Reason Magazine - Staff > Matt Welch > Hit & Run Posts

"But what about those of us in the nonprofit world? Where's our bailout?"

matt.welch@reason.com (Matt Welch) — Mon, 01 Dec 2008 11:39:00 EST

Nope, not The Onion. Here's the sales pitch:

My child-care agency, supported largely by government contracts -- federal and state dollars partially matched by county funds -- went nine years without an increase in the rate of funding it receives. During those years, the cost of a child-care worker rose from $23,000 a year to $29,000 a year. Multiply that figure by our 100 child-care workers, and we are facing a $600,000 shortfall in just one job category. No industry in the public or private sector could have survived nine years of flat funding.

How will we make up that shortfall? Fundraising? Unlikely, in this economy. And investment losses have had a profoundly negative effect on endowed organizations. We need a bailout.

reason's sock puppet and assorted goodies here.

$8.5 Trillion and Counting

matt.welch@reason.com (Matt Welch) — Mon, 01 Dec 2008 10:54:00 EST

The L.A. Times on Sunday updated the numbers on 2008's historic (and historically awful) round of bailouts, and came out with a shiny new figure: $8.5 trillion. It's a useful piece of journalism, so I almost hate to complain, but the lead-paragraph framing is really annoying:

With its decision last week to pump an additional $1 trillion into the financial crisis, the government eliminated any doubt that the nation is on a wartime footing in the battle to shore up the economy. The strategy now -- and in the coming Obama administration -- is essentially the win-at-any-cost approach previously adopted only to wage a major war.

What a godawful mix of imprecise, played-out metaphors ("wartime footing," "battle," "major war") and couldn't-possibly-be-accurate absolutism ("eliminated any doubt," "win-at-any-cost approach," "only"). As in the inaccurate, propogandistic usage of "rescue" over "bailout," this paragraph conveys the impression that the financial crisis can be likened to a finite, singular goal, one that can be accomplished if only you marshal enough resources. Neither are true. Globalized economies are organisms that evolve constantly, not stationary mountains that can be climbed with enough sherpas. And by definition, not all government interventions into a national economy get you closer to the goal of allaying a capital-C Crisis, particularly when key elements of said Crisis (politicized lending practices, moral hazard caused by federal guarantees, cheap monetary supply, mark-to-market accounting rules) were caused by...government intervention!

Anyway, the rest of the article is actually about that latter conundrum, which is another reason to read it. Here is a section devoted to sanity:

Once the financial crisis eases, higher interest rates and soaring inflation will be risks. If they materialize, they could dramatically increase the government's borrowing costs to meet its annual debt payments. For consumers, borrowing could become more expensive even as the price of everyday items rise, holding back economic growth.

"We could have a super sub-prime crisis associated with the meltdown of the federal government," warned David Walker, president of the Peter G. Peterson Foundation and former head of the Government Accountability Office.

My only quibble there being with the word "if," since we will have bailout-triggered inflation, mes amis.

And here's a quote that scares me:

"You just throw everything you have at the problem to try to fix it as quickly as you can," said David Stowell, a finance professor at Northwestern University's Kellogg School of Management. "We're mortgaging our future to a certain extent, but we're trying to do things that give us a future."

As the economics journalist Amity Shlaes told Nick Gillespie in a January 2008 interview, such kitchen-sink problem solving, and the uncertainty it creates, certainly prolonged the Great Depression. A selection from that interview:

Both the Hoover and Roosevelt administrations (but especially the Roosevelt administration) were so unpredictable. That hurt the economy very much, and when I went back and saw the extent I was astounded. Uncertainty is a factor that I thought needed to be explored. There were lots of people who said, "I will not invest 'til I know what's going to happen."

During the Depression, you heard the phrase "bold, persistent experimentation" all the time. We've been taught that was good. Somebody had to do something, was what we learned. But what I saw was this enormous cost, especially during the second half of the 1930s.

Where Ano Means Yes

matt.welch@reason.com (Matt Welch) — Wed, 26 Nov 2008 12:51:00 EST

The Telegraph (UK), and by extension the Drudge Report, are expressing wonder that, judging by the credit default swaps (CDS) market, "California is now priced as a greater bankruptcy risk than Slovakia 150."

As a former resident of both states, I can testify that this is an unfair slap...at Slovakia.

An economy that was widely predicted to fail at the time of Czechoslovakia's Velvet Divorce grew at a European Union-leading 10.7 percent last year. Unlike certain countries I could name, the domestic auto industry is booming. Inflation is at 7.5 percent, but trending heavily this past decade in a positive direction. And Bratislava's latest budget deficit figures look a damn sight better than Sacramento's $28 billion nightmare.

In the 1990s a common refrain among Americans journalists covering the great post-communist transitions was, "Would the U.S. ever tolerate economic austerity plans this severe?" In 2008, regrettably, I think we have found our answer.

"This is how you clowns are spending EIGHTY BILLION DOLLARS of taxpayer money, whining to comedy blogs?"

matt.welch@reason.com (Matt Welch) — Tue, 25 Nov 2008 18:45:00 EST

There are probably more effective ways for bailout beneficiary AIG to spend its time than sending multiple e-mails to Wonkette.

At What Price Is Saving a House, When the Savior Might Break the No-Siren Rule?

matt.welch@reason.com (Matt Welch) — Mon, 24 Nov 2008 16:23:00 EST

The L.A. Times has a story out about fire prevention and firefighting efforts paid for by private insurance plan, with the following subhead:

Some residents whose homes were saved in the recent blazes thank response teams dispatched by their insurers. But public firefighters express uncertainty about the private sector.

Juicy conflict! Let's hear why firefighters paid by the state feel uncertain about those paid by insurance companies and homeowners who live in fire zones:

Santa Barbara County Fire Capt. Eli Iskow said the companies can be a valuable resource, but they tend to exaggerate the number of homes they save and sometimes get in the way.

On a more philosophical level, he questions the social benefit of for-profit firms providing services only for some.

"When firefighters battle flames," he said of public crews, "they don't make a distinction between a $50-million Oprah mansion and a tract home."

Ventura County Fire Chief Bob Roper, who is vice chairman of Firescope, a statewide panel that makes recommendations on firefighting policy, believes there is a place for private contractors. But their best use, he said, is early in the fire season when they visit homes and suggest ways to reduce fire risks.

"We have found some very reputable contractors and others that are less than reputable," Roper said. "It's a hazard if they block an access point or if we end up having to rescue them."

Roper said he's seen private trucks using flashing red lights and sirens, violating laws that allow such devices only on public emergency response vehicles.

The problem with private crews, Roper said, is that they are largely unregulated.

To briefly sum up: Private firefighters....
1) "tend to exaggerate"
2) "sometimes get in the way" (no examples cited)
3) work first to protect homes that pay for their services
4) are sometimes "less than reputable" (no examples cited)
5) could conceivably "block an access point" or require rescue (no examples cited because it's a hypothetical)
6) sometimes break the no-siren/lights rule, with adverse consquences we can only guess at
7) are "largely unregulated"

Which is not exactly the level of hysteria brought to the subject during the last fire season by liberal stalwarts Rick Perlstein, Naomi Klein, and Chris Hayes...but it's a pretty thin complaint nonetheless, considering that California has, and always will have, more fire than firefighters each and every October and November.

What's great, too, is that the lead anecdote in the story doesn't actually talk about private firefighters at all, but rather how one house was saved because the owner's $10,000-plus premium coverage included squirting the perimeter of his compound with (commercially available!) fire retardant.

My reason rant against the burn-the-rich set is here.

The Voodooest Economics of Them All

matt.welch@reason.com (Matt Welch) — Mon, 24 Nov 2008 11:00:00 EST

If you've successfully managed to keep your breakfast down for this long, don't read this Bloomberg News analysis of the bailout extravaganza. Your lead paragraph:

The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.

Gulp. Ignore the misuse of the word "rescue," and the challengable assertion that you couldn't get credit in August of 2007, and plow ahead into one of the most gruesome tabulations since the Jonestown Massacre (or the Brian Jonestown Massacre, for that matter):

The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14. [...]

President Franklin D. Roosevelt's New Deal of the 1930s, when almost 10,000 banks failed and there was no mechanism to bolster them with cash, is the only rival to the government's current response. The savings and loan bailout of the 1990s cost $209.5 billion in inflation-adjusted numbers, of which $173 billion came from taxpayers, according to a July 1996 report by the U.S. General Accounting Office.

The 1979 U.S. government bailout of Chrysler consisted of bond guarantees, adjusted for inflation, of $4.2 billion, according to a Heritage Foundation report.

In other words, comparing the other government interventions during our lifetimes to what we've seen in the Late BushCapitalism era is like comparing fleas to an elephant. Well, at least they're being transparent about it!

Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral.

Collateral is an asset pledged to a lender in the event a loan payment isn't made.

"Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting," Bernanke said Nov. 18 to the House Financial Services Committee. "We think that's counterproductive."

reason on the bailout here.

What Happens When You Decline Pre-Reeducation

matt.welch@reason.com (Matt Welch) — Fri, 21 Nov 2008 18:21:00 EST

Alexander McPherson, professor of molecular biology and biochemistry at UC Irvine, is not the world's biggest fan of AB 1825, the 2004 California bill signed into law by, *cough*, Arnold Schwarzenegger forcing any state employer with more than 50 workers to subject its supervisors to sexual harassment training. So when McPherson continued to tell UCI that he "refused, on principle" to be trained, they were like, "That's cool, this is a university after all."

Ha ha, not really (and not really funny, either).

Last month, the university finally followed through, sending me a letter announcing that my laboratory and the students I oversaw were to be immediately turned over to other university officials and faculty. I continued to refuse to take sexual harassment training, and do so now.

Why so stubborn, professor?

First of all, I believe the training is a disgraceful sham. As far as I can tell from my colleagues, it is worthless, a childish piece of theater, an insult to anyone with a respectable IQ, primarily designed to relieve the university of liability in the case of lawsuits. I have not been shown any evidence that this training will discourage a harasser or aid in alerting the faculty to the presence of harassment.

What's more, the state, acting through the university, is trying to coerce and bully me into doing something I find repugnant and offensive. I find it offensive not only because of the insinuations it carries and the potential stigma it implies, but also because I am being required to do it for political reasons. The fact is that there is a vocal political/cultural interest group promoting this silliness as part of a politically correct agenda that I don't particularly agree with.

The imposition of training that has a political cast violates my academic freedom and my rights as a tenured professor. The university has already nullified my right to supervise my laboratory and the students I teach. It has threatened my livelihood and, ultimately, my position at the university. This for failing to submit to mock training in sexual harassment, a requirement that was never a condition of my employment at the University of California 30 years ago, nor when I came to UCI 11 years ago.

Read McPherson's whole cri du liberte here.

This kind of stuff drives me plum loco. Sexual harassment is already plenty illegal in California; the forced training is because lawmakers were chagrined to discover that criminalization hadn't eliminated every stray ass-grab and Kojak-style boss. More importantly (to me, anyway), is the pile-up of government-enforced behavioral oaths, whether it's to swear to uphold the state constitution (another University of California specialty) or to pretend that marijuana is a dangerous drug. I hope McPherson has an active legal defense fund.

Cathy Young wrote about campus sexual harassment politics for reason back in 1999.

Serve the Servants

matt.welch@reason.com (Matt Welch) — Wed, 19 Nov 2008 17:52:00 EST

If ever you wanted to see the inner workings of an unfocused mind, particularly one plugged into the zeitgeist of the country's momentarily dominant political ethos, you could do worse than reading the output of California's most overrated columnist, the L.A. Times' Steve Lopez. Here Lopez makes the following assertions about National Service, apparently without irony:

* FDR's Civilian Conservation Corps "kept service strong and unemployment low during the Great Depression." (The Corps was created in 1933; unemployment averaged 18 percent for the ensuing six years, and was higher in 1938-40 than it was in 1937.)

* The California Conservation Corps, with significant goosing from an Obamatastic federal government, might just help the Golden State "become the capital of the clean energy industry, using service agencies to recruit and train kids beginning in middle school and high school," which will help them "be linked along the way with clean energy employers who might later hire them."

* Even though "it's a huge cost," and the federal government is "throwing money around like there's no tomorrow" (as Lopez approvingly quotes once-and-future California governor Jerry Brown), that just makes the case for AmeriCorps that much stronger in a world of Wall Street bailouts. "If there's money for them," Lopez concludes, "then why not for our youth, now that they're lined up and ready to march?"

To paraphrase reason Contributing Editor Julian Sanchez from five years back, if the kids are indeed "lined up and ready to march," I'm pretty sure it ain't my tax dollars that's preventing their little legs from stomping in unison. And as Paul Thornton pointed out in our pages this spring, candidate Obama spoke of "a goal of having middle and high schoolers contribute at least 50 hours a year to community service." Also, 18-year-old women under an Obama administration can look forward to the patriotic pleasures of mandatory "selective" service.

There's a l-o-n-g list of Obama National Service ideas up over at The New American. His chief of staff, Rahm Emanuel, called for "universal civilian service" in his book of two years ago. Meanwhile, some are floating the idea that Obama appoint ex-rival John McCain as Service Czar (a prospect I'd put money on), and Arianna Huffington, for one, is keeping the president-elect's feet to the fire on this, one of his most oft-repeated campaign promises. "Obama must turn his words into action and follow through on his promise to emulate FDR's Civilian Conservation Corps, JFK's Peace Corps, and LBJ's Vista," Huffington wrote today, adding: "A crisis is a terrible thing to waste."

House Negro, Please

matt.welch@reason.com (Matt Welch) — Wed, 19 Nov 2008 12:32:00 EST

Al-Qaeda is trying to taunt the president-elect, drive a wedge between post-racial transcendence and Malcom X, or both:

Ayman al-Zawahri said in the message, which appeared on militant Web sites, that Obama is "the direct opposite of honorable black Americans" like Malcolm X, the 1960s African-American rights leader.

In al-Qaida's first response to Obama's victory, al-Zawahri also called the president-elect—along with secretaries of state Colin Powell and Condoleezza Rice—"house negroes."

Speaking in Arabic, al-Zawahri uses the term "abeed al-beit," which literally translates as "house slaves." But al-Qaida supplied English subtitles of his speech that included the translation as "house negroes."

The message also includes old footage of speeches by Malcolm X in which he explains the term, saying black slaves who worked in their white masters' house were more servile than those who worked in the fields. Malcolm X used the term to criticize black leaders he accused of not standing up to whites.

It will be interesting indeed to watch how the outside world–and not just the Islamo-nutsandwiches–react to a half-black American president. Judging by Silvio Berlusconi's early example, we could be in for some comedy.

I Had a Dream, I Had an Awesome Dream

matt.welch@reason.com (Matt Welch) — Wed, 19 Nov 2008 12:00:00 EST

So I pick up the Sunday edition of the Los Angeles Times, and what do I see but a 16-page special section with a heroic, back-lit photograph of the president-elect under the banner headline:

CHANGE
-------------------
OBAMA'S MOMENT

It is an incredible thing to behold. The first words of defenestrated Washington bureau chief Doyle McManus' portentiously laid-out cover text were "WE ARE A DIFFERENT COUNTRY NOW." Page two featured a steely Norman Rockwell-style half-page illustration of the man; page four was topped by the following quote:

'He might be the best president we ever had. But even if he's the biggest jerk in the world, he's done an awesome thing for this country already.'
-- Anna Kormos, who struggled with doubts before voting for Obama

Page seven was a photo essay entitled "A CITY CELEBRATES." The page 8-9 double truck was dominated by this photograph:

The page 10 Michelle Obama story was adorned with the Onion-caliber headline "SPEAKING HER MIND, HEART," and on page 14, in case you didn't see it the first time around, my ex-colleagues over on the editorial board reprinted their "Obama for president" endorsement.

What the hell is going on here? In part, you have a major metropolitan newspaper taking the rare (for it) step of reacting to audience demand. The LAT was stunned and delighted to discover in the first several days after the election huge lines of readers actually demanding product, in the form of a reprint from the first post-election paper. Coupled with Obama's recent audience-spiking appearances on 60 Minutes and The Daily Show, we are beginning to see a strange new trend: The liberal media temporarily reversing its long decline by hyping the liberal president.

The second interpretation is somewhat less generous. Namely, the media is in full-on, unembarrassed (OK, maybe slightly embarrassed) gush mode. Connoisseurs of media bias will certainly have their hands full for at least the next six months.

The Anti-Socialist Wealth Redistributors

matt.welch@reason.com (Matt Welch) — Mon, 17 Nov 2008 10:50:00 EST

George Will on Sunday furthered his valuable recent service to the nation by giving Republicans the kind of intellectual shock therapy they'll need if they are to learn anything both useful and objectively pro-freedom from their electoral drubbing earlier this month:

Conservatism's current intellectual chaos reverberated in the Republican ticket's end-of-campaign crescendo of surreal warnings that big government -- verily, "socialism" -- would impend were Democrats elected. John McCain and Sarah Palin experienced this epiphany when Barack Obama told a Toledo plumber that he would "spread the wealth around."
America can't have that, exclaimed the Republican ticket while Republicans -- whose prescription drug entitlement is the largest expansion of the welfare state since President Lyndon Johnson's Great Society gave birth to Medicare in 1965; and a majority of whom in Congress supported a lavish farm bill at a time of record profits for the less than 2 percent of the American people-cum-corporations who farm -- and their administration were partially nationalizing the banking system, putting Detroit on the dole and looking around to see if some bit of what is smilingly called "the private sector" has been inadvertently left off the ever-expanding list of entities eligible for a bailout from the $1 trillion or so that is to be "spread around." […]
Hyperbole is not harmless; careless language bewitches the speaker's intelligence. And falsely shouting "socialism!" in a crowded theater such as Washington causes an epidemic of yawning.

Whole thing, well worth a Monday morning read, here.

Now He Tells Us

matt.welch@reason.com (Matt Welch) — Mon, 10 Nov 2008 16:21:00 EST

Remeber when Arnold Schwarzenegger was a Milton Friedman-quoting fiscal conservative out to clean up the irresponsible budgets of Singapore Gray Davis? Ah, memories:

"I think the important thing for the Republican Party is now to also look at other issues that are very important for this country and not to get stuck in ideology," the governor said in an interview broadcast on CNN. "Let's go and talk about healthcare reform. Let's go and . . . fund programs if they're necessary programs and not get stuck just on the fiscal responsibility."

reason on Schwarzenegger here.

The Palin Wars

matt.welch@reason.com (Matt Welch) — Mon, 10 Nov 2008 10:02:00 EST

It was clear within the first few days of her nomination as vice president that can-do Alaska Governor Sarah Palin was a peculiarly divisive political figure. But who knew she would become a one-woman Republican civil war?

Here's George Will, in a Sunday Washington Post column that I shall decorate with a few reason hyperlinks:

Some of the Republicans' afflictions are self-inflicted. Some conservatives who are gluttons for punishment are getting a head start on ensuring a 2012 drubbing by prescribing peculiar medication for a misdiagnosed illness. They are monomaniacal about media bias, which is real but rarely decisive, and unhinged by their anger about the loathing of Sarah Palin by similarly deranged liberals. These conservatives, confusing pugnacity with a political philosophy, are hot to anoint Palin, an emblem of rural and small-town sensibilities, as the party's presumptive 2012 nominee.
These conservatives preen as especially respectful of regular -- or as Palin says, "real" -- Americans, whose tribune Palin purports to be. But note the argument that the manipulation of Americans by "the mainstream media" explains the fact that the more Palin campaigned, the less Americans thought of her qualifications. This argument portrays Americans as a bovine herd -- or as inert clay in the hands of wily media, which only Palin's conservative celebrators can decipher and resist.
These conservatives, smitten by a vice presidential choice based on chromosomes, seem eager to compete on the Democrats' terrain of identity politics, entering the "diversity" sweepstakes they have hitherto rightly deplored.

Meanwhile over at RedState and Michelle Malkin's blog, there is, well, Operation Leper.

An intriguing subplot in all of this has been the role of certain magazines of opinion, and what that might say about a conservative moment that once embraced a distinct style of intellectualism. Here's Mark Lilla writing about "Populist Chic" in the Wall Street Journal:

John McCain's choice was not a fluke, or a senior moment, or an act of desperation. It was the result of a long campaign by influential conservative intellectuals to find a young, populist leader to whom they might hitch their wagons in the future.
And not just any intellectuals. It was the editors of National Review and the Weekly Standard, magazines that present themselves as heirs to the sophisticated conservatism of William F. Buckley and the bookish seriousness of the New York neoconservatives. After the campaign for Sarah Palin, those intellectual traditions may now be pronounced officially dead. [...]
Over the [last] 25 years there [has grown] up a new generation of conservative writers who cultivated none of their elders' intellectual virtues -- indeed, who saw themselves as counter-intellectuals. Most are well-educated and many have attended Ivy League universities; in fact, one of the masterminds of the Palin nomination was once a Harvard professor. But their function within the conservative movement is no longer to educate and ennoble a populist political tendency, it is to defend that tendency against the supposedly monolithic and uniformly hostile educated classes. They mock the advice of Nobel Prize-winning economists and praise the financial acumen of plumbers and builders. They ridicule ambassadors and diplomats while promoting jingoistic journalists who have never lived abroad and speak no foreign languages. And with the rise of shock radio and television, they have found a large, popular audience that eagerly absorbs their contempt for intellectual elites. They hoped to shape that audience, but the truth is that their audience has now shaped them.

I am not now and will never be a Republican (nor any other kind of political tribesman), but I have an active interest in seeing the two dominant political parties in this country embrace the maximum amount of freedom. Which, these days, isn't very maximum at all. What's particularly curious to me about this whole "We need new ideas to connect with those Sam's Club voters we never hang out with" meme is that I've seen very little enthusiasm for adopting a policy that has real juice out there in the grassroots of both parties–opposition to the ill-planned, panic-brokered, $2 trillion-and-counting bailout. The effects of which will be with us long after we remember the cruise-ship habits of star-struck opinion journalists.

Who Shall They Give my Money to Next!

matt.welch@reason.com (Matt Welch) — Fri, 07 Nov 2008 17:39:00 EST

In addition to the horror-show of government giveaways listed below, it now appears as though America's crappy car companies will be seeking another $50 billion from the money factory formerly known as the United States Treasury. And if President-Elect Obama's first press conference is any indication, there'll be more green where that came from come January:

The news coming out of the auto industry this week reminds us of the hardship it faces, hardship that goes far beyond individual auto companies to the countless suppliers, small businesses and communities throughout our nation who depend on a vibrant American auto industry.

The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil.

I would like to see the administration do everything it can to accelerate the retooling assistance that Congress has already enacted.

In addition, I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars here in the United States of America.

And I was glad to be joined today by (Michigan) Gov. Jennifer Granholm, who obviously has great knowledge and great interest on this issue.

I've asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose.

"Today there is a categorical difference between what Republicans stand for and the principles of individual freedom"

matt.welch@reason.com (Matt Welch) — Fri, 07 Nov 2008 15:46:00 EST

So sayeth Dick Armey, former Gingrich revolutionary and House majority leader from 1995-02. Armey, who now heads up Freedom Works, has uncharitable things to say about the last eight years of Republicanism:

Too often the policy agenda was determined by short-sighted political considerations and an abiding fear that the public simply would not understand limited government and expanded individual freedoms. How else do we explain "compassionate conservatism," No Child Left Behind, the Medicare drug benefit and the most dramatic growth in federal spending since LBJ's Great Society? [...]

The response by Mr. McCain to the financial crisis on Wall Street was the defining moment of the campaign. In what looked like a tailor-made opportunity to "clean up Washington," the Republican nominee could have challenged the increasingly politicized nature of Federal Reserve policies, and the inherently corrupt relationships between Fannie Mae, Freddie Mac and various Democratic committee chairmen. Instead, his reaction was visceral and insecure: He "suspended" his campaign and promised "to put an end to the reckless conduct, corruption, and unbridled greed that have caused a crisis on Wall Street." [...]

Republicans lost control of Congress in 2006 because voters no longer saw Republicans as the party of limited government. They have since rejected virtually every opportunity to recapture this identity. But their failure to do so must not be misconstrued as a rejection of principles of individual liberty by the American people. The evidence suggests we are still a nation of pocketbook conservatives most happy when government has enough respect to leave us alone and to mind its own business. The worrisome question is whether either political party understands this.

I don't know if Armey is right about the political calculus of it all, but I do know that if Republicans react to Tuesday's drubbing by embracing less individual freedom in the form enhanced cultural conservatism, they are flirting with the possibility of going extinct. Ask newspapers, for one, how that whole, don't-attract-customers-under-30 thing has worked out for them.

Some Dick Armey hits from the reason archives: Before the 2006 elections he explained why Republicans deserved to lose. A few weeks before that, he kicked social cons square in the be-hind. In 1997, he was interviewed by contributing editor Caroyln Lochhead. And earlier this year he was on reason tv, talking about immigration:

And the Bailout Rescue Goes on

matt.welch@reason.com (Matt Welch) — Fri, 07 Nov 2008 09:45:00 EST

The federal government is preparing to take tens of billions of dollars in ownership stakes in an array of companies outside the banking sector, dramatically widening the scope of the Treasury Department's rescue effort beyond the $250 billion set aside for traditional financial firms, government and industry officials said. [...]

Since the announcement of the program to inject capital into banks, a number of industries, including automakers, insurers and specialty lenders for small businesses have approached the Treasury with hat in hand. Some have been turned away because they are not banks and thus not eligible for capital.

The new initiative would make it easier for the Treasury to aid a wider variety of firms if their troubles put the wider financial system at risk, government and industry officials said.

Whole Washington Post story here. A sampling of reason pieces on the bailout here.

McCain's Classy Concession

matt.welch@reason.com (Matt Welch) — Wed, 05 Nov 2008 02:12:00 EST

Aside from the speech's almost astounding graciousness, note McCain's visceral disgust at the anti-Obama/Biden sentiments in the crowd. Sentiments he knows, on some basic level, that his campaign–especially the Sarah Palin wing of it–whipped up. As I mentioned in my column of this morning, McCain was extremely proud of the way he waged his campaign in 2000, and some important part of him must be flabbergasted that it was Barack Obama taking the comparative high ground this time around. McCain has always seen partisan politics as kind of dirty; to really compete on the presidential level, he convinced himself, he had to hold his nose, at least until the stench became too much to bear.

It's in that context that you should take in McCain's comment about Sarah Palin, that she's a "great campaigner." It played like a compliment to a ravenous Phoenix crowd that loved the Alaska governor much more than their own semi-native son. But coming from a man who chose his concession speech to make a forceful and moving address about race and unity in America, and who will no doubt be doing some serious soul-searching these next few weeks about the conduct of his failed campaign, it was probably more of an insult.

Re-Districting

matt.welch@reason.com (Matt Welch) — Wed, 05 Nov 2008 01:24:00 EST

Continuing my octennial tradition, I spent part of Election Night at the Ralph Nader party inside the National Press Club before taking a post-victory stroll around the White House. At Nader HQ, I had a very pleasant conversation with a Hit & Run-reading Nader-backer about Milton Friedman's ideas on the negative income tax.

The front of the White House, like indeed much of Washington D.C. right now, is a very big, very joyous young-people party. It's like Del Playa on a Friday, only starring every model who ever appeared in a Benetton ad. I saw two different two-man brass bands perform enthusiastically received versions of "When the Saints Go Marching In," which is a statement either about Hurricane Katrina, or about the limited repetoire of happy white dudes with trombones.

Unlike in 2000, the crowd outside was much more celebratory, much less shouting angry taunts in the direction of the presidential bedroom, for whatever little that's worth. It's a bit startling to have people roll down their windows and yell "O-ba-ma!" at you, but they seemed pleasant enough. Not for the first time, I wonder what it must feel like to vote for the winning team.

How Ya Votin', Libertarian?

matt.welch@reason.com (Matt Welch) — Tue, 04 Nov 2008 09:52:00 EST

Esteemed Reason Foundation trustee Manuel S. Klausner says Barr in uncontested states (such as his native California), but McCain in battleground states as "the lesser of two evils." The kicker: "No doubt we all agree that these are horrendous times for libertarians." Actually, I feel a Righteous Wind behind the intellectual argument for free minds and free markets, being a firm believer in both the Plexiglass Principle and the anecdotal/polling data that Americans detest the bailout that their two major parties foisted upon them. Whole Klausner argument here.

Want to see who Canadian libertarians and conservatives would vote for, if they had the chance? Check out the Western Standard, here and here. Last week we polled our staff and the broader reason universe; results here (and a Reader's Digest condensed version of regular reason contributors here).

Lords of Undiscipline

matt.welch@reason.com (Matt Welch) — Fri, 31 Oct 2008 11:16:00 EDT

This gruesome CNN exchange with John McCain spokesman Michael Goldfarb (on loan from The Weekly Standard), highlights something I've long observed but rarely written about: The McCain campaign's stunning lack of discipline. First, take a look at Goldfarb missing an opportunity to paint Rick Sanchez as a rabid Obama fan by instead turning the entire segment into a bizarre Obama-consorts-with-known-anti-Semites-who-we-all-know-but-I-won't-name:

Goldfarb may be a swell guy in private (I've heard rumors to that effect), but you don't win elections by deploying non-professionals who aren't ready for the ultimate prime time of a presidential campaign. And it really ain't Goldfarb I'm talking about here (though his campaign blog amounts to a churlish dartboard on the face of the evil MSM), it's seemingly everyone in McCain's campaign, from alter-ego Mark Salter on down. Consider the kind of comments that have leaked from the McCain shop over the past few weeks:

The Politico:

"These people are going to try and shred [Palin] after the campaign to divert blame from themselves," a McCain insider said, referring to McCain's chief strategist, Steve Schmidt, and to Nicolle Wallace, a former Bush aide who has taken a lead role in Palin's campaign. Palin's partisans blame Wallace, in particular, for Palin's avoiding of the media for days and then giving a high-stakes interview to CBS News' Katie Couric, the sometimes painful content of which the campaign allowed to be parceled out over a week.

"A number of Gov. Palin's staff have not had her best interests at heart, and they have not had the campaign's best interests at heart," the McCain insider fumed

CNN:

"She is a diva. She takes no advice from anyone," said this McCain adviser. "She does not have any relationships of trust with any of us, her family or anyone else.

"Also, she is playing for her own future and sees herself as the next leader of the party. Remember: Divas trust only unto themselves, as they see themselves as the beginning and end of all wisdom."

New York Times magazine:

"Leaving aside her actual experience, do you know how informed Governor Palin is about the issues of the day?" The senior adviser thought for a moment. Then he looked up from his beer. "No," he said quietly. "I don't know."

To which I'll add one stupid second-hand anecdote: I shared a cab ride from Reagan National after the Republican National Convention with a legal adviser who happened to stay in the McCain campaign hotel. One night late, she said, she was at the bar with several McCain staffers, and the solicitous hotel staff asked if there was anything else they could get for them? "Yeah," groused one (she said). "A vetted vice presidential candidate"

Even leaving the bizarre Palin feud out of it, there are near-daily comments that make you wonder why campaign staffers aren't being fired. Probably the worst example of all was the early-October quote by a "top McCain strategist" in the New York Daily News that "If we keep talking about the economic crisis, we're going to lose." Thus the headlines for a week (rightly) focused on the fact that McCain was intentionally diverting the conversation away from the issue Americans care about most. Brilliant!

On some important level, campaign comportment is really, really low on my totem pole of who-gives-a-rip (far below, say, attitudes and policies toward free trade, where McCain beats Obama like a gong), but after a while you look at the gross indiscipline of a political organization and begin to wonder, is the guy at the top even competent at running a large, pressure-filled organization?

Without soliciting a single one, I've received earfuls of off-the-record anecdotes over the years from McCain insiders bemoaning and detailing various manifestations of organizational civil wars, incompetence, murky contracting.... And to speak against my own interest for a minute, I shouldn't be the guy hearing this stuff. Winging it frat-boy style may be a hoot for those who enjoy 1 a.m. hotel-bar bull sessions, but unless you've got a super-coherent campaign message–and Lord knows, McCain does not–it's a recipe for embarrassment, and failure.

I Know This Man, I've Worked With This Man. Your Guess, Sir, Is as Good as Mine

matt.welch@reason.com (Matt Welch) — Fri, 31 Oct 2008 09:49:00 EDT

Legal scholar extraordinaire Richard A. Epstein, one of six all-star panelists to assess Barack Obama in the November issue of reason, considers the Democratic nominee at more length over at Forbes.com:

I know him through our association at the University of Chicago Law School and through mutual friends in the neighborhood. We have had one or two serious substantive discussions, and when I sent him e-mails from time to time in the early days of his Senate term, he always answered in a sensible and thoughtful fashion. And yet, for assessing the course of his likely presidency, I don't know him at all. [...]

The odd point is how his many learned and thoughtful supporters couch their endorsement. Almost without exception, they praise the man, not the program. Their claim is that Obama has proved himself to be a consummate politician who understands that the first principle of holding high office is to get reelected. His natural moderation in tone and demeanor, therefore, translate into getting advisers who know their substantive areas, and listening to them before making any rash moves. The dominant trope is that he will be a pragmatic president who will move in small increments toward the center, not in bold steps toward the left.

But is it all true? The short answer is that nobody knows. [...]

Obama's vague calls for change that "you can believe in" are, to my thinking, wholly retrograde in their implications. At heart, he is an unreconstructed New Dealer who can see, and articulate, both sides on every question--but only as a prelude to championing the old corporatist agenda with a vengeance.

Whole thing here; link via Behind Enemy Lines.

I'm Not Going to Disneyland!

matt.welch@reason.com (Matt Welch) — Fri, 31 Oct 2008 09:24:00 EDT

New York magazine has asked a bunch of political bloggers what they're going to do with their time once the election is over. I'm in there along with Markos Moulitsas, Markos Steynos, Ta-Nehisi Coates, Ben Smith, Rachel Sklar, Jim Treacher, Ken Layne, Marc Ambinder, and others.

If this goofy little feature is any guide, don't count on victorious lefties to be your source of humor for the next four years. As Talking Points Memo's Greg Sargent put it, "Whatever short post-election respite there is will quickly be overtaken by the Obama presidency, should he win. This election is just one chapter in a much bigger story — the creation of a true and enduring 21st-century American politics, domestic and international — and I'm looking forward to focusing the site on that." I dare you to tear your eyes off that page!

Adds the Daily Kosser: "But while I may be able to scale back from sixteen-hour workdays, the election won't be the culmination of our efforts, just a waypoint. We have a big year ahead of us, and will likely scale back up in short order in support of the Obama agenda." Looks like somebody's about to finally get that hammer!

"The worst economic crisis since the Great Depression"

matt.welch@reason.com (Matt Welch) — Thu, 30 Oct 2008 13:57:00 EDT

That's how Barack Obama assessed the economy during his infomercial last night. Do the latest economic numbers back his alarmist, quasi-Bushian claim? Not quite:

The U.S. economy shrank at a 0.3 percent annual rate in the third quarter, its sharpest contraction in seven years [...]

The third-quarter contraction was a striking turnaround from the second quarter's relatively brisk 2.8 percent rate of growth.

Seven years, 70 years, whatever. Ah, but there are worse signs than mere GDP:

Consumer spending, which fuels two-thirds of U.S. economic growth, fell at a 3.1 percent rate in the third quarter - the first cut in quarterly spending since the closing quarter of 1991 and the biggest since the second quarter of 1980. Spending on nondurable goods - items like food and paper products - dropped at the sharpest rate since late 1950.

Getting warmer!!

The GDP report showed that disposable personal income dropped at an 8.7 percent rate in the third quarter - the steepest since quarterly records on this component were started in 1947 -- after rising 11.9 percent in the second quarter when most of economic stimulus payments still were flowing.

Finally, a number that could be the worst on record since the Great Dustbowlia, though it's a number of direction, not position, and (just like GDP) when combined with the prior quarter it shows net growth.

I don't mean to minimize the pain here. But as Nick Gillespie pointed out a couple weeks back, "Any comparison with the Depression, which featured an unemployment rate of 25 percent and a contraction in GDP of over 33 percent at its worst moments, strains credulity."

Both the outgoing administration and the incoming one (whichever wins) have been using such inaccurate, scaremongering analogies to justify massive, ill-conceived federal interventions all over the private economy that will likely have profoundly negative long-term consquences in the forms of renewed inflation, managerial inefficiency from central planners, offshoring of capital markets, and what I fear will be the biggest Bubble of them all: Having the federal government guarantee damned near every large financial risk anybody takes. In a world of ever-increasing guarantees, why shouldn't every investor pour maximum money into whatever federally backstopped financial institution is offering the highest rates? And how do you suppose said institution will be able to afford paying out those high winnings? It won't be through sound investments, boyo.

As a confirmed apocalyptic, I continue to expect the sky to fall; but as a stat dweeb I'm just not seeing the elephant tracks. Right now, during our Worst Economic Crisis Since the Great Depression, unemployment is at 6.1 percent, inflation is at 4.9 percent, and GDP shrank 0.3 percent this quarter, though it's still up for the year. I don't see how that even begins to compete with the late-Carter, early-Reagan era, when GDP shrank in both 1980 and 1982, unemployment never dipped below 8 percent from November 1981 to January 1984, and inflation never dipped below 8 percent between September 1978 and January 1982.

One big difference between that Next Great Depression and this one: Washington, in the form of Reagan and Paul Volcker, was forcing us to swallow our medicine to whip inflation and create conditions for future growth. Nowadays the only government medicine being doled out is temporary pain relief

Republicans Drank Whiskey Neat

matt.welch@reason.com (Matt Welch) — Thu, 30 Oct 2008 09:51:00 EDT

While some Republicans rehearse their blame-the-liberal-media oratoria for John McCain's likely loss next Tuesday, and others set their scope rifles on fashion-chasing Obamacons (or, in the Weekly Standard's case, uh, analogize John McCain to the Tianenman Square guy facing down a tank full of elitists?) ... there remains one stubbornly unhelpful figure contradicting all those narratives while consistently scoring the deepest blows against the Republican candidate: Conservative syndicated columnist George Will. Who, from what I understand, is still planning to vote for the guy about whom he writes stuff like this:

From the invasion of Iraq to the selection of Sarah Palin, carelessness has characterized recent episodes of faux conservatism. Tuesday's probable repudiation of the Republican Party will punish characteristics displayed in the campaign's closing days.

Some polls show that Palin has become an even heavier weight in John McCain's saddle than his association with George W. Bush. Did McCain, who seems to think that Palin's never having attended a "Georgetown cocktail party" is sufficient qualification for the vice presidency, lift an eyebrow when she said that vice presidents "are in charge of the United States Senate"? [...]

Perhaps Palin's confusion about the office for which she is auditioning comes from listening to its current occupant. Dick Cheney, the foremost practitioner of this administration's constitutional carelessness in aggrandizing executive power [...]

Palin may be an inveterate simplifier; McCain has a history of reducing controversies to cartoons. A Republican financial expert recalls attending a dinner with McCain for the purpose of discussing with him domestic and international financial complexities that clearly did not fascinate the senator. As the dinner ended, McCain's question for his briefer was: "So, who is the villain?" [...]

McCain revived a familiar villain -- "huge amounts" of political money -- when Barack Obama announced that he had received contributions of $150 million in September. "The dam is broken," said McCain, whose constitutional carelessness involves wanting to multiply impediments to people who want to participate in politics by contributing to candidates -- people such as the 632,000 first-time givers to Obama in September.

Why is it virtuous to erect a dam of laws to impede the flow of contributions by which citizens exercise their First Amendment right to political expression? "We're now going to see," McCain warned, "huge amounts of money coming into political campaigns, and we know history tells us that always leads to scandal." The supposedly inevitable scandal, which supposedly justifies preemptive government restrictions on Americans' freedom to fund the dissemination of political ideas they favor, presumably is that Obama will be pressured to give favors to his September givers. The contributions by the new givers that month averaged $86.

Whole thing here. My take in May about the GOP coalition dissolving here.

Staff Vote 4 Dummies (Get it??)

matt.welch@reason.com (Matt Welch) — Wed, 29 Oct 2008 16:34:00 EDT

In my column from four years ago imploring other journalistic outlets to show us who they're voting for, I boiled down our more expansive 2004 presidential survey into the responses of 13 key reason contibutors. The breakdown then:

only one certain vote apiece for Bush, Kerry and Badnarik. Two principled non-voters and two more probable non-voters (one of whom leans Badnarik); two I'll-never-tells, two undefined undecideds, and two undecideds who will either vote for Badnarik or a major-party candidate.

I was the sole loser for Kerry, BTW, though it was because "Bush needs to be fired." Go to the link to see an easily digestible list of how the 13 responded.

For the purposes of symmetry I thought I'd do the same boiling-down exercise from our just-published 2008 survey. So here goes, with 18 staffers and regular contributors this time around:

Peter Bagge: Barr; Obama if close
Ronald Bailey: Obama
Radley Balko: Barr
Drew Carey: "Anybody but McCain/Palin"
Tim Cavanaugh: Obama
Shikha Dalmia: Nobody
Brian Doherty: Never votes
Nick Gillespie: Barr, if he votes
Katherine Mangu-Ward: Never votes
Michael Moynihan: Won't vote
Charles Oliver: Won't vote
Bob Poole: McCain
Damon Root: Probably nobody, maybe Barr
Jacob Sullum: Barr
Jesse Walker: Barr
David Weigel: Obama
Matt Welch: Probably Barr
Cathy Young: Probably Barr

By my count that's three definitely for Barr, three definitely for Obama, one definitely for McCain. Five won't-votes, four probably-Barrs, one probably-nobody, and one "anybody but McCain/Palin." What does it all mean? You tell us.