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Bailout Dodged for Now

The compromised house bill has been defeated 227-206, in a bipartisan fit of doing well by doing nothing.

A few things:

First, despite the doomsday scenarios sketched out regarding the collapse of the credit/financial market, evidence of peril beyond Mass Hysteria is harder to come by- though I dont have it handy at the moment, I recall that McClatchy just managed to rollover a huge amount of debt; that and the fact that aside from investors pulling out of the stock market we don't see the big players acting like its Doomsday/ELE type crisis says to me that extraordinary actions aren't exactly called for, especially with the known downside risk of nationalization and corporatism that have stymied and stagnated economies all over the globe since WWII and the end of the Cold War.

Second, if there is to be bailout, let it be in the time-honored form of the conventional "safety nets" vs. massive intervention in how the economy works. The steel tariffs put more people out of work than were kept at work, meaning that if "we" (re: govt) just paid the affected workers their salaries, "we'd" come out better and with less distortion of the productive economy. Given that we're still seeing lending, albeit at much higher prices, I'm becoming convinced that the way forward here is the same- pick up the collateral damage instead of trying to game the whole system.

Third, via Arnold Kling, if this is a wealth shock at base, then all of this propping up of the financial markets via asset purchases, etc, is just reshuffling the deck chairs. If the economy loses $4-5 trillion in wealth, the economy is poorer and reality is going tor eflect that. The more we distort our indicators of reality, the worse (and longer) the adjustment will take.

Fourth, mea culpa as one of the "excitables" freaking out last weekend- fool me once, shame on you, fool me twice, shame on me. A tepid response is to say "well, I wasn't for what was proposed," but still, the impulse was there so my bad. I (and others excitable as I was) should have more faith in the US financial system, economy, and people that we can absorb and adjust to the shock.

So hopefully, the demise of the bill will allow time to muster a more substantive opposition to the bailout in principle, or at least get a better/less-distortionary policy.


Readings on the Financial Crisis

For those of you interested at home, here's a list of important blog posts on the topic before us:

McArdle - The Nightmare Scenario if the financial markets collapse.

Credit Crunch or Not?
Yes:
McArdle - There is a Credit Crunch
Brad Delong - Real side of the economy feeling the pain
Ezra Klein - Commenter "Profane & Informed" says Frak Yeah theres a crunch.
Arnold Kling - Comments on Higgs & McArdle's takes on the Crunch

No:
Landsburgh - Not buying the crisis.
David Johnston - Where's the beef?
Robert Higgs (Boson) - No Credit Crunch.
Alex Tabarrok - No Crunch.

Ezra Klein:
Economists say don't be hasty on intervention.
Markets not acting as though the crisis is dire.
Proposed bailout is at best a half solution.
Talk about 'Assets' ultimately mean housing.

Alex Tabarrok
Supply-side approach to the crisis.

Mindles Dreck (via Tyler Cowen)
Regulations that make derivatives more complex = a douchebanker's best friend. (i.e. I-banker)

Luigi Zingales
Why Paulson is Wrong.

Aaron Edlin
Dr Strangeloan.
Questioning the $700 billion blank check.

Arnold Kling (for Treasury Secretary)
Case Against the Bailout.
The Paulson Plan is based on ignorance.
Hold-to-Maturity Pricing.
A simpler solution (lower capital requirements).
Open Letter to Bernanke - Shrink the Industry.

Brad DeLong:
Saving Capitalism from the Capitalists.

Megan McArdle
Should the Feds should just seize foreclosed houses & keep making the payments?
What MM thinks of the bailout proposal.
Why some sort of bailout is needed.

Randal O'Toole
Blame Urban Planning.

Russell Roberts
Krugman wrong on Fannie and Freddie.
Role of the CRA in causing the crisis. -
Affordable = Subprime.

Volokh Conspiracy
Full chain post on Crony Capitalism.

Ilya Somin
Commentary on Landsburg's on the Bailout.
Gotta take both possible sides of a catastrophe into account when envisioning worst case scenarios.
Moral Hazard contagion (bailout in every pot / slippery slope).

Will Wilkinson
You got Govt in my Markets/ Markets in my Govt!
Whats an incrementalist market liberal to think?
Vulgar? The benign rule of our elite economists.

-----

As they say, read the whole thing. (All of them!) Discussion will follow...


Canucks pwn Krugman

Krugman gets schooled by people who actually have to live with Canada's 'awesome' health care system.


A third party candidate we can all get behind in 2008

Pvllo for President

Vote Aventine!


Sullivan pwned

In a nice one-two punch from my other favorite blogger, Megan McArdle answers Andrew Sullivan's smug, McCain-like ignorance of financial economics with a detailed recitation of all the problems that no one had any prescience to tackle.

Seriously, how does any intellectually honest critic justify blaming Bush for all this?

Oh wait.


Will Wilkinson doles out the Harshness

Speaking of 'Vulgar Libertarians, Unite!', Run, don't trot(sky), to this righteous beatdown of Naomi Klein over at the Fly Bottle.

Associated beatdown from '07, Brad DeLong, on Klein believing her own bullshit.

The original Tyler Cowen article, which in typical Cowenian fashion is polite about its smackdown.


Andrew Sullivan: Palin now worse than torture

Perhaps though more like "Sully's obsession with Palin now worse than straight-up torture."

Seriously, if there is a example in the dictionary of what "going apeshit" is, its got to include Andrew's wall-to-wall freakout involving Sarah Palin.

On the Dish, according to Google:
5650 pages referring "torture"
5960 pages referring "palin" (479 just since the announcement)

For the love of all that is holy, calm the fvck down Sully. You're an Obama supporter; if all of what you're saying is true, you get your way in November. THe irony to me is that the only justification for freaking out is that you don't believe what you're saying, and that Palin has a very good shot at being VP. Which is it?

I say this out of love, Sully, please get your wits together and chill. You're currently the alternative instapundit. Don't mimic the worst instincts of insty as well as the best ones.

Update (09-04-08): Reason calls Sully out on his Palin hypocrisy.


America's Naughty Librarian

(gotta get in on this Palin meme thats going around for some reason...)


The totemic power of Rich/White Kids

Over at Hit&Run, Joanne Jacobs explores a strange fetish among educrats:

Proximity is not destiny, educationally speaking. A generation of experience with racial integration has taught a clear lesson: Sitting black kids next to white kids in school is not a silver bullet that zaps unequal achievement.

However, the faith that proximity leads to equal achievement remains the cargo cult of education. In June, the U.S. Supreme Court barred school assignments based on race to increase racial diversity. So school leaders immediately began considering economic integration plans instead.

Sit poor kids next to middle-class kids. That should work!

Of course, it hasn't worked, as there arent actually magical success rays and penumbras emanating from white or rich/middle class students.

 All is not lost, though, if schools actually tailor their systems and methods to the underachieving; sayeth Joanne:

In my book, Our School, I describe the struggles and triumphs of a charter high school in San Jose, California, that recruits 'D' and 'F' students, works their butts off and sends all graduates to college. Downtown College Prep succeeds because it targets instruction to struggling students who come from low-income and working-class families; most are the children of poorly educated Mexican immigrant parents. Mixing in middle-class whites would dilute the focus.

Success may require explicit teaching of behaviors and skills that middle-class students don't need to be taught and extra counselors to deal with family problems and reach out to parents. It almost certainly requires a longer school day. What isn't essential is proximity to white or middle-class students.


Sorry for the outage

Our host was knocked out all yesterday, much to our chagrin. At least for now, the Republic is restored...


Bush understands the Zombie threat


The unanimous Declaration of the thirteen united States of America

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

 

declg.jpg

 

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. --Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

  • He has refused his Assent to Laws, the most wholesome and necessary for the public good.
  • He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
  • He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
  • He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
  • He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
  • He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
  • He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
  • He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
  • He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
  • He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.
  • He has kept among us, in times of peace, Standing Armies without the consent of our legislatures.
  • He has affected to render the Military independent of and superior to the Civil power.
  • He has combined with others to subject us to a jurisdiction foreign to our constitution and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
  • For Quartering large bodies of armed troops among us:
  • For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
  • For cutting off our Trade with all parts of the world:
  • For imposing Taxes on us without our Consent:
  • For depriving us, in many cases, of the benefits of Trial by Jury:
  • For transporting us beyond Seas to be tried for pretended offences:
  • For abolishing the free System of English Laws in a neighbouring
    Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
  • For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
  • For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
  • He has abdicated Government here, by declaring us out of his Protection and waging War against us.
  • He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
  • He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
  • He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
  • He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by the Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

declarationdunlap.jpg

 



Signed:
--John Hancock

 

New Hampshire:
Josiah Bartlett, William Whipple, Matthew Thornton

Massachusetts:
John Hancock, Samuel Adams, John Adams, Robert Treat Paine, Elbridge Gerry

Rhode Island:
Stephen Hopkins, William Ellery

Connecticut:
Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott

New York:
William Floyd, Philip Livingston, Francis Lewis, Lewis Morris

New Jersey:
Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark

Pennsylvania:
Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross

Delaware:
Caesar Rodney, George Read, Thomas McKean

Maryland:
Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton

Virginia:
George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton

North Carolina:
William Hooper, Joseph Hewes, John Penn

South Carolina:
Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton

Georgia:
Button Gwinnett, Lyman Hall, George Walton


More virus breakout

On the minus side, the home grown terror contingent of Britain is continuing to manifest, this time in Scotland.

On the plus side, the virus strain in Britain seems to be a particularly incompetent one, at least compared to the lethal strain in Iraq. Driving a flaming SUV into a wall? And then getting out and setting one's self on fire? Sounds about as terrifying as the Crack Suicide Squad.


Confirming what we all knew already

...Nurse Bloomberg reveals he's not a Republican. Well I think he was saying "no longer" a Republican but really, who's kidding whom here. Thats like Elton John saying he's "no longer" straight.

In other shocking news:

- Man lands on moon. 

- Water is wet.

- Fire is hot.

- The Sun is bright.

- Brooks traded to the Saints.

- Germans bomb Pearl Harbor.


Et Voila

Behold the new design! We're still working the aesthetic kinks out (including the now fixed horrible black-on-green wysiwyg) but its getting better... :)