Saturday, June 30, 2018

Rcession on the Horizon?

When the excess return on long-term vs short-term loans inverts, and becomes negative, investors take notice and begin to fear a recession. That metric is nearly zero now after recently being above 1%.

Bill Maher complained in a recent podcast that he was being accused of hoping for a market crash. In fact, he argued, what he had said was that he hoped that a recession would bring the electorate to their senses and rid themselves of Narcissus I.

As I was listening not to his original plea, but his defense, I was curious about a number of things he said in his rant, beginning with his statement that we would survive a recession, but not survive much more of Narcissus I. He then went on to say that every Republican President since Hoover had presided over a recession, many more than one. I think he said there had been  42 recessions in total under Republican presidents. I’ve checked two things out:

1. Is it true that recessions are more likely under Republican leadership? The answer appears to be a resounding affirmative:

Any way you slice it, folks are worse off always under a Republican president than under a democratic president. The only president that makes it even close was the growth under Gerald Ford, the least republican of all republican presidents.

2. Do recessions benefit anybody? The answer is, again, a resounding affirmative:

Any way you slice it, the rich inevitably profit from recessions. This cannot be accidental, can it?

The Emperor's New Clothes

It strikes me at the moment that the nation is very much in the position of the kingdom in Hans Christian Anderson’s 1835 tale, “The Emperor’s New Clothes” who admire the king’s royal trappings, despite that fact that the weavers who created them had duped the king by undressing him, while flattering him with their sycophantic blather.  

We fail completely to identify Narcissus’s nakedness, I think, for two reasons. Most importantly, there is no signal; everything he does is astonishingly horrific, so there is nothing on which to focus. Of course, it is also because of two hundred plus years during which we were taught American exceptionalism.

And this despite broadly-based and robust evidence: 

 He has created an immigration crisis at a time when illegal immigration is at an all-time low, thanks primarily to Barrack Obama. He has sowed fear of violent crime at a time in history when it is at an all-time low. He wishes to erect a barrier of tariffs that will inevitably cause a deep recession. He angers all world leaders except for the totalitarian dictators whom he both admires and apes. He pummels the department of justice and persuades justice Kennedy to retire in order to install a bullet proof SCOTUS that will exonerate him for colluding with the Russians to steal the presidency. He is a massively criminal racist who defrauds and stiffs his creditors. He lies about virtually everything, national and personal. He confirms in daily tweets that he is at once the most vain and the most deluded individual on the planet.

Indeed, Anderson’s tale is so subtly constructed and relevant, and Narcissus is a dangerous buffoon who so resembles the Emperor in his story in every particular, that I despair for the child in the crowd, too young to understand the desirability of keeping up the pretense, who will blurt out that Narcissus is wearing nothing at all, so that the cry can assumed and amplified by others?

Monday, February 15, 2016

Textualism; Originalism

About a year ago, or perhaps two years ago we were treated to a wonderful and original play at the Arena Theater in Washington DC called "The Originalist". It is remarkably well-written, with word-play and ensemble performances of Scalia and a hypothetical lesbian graduate of Harvard Law School as his clerk. What made it stunning was that the actor who played Scalia was not only a dead ringer physically, but that he had studied Nino's mannerisms carefully and managed a stupendous theatrical coup of making us think we actually watched the judge himself. I thought long and hard afterward about the meaning of the word "originalist", now popularly textualist. I decided, rightly or wrongly, that Scalia's pretense of revering the US Constitution was, inherently, an act of the deepest form of hypocrisy; he used the protection of claiming reverence to the founding fathers words to justify whatever he felt in his most partisan feelings. To my knowledge, he NEVER found that the words in the US Constitution actually told him otherwise. In science, an idea that cannot be falsifed—i.e., for which no test can be constructed that would show it to be false—cannot be considered a theory. If Scalia never deviated from partisan beliefs, that would be an exceptionally strong and scientifically valid basis for accusing him of hypocrisy. Thus, unless Scalia even once issued a progressive ruling because the Constitution was written that way, he cannot avoid being guilty of hypocrisy. In the context of the scientific method, Scalia's "originalism" was inherently not falsifiable, and hence logically akin to scientific creationism. Scalia was gifted at word games, to be sure, and lawyers love word games, often perhaps more than justice itself. The central truth of my perception of hypocrisy has now become self-evident. The Constitution assigns the responsibility of judicial appointments to the sitting President, and yet Scalia's partisans now wish to efface that authorization from the Constitution and are willing to risk a lasting constitutional crisis to get it erased. We have already been treated to Elizabeth Warren's sparkling statement that the people have already spoken. I'm curious to consider the opinions on this point from folks more familiar with jurisprudence than I am.

Saturday, February 13, 2016

Excitement at SCOTUS!

The shocking news just came across Huffington that Antonin Scalia had passed away in his sleep. I am one who, since the 2000 ruling in Bush Vs Gore has felt that the Supreme Court of the United States was little more than a joke. In the intervening time, five Roman Catholic men have made that characterization even more certain. I don't feel that institutions deserve our respect; I feel they must earn it. Antonin Scalia's time on the court was dominated by his own hypocrisy. Rather than actually considering the meaning of the constitution, he hid under that rubric while issuing rulings which, instead of reflecting what the framers of the constitution meant, actually expressed his own, particularly nasty, partisan feelings. What now? I have been reserved in my response to many of Barack Obama's accomplishments; I think he has all too often taken everything valuable off the table before he went to the mat. However, his two appointments to the court have been stellar. Will he now make a similarly progressive appointment? More importantly, can he get his appointment confirmed by a Senate that houses a ravenous minority? Stay tuned!

Tuesday, September 18, 2012

Mittens insults his own base!

There is a rich and delicious irony in the news story that broke late Monday afternoon, 17 September, and which was covered extensively tonight major network news hours. Romney describes a group of voters to a group of investors and, by extension political supporters. The scene, according to David Corn of Mother Jones, was a private a fundraising party with lots of booze and sex playmates. Those who take more from the government than they pay, said Romney, are not his concern. They will vote for Barack Obama under any circumstances. This inane charge breaks entirely new ground in political naiveté. Unbeknownst to mittens, he was actually describing where most of his votes actually come from!!! According to quite readily accessible demographic figures, It insults precisely those voting blocks most likely to vote for Romney himself. If these voting blocks only could hear what he said about them, might change their minds about for whom they are going to vote. The only demographic in which Romney holds a lead are those over 65 - those "entitled" to medicaid and medicare. Those who pay little or no income tax are those in red states! Ah what a glorious turn of events! When your enemy is making a savage mistake, don't interrupt - Napoleon.

Friday, March 30, 2012

Administration defense of the Affordable Care Act

As a former enthusiast for Barack Obama’s 2008 campaign and as someone approaching most political questions from the far left, I register here my dismay at the case prepared by Mr. Verrilli and Mr Kneedler to support the Affordable Health Care Act. Good friends who are accomplished lawyers tell me that the SG and ASG are indeed among the best of the nations lawyers. I am also not a lawyer. Nonetheless, it is clear to me from what was presented on the media I’ve seen that both the SG and the ASG were unconvinced of the constitutional foundation of the ACA. Their argument failed even to convince me of its constitutionality.

Ironically, the unconstitutional part of the law is actually a conservative republican idea that the president was forced, against his better judgment, to admit because he began negotiations by taking most reforms worth achieving off the table before any negotiations took place in Congress. The defense given repeatedly by the Administration is that the ACA does many good things. Perhaps that is true. However, if as seems likely, the five conservative justices declare the individual mandate unconstitutional, then we are left with a skeleton from which most of the good things in the bill have been removed.

I don’t know why the arguments presented by the Administration were not better prepared. I suspect it is a combination of factors, including the sense that the ACA itself is deeply flawed together with the national inattention of the President for the detail necessary to ensure that the Act will be declared constitutional, which led to a pathological combination of overconfidence and insecurity. At least that is what came across. How else could the Republicans find so easy a path to ridicule the Administrations presentation (ie., the clinking of glass and repeated “excuse me” from Verrilli). The SG’s closing remarks were typical flimsy liberal argument so pastiched by right-wingers over the years. Nowhere was there evidence that the Administration understood that the right wing plays hardball. No mention of the underlying constitutional issue. In short, it failed even to convince me that the law really is constitutional. It is difficult for me to imagine a worse argument, or to think of the SG and the ASG as anything but rookies. I am deeply embarrassed and shamed.

Thursday, January 19, 2012

venture/vulture capitalism

There was an especially helpful discussion of this issue on PBS last night where Judy Woodruff interviewed Josh Kosman and Stewart Kohl. Kohl is head of a Canadian Venture Capital group that has an much more respectable record than that of Bain Capital. Kosman is one of the most articulate and well-informed critics of venture capitalism that I have heard on the topic.

One aspect of venture capital that is especially troubling to me is those cases, exemplified by Mitt Romney's Bain Capital, in which the debt incurred by Bain to purchase a company - usually one that is not in need of any help, but is unable to defend against the hostile takeover - is then vested somehow in the company itself, so that the purchaser (Bain Capital) can basically swallow up the assets of the healthy company, often including the pension plans of the workers at the purchased company, leaving that company to pay off the debt incurred when Bain Capital purchased them. Statistically speaking, many of these companies go bankrupt, while the venture capital group reaps multimillion dollar profits.

In my view, this practice should be highly illegal. However, it is not. It is, rather, venal, hypocritical, and devastating to the jobs and pension plans of the employees of the company taken over.

I cannot believe that anyone in his right mind can think of such an odious vulture as Mitt Romney in positive terms. The prospect of his ascending to power is abjectly horrifying.