Instapun*** Archive Listing

Archive Listing
May 7, 2010 - April 30, 2010

Wednesday, February 04, 2009

Melting Messiah?

I TOLD YOU SO. It's easy to minimize the bumps in the road that have gotten the biggest play in the press, but Obama's problems may already go beyond a few lame cabinet choices and a rocky introduction to the process of working with the congress. Victor Davis Hanson has a brief but excellent analysis of the president's missteps thus far, and his conclusions are sobering.

The Impending Obama Meltdown

Some of us have been warning that it was not healthy for the U.S. media to have deified rather than questioned Obama, especially given that they tore apart Bush, ridiculed Palin, and caricatured Hillary. And now we can see the results of their two years of advocacy rather than scrutiny.

We are quite literally after two weeks teetering on an Obama implosion—and with no Dick Morris to bail him out—brought on by messianic delusions of grandeur, hubris, and a strange naivete that soaring rhetoric and a multiracial profile can add requisite cover to good old-fashioned Chicago politicking...

Hanson proceeds to offer up an itemized list of major blunders at home and abroad. The former are serious, but the latter are rapidly mounting up to potential disaster.

Abroad, some really creepy people are lining up to test Obama's world view of "Bush did it/but I am the world": The North Koreans are readying their missiles; the Iranians are calling us passive, bragging on nukes and satellites; Russia is declaring missile defense is over and the Euros in real need of iffy Russian gas; Pakistanis say no more drone attacks (and then our friends the Indians say "shut up" about Kashmir and the Euros order no more "buy American").

This is quite serious. I can't recall a similarly disastrous start in a half-century (far worse than Bill Clinton's initial slips). Obama immediately must lower the hope-and-change rhetoric, ignore Reid/Pelosi, drop the therapy, and accept the tragic view that the world abroad is not misunderstood but quite dangerous... If he doesn't quit the messianic style and perpetual campaign mode, and begin humbly governing, then he will devolve into Carterism—angry that the once-fawning press betrayed him while we the people, due to our American malaise, are to blame.

It's all well and good to end a dismal reckoning with upbeat bullet points about how to clean up the mess, but Hanson's finale is the only disingenuous part of his essay. In some sense, all this was -- and is -- inevitable. The frightening core of the situation is that Obama really is more messiah than politician. Yes, he showed considerable talent and flair at getting elected, as well as a ruthlessness about tactics which must have convinced his inside-the-beltway followers that he was, something like Reagan and JFK before him, a Natural. But the attainment of high office is only half the skill set of a gifted politician. The other half is the tempering of ideological conviction with the grubby pragmatism of problem solving: being a shrewd and skeptical judge of character, knowing the difference between delegating and losing control, and understanding when pure idealism must bow to the realities of the people, places, and timeframes involved.

But messiahs don't sell, bargain, close deals, and hammer out tough compromises. They simply speak and expect everyone to accept their wisdom. That's why Obama still hasn't figured out that all his gloom and doom characterizations of the economy are the antithesis of effective presidential politics. He is a true contemporary liberal, which means that he is a deep down opponent of America's traditional rugged individualism and can-do spirit.

Back in October 2005 I took the liberty of describing the real core beliefs of liberals. Does any of this ring a bell in terms of the rhetoric you've heard from Obama and the Democrat congress since the election? (Coincidentally(?), this was another time when Limbaugh was under assault for his claim to speak on behalf of conservative principles.)

What Limbaugh doesn't say is that liberals could articulate their own views almost as clearly if they weren't so at odds with the pesky national consensus that determines election outcomes. They could say: "We believe in group entitlements, expanding government, government-managed socialist economies, a judiciary empowered to act as an elitest super-legislature, rigid public secularism, government redistribution of assets, opportunities, and rights based on race and sex, and subordination of the national interest to the rulings of international bodies. We support government schooling under the absolute control of teacher unions, urban-centric government make-work programs, tax increases and increasing progressivity of tax rates, dynamic expansion of welfare into the middle class (a la France and Germany), exclusion of all religious institutions from public life, government controls on political speech we dislike, subordination of property rights to government-based social engineering initiatives, and a swift end to all military and unilateral aspects of the war on terror."

But they will not say such things out loud because they know a slender majority of Americans are too stupid to understand the superior wisdom of their ideology.

All that's changed since then is that Obama won the election and somehow believes this fact means the nation as a whole subscribes to exactly the beliefs enumerated above. He thinks we're all, or mostly, converts to this dark view of the American opportunity. Everything about us is wrong and he's been Chosen to fix us and the country. He believes our belief in him is so strong that it will survive even a prolonged period of chaos while he remakes the social contract and the international scene in the image of his utopian vision.

Any real politician would know just how thoroughly wrong that particular belief of his is. No heterogeneous population will long accept a vision that is fundamentally bleak and insulting to the people it's supposed to inspire.

Obama has begun as he had to. He will proceed as he must. I don't doubt that he still has some smoke and mirrors in his arsenal, but eventually smoke blows away in the wind, and the empty image inside the mirror may very well shatter it beyond repair.

Tuesday, February 03, 2009

Too Good Not to Share

Have a nice day.

Monday, February 02, 2009

A Possible Bright Spot?

Radical Notions

Bailout worries? Quit carping and dream big.

THE NEWS MISSES THE NEWS . I'm not predicting, mind you. I'm speculating. But there is some evidence on my side for such speculation. All I'm doing here is putting together some facts of the current situation in a way nobody else has thought to do.

Yes, it looks as if the Obama administration and the Democrat congress are actively seeking to destroy the American economy and the capitalist system. All the bailout requests from various big companies and industries have given them a long-awaited excuse for nationalizing many of the country's largest corporate entities. Their labor policies also look as if they're designed to paralyze the ability of individual entrepreneurs to respond to market conditions and weather the storms that will be created by capital scarcities caused by too many government borrowings that compete for funds which should be invested in profit-making schemes. All of this looks bad. In fact, very very bad.

But. Let me note that the doomsayers are making an argument that is at least redundant if not deliberately dim-witted. The companies and industries that are begging for government help are, by definition, already moribund. So why all the dark mutterings about what their prospects are as nationalized pawns of a government that will kill them through interference and ignorance? When your last resort is to a government that will unquestionably make your competitive situation even more untenable than it is now, you're already dead. You're in intensive care and all your negotiations aren't about being cured; they're about not having the plug pulled today.

Permit me to suggest three points. One, the giants of Wall Street, Detroit, and the mass media are appropriately at the end of their natural life cycles. Two, the government cannot nationalize the entire economy; their budget for financial misadventures of this sort has been or will be entirely consumed by the cost of the corpses they've already acquired. And, three, the underlying infrastructure of the American economy has been so much changed by technology that it is simultaneously responsible for the collapse of the elderly titans and beautifully conducive to a new phase of economic growth that can make up for all the insanity of the Democrats.

Insanity is, after all, the exact right word. Let's say you wanted to take over the NFL and remake the game so that every team finished every season 8-8, and the person in charge got to pick the playoff teams based on personnel diversity, environmental factors, and all-around niceness. Which four teams would you seize? I'm thinking you'd "nationalize" the Pittsburgh Steelers, the Arizona Cardinals, the New York Giants, and the New England Patriots. If your goal is mediocrity, cripple the best first. But in this analogy, who would the Democrats be nationalizing? The Detroit Lions, the Kansas City Chiefs, the St. Louis Rams, and the Cincinnati Bengals. They'd run them by committee, lose every game, and be out of business in two seasons. And guess what? The NFL would be better off. The worst teams would be off the field, new franchise opportunities would open up for cities and owners who are committed to winning, and the fans would be a lot more interested because of the new unfolding drama. The government would be out of money and their only remaining power would be to change the rules in eccentric ways. But if the rules got too absurd, the fans would rise up and demand a change.

That's where we are today in economic terms. Why is everyone so alarmed that the federal government is in the process of nationalizing the Detroit Lions? So what. So fucking what. America won't become Europe because Americans are not Europeans. TA DA. Who else has pointed out this particular obvious fact? We're not going to become Britain or France because we're not Brits or Frogs. We don't settle for dismal, unacceptable crap because we're not prisoners of centuries of class warfare propaganda that persuade us to put up with numbskull oppression because the weight of all our dead ancestors on our shoulders has drained away the energy to resist. We don't have ancestors. 99 percent of us don't even know the names of our grandparents' moms and dads. What we do know is that we still want cool stuff. Right now. And we'll move heaven and earth to get it. And most importantly, we also know how to move heaven and earth to get we want. It's called work. As a people, we know what that is because it's bred into us at a deeper level than all the media propaganda and government schools and political lies can overcome. Do you hate Y-Gen slackers because they think the world owes them a living? That they're the proof America's day in the sun has ended? You do? Then why are the slacker founders of Google and YouTube billionaires? You think they didn't do any work to make their billions come true? Ha.

Two key conceptual points of relevance. The average lifespan of a corporate entity is about half that of a human being. Ford, GM, Chrysler, Merrill Lynch, CitiBank, The New York Times, The Washington Post, and Time Magazine are extreme exceptions to this rule. As corporate organizations, they are all in late senility. IT'S OKAY IF THEY DIE. If they vanished from the scene entirely today, it would not eliminate the demand for cars, stock transactions, or news reporting. That demand would continue and new organizational entities would arise to meet that need. Government can seek to control or suppress capitalism, but capitalism is not an ideology; it is merely a description of what happens when government isn't big enough to sit on absolutely everybody. And as big as our government is, it's not big enough to sit on all of us, because we have too much stuff, too many ideas of our own, and we're Americans. Which is the perfect intro to the second point.

The government of any nation is determined by the personality and expectations of its people, not by the political framework in which that government operates. Citizens of the U.K. remain subjects of the Crown, regardless of the long steady ascendancy of democratic ideas over the perquisites of aristorcracy. That's why they stand still for the fact that they're the most camera-surveilled society in the western so-called free world. Russians remain hostages of an arbitrary, authoritarian, and bloodily ruthless czarist regime that has changed vocabulary in its transition from monarchy to communism to democracy but never the naked brutality, paranoia, and inferiority complex that drives its leaders to mindless aggression on the world stage. China remains a dynastic culture whose leaders always command absolute power over the tiniest details of individual lives, whether the government calls itself an empire, a dictatorship of the proletariat, or an oxymoronic communist-capitalist directorate. Japan remains Samurai... France remains Napoleonic... Spain remains a matador... Nigeria remains tribal... India remains a schizophrenic blend of the Raj and deep-down Hindu voodoo.. Australia remains a resentful, racist prison colony with something to prove... Canada remains a dutiful, mild-mannered colonial cipher in which freedom is merely a word... South Africa remains a volatile outpost of imperialist go-to-hell hubris... the Israeli Knesset has more in common with a board meeting of the average synagogue than it does with the U.K. House of Commons.

And America -- the United States -- remains a bubbling, irascible stew of mixed peoples, cultures, and beliefs united by an incredibly long tradition of only putting up with the shit for this long. A nakedly totalitarian regime in this country would give rise to the most indefatigable resistance movement in human history, something that would make the Civil War look like a riot at the mall. You see, our tradition is that the government cannot contain us or command us. We tolerate its impositions, and they are always impositions, up to a point.. Most of us pay the government so little mind that we notice its impositions late, reluctantly, at first with amusement and then, suddenly, with savagely creative defiance. Cowards become heroes, meek mice become attack dogs, and mere pawns become a boardful of queens moving whither they will to checkmate a king whom tradition has never allowed to move more than space at a time. Even if we had a king or emperor, he'd still be sucking up to this week's polls.

I remember when the first bailout was in place and the MSM was telling us every day that credit in the United States was "frozen." Am I the only one who noticed the flurry of new ads for immediate credit to buy a car, a house, an insurance policy against every medical and life emergency? Yes, the giants of olden times were frozen, but every entrepreneur in the country was flowing like mercury into the cracks in the ice.

That's where we are now. If the car companies fail, foreign manufacturers will build new manufacturing plants in the U.S. If the banks fail, every dreamer and weasel who owns a blue suit will open new banks. If the big newspapers cease operation, entrepreneurs will hire reporters to produce the grist for the endless Internet mill of commentary and satire. That's who we are. As a people. As Americans. If they kill the Pittsburgh Steelers, the Houston Texans will romp. We have clout because we have stuff and we are Americans. Our expectations are permanent.

And. Most critically. The technology is on our side. Never before in history has it been so comparatively easy to start a national or international business with no investment greater than a website. The reinvention of manufacturing a generation ago via "Just in Time" principles has now catapulted into the phenomenon of Just-in-Time businesses. A publication can be launched in an instant without an expensive printing press. An insurance company can be vaulted to billions in revenue by a CG lizard. New software can build an empire from a basement. And even the most onerous labor laws can be circumvented by virtual organizations that redefine what an organization is and who works for it or doesn't.

So Circuit City died. Aw. Chances are, they were obsolete, not price-competitive, Not sustainable. Maybe there will be no more strip malls in twenty years. Who knows? Maybe by then all goods will be flashed through an electronic network that makes UPS and Federal Express richer than Croesus until they expire of size, age, and senility....

Meanwhile, the U.S. government is still micro-managing the expensive hulks of CitiBank and The New York Times.

Who cares? It's entirely possible that the speed of entrepreneurially created markets will fatally outstrip the incomprehensibly slow attempts of 19th century socialists to "manage" them. Look at China.

Look at China. Then tell me we Americans can't outlast Obama's retro agenda and still come out smelling like a rose, with yet another recordbreaking run as the world's highest standard of living and freedom.

UPDATE. I shouldn't. But I will. Because I'm InstaPunk. Bruce Springsteen at the Super Bowl? He SUCKED. He can't sing any more, he was wearing a corset and a hairpiece, and I consequently broke my vow not to watch Scorsese's "Shiine a Light" because I didn't want  to see the Rolling Stones fall below the standard of the five concerts I attended over twenty years. A friend of mine who saw "Shine a Light" and the Springsteen performance put it to me starkly. "The Stones can still play. Springsteen is a joke." I can't believe Bruce began with his first and biggest hit and couldn't sing it. I've seen Mick perform "Sympathy for the Devil" (not his first hit) five times live, and every time he makes it a new dramatic event. I disapproved of the Stones as a Super Bowl Act a year ago. But it can't compare to my contempt for the decision to schedule this hyper-politicized mega-millionaire from New Jersey to play out his threadbare common-man act in Tampa yesterday.

A Step Aside:

She rooted for the Steelers, but...

LOVE. I love her anyway. She's my wife. And there won't be any Valentine's Day guff, either. No need. Love is year round.


It’s a Ronnie thing.
She’s an itty bitty thing
but she explodes
sitting in the chair
she dances, she knows
everything, she dances,
she stops clocks with her eyes.

Saw her sitting in a lobby
years later she was more
tiny and touching
than a heart can recall
she was still freckled
and left-handed, she was
not pretty, she was only
absolution in human form.

And beautiful in the way
only an unfurious redheaded
Fury can be.

I'm just sorry for all of you who don't have one of these.

Saturday, January 31, 2009

Super Bowl XLIII
The Short Version

HERE WE GO AGAIN. This really isn't hard to do. We have it from the MSM that there's a lot of hoopla but little mystery.

Everything about the Super Bowl is bigger, grander and more expensive. There is no better example than the live television production.

Broadcasting Sunday's Pittsburgh-Arizona game at Raymond James Stadium will cost NBC $8 million to $10 million, and that doesn't count $600 million a year in rights fees the network is paying to also get "Sunday Night Football" through 2011 and the 2012 Super Bowl...

Viewers won't notice any new gimmicks or major enhancements in the telecast, but there's already enough technology in a Sunday or Monday night NFL telecast to land Ben Roethlisberger on the moon.

Basically, the Super Bowl telecast is an amplified edition of "Sunday Night Football."

So if you'd rather get it all out of the way ahead of time and use your Sunday for something other than an exhausting TV marathon, here's our little cheat-sheet of a post.


This part of the day will last, well, all day. Every single segment of it will begin with the same quasi-Ben Hur chariot race music accompanied by stupid graphics, so you may as well get it out of the way now with our small-scale version:

Then comes all the pre-game crap presided over by Bob Costas and his crew of exceptionally self-satisfied jocks and NBC know-it-alls and technicians. Here's pretty much all you have to know about them. (You can make up tomorrow's Steelers-Cardinals banter for yourself: Pittsburgh tough, Arizona lucky.)

Remember that line about "a different feel." Think MORE ADS.

And since halftime will be its own mega-extravaganza, NBC will probably have to give Keith Olbermann his airtime in the pregame hours as well. Here's a sample.

Again, you can make up the football hysterics for yourself.

Eventually every single person shown on camera will have said everything everybody else has said enough times that they start to collapse from boredom and vocal strain. Then it's time for...

This is easily the least important part of the proceedings. Think of it as filler for the real purpose of the broadcast: commercials and NBC programming promos (commercials). We can easily simulate this experience for you right now. Here's the whole damn game of football that will be played.

Of course it's tempting, but you're not allowed to watch it all the way through. After every kickoff, punt, touchdown, timeout,  and any other excuse you can think of, you must pause the game and go to this site, where they have the most ballyhooed Super Bowl commercials available for your viewing pleasure, and watch at least one of them. After that, you have to go here and see at least one of the NBC promos. Only then can you return to the game, and on no account can you let more than a few minutes of playing time elapse before you pause for the next commercial. Got it?

You also have to pause the game at halftime, of course, so that Bob Costas can narrate the incredible pyrotechnics that will be taking place on the field:

Oops. Wrong tediously overblown stadium event. Our mistake. Actually, there will be a slight delay as they construct a second stadium inside the first one for the super-spectacular Bruce Springsteen concert. Here's Bruce telling us how long that delay will be:

Everyone will be glad to wait, though, for the always unforgettable poet-idiot of New Jersey, secure in the confidence that we can't be offended by loopy political non-sequiturs we couldn't possibly decipher through his increasingly Dylanesque slur. It's bound to be as great as all his other legendary four-hour concerts.

Don't make the mistake of rushing right back to the game after Bruce is done. They still have to demolish the temporary stadium on the field, which means you need to go back here and here for more commercials. And keep going back, again and again till all it's all mercifully over.

Got it? Enjoy the game.


Yes, if you're still not in a coma after the final gun, there will be highlight shows. Here's what we expect you'll be seeing a lot of.

We know we're really looking forward to it.

Friday, January 30, 2009

Mars Rover Mystery!

It went kind of dark over the weekend and woke up acting strangely.

MORE DISAPPOINTING NEWS. Here's the straight skinny from NASA:

NASA engineers are scratching their heads over some unexpected behavior from the long-lived Spirit rover, which began its sixth year exploring Mars this month.

Spirit failed to report in to engineers at NASA's Jet Propulsion Laboratory (JPL) in Pasadena, Calif., last weekend, prompting a series of diagnostic tests this week to hunt the glitch's source.

The aging Mars rover did not beam home a record of its weekend activities and, more puzzlingly, apparently failed to even record any of its actions on Sunday, mission managers said.

"We don't have a good explanation yet for the way Spirit has been acting for the past few days," said NASA's Sharon Laubach...

Or maybe it just, you know, met somebody more fun to talk to than NASA engineers.

Don't mind us. We're just having fun. Somebody has to.

The "Americans With
No Abilities" Act

OLD FRIENDS. As  matter of record, I've never used viral emails from the Internet as the whole substance of a post. But I'm starting to get the hang of the new political culture. Actually working is a waste of time if you can find some kind of bailout somewhere. So here's what I found in my inbox this afternoon.


Washington, DC - Congress is considering sweeping legislation that will provide new benefits for many Americans.

The Americans With No Abilities Act (AWNAA) is being hailed as a major legislative goal by advocates of the millions of Americans who lack any real ambition or skills...

'Roughly 50 percent of Americans do not possess the competence and drive necessary to carve out a meaningful role for themselves in society,' said California Senator Barbara Boxer.

'We can no longer stand by and allow People of Inability to be ridiculed and passed over. With this legislation, employers will no longer be able to grant special favors to a small group of workers, simply because they have some idea of what they are doing.'

In a Capitol Hill press conference, House Majority Leader Nancy Pelosi and Senate Majority Leader Harry Reid pointed to the success of the Transportation Security Administration, which has a long-standing policy of providing opportunity without regard to performance.

Approximately 74 percent of postal employees lack any job skills, making this agency the single largest U. S. employer of Persons of Inability. Private-sector industries with good records of non-discrimination against the Inept include retail sales (72%), the airline industry (68%), and home improvement 'warehouse' stores (65%).

At the state government level, the Department of Motor Vehicles also has an excellent record of hiring Persons of Inability (63%).

Under the Americans With No Abilities Act, more than 25 million 'middle man' positions will be created, with important-sounding titles but little real responsibility, thus providing an illusory sense of purpose and performance.

Mandatory non-performance-based raises and promotions will be given so as to guarantee upward mobility for even the most unremarkable employees.

The legislation provides substantial tax breaks to corporations that promote a significant number of Persons of Inability into middle-management positions, and gives a tax credit to small and medium-sized businesses that agree to hire one clueless worker for every two talented hires.

Finally, the AWNAA contains tough new measures to make it more difficult to discriminate against the Non-abled, banning, for example, discriminatory interview questions such as, 'Do you have any skills or experience that relate to this job?'

'As a Non-abled person, I can't be expected to keep up with people who have something going for them,' said Mary Lou Gertz, who lost her position as a lug-nut twister at the GM plant in Flint, Michigan, due to her inability to remember righty tighty, lefty loosey. 'This new law should be real good for people like me,' Gertz added.

With the passage of this bill, Gertz and millions of other untalented citizens will finally see a light at the end of the tunnel.

Said Senator Dick Durbin (D-IL): 'As a Senator with no abilities, I believe the same privileges that elected officials enjoy ought to be extended to every American with no abilities. It is our duty as lawmakers to provide each and every American citizen,   regardless of his or her adequacy, with some sort of space to take up in this great nation and a good salary for doing so.'

Gosh. That was easy. It's politically pungent and contains virtually none of the strange unerhanded humor I normally inflict on readers of this blog. I like it. Hell. Why should I work? If you stop coming around to read posts, I'll just demand federal compensation under the terms of the AWNAA.

Feedback is acceptable but not exactly desired. If you know what I mean.

Thursday, January 29, 2009

Deadpan Delights

The very definition of deadpan. Not that he didn't do stuff.

CHILLING. Doesn't everybody seem a little overwrought these days? I think so. Regardless of what Al Gore thinks, whatever happens in the next few months or years isn't the end of the world*. Times may get tough, but the human species is pretty hardy and resilient. And that goes double for Americans. So I'm thinking it's time to dial everything back a notch or two, emotionally speaking. That's why I'm offering up three movies for your delectation -- no, not IP's grandiose list of national treasures, but something much more modest. In fact, modesty is the whole point. These are movies in which the normal range of human emotional expression appears to be lopped off somewhere above faint pleasure and somewhere below mild anxiety. It's not that the characters in these dramas don't have good reason for more fulsome reactions; it's just that they don't seem to be afflicted with our increasingly promiscuous urge to assault everyone else with our limbic seizures. Do you understand what I mean when I say "everyone"?

That's right. I mean EVERYONE. Give it a rest, why don't you?

Sorry. I'm just pretty maxed out with all the passionate rhetoric about "the first," "the best," "the greatest," "the smartest," "the dumbest," "the worst," "the awfullest," etc. Maybe it's a WASP thing. It really is possible to have powerful feelings without forcing them on all and sundry just because they happen to be within earshot or striking distance. Really.

As proof, I offer up these three obsessively understated little films. I don't ordinarily use the word 'film,' but when a director goes miles (leagues?) out of his way to stomp on any attempt by his hired actors to act, we're no longer in Hollywoodland. We're in that peculiar but very occasionally rewarding hell called, well, you know.

The first one is actually the best. I know you're supposed to work your way up to the best, step by step, but to hell with that. Today, I'm all about anti-drama, anti-suspense. This is a movie that has absolutely nothing going for it. It's part of an artsy trilogy. It's Finnish. Finnish. Did you get that? Finnish. So it has subtitles. And I can't verify my sources on this, but I've been informed by the usual reliable sources that the production budget was sixteen dollars. It's called "Laitakaupungin Valot" or, in humanspeak, "Lights in the Dusk."

Are you snoring yet? Don't. It may be the most screamingly funny movie I've seen in a dog year, and I'm pretty sure the director wasn't trying to make an Ingemar Bergman film except for the no content; I think he knew exactly how funny it would be to make a movie about the world's most laconically miserable people failing to react visibly to anything that happens, no matter how dire. It's impossible to describe. Can you even imagine a first date on which neither partner makes any eye-to-eye contact ever and one of them still falls fatally in love with the other? With absolutely NO change in facial expression? And [SPOILER ALERT] did you know that when you buy a hot dog at a hot dog stand in Finland, what you get is a hot dog -- no mustard, no relish, no sauerkraut, and no bun? That's pretty much the movie in a nutshell. All right. Enough with the mesmerizing promo talk. Here's the trailer:

Go ahead. Find it. Watch it. I dare you. Laugh yourself sick. Just don't let on to anyone in the room that you deem any of it amusing.

The next one isn't as good. It's American. Unless it's Canadian. But you know. No subtitles. No bleak Helsinki nightscapes. What it does have is mallscapes. And John Turturro as a man who adamantly refuses to betray the slightest flicker of emotion about the personal annihilation he experienced when his wife was murdered in a mall parking garage. Actually, it's not funny. At all. It's eerie, creepy, brooding, and bulging with nameless dread. Somehow, no emotion becomes all the emotion in the world. It's called "Fear X." Here's the trailer.

After you see it, you won't know what happened exactly. Yup. It's a film, not a movie. But for some really weird inexplicable reason, you'll be glad you watched John Turturro hammer you without moving any of his facial muscles. The challenge is to get through it without moving any of your own. It's excellent practice for the Obama administration.

The third movie is the worst of the three unless it's the best. It's hard to know because it's one of those ones where you get to the end and realize you'd have to watch it two or maybe six more times, carefully, to figure out what the hell is going on. But you still think it's possible to figure out what's going on. If you pay close enough attention. Which makes it kind of an anti-Bergman film if you think about it. You see, it's not about Death or Despair or Growing Up Swedish. It's about time travel. Only not in the H.G. Wells science fiction sort of way, but in the Silicon Valley yuppie startup in the garage sort of way. In fact, it takes about a half hour to realize that this isn't a yuppie startup documentary kind of movie, but an incredibly complicated ''film' in which drastic things are happening without any emotional cues to help you decide who to root for and against. It's called "Primer." Here's the trailer.

There you have it. Three films. Don't get excited. Please. Keep it down. Don't thank me. Well, a politely worded note would be okay as long as you don't get all sentimental and like that.

Clear? Have an uneventful day, everyone.

*Unless there's any truth in this fairly alarming story.

Wednesday, January 28, 2009

Remedial Economics:

The REAL Tax Increase to Come

Do you know my name?

. I'm not saying nobody's using the word 'inflation.' Various people are. But they tend to be the ones who are old enough to remember what it actually means, what it feels like, how it touches individual lives. And because I'm still capable of basic arithmetic, I know that people under the age of, say, 48 are highly unlikely to have the slightest idea what a significant resurgence of inflation would do to them. That's what this post is for. To bring all the neophytes up to speed so that they'll start paying attention when this mild-sounding term is tossed around by economists and politicians.

I'll start with a chart. (The only one in the post, I promise.)

So what's the "Inflation Rate"? It's the average percentage increase in the price of goods and services in any given unit of time. Mostly, it's calculated on a yearly basis. Sound technical? Well, it is and it isn't. Yes, in that it involves millions of computations by nerds in gray cubicles. No, in that it is absolutely real and when it attacks it will devour you, you, and you. And, yes, YOU too. It's a beast.

You go to the supermarket every week to discover that prices of things you need have gone up since last week. Personal income never keeps pace. Every producer of goods and services is also behind the curve. The prices of the goods and services they need to produce their products are going up at the same rate, and they raise their prices after they've already taken losses because they still have to compete, and so they accept declining profits until the last possible second. They economize in every possible way, which means that employee compensation is just about the only cost over which they have relative control -- unless their labor is union labor, which means that the demands for wage increases will be more frequent and dire. Of course, the result of such intense economic pressure is more strikes, and both employers and employees always lose when there are strikes. Employees never make up their lost wages after a strike, and employers never recover the lost revenues effected by an interruption of production.

Meanwhile, other terrible things are happening. Since today's dollars aren't as valuable as yesterday's dollars, the absolute value of debt of all kinds is declining, which sounds like it would be good for people and companies who owe lots of money in long-term loans and bonds and mortgages. But it doesn't work out to be a benefit to anyone. Why? Multiple reasons, though they mostly boil down to the fact that big institutions of all kinds have more power than individuals, and they are very very good at passing as much of the burden of inflation as possible to individuals.

For example, when tomorrow's dollars are certain to be significantly less valuable than today's, interest rates on every kind of loan and investment go up dramatically. Which becomes a self-perpetuating phenomenon. Mortgage rates go up and up and up. Credit card rates go up and up and up. Insurance rates of all kinds go up and up and up. After a while, the anticipatory increases become automatic and impossible to overtake. Which means that while the value of debt principal goes down, any gain is more than eaten up by exponentially increasing interest charges. And while personal incomes may rise faster than they would in a low-inflation economy, the governments to which you pay income taxes are perfectly happy to watch you bump up to higher tax brackets and pay higher marginal rates even while other price increases are reducing your standard of living below what it it was before your various tax bills went up. Your ability to save is seriously damaged at a time when the value of all your long term investments -- pension, life insurance, social security benefits, etc -- is, like the long-term debt it represents to the institutions for whom your future income is a liability, evaporating in big chunks every year.

Viewed from the perspective of individual citizens, a significantly inflationary period is a lose-lose-lose-lose proposition. The cost of living goes up, the cost of investing goes up, the cost of borrowing goes up, and the relative cost of taxation goes up, despite the fact that the real value of the debt principal everyone owes is falling every day. Cumulatively, the costs of inflation are a catastrophe for individuals.

Are you starting to see that inflation is more than a statistic, more important than similar-sounding terms like the federal deficit, the trade deficit, the exchange rate of the dollar, and the consumer confidence rating? When gas prices skyrocketed last year, did you receive any adjustment in your personal income to make up for it? Rampant inflation is like the sick feeling you experienced at gas stations last year spread to every single part of your financial life. Do you get it?

 Now. Back to our one chart. There are four things you need to see there.

First, a little bit of inflation is absolutely normal. It goes up and down with normal fluctuations in a lot of economic variables. As long as it can be kept chained to a rate of about five percent or below, it doesn't break loose into the escalating spiral I've just described. That's been the state of affairs for the adult lives of all Americans who are younger than, say, 48 years old.

Second, this state of affairs is not a permanent condition of any economy. The tall peaks on the chart are proof that so-called "runaway inflation" does occur. Moreover, the size of those peaks demonstrates that when the rate of inflation slips past a five or six percent ceiling, it awakens the Beast. There is a point past which inflation ceases to be a variable and becomes the prime driver of economic events.

Third, the big changes in the rate of inflation have everything to do with the way the federal government chooses to interfere in the economy. The two biggest changes we can see on the chart have to do with the frightening increase in inflation that occurred under Carter from 1976 to 1980 and the miraculous decrease in inflation under Reagan from 1981 to 1988. The bald truth? Everything you youngsters think is "normal" for the U.S. economy has been a function of the economic policies initiated by the much-maligned Reagan administration. Did you know that? Honestly?

Fourth, the last huge spike in the inflation rate can be precisely dated to the last all-out liberal Democratic presidency and congress. Clinton was a self-professed moderate Democrat and his party's control of both houses of congress in his administration lasted only two years. (Note that the downward spike in inflation in the Clinton years occurred shortly after Republicans took control of congress in 1994.) For all his other failings, Clinton's most positive achievement was that he didn't break the Reagan prosperity machine. Carter, on the other hand, had a filibuster-proof Democratic house and senate, operating in accordance with government philosophies much closer to Obama-Pelosi-Reid than any federal government we've had since then. Until November 2008, that is.

So. What actually causes runaway inflation, and why should we be concerned about it now? Two things. Most economists will tell you that inflation is caused by too many dollars chasing too few goods. Which is true as far as it goes. When the government spends more money than it takes in in tax revenue, it pays its bills by what is called "printing more money." Actually, the new money has to be borrowed elsewhere, and the instrument used is government securities, which are supposed to be absolutely safe and therefore can be offered at modest interest rates to risk-averse investors like foreign governments who want a sure thing with a modest profit in the future. That's how we've financed generations of deficit spending without serious harm. In the broadest sense, government borrowing is backed by the record of growth of the U.S. economy. Tomorrow's dollars will still have value because the total U.S. economy will continue to grow, sustaining the value of external investments in U.S. securities. Of course, the more we borrow, the higher the interest rates we have to pay get, as the risk rises that the U.S. economy won't be able to grow at a rate that meets or exceeds the principal payments plus interest charges.

The money thus borrowed is then loaned to financial institutions, who can use it to make loans to businesses and individuals for the purpose of generating new income and more growth. The interest rates paid by those businesses and individuals are pegged to the rates the U.S. government has to pay on its own securities. Do you start to see the problem? The investors who buy U.S. government securities are making a bet -- that the U.S. economy will grow fast enough to make each dollar they receive from their investments worth at least, uh, a dollar.

But what happens when the potential investors in U.S. securities stop believing that tomorrow's dollar plus interest will be worth what today's are? They will want higher interest on their loans. Which adds to the baseline interest the U.S. government has to charge banks for lending them money they don't really have. You see, it's not just about starting a printing press and running it until you have enough dough to "give" banks to lend to their customers. It's about the financial calculations and expectations of those who lend real money to the U.S. government to paper over the funny money that's being pumped into the U.S. economy.

There is no free lunch. That's what the Democrats, especially the ultra-liberal Democrats, keep forgetting. It's perfectly okay for the U.S. government to run a deficit, which the record deficits of the spectacularly successful Reagan administration prove. What is not okay is federal spending that either fails to stimulate new growth, or much much worse, actually inhibits growth.

That's why the bailouts that began in the final days of the Bush administration and have metastasized into pork barrel spending and quasi-nationalization of former free market competitors in the U.S. economy are an almost certain recipe for runaway inflation. Adding one or two trillion dollars to the federal deficit will increase significantly the interest rates the U.S. government will have to pay to buyers of its securities. This would be true even if the federal spending the securities financed were a direct and immediate stimulus to economic growth. But if the additional federal expenditures do not stimulate the economy -- if they are merely various flavors of welfare for unproductive sectors of the populace -- the necessary growth will not occur, and future government borrowings will cost even more in interest charges, and the costs will be passed on to every single individual in the country.

There is such a thing as pissing money away. But there is no such thing as doing it without paying a very substantial price. Inflation is the cost of making bad decisions about how to spend money you don't presently have.

Why did inflation soar under Carter and plunge under Reagan? Because Carter spent money he didn't have in ways that totally failed to stimulate business growth. Under his administration, regulations increased, tax rates for individuals and corporations remained high, and the dollars government spent sucked money out of the private sector that could have been spent on new revenue-producing investments. Under Reagan, federal spending also increased, but tax rates fell, regulations were eased, and thus the ability of U.S. businesses to respond quickly to changes in their markets improved dramatically. Reagan's bets proved to be good ones. Carter's proved to be disastrous. The 13.7 percent inflation rate that peaked under Carter also resulted in home mortages of 20 to 22 percent and a prime rate of lending to banks that reached 18 percent. (As a purely academic exercise, calculate the monthly cost of your home mortgage if your interest rate doubled. Throw up here.)

The current Obama bailout bill is a disaster waiting to happen because 1) it spends money on non-revenue-producing projects (i.e., preventing STDs and government make-work projects), and because 2)  its explicit intention of increasing the government's role in interfering with the business decisions of multiple U.S. industries for social and environmental reasons will drastically reduce the capacity of private sector enterprises to respond swiftly and effectively to changes in their markets. Every business failure precipitated by government interference and oversight will serve to decrease the confidence of investors in U.S. government securities, and the result will be escalating interest rates for the government securities required to finance folly. That's how the inflationary spiral starts. And once it has begun, nothing can stop it but a revolutionary reversal of federal policy.

Any bets on whether that will happen in an Obama administration?

Why is this man laughing? Maybe Hamas gets the joke. We don't.

Batten down the hatches, kiddies. The storm clouds are gathering.

UPDATE. Commenter John Thompson writes: may be right, but this second we are dealing with deflation, and until that ends, it will be all that anyone in D.C. (of either party) cares about.

To which I respond, he may be right, but that doesn't make the politicians who are frightened of deflation right. The truth is that over the long term, depressions are more closely correlated with inflation than deflation. Moreover, deflation is closely correlated with a contraction in the money supply, which is certainly not happening in the present economic situation. For three interesting articles on the subject which examine empirical data rather than the various conflicting theories, go here.

I'll also add one more chart:

Does anybody remember the Great Depression of 1920? Yes, there was a depression but it lasted only a year, and a deliberate contraction of the money supply is implicated as a prime cause. The recovery was quite rapid, perhaps because the government did not attempt to remake the economy with massive deficit spending. Note that even in the Great Depression, deflation was retreating from 1932 on, though real recovery did not occur until 1942. Observe, too, that the biggest inflationary spikes of all are associated with the two world wars, whose costs represented huge unproductive government expenditures. Tanks and guns do not generate new wealth the way a factory can; they cannot be sold to consumers or investors at all, much less sold again and again and again. The inflationary run-up to the Carter years can be seen to have begun during the Vietnam War, which also coincided with the giveaway programs of Lyndon Johnson's Great Society. Finally, note that there has been no significant deflation since the Great Depression (or since the retirement of the gold standard), but the American postwar economy has endured multiple recessions since then, a couple of them fairly severe. If the past half century is any measure, it would seem that inflation is a far more persistent danger than deflation.

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