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Archive for June, 2010

Garet Garrett in The People’s Pottage (1953):

In a revolutionary situation mistakes and failures are not what they seem. They are scaffolding. Error is not repealed. It is compounded by a longer law, by more decrees and regulations, by further extensions of the administrative hand. As deLawd said in The Green Pastures, that when you have passed a miracle you have to pass another one to take care of it, so it was with the New Deal. Every miracle it passed, whether it went right or wrong, had one result. Executive power over the social and economic life of the nation was increased.

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It was nice to see Tony Woodlief (over at McArdle’s blog) take on the cult of happiness.  Happiness is surely a good, but it makes me unhappy to see people seemingly exalt it above all else – and this appears to be an especially strong current in a certain type of libertarian.

This gives me a chance to advertise my coming Pileus series on tensions within libertarianism and the libertarian movement.

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… because the U.S. soccer team lost to Ghana 2-1 in extra time.  

I spent the day thinking about monetary policy, so I missed what was surely a splendid match.   

Given it would have been fun to see the U.S. win the World Cup and have the Europeans collectively check into a mental ward in response, I’m sorry to hear the U.S. team is out.  But not real sorry, as U.S. losses in such events help prevent soccer from cutting into the focus on baseball in the zero-sum world of sports programming and indirectly help keep our best young athletes from choosing to play soccer instead of sports I like to watch.

In more important news to Red Sox Nation, Dustin Pedroia broke a bone in his foot and is out for 6-8 weeks.

Update: Mock soccer, soccer-gods retaliate: Clay Buchholz injured too!

Update II: Now Victor Martinez is injured!  Fortuna is not smiling on the Red Sox this week!  And yet they are still in the race.

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Many libertarians voted for Obama - or had a pair-wise preference for him – in order to prevent (or express disdain for) a McCain presidency and all that might mean (for example, the neoconservative agenda – especially in foreign policy).  They also hoped that some time in the wilderness would be good for the Republican party and serve as appropriate punishment for its big government conservatism turn (This hope has been somewhat borne-out).  In terms of the latter, Alex Tabarrok argued:

Lack of power is no guarantee of virtue but Republicans are a far better – more libertarian – party out-of-power than they are in power. When in the wilderness, Republicans turn naturally to a critique of power and they ratchet up libertarian rhetoric about free trade, free enterprise, abuse of government power and even the defense of civil liberties.  We can hope that new leaders will arise in this libertarian milieu.   

But given what has occurred over the last year and a half, is McCain starting to look a lot better every day?  Or is the country still going to be better off in the long-term despite electing Obama (given we avoided McCain and Obama’s leftist governance could lead to a resurgence of a more libertarian Republican Party)? 

Of course, individual voting is strategically irrational, so don’t feel guilty if you regret voting for Obama. 

But if you could go back in time and be the marginal voter between Obama and McCain (as if this could ever happen in a large-scale election, let alone one in a system in which anything near a close decision would be litigated), what would you do?

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This today from the WSJ:

Federal Deposit Insurance Corp. Chairman Sheila Bair said bank regulators would have the tools they need to banish “too big to fail” institutions from the financial landscape once a Wall Street overhaul bill becomes law.

…Ms. Bair said that new powers allowing regulators to seize and liquidate failing institutions would act like a threat hovering over the financial industry, deterring firms from growing too large or reckless.

This is a kind of a nuclear bomb that you hope you never have to use,” Ms. Bair said. “The fact that it’s there, I think, is going to be important. And if we have to use it, we will.”

So I now have this mental image of a nuclear bomb “hovering” over Wall Street waiting for some bureaucrat to hit the ignition.  Like we don’t have enough to be worried about with this bill already!

Lovely.

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Damian Paletta (WSJ) has a summary of the conference committee’s final agreement on the new financial regulations.

There is nothing all that surprising here: expansion of regulation (with a few politically expedient exemptions and some revenue sweeteners).

Rep. Jeb Hensarling (R., Texas) is quoted in the above story as saying: “My guess is there are three unintended consequences on every page of this bill.”  My guess is that the good congressman is understating things. But even if he isn’t, at almost 2,000 pages—pages that, if experience proves true, have never been read—that is a lot of unintended consequences.

Let us recall that in May 2009, Congress passed legislation to create a  Financial Crisis Inquiry Commission “to examine the causes, domestic and global, of the current financial and economic crisis in the United States.” The commission was given broad investigative powers and is still holding hearings (indeed, it is scheduled to hold hearings next week on the role of derivatives in the financial crisis, where it will question witnesses from American International Group, Inc., Goldman Sachs Group, Inc., the U.S. Commodity Futures Trading Commission, the Office of Thrift Supervision, and the New York State Insurance Department).

Congress directed the commission to submit its report and specific findings on December 15, 2010. Presumably, this report could prove useful in making sense of the financial crisis and designing a new regulatory architecture. That is, it could prove useful if one believed that Congress and the administration were intent on good policy rather than good politics. But as is so often the case, politically established timetables trump careful deliberation.

Senator Dodd is quoted in the above story as saying: “This is about as important as it gets, because it deals with every single aspect of our lives.” Indeed, one measure of its importance is that Congress decided to act before it had allowed the experts it appointed to do the heavy intellectual work to complete their mission.

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General McChrystal

My quick reactions (written yesterday but held for various reasons) to the news that COMISAF has been relieved:

1.  Although it is sad to see a warrior like General McChrystal end his career this way, the silver lining is that President Obama’s move strongly buttresses civilian dominance in civil-military relations.  This is appropriate for a liberal republic in which the military is the clear agent that must be subservient to civilian control and show due deference and respect to its principals/principles.

2.  Replacing General McChrystal with General Petraeus is smart strategically and smart politically.

General Petraeus is extremely competent, and if you want to go with a full-blown COIN strategy a la FM 3-24, he’s the right person for the job (which is not to say that this, as practiced, is the best way to fight and win in Afghanistan).

As for the politics, Obama accomplishes a number of things.  First, he shows himself to be an assertive, in-charge leader who swiftly defended the principle of civilian control in the face of McChrystal’s inadvertant (I assume) challenge.  After his lame performance last week on BP, the President also gets to look presidential and show the vigor of his office at a time in which for both personal and structural reasons, he hasn’t looked so good.  Second, President Obama gets to partially reframe the Afghan narrative (after just doing so last year by firing General McKiernan and putting McChrystal in charge) – but this time he puts a general in charge who is the most popular man in uniform today.  This will inspire some confidence at a time in which popular dissent over the conflict has been increasing.

There is one part of this that is risky politically.  If President Obama sees General Petraeus as a possible threat to run against him in 2012, then this appointment could cut either way.  On the one hand, it could neutralize Petraeus by keeping him busy and off the chicken dinner circuit in the U.S.  Moreover, if the war continues to go south, then it could put a dent in Petreaus’ armor.  On the other hand, if Petraeus again rides to the rescue overseas, the American economy continues to flounder, and Petraeus decides he wants to ride in on horseback, Obama will have handed his opponent yet another claim for superior executive leadership.

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