Friday, March 28, 2008
Thoughts on the Fed trying to clean up its own mess
Wessel certainly makes some good points. It may be too early to tell how all of this will play out. While government involvement in the economy via the central bank or Treasury is generally undesirable and will most certainly have long-run unanticipated consequences, I am sympathetic to Fed Chair Ben Bernanke in one regard. He inherited a mess that his predecessor, Alan Greenspan, played a large role in creating. Greenspan's manipulation of interest rates following 9/11 caused a distortion in the free market, injecting excess liquidity that largely made its way into real estate and set the stage for a bubble.
In a way, it's deja vu all over again. As I wrote in my book The PayPal Wars, we saw the same drama play out eight years ago in Silicon Valley. Currency market "contagion" in the late '90s had been the catalyst for Greenspan's interest rate roller coaster, and tech stocks were the asset class that was taken along for the ride. That bubble burst as rates were rapidly jacked up by the Fed after it had concluded a period of aggressive cutting. Sound familiar?
Wessel makes the point that capitalism might be profoundly changed by this current crisis. And that seems possible. But can the Fed's policy of using interest rates in Keynesian fashion -- to "stimulate" the economy -- really be called a form of capitalism? It seems more like central planning than the Invisible Hand. But I doubt that any of the presidential candidates, and certainly not Hillary or Obama, will cite this crisis as a reason for less government meddling in the economy.
Thursday, March 27, 2008
Americans oppose mortgage bailouts
It will be interesting to see if this skepticism of federal handouts holds up should the mortgage crisis worsen. Over the past week, investment banks have averaged $32.9 billion per day in borrowing from the Federal Reserve's new emergency lending facility. No doubt Hillary and Obama will be ratcheting up their calls for command economy solutions to address the problem, but hopefully the American people will remain skeptical.
Friday, March 21, 2008
Making our nation proud
A Good Friday meditation
a man of sorrows, and familiar with suffering.
Like one from whom men hide their faces
he was despised, and we esteemed him not.
Surely he took up our infirmities
and carried our sorrows,
yet we considered him stricken by God,
smitten by him, and afflicted.
But he was pierced for our transgressions,
he was crushed for our iniquities;
the punishment that brought us peace was upon him,
and by his wounds we are healed.
We all, like sheep, have gone astray,
each of us has turned to his own way;
and the LORD has laid on him
the iniquity of us all. (Isaiah 53: 3-6)
As the economy stumbles and terrorists bray new threats, take heart, my friends. The world is broken and evil is most real, yet the endgame is in motion. We are actors in this grand drama, but the script has already been written. And the Author penned for Himself the most shocking, unsettling, and important role in the entire story.
Monday, March 17, 2008
China blocks YouTube -- how will Google respond?
Access to YouTube.com, usually readily available in China, was blocked after videos appeared on the site Saturday showing foreign news reports about the Lhasa demonstrations, montages of photos and scenes from Tibet-related protests abroad.
How will Google, YouTube's parent company, respond? Readers of my blog will recall that I've previously criticized Google and other Silicon Valley companies for assisting Chinese censorship by restricting search results (see here and here). Now that one of Google's most valuable web properties is being blocked, will it stand up to the dictators in Beijing or seek to accommodate them by removing the related videos?
Friday, March 14, 2008
Audacity of hate: Obama and his spiritual mentor
The Chicago minister ... said in a January 2006 sermon at his alma mater, Howard University, "America is still the No. 1 killer in the world. … We are deeply involved in the importing of drugs, the exporting of guns and the training of professional killers."
Speaking at the Washington, D.C., school's Andrew Rankin Memorial Chapel, Wright said, "We started the AIDS virus. … We are only able to maintain our level of living by making sure that Third World people live in grinding poverty."
Without a doubt, Wright is an influential part of Obama's life, both private and public. Even if Obama does not agree with his mentor that the U.S. is "the No. 1 killer in the world," creator of the AIDS virus, and deserving of damnation, he obviously must not consider Wright's worldview to be too offensive. How else can one explain the role he's given Wright in his life? It's not ignorance. It's incomprehensible to assert that glimmers of Wright's worldview were not visible to Obama over the past 20 years. (One doesn't choose a "sounding board" because he stays silent, and the reverend is not exactly hesitant about voicing his politics from the pulpit.) So even if he did not directly hear Wright drop "G-damns" on America, Obama surely heard him voice the beliefs that served as the basis for those condemnations. To assert otherwise, you'd have to assume that Obama is either lying about his ties to Wright, or he has no idea of the beliefs of his advisors.
The questions still stand, Senator Obama. We, the people, await your response.