The Ignorant Investor

I sometimes hear people say that such and such industry or company is egalitarian because it has a woman or black guy in a high ranking slot. There's usually some kind of extraordinary history associated with the person's rise at the company. Top honors at an Ivy League school, an industrious childhood, parents who stressed the importance of education or excellence.

But we should measure equality by looking at the extraordinary, since being extraordinary is so rarely a requirement for leadership in our business culture. Instead, we should look at the level of incompetent or mediocre executives in an organization. Are there as many black mediocrities as white? Are there enough incompetent women?

Sen. McCain wants to sent weapons and other aid to Libyan opposition leaders to topple Gaddafi. Mr. Change-his-mind-and-calls-for-war strikes again.

U.S. Republican Senator John McCain praised Libya's leader Muammar Gaddafi for his peacemaking role in Africa and said Congress would support expanding ties, Libyan state news agency Jana said on Friday.

Then there's this McCain twitter from Aug. 15, 2009:

Late evening with Col. Qadhafi at his "ranch" in Libya - interesting meeting with an interesting man.

So says liberal blogger Digby in a post today, pointing to the idea that Obama wants to make a bargain with Republicans on entitlements to cut the deficit:

I've been writing about the Grand Bargain since the minute I read about it before the inauguration. It struck me as a perfect illustration of Obama's stated desire to "bring people together" by killing liberalism as we've known it. Others have recently been revisiting the topic since Obama's fabulous success in extending the Bush tax cuts in exchange for the Republicans agreeing to do what they were already going to do.

Opinions differ among left-wingers about exactly what Obama is doing up there on his giant perch in the clouds, but it's hard to understand why Obama always seems ready to offer huge concessions to Republicans while expecting something in return. Surely he knows by now that deficit reduction isn't a real issue for republicans. Only preserving tax cuts.

Obama has done a terrible job of explaining to Americans why liberal policies work. What they've done for the middle class, how they help economic development, what the ramifications are for eliminating programs. He can't be bother to argue about it and so falls back on the now ingrained beltway assumption that the public favors market-based unregulated competition as the default setting for social organization. It's like Obama's history books skipped the nearly all the 20th century and simply began with a section on how Ronald Reagan brought morning to America.

Back in May 2006 I wrote this in the blog:

It's becoming increasingly clear that Congress has no intention of doing anything about controlling the deficit. With interest rates rising, failing to match revenues with spending and financing the resulting gap will only get more expensive as time passes. The government, just like the consumer, has grown so used to cheap credit that it now takes it for granted. These deficits are coming at a time when the economy is booming. We are in the years of plenty, and years of plenty are inevitably followed by the time of scarcity. The time of scarcity is when the government can be expected to run huge deficits as the need for social services explodes and it seeks to 'prime the pump' with spending on infrastructure and other projects. That's no time for raising taxes, economists say. So what's going to happen when the huge deficits of today need to be serviced with the lower revenues of tomorrow, when the government will have no ability to raise taxes? Somehow I already know the answer: Someone is going to suggest a big tax cut.

What I said in 2006 turned out to be true (if banal), I'm sorry to say that I don't remember any economists pushing such common sense banalities back then. That's because the well-known economists of America all work for the wealthy and investment houses. They never support higher tax rates no matter what is happening in the economy.

I haven't seen much mention on liberal blogs about the Obama administration's newly floated plan to wind down Fannie and Freddie's role in the home mortgage market and push for an end to the home mortgage interest tax deduction. I've benefited from both, but I think it makes sense for the government to stop subsidizing mortgages.

Freddie and Fannie expand the amount of credit in the housing market. Expanding credit leads to higher home prices as buyers are able to throw more money at existing housing stock. This home seller richer, but it also makes homes more expensive for home buyers and for renters. If you want low and middle income people to own their homes, shouldn't government policy be targeted towards making home prices lower rather than making consumers increase the money they owe to a bank every month? Higher debt levels make workers more susceptible to economic shocks in an era when job disruptions and unexpected bills are common. If anything, we should have policies that support higher savings and lower debt levels, not the other way around.

Housing is a necessity, and while we should expect home prices to go up over time, there is a social cost to making the cost of housing higher rather than lower.

Americans paid their lowest level of federal taxes since 1950 last year, but according to the media the problem we have with our deficit is that "spending is too high." Seems like there's a disconnection between reality and reporting. You can cut spending or you can raise taxes. The public says it wants to cut government spending, but it also says it wants the programs like medicare social security not to be cut. So what other alternative is there to raising taxes?

I've come to loathe Obama's tendency towards soft-soap centrism, but he knows that come 2012, the only alternative to voting for him will be either a hard-right corporatist or a nutjob tea partier? So he's going to propose some left-wing programs that he knows will never pass while sucking up to the business community with promises of giving them more pie. Also, he'll make sure to tell left-wingers that they're hippies who don't understand the real world like he does.