borrowing costs.  The deficit would skyrocket.

And I haven’t even mentioned the credit default swaps market.  Well, I have now.

But for another point of view, try Jeff Rogers Hummel.

Conservatorship for the mortgage agencies

…the government would place the two companies under
"conservatorship," a legal status akin to Chapter 11 bankruptcy. Their
boards and chief executives would be fired and a government agency, the
Federal Housing Finance Agency, would appoint new chief executives.

Instead of making a one-time cash infusion to keep the companies
[the mortgage agencies] afloat, the government will make quarterly investments, to the degree
that market conditions require. That way, in Treasury officials’ view,
investors can have confidence of a ready source of cash if the firms
need it, but taxpayers need not be put on the hook anymore than
necessary.

Here is the article.  Here is further analysis.  Here is Brad DeLong.  CalculatedRisk has lots and they note that the details on the status of the preferred stock — held by many U.S. banks — remain vague.

Overall it reminds me of how they treat misbehaving academic departments and I do not take that to be a good sign.  There is no expectation that things will get better soon.  The deal also seems to recognize that any one-off "solution" (e.g., a once-and-for-all recapitalization with a new and more senior class of stock) would recreate moral hazard problems and thus is unacceptable.  Or is it Paulson saying he is done and he wants either Obama or Palin to have to worry about this?  Or is this really about protecting the dollar rather than choosing the best institutional structure for the agencies?  I believe that at least forthcoming home buyers will be better off, as Congress will not want to look responsible for higher mortgage costs.

Addendum: Here are some of the details.  They are saying that preferred stock will take losses and that this won’t hurt too many banks.  That would seem to represent the ascendancy of Paulson’s view over the Fed.  Here is good commentary on that.

And Max says: "Here’s the real bailout. Taxpayers will now directly support the housing market."  The coming series of events could end up as the biggest bailout in the history of the world.

What I’ve been reading

1. The Future of the Internet — and How to Stop It, by Jonathan Zittrain.  The main claim is that everything will be sterile, tethered appliances.  The opening up of the iPhone would seem to bely this message plus competition usually works in giving consumers what they want.  A smart book (that is rare for internet books, oddly) but I suspect it will prove to be wrong.

2. Paul Auster, Man in the Dark.  Reviews for this work have a bimodal distribution.  I like most of Auster’s books but I vote no.

3. The Gargoyle, by Andrew Davidson.  So far this is excellent junk reading.

4. Epilogue, by Anne Roiphe.  Ideally this book deserves its own post but it is difficult to excerpt.  It’s about why the author, now a widow, finds it hard to fall in love again.  Definitely recommended.

5. The Boy with Two Belly Buttons, by Stephen Dubner.  It’s a children’s book.  I haven’t read so many of these since Mr. Pines Paints a Purple House — my favorite as a tot — but to me it seemed very good.  Ages 4-8.

Big Mac Attack

No country with a McDonald’s outlet, the theory contends, has ever gone to war with another….

Thomas
Friedman, who invented the theory in 1996, said people in McDonald’s
countries "don’t like to fight wars. They like to wait in line for
burgers."…

The Russia-Georgia conflict has finally blown this theory out of the water.

From the Guardian.  Clearly the theory was over-identified.  Perhaps no two countries with Taco Bell’s every go to war with one another.

Hat tip to Chris Blattman.

Rational Spelling

Here’s a great, little video from Ed Rondthaler former president of the American Literacy Council and author of The Dictionary
of Simplified American Spelling
.  Loyal readers will know that simplified spelling or what I call rational spelling holds a special place in my heart.

I worry that the tyranny of spell checkers impedes evolution towards rational spelling.

Hat tip to Boing Boing.