armchair pundit

As I wandered through the crowded mall in Washington D.C. on Inauguration Day, chatting with people and overhearing many other conversations, a theme emerged.

Or rather, two themes.

Folks of older generations as well as the African-Americans on the scene seemed to see the day in largely symbolic terms. Obama is our first black president, sworn in the day after the Martin Luther King Jr. holiday. Obama represents a significant step toward realizing Dr. King’s dream of a just world and one in which men are judged by the quality of their character and not the color of their skin.

This symbolism was not completely lost on the younger folks on the mall, but people too young to have personally witnessed (or participated in) the civil rights movement seemed to see the day more pragmatically. To them, the election of Obama represents a shift back to a government that values competence and toward a post-partisan one that welcomes debate, seeks consensus and eschews ideology.

I think the big deal about Obama is that both perspectives are true, although I count myself mostly as one of the latter group.

In politics, superficial things matter, and if dark skin isn’t enough to kill a person’s chances of becoming president, then a funny name often is. I remember people saying in 1988 that “Michael Dukakis” was too ethnic-sounding a name for the White House. If that’s the case, then “Barack Hussein Obama” should have been catastrophic – especially in these Islamophobic times. Obama, however, transcended his name and his race (not to mention his exotic upbringing and his lack of experience) almost at the outset of his campaign. He transcended it and brought enough of us along with him to get elected president.

At a cocktail party before the inaugural ball, a question was circulating: “When did you decide you were going to vote for Obama – instead of Clinton, or McCain, or someone else, or no one at all?” One person said it was when her 10-year-old daughter told her she thought Obama would be the best president “for the future.” Another person said he refrained from choosing until Obama seemed like the candidate who had the best chance of defeating McCain.

As for me, Obama had me at “no red states or blue states, but only the United States.”

Who killed the economy? Hint: call your lawyer.

The witch hunt to expose the people responsible for the current financial crisis has been underway for several months, and there is no shortage of suspects. This week, however, I read a couple of articles that together lay out the best case so far.

Why Wall Street Always Blows It by Henry Blodget in the current Atlantic Monthly puts the reader in the shoes of someone sitting on a bad mortgage and at risk of being laid off. He surveys the list of candidates to blame for the mess we’re in.

• There were the predatory lenders of course. Mortgage brokers sold millions of “ticking time bombs” known as ARMs, and they encouraged people to lie about their incomes. But this was fine because a) home prices were going to go up forever, b) the buyers were probably going to sell before the mortgage rate adjusted anyway and c) they got fat commissions and bore none of the risk.
• There were the sleazy real-estate agents. Many probably knew it was a bubble but wanted to close as many sales as they could before it popped. On the other hand, real estate agents are always trying to close as many sales as possible, and most were probably as deluded and blind as everyone else.
• What about home buyers? If a mortgage broker encourages you to lie about your income, does that make it OK? A lot of people who knew it was a bubble expected it to burst five years ago and stayed out of the housing market only to see a gazillion idiots get crazy rich. Only then did they finally decide to jump in – right at the peak. The bottom line is that too many people forgot a home is a home first and an investment second.
• There’s Wall Street of course. ‘Nuff said.
• On the other hand, Investors demanded that their banks and brokers deliver higher returns than all the other banks and brokers, and if they failed, then the investors simply moved their money to one of those other ones. When this happened, bankers and brokers got fired. So, the career incentive (to not get fired) ended up outweighing the incentive to invest prudently, and bankers and brokers made more and more risky bets in a race to outdo each other.
• There’s the SEC, whose leaders seemed to be mostly concerned with positioning themselves for future jobs in the Wall Street firms they were supposed to regulate.
• And there’s Alan Greenspan, who most people now agree kept interest rates too low for too long.

The second article was a two-part Op-Ed piece in the New York Times by Michael Lewis and David Einhorn:

1. The End of the Financial World As We Know It
2. How To Repair a Broken Financial World

Lewis and Einhorn look at many of the same players, but they focus more on the SEC and the ratings agencies:

It’s almost as if the higher the rating of a financial institution, the more likely it was to contribute to financial catastrophe. But of course all these big financial companies fueled the creation of the credit products that in turn fueled the revenues of Moody’s and Standard & Poor’s.

These oligopolies, which are actually sanctioned by the S.E.C., didn’t merely do their jobs badly. They didn’t simply miss a few calls here and there. In pursuit of their own short-term earnings, they did exactly the opposite of what they were meant to do: rather than expose financial risk they systematically disguised it.

A big theme across these three articles is incentives. No one had any reason to care about the larger and long term consequences of what was happening. The short term – in some cases just the next commision – was all that mattered. Everone was making money, so everyone just assumed the system was working. The few naysayers who insisted it shouldn’t be working – or, preciently, that it would soon stop working – weren’t taken seriously.

Bernie Madoff’s victims are a case in point. They were happy enough not to ask any questions about where the exceptional returns were coming from, as long as there were returns. That Madoff, like most scammers, was unwilling to disclose anything about his investment strategies didn’t stop them from handing their money over.

Investors’ enthusiasm for complex and inscrutable investment vehicles like CDO’s and credit default swaps was not that different. People didn’t care to know what was happening inside the black box, as long as money was coming out of it.

Americans accept the reality of a broken and corrupt system – even take pains to preserve it – as long as enough people think they can personally profit from it. Most people may over-estimate their ability to predict the collapse of the system in the hope of timing their exit. They lose money and eagerly join the witch hunt.

Nonetheless, Americans still prefer this corrupt system for the same reasons people play the lottery. The lottery has a few winners and a multitude of losers, but the people who spend loads of money playing it no doubt imagine they will win someday. A corrupt system by its very nature offers opportunities for crafty and motivated people to “win,” and the possibility of tremendous wealth for a few is more enticing to too many Americans than guaranteed prosperity for all.

And this is why it will never be fixed.

The other day on my bus into downtown SF, a down-and-out looking guy stepped on and asked if anyone could give him the dollar he was short on bus fare. Amazingly, five or six people stepped up to oblige, and it got me thinking about the economy. I’ve seen people ask for money on the bus before, but I’ve never seen five people leap to lend a hand.

Hard times can create a kind of brotherhood. The word compassion literally means to suffer together, and when we don’t have to work too hard to put ourselves in another man’s shoes, then maybe we’re more inclined to help each other out.

Economic growth is not something that can go on forever. The last hundred years of exponential growth and unrestrained consumption has taken a serious toll on the earth and left entire cultures wrecked in its wake. For our own survival on this planet, we need to curb our appetites, but the dilemma has been how to slow down consumption without throwing the economy into turmoil.

Well our hand has been forced, and maybe we have the answer: You can’t slow down consumption without hurting the economy. The economy is in turmoil and consumption is way down. Each exacerbating the other. But maybe nothing good comes without some hard work and sacrifice – concepts that are antithetical to American existence. We have indigestion, and maybe this is just the medicine we need.

We can look forward to tough times, that’s certain. The last eight years have left some fresh scabs, but it’s the last hundred years that did the real damage. Tougher times are still ahead, but maybe there’s an upside. Maybe this is a blessing in disguise.

As we endure this downturn and after we come out the other side, maybe we’ll do a better job of taking care of each other, and the planet we share.

Yesterday, NPR’s On The Media aired an interesting segment about Bush and language. It wasn’t another jab at his butchering of English; it was a look at his administration’s creative branding of its policies, programs and  initiatives:

Gladstone’s guest, “Republican wordsmith” Frank Luntz, doesn’t anticipate that much of Bush’s lexicon will stick, but he seems to be referring to Bush’s oratory, rather than the Administration’s knack for naming. Regretfully, I think we’ll have to live with some of these names for a while (not to mention the damage they’ve done). In no particular order…

• Operation Enduring Freedom. I think you have to establish freedom before it can endure. As I read on a bumper sticker once: “We’ll Liberate the Shit Out of You.” Remember when this one was…
• Operation Infinite Justice. Because Bush’s top adviser is… The Lord, and The Lord apparently likes Tom Clancy novels. Either way, this war introduced us to…
• Unlawful enemy combatants. Not just enemy combatants, but unlawful ones. In any case, this means that even though we’re in the middle of a “war” on terror, the people we’re fighting are not “prisoners” of said war once we capture them. They’re “detainees.” And they’re unlawful. How convenient for us. Or maybe not, since the government can decide that any one of us is an unlawful enemy combatant pretty much whenever it wants to and with no explanation whatsoever. Think about this before you chuck your shoes at the president smart guy, or you might be subjected to…
• Enhanced Interrogation Techniques. Don’t worry though, it’s not torture. Sigh.
• The Axis of Evil. We have to trust him on this. He talks to The Lord, remember?
• Homeland Security. They tell us what color we are – red, orange, yellow (like Lifesavers… literally), and they keep American cities from being destroyed (except by hurricanes). We all feel much more secure with them around.
• Patriot Act. It tells us how to act patriotic.
• No Child Left Behind. And seven years later, no children are behind! Right?
• The Clear Skies Initiative. Because who’s not for clear skies? Wait, Bush? Really? But what about the name? I don’t get it.
• The Healthy Forests Initiative. Because who’s not for healthy forests? Wait, Bush? Really? But what… oh, I think I’m starting to understand.
• Compassionate Conservatism. Ahhh, this is where it all began.

For a final word on Bush’s knack for naming, I leave you with Jon Stewart.

Aspirational Time Horizon

Re-distributing the wealth? Turning the other cheek? Someone has to stop this guy…

When the folks in “real America” want to make a point of distinguishing themselves from the rest of us, they often spit words like French, European, elite, socialist and of course San Francisco and Nancy Pelosi. SNL captured this sentiment pretty well:

Now, I live in San Francisco and Nancy Pelosi is my representative, and while I think the right’s characterizations of her are simplistic, exaggerated and unfair, I was very surprised to receive a robocall from Rosanne Barr the other night urging me to dump Pelosi, especially when I realized that Barr was saying Pelosi is not liberal enough. Specifically Barr declares, Pelosi is “a collaborator with a criminal administration.”

Pelosi’s biggest mistake, in my mind, was to have stated upon assuming her position as Speaker of the House that “impeachment is off the table.” People understood her to be, in effect, giving the Bush Administration a free pass, but Pelosi was only being pragmatic. Regardless of what you think Bush and Cheney deserve (impeachment, a war crimes trial), the Democrats hold the slimmest majority in Congress, and there’s no way they have the votes to impeach. She recognized it as a hopless cause that would only make it impossible to push anything else on the Democratic legislative agenda.

Rosanne’s candidate, by the way, is Cindy Sheehan.

I’ve been off the grid for a couple weeks, backpacking with my brothers. We embarked a day or two after McCain announced his surprising (and IMHO almost surreal) choice of Sarah Palin as his running mate. This, and she, dominated the headlines as we headed into the mountains, and I was hoping the shock and awe would have faded by the time we got back.

The press’s attention span is an interesting thing. It’s still all Palin all the time, and the Republicans seem to be fine with that. They can’t win on the issues, so why wouldn’t they be?

Anyway, I’ve designed a graphic for the new Republican ticket (above). Let me know if you want some stickers.

In a word: compromise.

Now, compromise is often a good thing. I’m all for bi-partisanship. I want a candidate and a president who’s truly willing to look at all sides of an issue and accept that the other party’s point of view might be the right one. I don’t want a candidate who simply panders to the left or the right, and I actually appreciate Obama’s willingness to buck many members of his own party with his recent vote on the FISA bill, as an example.

I’m all for having “no red states and no blue states, but only the United States.”

But then there’s compromise that just seems spineless in a particularly Democrat kind of way, and that’s what I feel like I witnessed this week.

Barack Obama recently took a few steps back from his stance against expanding offshore oil drilling, saying:

If, in order to get that passed, we have to compromise in terms of a careful, well-thought-out drilling strategy that was carefully circumscribed to avoid significant environmental damage – I don’t want to be so rigid that we can’t get something done.

This is a compromise that seems transparently political. Obama’s lead over McCain has all but evaporated over the last week, and polls indicate that the candidates’ opposing views on oil drilling is a key factor. Obama’s move toward the Republican position on oil drilling, therefore, seems like a calculated attempt to neutralize McCain in this one area where he seems to have shown some strength, rather than a sincere effort to reach bi-partisan consensus. It is, “the same old politics” as Obama himself might say.

The problem with this particular compromise is that Obama has professed to agree with virtually all the experts on this issue (including spokesmen from the major oil companies) who say that expanding offshore drilling will have no effect on fuel prices until at least 2017, and little effect even then. This is the truth, and Obama knows it.

So this compromise feels political. It feels like pandering.

It takes quite a bit of courage for a candidate to stand up for the truth when it means telling people what they don’t want to hear, and Obama has made himself out to be the rare Democrat who has that kind of courage. Obama should tell people the truth. He should make a vigorous, passionate case for the truth.

The Republicans have succeeded in clouding the truth on this issue, and Obama’s response should be to clear away the clouds, to shine a bright light on the truth. Instead, he has chosen to accept the clouds.

My belief is that this kind of compromise is what has killed the Democratic Party. When you compromise on everything, then you stand for everything. And when you stand for everything, you stand for nothing.

And when you stand for nothing, then you don’t really give voters an alternative to what the other party offers.

And come election time, if you don’t offer an alternative to what the other party offers, then the people who don’t want to vote for the other party will simply stay home.

RELATED: Why the Democrats will lose in ’08 – Part 1

Don’t ask me why, but I was looking at Sean Hannity’s website today. OK, I was looking for a video clip of his recent interview with Shelby Steele that I learned about via Digg or reddit or something. Anyway, once I was there, I found myself clicking around out of sheer amazement.

Right away, I was assaulted by an orgy of red, white and blue that makes Stephen Colbert’s set look sedate. This is the obligatory patriotic pose. When you stand in front of the American flag, you must look proudly into the distance and display the underside of your chin. It also helps to have a second shot of yourself behind you, representing that “over-reaching” quality we want from our government.

Anyway, after I absorbed the full weight of Hannity’s patriotism, I tried searching for “Shelby Steele” and came up with nothing…

I was delighted to see, however, that I can share this page of zero search results with a friend. And I can search for Shelby Steele in the Yellow Pages. Do people still use the Yellow Pages?

Undeterred, I tried searching for Obama…

Nothing. Hmm… An example of “fair and balanced” reporting? How about a search for Clinton…

OK, could be the same thing. How about a couple of searches more in line with Hannity’s views…

Wow! How about another…

So, clearly pure incompetence. Maybe it has something to do with the way every word you search for is transformed into a “Sean Hannity Keyword.”

I want to keep clicking! By far the best thing I found on Sean Hannity’s website was this…

This has to be a joke. It needs to be a joke. But there’s no way Hannity is that funny, so I can only conclude that it’s real. I’m completely hooked at this point, especially when I see…

I love this. Watch out ladies, he’s “ready for it.” He’s actually armed and ready for it, if you look at the picture. Don’t take your eyes off your drink if you’re around this guy, because he’s bound to slip you a rohypnol.  I can’t stop myself from clicking into his profile…

Who would have guessed motor racing and wrestling? I mean, the guy has a high school education. But wait, there’s more…

Wait, twenty-seven? Didn’t your personal information say you were 31?

This dude can’t be real. I’m almost sure he’s fake… but he is the “featured” profile, which either says something about Hannity’s audience (if he’s real) or his ability to run a website (if he’s fake).

I wish I had time to see more, and say more, but it’s midnight, and I’m procrastinating. I have a couple more hours of work left before I can go to bed, so I’ll just leave it here.