November 2008 Archives

OK — we all know by now it's tough out there: rising unemployment, the credit freeze and major business failures. It's enough to make you want to climb into your Christmas stocking, skip Christmas, and hide there until it all passes over.

However, not all is gloom and doom. Forrester Research (Nasdaq: FORR, an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology) estimates that internet sales will surpass $200 billion this year, up from $175 billion in 2007.

Why is that? Simply because the internet offers unique savings and marketing opportunities to businesses.

Tyler Cowen (of the Marginal Revolution blog) and a George Mason economist participated in a Big Think Forum on Business and Economics.

The full talk started with a discussion of capitalism and morality but it ended up focusing on the financial crisis, and he makes some great points about the nature of markets and their role and purpose in our lives.

Building on an unacknowledged base of Randian enlighten self-interest, Tyler Cowen begins by making the case that markets and capital helps us to realize ourselves, to become more of what we are as individuals.

Answer: Because they're so much alike — to wit:

You never want a serious crisis to go to waste (Obama Chief of Staff Rahm Emanuel).

From the WSJ:

Obama Chief of Staff Rahm Emanuel, speaking to a Wall Street Journal conclave of business leaders Tuesday, said the economic crisis facing the country is “an opportunity to do things you could not do before.” (Wider U.S. Interventions, Wall Street Journal).

Cato's David Boaz sums it up:

In Crisis and Leviathan, Robert Higgs demonstrated that government growth in the United States has not been slow and steady, year in and year out. Rather, its scope and power tend to shoot up during wars and economic crises. Occasionally, around the world, there have been instances where a crisis led to free-market reforms. Generally, though, governments seek to expand their power, and they take advantage of crises to do so. But they rarely spell their intentions out as clearly as Rahm Emanuel did.

Ok: why did Iceland's banking system completely unravel and collapse? Because the government  decided to let them fail? Nope — the government couldn't save them:

Iceland’s banking system is ruined. GDP is down 65% in euro terms. Many companies face bankruptcy; others think of moving abroad. A third of the population is considering emigration.

Iceland experienced the deepest and most rapid financial crisis recorded in peacetime when its three major banks all collapsed in the same week in October 2008. It is the first developed country to request assistance from the IMF in 30 years.

Negotiations with the IMF have finished, but at the time of writing the IMF has delayed a formal decision. Icelandic authorities claim this is due to pressure from the UK and Netherlands to compensate the citizens who deposited money in British and Dutch branches of the Icelandic bank Icesave. The net losses on those accounts may exceed the Icelandic GDP, and the two governments are demanding that the Icelandic government pay a substantial portion of that. The likely outcome would be sovereign default. (VoxEu).

Sovereign Default means "national bankruptcy."

While Guantanamo detainees are not citizens of the U.S., and what to do with them was a tricky question, the complete suspension of habeas corpus and keeping them locked up forever with no due process was an affront to the basic ideas enshrined in both the Constitution and the bill of rights.

The idea of habeas corpus is fundamental because it suggests that, when you have an executive detention, there ought to be an opportunity for the individual detained to get an independent judicial assessment about whether the detention is legal.

Remember, habeas does not create a single right. It just says you can have a judge examine the legality of your detention. This is what the Supreme Court upheld at the end of its 2007 term (see: Boumediene v. Bush). Forty detainees have been held for more than six years without charges filed against them. Some detainees who deny being enemy combatants have never been given an opportunity to show their detention is unwarranted. To its credit, the Supreme Court has finally said "enough."

While I'm concerned about Obama's domestic economic policies (and would McCain's have been much better? Probably, but that's water over the dam), the one thing I'm really looking forward to is a reversal of the constitutional oversteps taken by the neo-conservatives in the past 8 years:

You don't have to look far for evidence that "Latte Drinking Liberal Elitists" have ZERO understanding about economics:

I figure that under Democrats taxes might be a little higher, but this is more than offset by both increased business income and increased returns from the stock market under a the Democrats as compared to the economy under Republicans.(Ron Chusid The Useful Idiot on the Liberal (ill)Values Blog: Why We Latte Drinking Liberal Elitists Can Vote Democratic.)

It might seem incredible that over the past year, with the looming credit crisis and the bursting housing bubble, a normal functioning human being could really think that raising taxes on the most productive segment of the population is a good idea, but — never underestimate the utter intellectual corruption of an "elitist" hopelessly steeped in liberal ideology.

This is exactly why the Democratic and Neo conservative-admin engineered bailouts will solve nothing. Yves Smith of the Naked Capitalism Blog is pissed off:

While anticipated, predicted, & even expected, the election of Barack Obama nevertheless was an amazing moment: the lifelong dreams and aspirations of millions realized.

It happened. It really happened.

Whether or not one voted for Barack Obama, I think there's one thing that we all shared tonight: a realization that anything is possible, and that the only real limits in our lives exists in our own minds and hearts. For a moment, all that was lifted, and we saw what was — and is — possible.

Barack Obama has been the elected 44th President, the nation's first African-American President. While it was predicted and anticipated, it's absolutely amazing nevertheless.

A celebration -- but a warning too (to the DNC):

“Well, Doctor, what have we got—a Republic or a Monarchy?

"A Republic, if you can keep it.”
~ Benjamin Franklin

Absolute power corrupted the GOP, and it can happen to you.