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.
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
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
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
Have a nice day.
Monday, February 02, 2009
A Possible Bright Spot?
worries? Quit carping and dream big.
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
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
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
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.
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.
. 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
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
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
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.
you can make up the football hysterics
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
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
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.
. 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
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.
THE AMERICANS WITH NO ABILITIES ACT
Washington, DC - Congress is
considering sweeping legislation that will provide new benefits for
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
Mandatory non-performance-based raises and promotions will be given so
as to guarantee upward mobility for even the most unremarkable
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
very definition of deadpan. Not that he didn't do stuff.
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"?
right. I meanEVERYONE.
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 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
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
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
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
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
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.
. 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
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
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
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
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
Any bets on whether that will happen in an Obama administration?
is this man laughing? Maybe Hamas gets the joke. We don't.
Batten down the hatches, kiddies. The storm clouds are gathering.
Commenter John Thompson writes:
...you 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)
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.