It has been a long time since February 2007. Today we live in a different world.
We do not know what changes will define the next era or how the coming years will be judged. Yesterday's election of Obama was an historic day, a clear break with the past. To my eyes, yesterday marked an ascendancy of the global Internet-connected community and a startling victory of our shared purpose over ancient divisions.
Human society is changing, and it is our own doing. It is time to look forward and think about how we will shape the future.
The financial collapse continues. Banks are still too scared to open their own coffers - so shoveling free money to banks (dropping rates, buying debt), is not helping anybody besides bankers.
How do we put money into the economy if we cannot tunnel it through banks?
Bernanke has famously advocated "Helicopter drops" of money to inject liquidity directly. Back in 2002, he was talking about Japan's deflationary depression, but in 2008 the United States faces the same problem. Since Bernanke is in charge now, some people think that the helicopters are on the way.
The Wrong Way To Do A Helicopter Drop
Here is how a Bernanke helicopter drop works: the U.S. government offers a massive tax cut across the board. But instead of funding the budget shortfall through the normal offering of government debt to private investors, the money is funded through a special account opened at the Fed which is not backed by any future obligation at all.
Helicopter drops are a monetary nuclear option: a way to print money directly.
Bernanke envisions a helicopter drop as a major simple tax cut or rebate, but I am not so sure that would work out so well. Handing out stacks of dollar bills to consumers in the face of a Great Depression reminds me of the George W. Bush non-inspirational call to consumers to go on vacation, sports games, and restaurants after the 9/11 attacks. Bush handed out money and told people to go spend it on all-American luxuries. But the problem with 9/11 was that the world did not understand America well enough (and vice-versa) - he should have invested in exporting our ideas and ideals to the undeveloped world, in Arabic language education, and in overseas service. If we had spent the last ten years pursuing a global cultural mission, America would be in a very different place today. Instead, we turned inward and shopped ourselves into today's deplorable debt.
Nobody has ever tried helicopter drops in a modern economy before, so we have no road map. But we should not repeat Bush's post-9/11 mistake.
Since nobody knows anything, here are my two cents on the right way to do a helicopter drop.
Yesterday Michael Lind argues in Salon that the United States is entering a fourth 72-year cycle.
Each cycle, he argues, starts with three decades of government growth fueled by new technology, then ends with three decades of small-government backlash. He predicts we are entering the country's fourth cycle now.
Lind compares Obama to George Washington, Lincoln, and FDR; George W gets compared to Buchanan and Hoover.
Who is Rahm Emanuel and how did he hook up with Obama?
Rahm Emanuel, Pitbull Politician is a great 2006 Fortune article that profiled Emanuel's personality and career. The centrist ex-Clinton-fundraiser, Iraq war supporter, and friend of Lieberman is not popular among the liberal-left MoveOn DailyKos crowd. He is a political street fighter, not an idealist, and he is well-known for battling against Dean's gauzy "50 state" strategy. Instead Emanuel publicly bullied Dean into directing precious 2006 DNC funds into 40 targeted congressional races.
Democrats won 30 of those races and took control of Congress. Now the abrasive, aggressive Emanuel has a lot of political capital he can call in. In fact, early in this presidential campaign, many Democrats were fearful of supporting Obama because Emanuel had declared support for Clinton in 2006. When Emanuel famously pivoted and withheld an endorsement for either Hillary or Barack in January 2007 ("I'm hiding under the desk," he said, "I'm very far under the desk, and I'm bringing my paper and my phone."), he helped open up Obama's path to the nomination.
Emanuel is a powerful teammate for Obama: Emanuel and Obama deserve credit for the Democratic congressional gains in 2006 and 2008 - perhaps a hundred representatives and senators owe their jobs to this pair. Together, they command a tremendous amount of legislative power.
This great depression of 2008 thing that we are all in....
Is there some good official name for it?
We need a good name for it. UCLA's Matthew Lieberman has concluded from brain scan studies of the amygdyla that if want to control our fears, we should name them. So, let's have it! What is the right name?
There is a bottom-up solution to the economic meltdown that is woven in each of our daily lives - most of us have a much larger cushion than we think. Us ordinary people have thousands of dollars of free value in a hidden account we can tap every month. The total amount of pent-up capital is enormous, and if everybody were to unlock it worldwide, I am convinced we would easily inject enough extra liquidity in the world economy to end the depression.
Tapping this resource is a personal choice and does not require a government handout or a PhD. Withdrawals will not tie you into long-term obligations. And although spending your savings may change your life, studies have shown it will make you happier and healthier in the long run.
To do it, all you need is a TV and enough imagination to figure out how to spend twenty eight hours of leisure.
Continue reading "Twenty Eight Hours"Yesterday I tried to switch from a downtown doctor to a suburban doctor, but I was turned away. According to the person answering the phone, few practices in the state are accepting new patients. It is very difficult to get a primary care physician in Massachusetts today.
Massachusetts is the first state in the country to institute a "near universal health care" policy - basically everybody in the state is required to have some form of health insurance, with the state guaranteeing access to some basic coverage. It is a great idea, but it is now obvious that the medical industry wasn't prepared to handle the onslaught of new patients.
The Globe estimates the wait for getting a doctor in the state now exceeds 100 days. The severe shortage can probably be blamed on 13 straight years of decreasing doctor compensation, increasing malpractice liability, and increasing administrative overhead in the state. 2008 is the first year that some of these trends have started to reverse themselves here.
As the Democrats gear up to increase medical care for the whole nation, they would be wise to start making medicine a more attractive profession now.
For now, I am stuck going downtown to see my doctor until the new crop of med school students graduate. I consider myself lucky to have a doctor at all.
On learning spelling. My second-grade Piper is getting plenty of practice writing but hasn't been getting spelling homework. We notice she is often guessing wrong on words like "sweep" ("sweap"), and I wish she were getting lists of spelling words to help her along.
What is the best way to learn spelling?
I don't know, but here is a sequence of second-grade spelling lists I thought was great, and that we will be playing with at home. It comes from Mrs. Schlib, who teaches elementary school in East Moline, IL: second grade spelling lists. The lists clearly have a structure - there must be a method to this.
When you get stuck on a Sudoku, you want a little hint not a whole solution - you want Dave's Sudoku Help Page.
The tool is also handy for analyzing and building Sudoku puzzles by hand.
Continue reading "Sudoku Help"Maybe 'these dark times' will be known as the Chinese Depression.
Michael Pettis of Peking University has written a superb clear-eyed analysis of the current economic collapse.
Continue reading "The Chinese Depression"