I can't concentrate on the debate; I'm too busy concentrating on drawing breath. Check out Culture11, Alex Massie, and Will Wilkinson for the finest in libertarian debate-blogging.
Feel better! It's awful to be getting ill just at the time everyone should be getting a flu shot.
It was unfortunate not to have your commentary, but took your Culture11 recommendation/shout-out and liked it pretty well; now it's time to check out those other blogs you suggested.
Good to see you're not blogging today. If your bronchitis is its usual nasty self, I won't expect any more posts until next week. Don't come back to work too soon--but as soon as you're feeling better, fix something nice in the kitchen and give us the recipe after Colombus Day.
...what we are seeing with the crash on Wall Street, I believe, should be for Friedmanism what the fall of the Berlin Wall was for authoritarian communism: an indictment of ideology. It cannot simply be written off as corruption or greed, because what we have been living, since Reagan, is a policy of liberating the forces of greed to discard the idea of the government as regulator, of protecting citizens and consumers from the detrimental impact of greed, ideas that, of course, gained great currency after the market crash of 1929, but that really what we have been living is a liberation movement, indeed the most successful liberation movement of our time, which is the movement by capital to liberate itself from all constraints on its accumulation.
So, as we say that this ideology is failing, I beg to differ. I actually believe it has been enormously successful, enormously successful, just not on the terms that we learn about in University of Chicago textbooks, that I don’t think the project actually has been the development of the world and the elimination of poverty. I think this has been a class war waged by the rich against the poor, and I think that they won. And I think the poor are fighting back. This should be an indictment of an ideology. Ideas have consequences.
She later says something that I've said myself dozens of times, perhaps more than once on this very blog:
Now, I admit to being a journalist. I admit to being an investigative journalist, a researcher, and I’m not here to argue theory. I’m here to discuss what happens in the messy real world when Milton Friedman’s ideas are put into practice, what happens to freedom, what happens to democracy, what happens to the size of government, what happens to the social structure, what happens to the relationship between politicians and big corporate players, because I think we do see patterns.
Now, the Friedmanites in this room will object to my methodology, I assure you, and I look forward to that. They will tell you, when I speak of Chile under Pinochet, Russia under Yeltsin and the Chicago Boys, China under Deng Xiaoping, or America under George W. Bush, or Iraq under Paul Bremer, that these were all distortions of Milton Friedman’s theories, that none of these actually count, when you talk about the repression and the surveillance and the expanding size of government and the intervention in the system, which is really much more like crony capitalism or corporatism than the elegant, perfectly balanced free market that came to life in those basement workshops. We’ll hear that Milton Friedman hated government interventions, that he stood up for human rights, that he was against all wars. And some of these claims, though not all of them, will be true.
But here’s the thing. Ideas have consequences. And when you leave the safety of academia and start actually issuing policy prescriptions, which was Milton Friedman’s other life—he wasn’t just an academic. He was a popular writer. He met with world leaders around the world—China, Chile, everywhere, the United States. His memoirs are a “who’s who.” So, when you leave that safety and you start issuing policy prescriptions, when you start advising heads of state, you no longer have the luxury of only being judged on how you think your ideas will affect the world. You begin having to contend with how they actually affect the world, even when that reality contradicts all of your utopian theories. So, to quote Friedman’s great intellectual nemesis, John Kenneth Galbraith, “Milton Friedman’s misfortune is that his policies have been tried.”
I would say "read the whole thing," but that's asking a lot from a hostile audience. So I just present it for your perusal and discussion. Or not.
"Who do you serve, and who do you trust?"
-J. Michael Straczynski, Crusade
I can understand why you might blame Friedman for the current crisis (although I don't see how that makes sense given the failure of the pro-regulation crowd to propose a regulation that would have prevented this mess), but I don't see how you can blame the man for the authoritarian excesses of Pinochet. It's not like free markets lead naturally to death squads. Or at least if they do, the free-market death squads turn out to be less murderous than the Communist ones.
Blaming him for the authoritarianism of China is whacko-world bizarre; better Deng than Mao any day of the week.
Finally, calling Mr. Medicare Part D a Friedmanite strikes me as a bit of a stretch.
Just as a point of clarification, the "thing I've said dozens of times" was the part about Friedman's theories not surviving contact with the real world (as is the case for so many theories). I will grant that they did better than Marx in that regard; and in the short term even enjoyed some successes. However, even the most shining success stories didn't seem to survive very long before succumbing to corruption, which I think was Klein's point. It's just Fail, not Epic Fail; but still Fail.
Or at least if they do, the free-market death squads turn out to be less murderous than the Communist ones.
ROFL. Markets in everything! Free market competition should result in far more efficient death squads than those produced by a Communist system. Inefficient death squads would soon be driven out of business, where under Communism death squads are guaranteed pay regardless of performance.
Inefficient death squads would soon be driven out of business, where under Communism death squads are guaranteed pay regardless of performance.
Well, yes. Clearly it's inefficient to just kill everyone; you want to cut costs by only killing the people who really need it. So being less murderous is consistent with what you'd expect from the market.
even the most shining success stories didn't seem to survive very long before succumbing to corruption, which I think was Klein's point
That's probably true, but it's a rather weak point. It's not as though free market reforms was the driving force behind the introduction of corruption to (for instance) Chinese society. The proper standard for comparison isn't perfection; the standard is the alternative. Better Deng than Mao (and better China 2008 than China 1968 on any number of indicators including human rights). Better Pinochet than Castro (and, perhaps Chavez, although that remains to be determined). Better TANF than AFDC, for that matter.
So to the extent that Friedman is wrong that his theories will lead to utopia, he's still closer to right than some want to give him credit for.
Just a comment on the freezing up of credit. The National Post, Canadian paper, said that ports were getting clogged with shipments that aren't moving. Usual practice is that a credit note is issued for payment before shipment. No one is accepting the credit notes from banks. So the shipments are stalled, or shipper is forced to find a buyer at any price.
I suppose that in time well regulated, solvent banks will gain reputation and market share, but the fear is palpable right now. Nothing makes sense. And of course if everything grinds to a halt all banks, all businesses will be jeopardy.
If you have bacterial bronchitis, serrapeptase is fantastic stuff. Not only is it a painkiller that's better for your health than aspirin and other NSAIDS but it also helps your body get rid of the nasty bacteria that are attacking you (via destruction of biofilms) and improves the effect of antibiotics.
The markets can stay irrational AND you can't stay solvent.
As I fretted over our investments today, my wife pointed out that thanks to the sale of our old house, we've been in a 2/3 cash position since March. I hadn't thought of it that way, but boy did that cheer me up.
Obama says the credit crisis 'is all due to deregulation of the Bush administration.' Now I think most people accept that that is just shtick though, in my fantasy presidential campaign league, L. Summers, VP-R candidate, would be citing chapter and verse as to Clinton's doing the (good) deregulation. But you know when McCain says something wrong, e.g. overestimating the importance of Chris Cox SEC, he's like Benjamin Franklin's fool 'who opened his mouth and proved it.' It's like adolescent cool against unhip dad but what we've really got to go on in this romance is the fun of overthrowing dad which may not be so cool once we have to see some real actions by our love.
Nobody yet has named a single deregulatory act that had anything to do with this crisis. The only candidate anyone has proposed was the Gramm-Leach-Bliley Act allowing commercial and investment banks to operate under the same roof, but even a cursory look at what institutions failed shows that to be hogwash.
On the other hand, while they aren't the causes of the crisis, it's easy to show how both the Community Reinvestment Act and the Sarbanes-Oxley Act contributed. As did the mortgage repurchasing cartel under the dominance of the government-sponsored entities Fannie Mae and Freddie Mac.
So, facing a case where no actual acts of deregulation made things any worse, while both government regulations and government-sponsored entities demonstrably did, the opponents of deregulation say the problem is insufficient government influence in the market.
Regulatory Lunatic:
Did you see the quote above about fools opening his mouth and proving it? That is you. The CRA has nothing to do with the credit mess and all your efforts to prove otherwise will not make it so.
I can't believe you're still exposed to this Market, didn't you Anything that I posted?
The vast bulk of my equity holdings are in tax-advantaged retirement accounts that are not easily converted to cash. My 401(k) recently added a precious metals mutual fund, I believe, but it's high-fee and August wasn't exactly the right time for that move.
I don't need that money for 30 years, so I'll be OK.
Hmm? You're saying that the CRA didn't encourage any of the subprime loans that defaulted? Not one of them?
Certainly, the CRA was not the core problem; those on the right who are claiming otherwise are fools. But just as certainly, it was a marginal incentive for bad loans, and the fact is that even marginal incentives do have economic effects. That it had very little to do with the mess is a perfectly justified statement. To claim it had absolutely nothing to do with the mess is a absurdity rooted in defensive overreaction.
Regulatory Lunatic said, "Nobody yet has named a single deregulatory act that had anything to do with this crisis."
Maybe not in this blog--little surprise at that--but lots of folks have commented on how Gramm snuck an Enron-sponsored provision into a late 1990's budget bill, at the last minute, without committee vetting or much of anyone understanding it. forbidding the regulation of credit default swaps as insurance. Much profitable writing of what one cannot legally treat as insurance ensued, to cover what insurers would not allow as insurable interests. (IE, fire insurance on your house, but payable to me.) Their CDS operation killed the otherwise healthy AIG. And a bunch of the recent panic selling has probably been driven by firms trying to raise capital to cover the billions of CDS's they wrote on Lehman bonds--obligations which more or less came due Friday. And the remaining CDS's out there are a much bigger bomb than the bad mortgage bonds. Ask Warren B. or Paul V. . . .
The deregulation mess was created in a bipartisan manner. The root problems are that our courts treat corporations as rights-bearing persons (thank you, SANTA CLARA COUNTY v. SOUTHERN PAC. R. CO--there's the deregulatory act of all time, and it occurred in 1886 as a judicial obiter dictum), and that our courts treat spending money on elections as protected speech. Thus plutocrats can more or less own both parties in congress.
Health is more important than blogging. Hope you are feeling better soon.
May you feel better soon; bronchitis definitely sucks.
get well soon
happy breathing - you're not missing much.
Ugh. I get Bronchitis often. It sucks and is so zapping of the energy. Drink plenty of juice and get well soon!
Get well soon; bronchitis sucks D:
Good luck Megan! Hope you feel better soon, certainly I am missing your posts.
Sorry to hear it also - get well soon!
Get well...
... are you sure it isn't the hideous green they gave you for the new skin isn't what's making you ill?
Culture11 is Libertarian? Come on, Megan.
Oh, and get well. Can't wade through the financial crisis without your guidance.
Hope you feel better soon, Megan. *hugs*
Same as everyone else,
Feel better.
foo
Does the Atlantic have the blade hanging over your neck? If not you need to rest and they should be giving you a break.
Hope you get well soon. Good luck for your speedy recovery.
Megan,
Did you know this about Clive?
http://clivecrook.theatlantic.com/archives/2008/10/diminishing_returns_in_the_nas.php#comment-1146755
Is it by chance, or from your intellectual positions that mean you both suffer physically? Or is Clive vegan and anemic also?
Steve Sailer says that IQ is inversely related to penis size. I'm really not sure how testicles fit into the equation. They must be connected, right?
Feel better! It's awful to be getting ill just at the time everyone should be getting a flu shot.
It was unfortunate not to have your commentary, but took your Culture11 recommendation/shout-out and liked it pretty well; now it's time to check out those other blogs you suggested.
"I do have one testicle which is more than twice the size of the other."
That there's a vas deferens.
Megan, I heard David Brooks mention you again on Charlie Rose's post-debate show last night.
I don't know what your marital status is, but I think if it were me, I'd look into getting an unlisted number. And maybe some pepper spray.
"I can't concentrate on the debate"
Who knew, when you wrote this, that YOU were the lucky one.
Get well soon.
Megan,
Andrew Sullivan has HIV and I'm sure he posts less about his health than you do.
If you just ate some meat perhaps?
I hear you're a smoker, Megan. Ever considered quitting? You seem to get sick a lot.
Best wishes for a speedy recovery. :D These are too interesting times to be sick in.
Good to see you're not blogging today. If your bronchitis is its usual nasty self, I won't expect any more posts until next week. Don't come back to work too soon--but as soon as you're feeling better, fix something nice in the kitchen and give us the recipe after Colombus Day.
Sorry you're sick, Megan. Hope you get over it soon.
While you're flat on your back, if you can still read perhaps you'd like to take a crack at Naomi Klein's discourse on Milton Friedman's legacy:
http://www.democracynow.org/2008/10/6/naomi_klein
She later says something that I've said myself dozens of times, perhaps more than once on this very blog:
I would say "read the whole thing," but that's asking a lot from a hostile audience. So I just present it for your perusal and discussion. Or not.
"Who do you serve, and who do you trust?"
-J. Michael Straczynski, Crusade
Ms Megan
We miss you. Hope you're feeling better......
I can understand why you might blame Friedman for the current crisis (although I don't see how that makes sense given the failure of the pro-regulation crowd to propose a regulation that would have prevented this mess), but I don't see how you can blame the man for the authoritarian excesses of Pinochet. It's not like free markets lead naturally to death squads. Or at least if they do, the free-market death squads turn out to be less murderous than the Communist ones.
Blaming him for the authoritarianism of China is whacko-world bizarre; better Deng than Mao any day of the week.
Finally, calling Mr. Medicare Part D a Friedmanite strikes me as a bit of a stretch.
Just as a point of clarification, the "thing I've said dozens of times" was the part about Friedman's theories not surviving contact with the real world (as is the case for so many theories). I will grant that they did better than Marx in that regard; and in the short term even enjoyed some successes. However, even the most shining success stories didn't seem to survive very long before succumbing to corruption, which I think was Klein's point. It's just Fail, not Epic Fail; but still Fail.
ROFL. Markets in everything! Free market competition should result in far more efficient death squads than those produced by a Communist system. Inefficient death squads would soon be driven out of business, where under Communism death squads are guaranteed pay regardless of performance.
Inefficient death squads would soon be driven out of business, where under Communism death squads are guaranteed pay regardless of performance.
Well, yes. Clearly it's inefficient to just kill everyone; you want to cut costs by only killing the people who really need it. So being less murderous is consistent with what you'd expect from the market.
even the most shining success stories didn't seem to survive very long before succumbing to corruption, which I think was Klein's point
That's probably true, but it's a rather weak point. It's not as though free market reforms was the driving force behind the introduction of corruption to (for instance) Chinese society. The proper standard for comparison isn't perfection; the standard is the alternative. Better Deng than Mao (and better China 2008 than China 1968 on any number of indicators including human rights). Better Pinochet than Castro (and, perhaps Chavez, although that remains to be determined). Better TANF than AFDC, for that matter.
So to the extent that Friedman is wrong that his theories will lead to utopia, he's still closer to right than some want to give him credit for.
Hope you get well soon.
Just a comment on the freezing up of credit. The National Post, Canadian paper, said that ports were getting clogged with shipments that aren't moving. Usual practice is that a credit note is issued for payment before shipment. No one is accepting the credit notes from banks. So the shipments are stalled, or shipper is forced to find a buyer at any price.
I suppose that in time well regulated, solvent banks will gain reputation and market share, but the fear is palpable right now. Nothing makes sense. And of course if everything grinds to a halt all banks, all businesses will be jeopardy.
Derek
The market for death squads is just over-regulated, rob. Reduce barriers to trade, and you'll see the best death squads capitalism has to offer.
Oh, come on. Suck it up! I need new content.
OT, but kudos to the design folks at The Atlantic. The new look is much improved overall (and solves my particular gripe with bullet lists.)
Hey Megan,
If you have bacterial bronchitis, serrapeptase is fantastic stuff. Not only is it a painkiller that's better for your health than aspirin and other NSAIDS but it also helps your body get rid of the nasty bacteria that are attacking you (via destruction of biofilms) and improves the effect of antibiotics.
Best of health to you!
Ryan
All of us will be missing your 'cognitive breathing' and we will be in an cognitive vacuum until your return.
Two days and no updates? I'm twitching, going through some serious McMegan withdrawal...
Seriously though, hope you get better soon.
Blackwater being the obvious example. America's new growth industry.
I generally like the new "skin," but the lime/apple green is annoying.
I wonder if Klien has applied the same criticisms of Keynes' ideas as she does to Friedman's?
That should read:
I wonder if Klien has applied the same criticisms to Keynes' ideas as she does to Friedman's?
Grammar fail.
Is there going to be deadblogging? Economically, that's an untapped niche.
Though Clive Crook may already be doing that; it's hard to tell.
Are you still advocating that we increase the savings rate by privatizing social security via equity investments, Megan?
Judging by today's close of the DJIA, I think we have a whole new expression to coin: The markets can stay irrational AND you can't stay solvent.
Who knew?
Hope you're feeling better, Megan. We need your insights.
Josh,
If that's really true, then you're already fucked.
The markets can stay irrational AND you can't stay solvent.
As I fretted over our investments today, my wife pointed out that thanks to the sale of our old house, we've been in a 2/3 cash position since March. I hadn't thought of it that way, but boy did that cheer me up.
Good to know foreclosure sometimes has a happy ending.
Posted by Rob Lyman | October 9, 2008 7:01 PM
Rob,
I can't believe you're still exposed to this Market, didn't you Anything that I posted?
Mark,
I can't believe he didn't act exactly as an pseduo anonymous commentor on a blog told him to in regards to his finances.
Shocking.
Feel better soon.
Hey Fred,
I'll bet you have a license to be such an asshole.
Rob knows what I'm/was referring to, I pointed out many links for further Inquiry.
Mark,
Why so aggressive. I'm as shocked as you are.
shocked
As long as Rob knows, that's all that matters.
If you're so close, perhaps email might be more effective.
FYI, The above comments are courtesy of a fake Fred.
Fred,
There is more than one Fred in the world.
Or are you like Madonna or Cher - known only as Fred?
Assuming you are the 'real' Fred, of course. How do I know you are actually Fred?
Obama says the credit crisis 'is all due to deregulation of the Bush administration.' Now I think most people accept that that is just shtick though, in my fantasy presidential campaign league, L. Summers, VP-R candidate, would be citing chapter and verse as to Clinton's doing the (good) deregulation. But you know when McCain says something wrong, e.g. overestimating the importance of Chris Cox SEC, he's like Benjamin Franklin's fool 'who opened his mouth and proved it.' It's like adolescent cool against unhip dad but what we've really got to go on in this romance is the fun of overthrowing dad which may not be so cool once we have to see some real actions by our love.
Nobody yet has named a single deregulatory act that had anything to do with this crisis. The only candidate anyone has proposed was the Gramm-Leach-Bliley Act allowing commercial and investment banks to operate under the same roof, but even a cursory look at what institutions failed shows that to be hogwash.
On the other hand, while they aren't the causes of the crisis, it's easy to show how both the Community Reinvestment Act and the Sarbanes-Oxley Act contributed. As did the mortgage repurchasing cartel under the dominance of the government-sponsored entities Fannie Mae and Freddie Mac.
So, facing a case where no actual acts of deregulation made things any worse, while both government regulations and government-sponsored entities demonstrably did, the opponents of deregulation say the problem is insufficient government influence in the market.
Megan - Hope you are feeling better soon, and that this does not drag on for weeks.
Best,
Jim Miller
Regulatory Lunatic:
Did you see the quote above about fools opening his mouth and proving it? That is you. The CRA has nothing to do with the credit mess and all your efforts to prove otherwise will not make it so.
I can't believe you're still exposed to this Market, didn't you Anything that I posted?
The vast bulk of my equity holdings are in tax-advantaged retirement accounts that are not easily converted to cash. My 401(k) recently added a precious metals mutual fund, I believe, but it's high-fee and August wasn't exactly the right time for that move.
I don't need that money for 30 years, so I'll be OK.
Hmm? You're saying that the CRA didn't encourage any of the subprime loans that defaulted? Not one of them?
Certainly, the CRA was not the core problem; those on the right who are claiming otherwise are fools. But just as certainly, it was a marginal incentive for bad loans, and the fact is that even marginal incentives do have economic effects. That it had very little to do with the mess is a perfectly justified statement. To claim it had absolutely nothing to do with the mess is a absurdity rooted in defensive overreaction.
Regulatory Lunatic said, "Nobody yet has named a single deregulatory act that had anything to do with this crisis."
Maybe not in this blog--little surprise at that--but lots of folks have commented on how Gramm snuck an Enron-sponsored provision into a late 1990's budget bill, at the last minute, without committee vetting or much of anyone understanding it. forbidding the regulation of credit default swaps as insurance. Much profitable writing of what one cannot legally treat as insurance ensued, to cover what insurers would not allow as insurable interests. (IE, fire insurance on your house, but payable to me.) Their CDS operation killed the otherwise healthy AIG. And a bunch of the recent panic selling has probably been driven by firms trying to raise capital to cover the billions of CDS's they wrote on Lehman bonds--obligations which more or less came due Friday. And the remaining CDS's out there are a much bigger bomb than the bad mortgage bonds. Ask Warren B. or Paul V. . . .
The deregulation mess was created in a bipartisan manner. The root problems are that our courts treat corporations as rights-bearing persons (thank you, SANTA CLARA COUNTY v. SOUTHERN PAC. R. CO--there's the deregulatory act of all time, and it occurred in 1886 as a judicial obiter dictum), and that our courts treat spending money on elections as protected speech. Thus plutocrats can more or less own both parties in congress.
The root problems are that our courts treat corporations as rights-bearing persons
How is extending (limited) equal-protection rights to corporations that the root problem?