My thoughts on recent developments:
The Bailout
Personally, I wouldn't have done the bailing out that's been done so far, much less do the $700 billion super duper deluxe bailout, for the following reason:
Live by the market, die by the market.
For oh so many years now, we have been subjected to shrill conservative complaints that government is always the problem, that regulation is always bad, etc. etc. Well, here is a great example of what happens when you don't have smart regulation. And by the way, I don't much blame the i-bankers. They do what they do, which is make as much money as possible within whatever set of rules are enforced on them. So, if we have a decent set of rules that are reasonably enforced, the i-bankers cause minimal harm, and we the people reap a non-trivial benefit of having a lot of freely flowing, pretty efficiently allocated capital.
Of course, without rules, or with rules but without enforcement, i-bankers will still make as much money as possible, but now they'll invent crazy ways to do it, and then we the people will bear the consequences when the crazier ideas start wrecking the financial system. I-bankers are like corgis- I don't know if you've ever spent significant time around a corgi, but if a dump truck dumped a metric ton of dog food in front of a corgi, the corgi would try and eat literally the entire pile. Long after its stomach had burst, the poor corgi would, with its last few breaths, keep eating. They just don't have an off swtich. I-bankers are like that- they'll just keep making deals, or selling crazy derivatives, or whatever, even if it means that they're endangering the health of the whole financial system, which includes themselves. So you have to have smart, enforced regulation in place to productively channel their impulses and to protect them from themselves, and by extension, to protect the rest of us from them.
But, with conservatism in ascendance at least since Reagan, we've seen a systematic dismantling of a lot of sensible regulation. Not all of it is sensible, but a lot of sensible things were trashed, typically under Republican leadership, with Democrats either powerless to stop, or too scared and weak to put up a decent fight. So now I say, let it all burn. Let all the banks that are going to collapse as a result of all this subprime nonsense collapse, and let the domino effects happen. For one, it'll speed up the process of economically readjusting everything that needs to be readjusted (i.e., ripping the bandaid off all at once instead of trying to pull it off little by little, which just increases the total amount of pain you end up experiencing), and two, it will help to underscore to more people the total failure of that extreme brand of economic conservatism that got us into this mess. Extremism in anything is to be looked at with great suspicion, in my opinion.
BTW, I'm a huge, huge believer in the power of capitalism and markets. Most of the world's innovation has come since the development of the joint-stock corporation, and over the last 20 years or so, globalization and the spread of capitalism to places like China and India have lifted hundreds of millions of people out of poverty. The problem is the people with black-and-white views about it: people, typically on the right, who think capitalism is somehow inherently good, and people, typically on the left, who think globalization/capitalism is somehow inherently bad.
Folks, it's neither. Capitalism is just a force, neither inherently good nor bad, but which, like any force, can be harnessed and made to produce a lot of good things when done with skill and foresight. So, I'd like to see the bailout never get passed, and then let all the fallout happen, and then rebuild the system with smarter regulation. Hopefully, by the time most of the effects worked themselves out, and it was time to start rebuilding, we'd have an Obama presidency. Which brings me to:
The Debates
Joel and I watched the debate from the Obama campaign office in Palo Alto. It was a lot of fun. It was nice to be in a place with a lot of other people who think the prospect of a McCain-Palin administration is just as terrifying as I think it is. I agree with what seems to be a general sentiment that the debate was pretty much a draw, but all that really matters is what the undecided people in about 10 states thought, and I hope they thought, as I did, that Obama looked more thoughtful, and had a more compelling long-run vision.
This Thursday I'll be in New Haven, so I won't get to watch the Biden-Palin debate live, but thankfully we have the magic of the internet to catch up on it later. Palin is doing her best to lower the bar for herself, managing expectations, saying Biden's such a great debater, he's so confident, blah blah blah. Lord knows, she desperately needs the expectations to be low.
All I can say is, I hope that whoever is prepping Biden stands over him every night while he sleeps whispering "Less is more" into his ear all night. He only has to speak a little to demonstrate that he has command of all the issues. Aside from that, let Palin talk, because the more she talks, the more it is apparent that she's totally clueless. Not stupid, but another George W. Bush- someone who isn't stupid, but has no intellectual curiosity and has made a life out of intellectual laziness. And I think it ought to be pretty clear that the world is complex enough that you can't have intellectually lazy people running the show. That will buy us another 4-8 years of what we've just experienced for the last 8. So don't go after her too hard, Joe, or everyone will start feeling sorry for her. And she doesn't deserve that- she could've said "no" when John McCain called and asked her to be his running mate.
As for us, if we as a country do end up electing McCain and Palin, we will absolutely deserve the 4-8 years worth of crap we're going to get. But I'm still optimistic that people do get it, and that in the end we will see an Obama victory. A smaller one than it ought to be, but a victory nonetheless.
Yes we can.
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