2008 Just the Numbers: Week 13

THE NUMBERS

The GOP race continued to widen, with the jump-up of Thompson in the rankings. Clinton moved ahead just a little more and Edwards recovered some of the ground lost in the prior week. (Thompson is not yet included on the Presidential contract).

THE STRATEGIES

Huckabee fell sharply in the week, and other small hopefuls slid as well, including Hagel and Brownback, but just by tenths. All told, the strategy outlined two weeks ago added another 1%, before trading costs.

The Thompson jump-up must be instructive to Newt Gingrich, who has yet to generate excitement like that.

Next President Pr (%) Chg Wk. bid-ask CLINTON(H) 24.7 1 1% GIULIANI 18.5 -1.5 19% OBAMA 17.3 -1.1 13% McCAIN 13.2 1.1 12% GORE 8 0.5 1% ROMNEY 7.2 0.1 10% EDWARDS 4 0 50%	2007 Week 13: Clinton/Obama in front of unions; Giuliani vetting reaches Kerik, views on his wife's role; McCain mistakenly calls some Baghdad neighborhoods "safe"; Kyle Sampson indicates AG's statements "not accurate"; Dobson not so humbly informs the Nation that Thompson is not a Christian, a hurricane of fundraising.
GOP Nominee Pr (%) Chg Wk. bid-ask GIULIANI 38.3 -2.2 1% MCCAIN 20.1 0 2% ROMNEY 16.3 -0.2 2% THOMPSON(F) 14.6 4.5 20% HAGEL 2.2 -0.1 27% GINGRICH 3.4 0.1 32% HUCKABEE 1 -1.8 n.m.	DEM Nominee Pr (%) Chg Wk. bid-ask CLINTON 49.3 2.3 0% OBAMA 26.4 -3 7% GORE 10.6 -0.1 1% EDWARDS 7.8 1 5% RICHRDSN 3.8 -0.6 5% CLARK 0.5 0.2 n.m. BIDEN 0.4 0 n.m.
Senate Pr (%) Chg Wk. bid-ask DEM 77 0 5% GOP 15 -2.5 53%	Next Executive Pr (%) Chg Wk. bid-ask DEM 56 -0.1 0% GOP 42.8 0.2 0% OTH 0.9 -0.3 n.m.

src: intrade.com; bid-ask are not points, but spread as a percentage of the bid.
IMPORTANT DISCLAIMER: this is just an informational note and not a solicitation or recommendation to buy or sell securities and there is no guarantee implied and people can lose all money on all investments. Numbers are believed to be correct, but do your own math and make your own conclusions or consult with an advisor before making any decisions.

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Science of Mind Study Pierces Media Veil

The LA Times covers a story from scientific researchers, who have been able to work with a few people with damage to the VMPC. As with most studies of its kind, the results are fascinating, raising all kinds of questions about what it means to be human in some ways:

The ventromedial prefrontal cortex [VMPC] processes feelings of empathy, shame, compassion and guilt. Damage to this part of the brain, which occupies a small region in the forehead, causes a diminished capacity for social emotions but leaves logical reasoning intact.

Researchers from USC, the University of Iowa, Harvard University and Caltech posed 50 hypothetical scenarios to six people whose ventromedial prefrontal cortices were damaged by strokes or tumors. Their responses were compared to those given by 12 people without brain damage and 12 others with damage in brain areas that regulate other emotions, such as fear.

...Joshua D. Greene, a Harvard psychologist not involved in the research, said the study showed that moral judgment was shaped by two brain systems — one focused on intuitive emotional responses and another that controlled cognition.

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2008 Just the Numbers: Week 12

THE NUMBERS

Fred Thompson gained again in the week, with most of it coming from McCain on the bid side of the market. Clinton gained slightly from Edwards' loss.

The GOP side of the race widened slightly, with just over 2% falling off of the top three probability. The converse occurred on the Democratic side, where the top three picked up.

THE STRATEGIES

The strategy mentioned last week picked up about 3.8% in the week, before trading costs. If one thinks that the Thompson thing is a fling, then there is now an additional 10% there. I'm not sure he could raise the money he needs now, with others having gotten a head start.

Next President Pr (%) Chg Wk. bid-ask CLINTON(H) 23.7 -0.1 10% GIULIANI 20 0 10% OBAMA 18.4 2.4 8% McCAIN 12.1 3.1 14% GORE 7.5 0.4 9% ROMNEY 7.1 0.1 11% EDWARDS 4 -2 50%	2007 Week 12: House passes budget calling for end to combat role by Fall '08; White House and Congress tussle over subpoenas in DOJ firings; Edwards announces wife's cancer no longer in remission.
GOP Nominee Pr (%) Chg Wk. bid-ask GIULIANI 40.5 0.4 1% MCCAIN 20.1 -1.9 0% ROMNEY 16.5 0.4 3% THOMPSON(F) 10.1 3.1 8% GINGRICH 3.3 -0.4 18% HUCKABEE 2.8 0.3 4% HAGEL 2.3 0 30%	DEM Nominee Pr (%) Chg Wk. bid-ask CLINTON 47 2.1 2% OBAMA 29.4 -0.3 5% GORE 10.7 0.3 7% EDWARDS 6.8 -2.1 9% RICHRDSN 4.4 0.4 5% BIDEN 0.4 -0.6 n.m. CLARK 0.3 -0.1 n.m.
Senate Pr (%) Chg Wk. bid-ask DEM 77 2 7% GOP 17.5 1.5 31%	Next Executive Pr (%) Chg Wk. bid-ask DEM 56.1 0 2% GOP 42.6 0 0% OTH 1.2 -0.2 n.m.

src: intrade.com; bid-ask are not points, but spread as a percentage of the bid.
IMPORTANT DISCLAIMER: this is just an informational note and not a solicitation or recommendation to buy or sell securities and there is no guarantee implied and people can lose all money on all investments. Numbers are believed to be correct, but do your own math and make your own conclusions or consult with an advisor before making any decisions.

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2008 Just the Numbers: Week 11

NEW TABLES, BOUNCE IN BIDS

The bid-offers have tightened in the week, which accounts for the large changes. Either that or there is a sampling bias associated with my practice of picking up these figures at week's end, when fewer bids are being made. The source prefers to do their charts on the offer (I've included new hyperlinks to them at the head of each table), but I prefer the bid.

BETTING AGAINST McCAIN?

That said, the widening of the bid-offer spread on the McCain in the Presidential contracts doesn't have an obvious explanation, as there wasn't especially thin volume. If fact, the regular size volume suggests that someone might be betting against McCain and driving the price down ...

GOP FIELD IS "OPENISH"

The GOP field is more open still than the democratic one, with 21% of the probability distribution outside the top three leaders. In contrast, the Dem field is more narrow, with 15% outside the top three.

EARLY RISKS DIFFERENT CHARACTER THAN LATER ON

Used to reading polls, people may think it is too early to think about these figures. However, there is arguably "smart" money to be made, potentially, by taking risks early, before races turn binary.

For instance, betting against this combo gains some 31% (before trading costs) perhaps by Super Tuesday, less than a year away on Feb 5: On the Democratic side, Gore, Edwards, Biden, Clark; on the Republican side, Hagel, Gingrich, Huckabee, and Brownback.

[n.b. refer to contract specification for details - contracts do not technically settle on Super Tuesday and unwinding trades before then would include paying the bid-offer spread, which is currently running at 0.1 for zero-bid candidates - or 0.8 for the eight candidates above, but may not guaranteed].

Next President Pr (%) Chg Wk. bid-ask CLINTON(H) 23.8 13.3 4% GIULIANI 20 3 6% OBAMA 16 15.9 24% McCAIN 9 -14.3 100% GORE 7.1 -12.9 10% ROMNEY 7 -0.5 11% EDWARDS 6 6 15%	2007 Week 11: GOP regulars unhappy with field, so Fred Thompson percolates in week; Newt in infidelity admission; Obama/Clinton forced to pronounce on "immorality"; Plame testifies; Gonzales "takes full responsibility". Dodd announces; Hagel fails to announce at his announcement.
GOP Nominee Pr (%) Chg Wk. bid-ask GIULIANI 40.1 0.1 4% MCCAIN 22 -2 3% ROMNEY 16.1 -2.2 2% THOMPSON(F) 7 6.8 7% HAGEL 2.3 -1.2 39% GINGRICH 3.7 -0.8 16% HUCKABEE 2.5 0.1 16%	DEM Nominee Pr (%) Chg Wk. bid-ask CLINTON 44.9 0.7 0% OBAMA 29.7 -0.1 2% GORE 10.4 -1.1 2% EDWARDS 8.9 0.3 9% RICHRDSN 4 0.5 2% BIDEN 1 0 n.m. CLARK 0.4 0 n.m.
Senate Pr (%) Chg Wk. bid-ask DEM 75 2 12% GOP 16 -4 50%	Next Executive Pr (%) Chg Wk. bid-ask DEM 56.1 0 2% GOP 42.6 0 1% OTH 1.4 0 n.m.

src: intrade.com; bid-ask are not points, but spread as a percentage of the bid.
IMPORTANT DISCLAIMER: this is just an informational note and not a solicitation or recommendation to buy or sell securities and there is no guarantee implied and people can lose all money on all investments. Numbers are believed to be correct, but do your own math and make your own conclusions or consult with an advisor before making any decisions.

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The Supplemental War

It took a while, but against the backdrop of another $100+ Billion wartime "supplemental", the expansion of the standing army, and General Petreaus' recent re-upping of the surge strength, I dug about for a long while until I could compose this table.

The mis-management of Operation Iraqi Freedom has probably cost the nation billions more than if it had been handled properly.

Here is an interesting metric. The cost of the war in Iraq, if you include conservative estimates for rebuilding the army and military benefits, has probably gone past the sum of ALL costs associated with the "New Deal" welfare programs, what used be called "Aid to Families with Dependent Children" (AFDC under HHS supervision).

In other words, the entire history of "welfare" cost the US taxapayer just about as much as Bush's incompetence in executing the Iraqi effort.

The table below shows the total of Federal AND State expenditures, benefits and administration costs, from 1962 to 1996, when the law was changed. The total is $734 billion in 1996 dollars. (You can make your own back-of-the-envelop inflation from 1996 to 2003, when OIF started.)

Yr	$ B
1962	$3.7
1963	$3.9
1964	$4.3
1965	$4.7
1966	$4.9
1967	$5.6
1968	$6.8
1969	$8.1
1970	$19.1
1971	$22.1
1972	$25.2
1973	$26.
1974	$25.6
1975	$27.2
1976	$28.9
1977	$28.9
1978	$27.9
1979	$26.2
1980	$26.
1981	$25.5
1982	$24.
1983	$24.4
1984	$24.5
1985	$24.6
1986	$25.4
1987	$25.6
1988	$25.3
1989	$24.9
1990	$25.6
1991	$26.5
1992	$28.
1993	$27.4
1994	$27.6
1995	$26.3
1996	$23.7
Total:	$734.3

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When Theories Fail

Zakaria throws down the gauntlet to various development economics orthodoxies:

It might be time to admit that we really don't understand China. The country simply does not conform to our most basic beliefs about what makes nations grow.

Hernando de Soto, the Peruvian scholar, has argued persuasively that clear and strong property rights are the prerequisite for economic growth. Except that China, the fastest-growing country in human history, has an extremely unclear and weak system of property rights.

Alan Greenspan has argued that the rule of law is the linchpin of market economics. Except that China has a patchy set of laws, unevenly enforced.

The Washington Consensus that the World Bank and the IMF have peddled across the globe claims that if currencies don't float freely, they will produce huge distortions in the economy. China has declined that advice and yet prospers.

So, instead of learning from facts and revising theory, we assume that the facts are wrong, that China is one grand charade.

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Free Markets?: "High and Tight" Collusion

The AP points out transparently naked collusion for military-style "high and tights" near Fort Lewis, Washington. Prices rose nearly 17% in one day.

It's like that Ghandi saying about Western Civilization. Ditto "free markets", eh?

Wash. investigates $7 military haircuts

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Nation's Health Care Crisis Hits the Military ... and GOP in the face

In a long post, Obsidian wings brings the on-going crisis in national health care into relief, against the backdrop of the GOP administered VHA. If it hadn't already, the GOP has lost the ability to run on running the government well, for a while, it would seem.

Based on some of my prior lookups ("You bet it's not just Walter Reed"), VA funding has been handled in the past as a non-defense discretionary part of the budget (there was a bill/movement to change that, but I don't think it passed the GOP controlled Congress - I could be mistaken). That, of course, is the part that most conservatives vote to "limit", even drastically.

Paul Krugman weighs in with the dope, in three parts, poor budgeting, poor execution, and calamitous labor market signalling:

The problem starts with money. The administration uses carefully cooked numbers to pretend that it has been generous to veterans, but the historical data contained in its own budget for fiscal 2008 tell the true story. The quagmire in Iraq has vastly increased the demands on the Veterans Administration, yet since 2001 federal outlays for veterans’ medical care have actually lagged behind overall national health spending.

To save money, the administration has been charging veterans for many formerly free services. For example, in 2005 Salon reported that some Walter Reed patients were forced to pay hundreds of dollars each month for their meals.

More important, the administration has broken longstanding promises of lifetime health care to those who defend our nation. Two months before the invasion of Iraq the V.H.A., which previously offered care to all veterans, introduced severe new restrictions on who is entitled to enroll in its health care system. ...
...
We know from Hurricane Katrina postmortems that one of the factors degrading FEMA’s effectiveness was the Bush administration’s relentless push to outsource and privatize disaster management, which demoralized government employees and drove away many of the agency’s most experienced professionals. It appears that the same thing has been happening to veterans’ care.

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2008 Just the Numbers: Week 10

Next President Pr (%) Chg Wk. bid-ask CLINTON(H) 23.3 -6.5 3.0% GIULIANI 20 2 10.0% OBAMA 17 0.1 14.7% McCAIN 10.5 3.3 42.9% GORE 8 1 22.5% ROMNEY 7.5 0.5 17.3% EDWARDS 5 0 40.0%	2007 Week 10: GOP cat-fight over Coulter; Libby convicted; Bush legal machine tested; Obama and the black vote...ad nauseum; Gingrich admits to affair during impeachment of Clinton.
GOP Nominee Pr (%) Chg Wk. bid-ask MCCAIN 24 -4.5 0.8% GIULIANI 40 7.9 0.3% ROMNEY 18.3 0.8 1.1% GINGRICH 4.5 -0.8 22.2% THOMPSON(F) 2 -2.5 120.0% HUCKABEE 2.4 -0.8 54.2% HAGEL 3.5 -0.4 22.9%	DEM Nominee Pr (%) Chg Wk. bid-ask CLINTON 44.2 -2 0.7% OBAMA 29.8 6.8 0.3% GORE 11.5 -1.3 0.9% EDWARDS 8.6 -1.4 1.2% RICHRDSN 3.5 0 5.7% BIDEN 1 -0.1 n.m. CLARK 0.4 -0.1 n.m.
Senate Pr (%) Chg Wk. bid-ask DEM 73 -2 6.8% GOP 20 0 40.0%	Next Executive Pr (%) Chg Wk. bid-ask DEM 55.2 -0.2 4.0% GOP 42.3 0.3 1.9% OTH 1.6 0.3 n.m.

src: intrade.com

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Of Note: New Coverage from Reuters, Out of Africa

Reuters introduces zippy new coverage for Africa.

The Africa site should be seen as part of our efforts to make sure Africa is covered as well as any other continent.
Columbia Journalism Review, lamenting the reduction of U.S. foreign correspondents, makes the point that the launch comes at a time when Africa is assuming far greater strategic importance to the U.S.

Photographers, much under-praised, get an eye-candy "Photographers Blog"!

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The Haiku - A Meta-meme, not a Trophe

Professor Balkin wittily introduces much needed meme for memes.

Moreover, as a memeticist, I am always on the lookout for new ways for academics to spread their memes ever more widely. The haiku is a far better meme than the abstract could ever be. It entices, it inveigles, it leaves the reader wanting more. The haiku is the delightful amuse bouche to the abstract's dry and tasteless dinner roll.
....
This week, I present a haiku of a recent work of my own, and one I wrote in honor of Sandy Levinson's latest book.
Original meaning,
The Living Constitution,
Are one and the same.

Abortion bans are
Compulsory motherhood,
Class legislation.

I might attribute this one, in my own rephrase, to the inimitable Ingo Walter (from whom it may have originated or not, I don't know):

Post-graduate education,
Postpone present consumption,
To postpone future consumption.

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Remembering Arthur M. Schlesinger, Jr.

In the Oval Office, 1962.
NY Times Obituary, DOUGLAS MARTIN

Mr. Schlesinger saw life as a walk through history. He wrote that he could not stroll down Fifth Avenue without wondering how the street and the people on it would have looked a hundred years ago.

“He is willing to argue that the search for an understanding of the past is not simply an aesthetic exercise but a path to the understanding of our own time,” Alan Brinkley, the historian, wrote.

Mr. Schlesinger wore a trademark dotted bowtie, showed an acid wit and had a magnificent bounce to his step. Between marathons of writing as much as 5,000 words a day, he was a fixture at Georgetown salons when Washington was clubbier and more elitist, a lifelong aficionado of perfectly-blended martinis and a man about New York, whether at Truman Capote’s famous parties or escorting Jacqueline Kennedy to the movies

Sam Tanenhaus, editor of the NYT Book Review

But Mr. Schlesinger performed a different function. He stood at the forefront of a remarkable generation of academic historians. Richard Hofstadter, who died in 1970, and C. Vann Woodward, who died in 1999, were its other towering figures. All three, reciprocal admirers, wrote classic works that reanimated the past even as they rummaged in it for clues to understanding, if not solving, the most pressing political questions of the present. As a result, new books by these historians often generated excitement and conveyed an urgency felt not only by other scholars but also by the broader population of informed readers.

“The Vital Center,” which Mr. Schlesinger expanded from an article he wrote for The New York Times Magazine in 1948, began with a ringing series of declarative sentences.

“Western man in the middle of the 20th century is tense, uncertain, adrift,” Mr. Schlesinger wrote. “We look upon our epoch as a time of troubles, an age of anxiety. The grounds of our civilization, of our certitude, are breaking up under our feet, and familiar ideas and institutions vanish as we reach for them, like shadows in the falling dusk.”

ROBERT B. SEMPLE, JR.

All this, though, was a mere prelude to Mr. Schlesinger’s own brief reflections, as he put it, on the “relevance of history. ” His first point was that historians themselves are prisoners of their own experience, committed “to a doomed enterprise — the quest for an unattainable objectivity.” It was a disarming way of acknowledging the critics who had suggested that he, at times, had shaped history to fit his own liberal agenda. It was also a summons to other historians to be willing to concede error and revisit the past.

But a far more grievous failing, he said, is to ignore history altogether, especially in a nation that has so often demonstrated imperial appetites.

By Evan Thomas, Newsweek

Schlesinger was, in some ways, a walking reproach to modern academic historians. He believed in writing from experience, and he argued that individuals—and not just broad social and economic movements—shaped history.
...
Schlesinger could see that young Bush was developing a lifelong hatred of liberal intellectual elites out of the personal experience of being shunned by them. This insight always stayed with me as I watched Bush govern with a certain lack of intellectual curiousity and a visceral disdain for anything that The New York Times might try to tell him. Schlesinger understood that early personal experience could shape leaders and that leaders shaped history with their prejudices and cultural baggage.

Princeton Historian, Sean Wilentz:

Many of Arthur's critics complained that his political opinions tainted his writing about the past, and robbed it of objectivity. The criticism was unfair. Arthur knew that objectivity is not the same thing as neutrality. He presented his historical arguments with abundant research and powerful logic, bidding others to challenge his conclusions. And he was always willing (with a graciousness uncommon among professors) to admit when he was wrong. He often quoted the great Dutch historian Pieter Geyl, that "history is argument without end". Historical truth, or its closest approximation, does not arise perfected from the writings of all-knowing, objective historians, but from those unceasing arguments.

Schlesinger's 2007 short essay on Ronald Reagan, here:

He radiated civility and took disagreement in stride as a natural part of political life. He held together the Republican Party, that incongruous partnership of the country club and the revival meeting.
...
In the end, he failed to shrink big government.
...
The Reagan legacy? In 1995, Newt Gingrich's "Contract With America" was supposed to complete the Reagan Revolution. It sank with hardly a trace, and Gingrich with it. Especially after 9/11, the antigovernment fever seems to be waning. Reaganism may prove to be a transient episode in the stream of American history. Yet memories will remain of Ronald Reagan himself as a gallant human being riding into the sunset of his life in a glow of national affection.

On how History will remember 9/11:

Arthur Schlesinger Jr.: It all depends how we handle what comes next. We now have the possibility of going to war with Iraq and destabilizing the entire Arab world. The question is whether September 11 will lead to another global war, in which case it will be salient in memory, or whether it will lead to containment of Saddam Hussein and police and intelligence work against terrorism. In that case, it’s likely to end up more like Feb. 15, 1898, which was when the battleship Maine exploded—an important event that has faded in memory.

Schlesinger: I agree with Alan. I think that we are in a very dangerous relationship with the rest of the world. The go-it-alone policy of the United States—of the present administration—shows a certain amount of condescension and contempt for international institutions and for international opinion. After all, we may be omnipotent, but we’re not omniscient.

Fellow Historian David Brinkley:

If the nose is a conduit to memory, then Arthur never forgot the stink of Sen. Joseph McCarthy. There was nothing he despised more than right-wing bully-boys. With a few exceptions, like the old Nelson Rockefeller crowd, he found Republicans repugnant. But he didn't care for the hard left either. The whole Beat Generation and counterculture left him cold. Jack Kerouac and Abbie Hoffman were, to his mind, sloppy thinkers who didn't have our nation's best interest at heart. As his 1949 book, "The Vital Center," made clear, he found extremists of all kind to be flaming idiots.
...
Nobody enjoyed kibitzing about the crosscurrents of the past quite like Arthur. Over lunch he'd tell you about Grover Cleveland's affairs or Woodrow Wilson's wife as if these risqué tidbits were worthy of tomorrow's "Inside Edition." Dramatizing how short a span of 220 years was, at a bistro back in 1996, Arthur, a deep wrinkle between his eyes, abruptly asked me to shake his hand across the white-linen table. Dutifully, I did. "Just imagine," he said. "You just shook the hand that shook the hand that shook the hand of a Revolutionary War general."

The lesson was clear: Our democratic experiment is very, very young in the scope of world history

HILLEL ITALIE, AP obit in NY Sun:

"What sort of people are we, we Americans?" Schlesinger asked at a commencement speech given the day after Kennedy's fatal shooting. "We are today the most frightening people on this planet. ... We must uncover the roots of hatred and violence, and, through self-knowledge, move toward self-control."

Being a liberal, Schlesinger once observed, means regarding man as "neither brute nor angel." Whether discussing the Kennedys, Vietnam or the power of the presidency, Schlesinger sought moderation, the middle course. He blamed the Vietnam War on the moral extremism of the right and left and worried that the executive branch had become "imperial," calling for a "strong presidency within the Constitution." He saw American history itself as a continuing "cycle" between liberal and conservative power.

NY Sun Editorial Board:

So we invited the great historian to put it down in writing, which resulted in the publication, under Schlesinger's byline, of one of the oped pieces we've enjoyed the most in the Sun. It ran under the headline "Hold On There, He's Ours." The piece said that Hamilton's hero was not Adam Smith but Jean-Baptiste Colbert, who, Schlesinger wrote, invented the French commitment to statism and was a mercantilist who believed in state planning and regulation. "The idea that the free market could regulate itself Hamilton called ‘a wild speculative paradox,'" Schlesinger wrote. And he ended his piece by calling on New Yorkers to applaud the Manhattan Institute for celebrating "the father of big government in America."

William F. Buckley, Jr.

He died in New York on February 27, after being struck by a heart attack at dinner in a restaurant, and I think back on the lunch we shared after the funeral of Murray Kempton, ...

The Harvard Crimson:

He wrote in a 2000 memoir that his childhood spent living in the shadow of Radcliffe Yard (where the Schlesinger Library named for Schlesinger, Sr. and his wife Elizabeth Bancroft Schlesinger now stands) was “a generally sunny time,” occupied by the exchange of letters with prominent Baltimore journalist H.L. Mencken and his parents’ Sunday teas that entertained Harvard professors and students alike.

“There was an innocence about growing up in those days,” recalled the perennially bow-tied Schlesinger in “A Life in the Twentieth Century: Innocent Beginnings.”

He arrived on the second floor of Thayer Hall as a freshman in the fall of 1934. Tuition was $400; room and board totaled $700.

Ted Widmer, The New York Observer:

One always pulls down the old books at a moment like this, seeking contact with a friend. In one of them, The Politics of Hope (1963), there’s an essay that Arthur wrote about Bernard De Voto, another gifted historian too seldom read. He ended the essay with a passage that De Voto had written about Mark Twain, but which also seemed to be about Arthur himself, and the great historian who’d inspired him. I repeat it here, with the same feeling of gratitude:

“Pessimism is only the name that men of weak nerves give to wisdom. Say rather that, when he looked at the human race, he saw no ranked battalion of the angels …. Say that with a desire however warm and with the tenderness of a lover, he nevertheless understood that the heart of a man is wayward, a dark forest. Say that it is not repudiation he comes to at last, but reconciliation—an assertion that democracy is not a pathway to the stars but only the articles of war under which the race fights an endless battle with itself.”

-Arthur M. Schlesinger, Jr. page at the Kennedy Presidential Library
-Featured author page from NYT Book Review.

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The Political Economy of Foreign Relations: Raw

Spengler has penned a raw piece with a theory and some observations on economics-driven foreign policy conclusions:

During the Cold War, the Soviet Union was the spoiler, seeking advantage from instability, while the United States sought to maintain stability. In financial parlance, the Russians were long volatility; they stood to exercise their political options opportunistically, and the more chaotic and uncertain the state of the world, the better for Moscow. For the past 20 years, though, it is Washington that is long volatility; in the absence of a contending superpower, instability frightens all contending parties into seeking help from Washington. The more unstable and uncertain the world, the stronger the position of the United States. Whether or not the US recognizes this is beside the point; the fact that President George W Bush has made a dog's breakfast of Iraq makes America's world position stronger.

...

Professor Niall Ferguson of Harvard observes that world markets anticipated the outbreak of neither World War I nor II

It's an interesting proposition, but I think that the converse might be true. As the hegemon, sustainer of the Pax Americana, the U.S. is short volatility.

He goes on to the "hard truth", which is that no economic linkages implies no concern about violence:

Bernard Lewis observed that the entire Arab world, except for oil, exports less than the 5.2 million people of Finland. The economic significance of the Shi'ites of Iraq and Lebanon is negligible; the Palestinians represent a net drain on the world economy, as consumers of subsidies. If space aliens were to transport all of them to another planet Tuesday next, world markets would not notice. By the same token, if the Sunnis and Shi'ites of Iraq and Lebanon were to eat each other up like the Gingham Dog and the Calico Cat, and the Palestinians of Gaza were to annihilate one another, the impact on the world would fall below the threshold of observation. I do not mean to suggest that this would be a good thing, for human tragedy never is a good thing; I mean only to state the obvious, that it would not be a matter of material importance for anyone else.

In a unipolar world, what happens to the perceived benefits of the Pax Americana as a public good, except that the perception of the marginal benefit goes to zero?

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Just the Numbers: Week 9

Next President Pr (%) Chg Wk. bid-ask CLINTON(H) 20 1.5 49.5% GIULIANI 19 1.8 4.2% McCAIN 17 -0.1 17.1% OBAMA 15 -7 32.7% ROMNEY 7 1.4 28.6% GORE 7 -1.1 11.4% EDWARDS 5 -0.3 70.0%	2007 Week 9: GOP at C-PAC (except McCain); Guiliani at Hoover (home of econ advisor Boskin); Obama at AIPAC; Coulter calls Edwards "Faggot"
GOP Nominee Pr (%) Chg Wk. bid-ask MCCAIN 28.5 -1.8 6.7% GIULIANI 32.1 2.7 3.7% ROMNEY 17.5 1.4 2.9% GINGRICH 5.3 0.6 32.1% HUCKABEE 4.9 0.7 20.4% HAGEL 4.3 0 2.3% BROWNBCK 3.2 -0.3 25.0%	DEM Nominee Pr (%) Chg Wk. bid-ask CLINTON 46.2 -2.1 3.5% OBAMA 23 0.7 5.7% GORE 12.9 -1.5 1.6% EDWARDS 9.9 3.9 1.0% RICHRDSN 2.6 0 3.8% BIDEN 1.1 0.1 n.m. CLARK 0.4 0 n.m.
Senate Pr (%) Chg Wk. bid-ask DEM 75 -5 6.7% GOP 20 0.1 25.0%	Next Executive Pr (%) Chg Wk. bid-ask DEM 55.4 -1.2 2.9% GOP 42 0.5 1.4% OTH 1.3 -0.3 n.m.

source: intrade.com; bid-ask are not points but spread as a percentage of the bid.

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2008 GOP Candidates on Taxes: Mitt Romney

For reasons that are inscrutible, I'm moving the series on 2008 Candidates and taxes to this blog.

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Voodoo Economists, artist Mark Kostabi.
Mitt Romney seems posed to take the mantal of atavistic economic policy.

I'm not sure if I've got all this right, but this is what I understand so far:

Romney (advised by Mankiw, among others): No new taxes, no "wartime" tax, extend the repeal of the estate tax; the problem is with line-item veto, tax-code complexity, and ... tort-reform (of course) and doing 'something other than CAFE standards'.

ref: Detroit Econ Club Speech

POSE AND PANDER

So, what does combining social division of the electorate and pandering to the super-rich get you?

The AP is reporting this afternoon that Team Romney is seeing the dollar signs and raising some pretty astounding figures off of their website, mittromney.com — to the tune of $1.4 million in one month!

Romney’s website has been taking donations since January 3, and up to the beginning of this week, one month’s time, they have raised $1.4 million - on top of the nearly $7 million raised in one day after Romney announced his exploratory committee.

The numbers are even more significant when compared to Howard Dean, the darling of the online community, and his campaign last year. It took him two months to even reach the $1 million mark - and that was a full year after he created his campaign committee. Add to that the fact that Democrats have always been able to raise more than Republicans on the web, and you’ve got a powerful contender in the money race with Mitt Romney. link

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2008 GOP Candidates on Taxes: Rudy Guiliani

GOP Nominee hopeful, Rudy Giuliani gave on 2/26 what some see as his first heavy policy speech, covering his economic views on health care and taxes:

According to the NY Sun, "Mr. Giuliani's campaign also said yesterday that a former Republican nominee for governor of California, Bill Simon, has signed on as Mr. Giuliani's policy director, and that a senior fellow at the Hoover Institution, Michael Boskin, will serve as the former mayor's chief economic adviser."

I SWITCHED PARTIES BECAUSE OF ... TAX POLICY FROM THE 1960s...

Elevating his economic policies to "Freedom" itself, Rudy tried out what promises to be as good (and as true) an election phrase than "Compassionate Conservatism":

“The Republican party is the party of the people,” said Giuliani. “The Democratic Party is the party of government.”

Sadly, what he seems to want is freedom from taxes equated to freedom of the people:

Democrats, he said, would want to raise taxes to pay the higher costs of a war.

"That shows a dividing line, and to me, a misunderstanding of how our economy works," Mr. Giuliani said. He said that while Republicans believe that the American economy is "essentially a private economy," Democrats "really believe, honest, that it is essentially a government economy.

"Citing the tax cuts of President Kennedy, Mr. Giuliani said the Democrats' move away from a low-tax policy was one reason he left the party to become an independent and later a Republican. - NY Sun

One supposes that Gerald Ford's failed "WIN" initiative and Nixon's wage-price controls were ... not meaningful? Even Ronald Reagan raised taxes early on in his administration, so ...

Paradoxically, there is this, perhaps a reference to Johnson's "War on Poverty" (something that I vaguely recall Reagan harping on in his campaigns or rhetoric):

"I would say to myself Democrats care about the poor and Republicans don't, and how can I join the party that doesn't care about the poor," Giuliani said. "I finally came to the conclusion that we care about the poor more."

I cannot think of any sizable efforts for the poor that haven't involved re-distribution of income. "Care" apparently doesn't include "expense"?

MY ECONOMIC POLICIES ARE FREEDOM ITSELF

If you thought you'd heard this M. Friedman-like line before, you have. Boskin is Mliton T. Friedman Professor at Stanford.

Notice the subtlety: if one has a different view of tax policy, it's not different values or responsibility toward the next generations, but a misconception, a misunderstanding of a technical matter, possible, of "how the economy works".

Conservative blogger Captain Ed picks up on the elements that reflect the tension with the conservative party:

[Giuliani] wants to emphasize a more libertarian approach for the Republican Party -- free markets and smaller government.

HIS PLEDGES, SO FAR: NOT 'NOT NEW TAXES' BUT 'LESS TAX'?

I cannot find a copy of Giuliani's remarks, but reports are that he stuck to platitudes, rather than propose specific policy. However, what he has said so far seems to suggest lower or less taxes, from current levels, than the expected 'No New Taxes'.

edit: including at C-Pac on 3/2: 12:25 p.m. - “I don’t just believe in lowering taxes, I did it…”

Background:

About Dr. Boskin (from Giuliani campaign press release):

Michael J. Boskin is T. M. Friedman Professor of Economics and Senior Fellow, Hoover Institution, Stanford University. He is also Research Associate, National Bureau of Economic Research. He served as Chairman of the President’s Council of Economic Advisers (CEA) from 1989 to 1993 and chaired the Commission on the Consumer Price Index.

Dr. Boskin serves on several corporate boards of directors, including Exxon Mobil Corporation, Oracle Corporation and Vodafone PLC, several philanthropic boards, and is a consultant to numerous other businesses and government agencies

In addition to Stanford and the University of California, he has taught at Harvard and Yale. He is the author of more than one hundred books and articles. He is internationally recognized for his research on world economic growth, tax and budget theory and policy, Social Security, U.S. saving and consumption patterns, and the implications of changing technology and demography on capital, labor, and product markets.

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