Is Liberal Democracy Viable?

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BlaiseP

BlaiseP is the pseudonym of a peripatetic software contractor whose worldly goods can fit into an elderly Isuzu Rodeo. Bitter and recondite, he favors the long view of life, the chords of Steely Dan and Umphrey's McGee, the writings of William Vollman and Thomas Pynchon, the taste of red ale and his own gumbo. Having escaped after serving seven years of a lifetime sentence to confinement in hotel rooms, he currently resides in the wilds of Eau Claire County and contemplates the intersection of mixed SRID geometries in PostGIS.

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83 Responses

  1. Avatar Kolohe says:

    The idea that Japan is more of a liberal democracy than the US, is well, wrong. (The Liberal Democratic Party is the Holy Roman Empire of 20th century misnomers)

    I’m trying to digest the rest of this; as usual, there are parts that are interesting, parts that are provocative, parts that are truth, and parts that are some combo on all three, but I’m still deciding which bin to sort some of it.Report

    • Avatar BlaiseP in reply to Kolohe says:

      I wondered about including Japan. I only did so because over the last few years, the Japanese have developed a stronger government social safety net to deal with the failure of the corporate safety net. Things got pretty awful after 2008. The Japanese were shamed into doing something about the wave of evictions and homelessness.

      But the Japanese are the best example I can find for the ethnic roots of Us versus Them.Report

    • Avatar smarx in reply to Kolohe says:

      Japan is always an interesting nation to examine when it comes to western ideals. Yes, it has adopted many western customs since the Meiji Restoration, but they don’t practice those customs in the same way. And, its federal bureaucracy would make any anti-statist’s head implode if they tried to comprehend it.

      If I were still in graduate school, and had more free time, I’d love to speculate how libertarianism would work within a Japanese framework.Report

    • Avatar Brandon Berg in reply to Kolohe says:

      It may be worth noting that Japan’s Liberal Democratic Party is actually the Liberal-Democratic party. That is, it was formed from a merger of the Liberal Party (???, literally “freedom party”) and the Japanese Democratic Party (?????).Report

      • Avatar Brandon Berg in reply to Brandon Berg says:

        WordPress seems to have eaten the Japanese characters, but I guess anyone who would have recognized them can figure out what they would have been anyway.Report

        • Avatar BlaiseP in reply to Brandon Berg says:

          It’s also worth nothing that Minshutou, the Democratic Party of Japan, is in the majority and is mostly left-ish.Report

          • Avatar Kolohe in reply to BlaiseP says:

            Now they are. It only took them a half a century to finally break the one party monopoly. (New York City has a more vibrant democracy that) (So does Los Angeles) (but not Chicago)Report

            • Avatar BlaiseP in reply to Kolohe says:

              Yeah. That’s a cogent observation. Japanese society, especially its democracy, defies any attempt to define it in any terms we’d understand in the West.

              I’m not sure how well you speak or read Japanese, or how long you spent there. Any outsider who says he understands the Japanese is only deluding himself. The Japanese are equally deluded: they entertain some rum ideas about their own cultural superiority, as do Americans, for equally specious and mythical reasons. I ascribe most of these differences to the fact that Japan went directly from a feudal society into modern times without any intervening Enlightenment period. Hell, you can’t even describe Japanese society using English words.

              Japanese have their own forms of internal dissent. We seldom see them in the West. Everything significant is nemawashi, furtive and usually drunken coalition-building to achieve consensus. When the actual “meeting” occurs, everything significant has already been discussed. The Great Recession went through Japan like a dose of salts. It got awfully ugly. If Minshutou wants to build a new modus vivendi for Japan, it’s based on ancient Confucian principles. We’re not going to Get It, from where we sit.Report

              • Avatar Tom Van Dyke in reply to BlaiseP says:

                Is Japan’s democracy “liberal?” That’s the prob I see here, Hamas democratically elected, Muslim Brotherhood on the rise. We routinely put “liberal” and “democracy” together, but although they’re left, are nanny states liberal? What of “conservative” regimes like Islamic republics or say, Singapore?

                [Let’s assume they enjoy majority support. Let’s say that Putin is the legitimate people’s choice.]Report

              • Avatar North in reply to Tom Van Dyke says:

                I myself know only enough about Japan to know that I don’t know a damn thing about them. That said it seems to me like that expensive island nation in the east is an especially unique and unusual sort of bird in the flock of nations.Report

              • Avatar BlaiseP in reply to Tom Van Dyke says:

                To a surprising extent, it is liberal these days. It’s shameful to fail but in the face of tens of thousands of people failing through no fault of their own, something deeper kicks in. Now it could be stretching things a bit to say this Japanese response is “liberal” but as I was trying to point out, everyone’s a damned old liberal when they realise they’re all in the same lifeboat. But let the disaster move off and the flood waters recede, the old mindsets reappear and we can sneer when the President says “You didn’t build that.”Report

              • Avatar Tom Van Dyke in reply to BlaiseP says:

                Thx for the reply, Blaise. Lifeboat rules are the antithesis of “liberal” to me, tho. Leftist, fascist, whathaveyou, but notnotnot liberal.Report

              • Avatar Kazzy in reply to Tom Van Dyke says:

                “Lifeboat rules are the antithesis of “liberal” to me, tho.”

                Why?Report

              • Avatar BlaiseP in reply to Tom Van Dyke says:

                YW, Tom. I’ve said elsewhere it was an unfortunate metaphor, said it to Roger earlier iirc. All metaphors fail at some point, this one particularly early. But I do hope you’ll agree on the Us versus Them trope, which could develop in the lifeboat too.Report

              • Here’s the thing, BP: Fascists kill other people, commies kill their own. I mean, faced with a choice…Report

              • Avatar smarx in reply to BlaiseP says:

                1. I think some of Japanese democracy can be described by western terms. Bureaucrats in the Energy Ministry letting TEPCO get away with sub-standard nuclear reactor? Regulatory Capture. Politicians getting votes by blasting tunnels through mountains and bulld rail lines to podunk fishing villages (before Japan Rail was privatized)? Bridges to Nowhere. But, the big picture is really messy.

                2. Even Japanese religion doesn’t conform to western standards, but that’s another topic completely.

                3. I spent over three years in Japan, and there’s still a lot I don’t understand. Hopefully I’ll get the chance to go back again.

                4. Japan sort of had an Enlightenment Period. Rangaku scholar, samurai, and founder to Keio University, Fuzukawa Yukichi is considered the Father of Japanese Enlightenment. However, he and his ilk’s impact was short lived when Japan’s conservative side reasserted itself in the beginning of the 20th century. Public schools became center’s for military indoctrination and emporer worship, while the censors came out of the woodworks.

                5. While in Japan I quickly discovered that many of english translations for Japanese words were not perfect translations. Even something as simple as “tori” would create confusion about whether I was talking about birds in general or a chicken. Then there are the words that are spelled the same way, but have a different kanji and mean something completely different. “Hana” can mean both nose and flower. A lot of words and phrases don’t translate well at all.

                5. Just before Minshutou defeated the LDP a doctor told me that his guild/organization was pressuring everyone to vote for the LDP. The younger members, like himself, weren’t keen on the idea. So, they all said they were going to vote for the LDP, but actually planned to vote for Minshutou.

                6. I don’t have too much hope for Minshuto. It’s founder, Ozawa, is a great organizer and he really knows how use populism to his advantage. But, during the run-up to the 2009 elections they started promising the sun, the moon, and the stars – getting rid of the Marine bases in Okinawa, fixing the national pension system, getting rid of tuition fees for public high schools, and taking power from the bureaucrats and giving it to the politicians. The last one didn’t sit well withe bureaucrats, especially in the Justice Ministry, and suddenly Ozawa and his assistants were on trial for campaign finance irregularities. So, Ozawa lost his chance to be Prime Minister and Hatoyama replaced him, and then there convenient leaks that Hatoyama didn’t report a large donation from his mother. After that prime ministers seemed to come and go with every new month. Now the Japanese government is as effective in governing as the current US Congress…. and, Ozawa has created another party and is promising to shut down all of Japan’s nuclear reactors.Report

      • Avatar smarx in reply to Brandon Berg says:

        If I remember correctly Dower’s “Embracing Defeat” (which covers a big chunk of the reconstruction period) states that the Liberal Democratic Party was basically formed wholecloth from the politicians who ran the Diet during the Pacific War… which explains why the LDP has a tradition of sending people every so often to the Yasukuni Shrine….

        Macarthur’s people didn’t get around purging the nationalists from the political sphere because they were needed to grease the wheels and get the economy moving so Japanese companies could manufacture supplies for the Korean War.Report

  2. Avatar James Hanley says:

    I think this post conflates two conceptions of liberalism; the classic liberalism that is inherent in the term liberal democracy, and the modern liberalism of the FDR and LBJ type.

    And the idea that liberal democracies are all small and homogenous seems beggared by the evidence. The U.S. is neither small nor homogeneous. Canada manages a liberal democracy despite that great heterogeneous lump called Quebec. Great Britain has managed to maintain a liberal democracy despite the heterogeneity of Scotland and Wales (although I’d say Northern Ireland puts the liberalness, if not the democraticness, to the test). The EU is currently the world’s most ambitious democratic project, despite being both larger and more heterogeneous than any other extant liberal democracy (although we may find in time that it’s not such much a liberal democracy as a bureaucratic democracy). It’s all a lot messier and less neat than supposed in this post.Report

    • Avatar BlaiseP in reply to James Hanley says:

      The question, as posed, was “Is Liberal Democracy Viable?” I wasn’t asked to distinguish classical liberalism from modern liberalism. The USA is not a liberal democracy. It’s profoundly conservative, even its liberals look more like rightist moderates than anything in Europe or elsewhere. Canada’s got its own problems, all of which arise from ethnic problems such as the Quebecois. The Scots and Welsh aren’t exactly immigrants, they don’t belong in that stack.

      Everyone else says “Don’t Tread on Me”. Liberals say “Don’t Tread on Us”. The rest is just semantics. Who’s “us” anyway?Report

      • Avatar Burt Likko in reply to BlaiseP says:

        The USA is not a liberal democracy. It’s profoundly conservative.

        I don’t agree. I’d agree that there is a profound streak of conservatism in U.S. culture. But I’d also point out that our culture is not monolithically conservative, nor is it immalleable. Further, culture is not government; government and law are structures built upon the culture.

        “Liberal democracy” calls to mind what I think you refer to as “classical liberalism,” which it seems to me is far from gone. The notions that the government has limits, that individual people have rights, and that political legitimacy dervies from the consent of the governed are very much at play in contemporary political dialogue.

        It’s true that we’ve broken down into, mainly, two camps with opposed constellations of positions on a spectrum of issues and we’ve labelled them “liberal” and “conservative.” Those labels seem more than a little bit arbitrary to me at times. But it’s worthwhile to note that members of both camps labor to claim that they are the true intellectual heirs of the liberal philosophes of the seventeenth and eighteenth centuries.Report

        • Avatar BlaiseP in reply to Burt Likko says:

          We are a conservative people. Look at our mouldy, untidy old Constitution. Nobody’s ever pulled the trigger on a Constitutional Convention. It’s like the Qu’ran: Islamic scholars are still debating some of the antique Arabic in which it was written. Look at all the Second Amendment blether being bandied about by well-meaning persons hereabouts. What did they mean, those Saintly Heroic Founders? Nobody knows. And look at the great freight of law hanging on the Commerce Clause and the Fourteenth Amendment. What was once a working document has completely lost relevance in our times. It’s become theology, not law.Report

          • Avatar Ryan Noonan in reply to BlaiseP says:

            I’ll agree with this much: the way we talk about the Constitution is utterly embarrassing. Every time it comes up, a large group of otherwise quite sensible people just completely take leave of their senses. It really does become an exercise in parsing the cryptic utterances of sages, and it has less than nothing to do with running a country.Report

      • Avatar James Hanley in reply to BlaiseP says:

        ” I wasn’t asked to distinguish classical liberalism from modern liberalism

        Unfortunately, in this kind of discussion, it’s necessary to make the distinction. Because being a “liberal democracy” really has nothing to do with whether a country’s public is liberal or conservative in policy terms.Report

    • Avatar Kris in reply to James Hanley says:

      I agree with James here and will add a couple of points.

      It shouldn’t be surprising that liberal democracies aren’t particularly ethnically diverse in general since most countries in the world, democratic or not, aren’t particularly ethnically diverse in general. I was looking at statistics on diversity and was surprised how homogeneous most countries are. The U.S. and some of the countries that were created by having boundaries imposed on them are the exception here.

      Israel is a small and unique country, so maybe they don’t prove much, but they have also succeeded economically and as a democracy. (The problems with Palestine don’t change the fact that within Israel, there has been success.) And Israel is about 75% Jewish, 20% Arab, 4% other. And there is a lot of diversity amongst the Jewish population, too: Russian Immigrants, longer term residents, etc. etc. Israke a data point, anyway.

      Canada, Australia, and the U.K are not exactly ethnically homogeneous, even though hey are whiter than the U.S. And the U.S. is fairly white if you count hispanic as a subset of white.Report

      • Avatar BlaiseP in reply to Kris says:

        Israel’s children are leaving in a reverse Aliyah. Those who remain are prisoners in a jail, locked from within, paralysed by ultra-Conservative factions. And let us not talk so blithely about the State of Israel’s ethnic diversity: they are busily engaged in a massive act of self-deception, stealing land from non-Jews and installing Jews upon it. It is a Jewish Nation, as I’m sure you’re willing to admit, but two laws govern it, the Law of Return for Jews and the Citizenship Law for Arabs. While both remain on the books, nothing more needs to be said on that front.

        Since you know so much about ethnic diversity, you might tell us how the case of the Israeli citizen Adel Kadaan went down.Report

        • Avatar Kris in reply to BlaiseP says:

          I didn’t mean to start a debate about any of those things. All I meant to say is that a.) the population of Israel within the 67 borders is ethnically diverse, b.) the country as defined by those borders is fairly wealthy and prosperous, and c.) if (maybe that is a big if) the parties can reach a two-state solution, the country is likely to be very stable and viable indeed.

          If you disagree with any of a, b, or c, let me know. I know very little about Israel and am open to being convinced.Report

          • Avatar BlaiseP in reply to Kris says:

            Of course you did. Your point was that the State of Israel is a contradiction of my point about ethnic solidarity forming a pillar of the Us versus Them Syndrome.

            Kris, if there’s any one country which proves my point, above any other democracy in the world, it is the State of Israel, founded upon the basis of ethnic identity. While Israel maintains two separate laws, one for Jews and the other for Arabs, it isn’t an inclusive democracy, as the Adel Kadaan case proved, beyond any wriggling about or equivocation.

            The early kibbutzniks were awfully liberal, even socialist. But they’re all gone, them and their good intentions, tucked away in tidy little graveyards. Those few Liberals who remain are little more than chevra kaddisha, tending to the corpse of a noble sentiment, that Jews and Arabs could ever live in peace together.Report

            • Avatar Kris in reply to BlaiseP says:

              We’ve misunderstood each other, I think. I agree that its intuitive that there would be more Us vs Them thinking in a country with more religious, ethnic, and racial diversity. That is obvious. In fact, I agreed with a lot of your OP, though I couldn’t quite figure out what your ultimate conclusion was about whether liberal democracy is viable. The post seemed to be a stream of consciousness of interesting thoughts about liberalism and democracy with no fixed conclusion at the end of it.

              I just wanted to disagree that somehow liberal democracy can’t work in a place that is too diverse. (I hear this all the time.) Maybe you disagree? Indeed, I would assert that heterogeneous societies do better under liberal democracy than other forms of government. And perhaps more specifically, I wanted to say that liberal democracy, even in a very heterogeneous Israel is viable.

              Or put slightly differently, which of my claims a, b, and c do you think are false?

              I recognize that there are incredibly strong ethnic tensions in Israel and a lot of horrible discrimination against Arab Israeli citizens. I suppose I was suggesting that even in these horrendously difficult conditions, liberal democracy is surviving in Israel. (Don’t get me wrong, I am very critical -to the extent I understand the issue- of Israeli policy towards its Arab citizens and even more so of Israeli’s treatment of Palestinians in the occupied territories.)

              Maybe this isn’t relevant, but I would think this is part of the reason why Israel survives as a Liberal Democracy even while aimiming unjust treatment at roughly 20 percent of its citizens: “Inequality in the allocation of public funding for Jewish and Arab needs, and widespread employment discrimination, present significant economic hurdles for Arab citizens of Israel.[205] On the other hand, the Minorities at Risk (MAR) group states that “despite obvious discrimination, Israeli Arabs are relatively much better off economically than neighboring Arabs.”[20”.

              http://en.wikipedia.org/wiki/Arab_citizens_of_Israel#Representation_in_the_Knesset

              That is to say, liberal democracy is so succesful, in terms of rights and economic wealth generation, that even those who are treated unjustly in a liberal democracy are better off than they woud be under alternative systems. Racial and ethnic tension creates problems within a liberal democracy, but liberal democracies ameliorate the worst effects of the racism, especially if there isn’t apartheid of some sort. (And really, any system with apartheid isn’t a liberal democracy.)

              Now that’s not a justification of Israeli Policy towards Arabs. Not at all. But it shows how even a messed up liberal democracy is viable and beneficial.Report

              • Avatar BlaiseP in reply to Kris says:

                This was not a Stream of Consciousness article. It began with a small précis, outlining three questions. I laid out a paragraph attempting to find some common ground in definitional terms and an important stipulation, to keep my many enemies reading: a state solution is the solution of last resort.

                I outlined my thesis: that liberal democracies are small and homogeneous, playing the first twelve bars straight. When it’s just Us, we are all Liberals. When it’s Us and Them, we’re not.

                Then commenced a bit of chromatic harmony, saying everyone’s a Keynesian when the markets crap themselves. To bolster my position, I reinforced the most obvious Liberal deficiency, the colossal failures of the Liberal Wars on Poverty. Statism wasn’t the solution then and it can’t be the solution now. But the Free Market isn’t a solution either.

                Returning to the tonic, I then build a synthetic position, neatly abstracting out the morality of these positions. Liberals can’t win when it’s Us versus Them, which I thought, as I was writing it, to be about as good a summary of the problem as could be summoned up, given the question at hand.

                Stream of consciousness. I wrote an outline, a precis, a summary, threw out about two thirds of what I’d written, pushed paragraphs around, cut out all sorts of rhetorical fat and kept it below a thousand words. Christ, I routinely write longer comments around here.

                Summary. I’ll write this nice and slowly. Liberal democracy works pretty well, when everyone involved thinks they’re part of the “Us” contingent. Let a “Them” contingent appear, all such sentiments disappear immediately.Report

          • Avatar North in reply to Kris says:

            Yeah I hate to agree with BlaiseP on this but the trajectory on your item C there is looking quite terrible. The liberal forces in Israel seem generally to have gone apolitical in despair. The right under Bibi and his clown brigade meanwhile flat out state that they like things just about the way they are now and they fully intend to keep it that way. What that means in practice is the damn fools will continue expanding their land grabs chaining the territories to Israel proper while blithely hand waving away the demographic tide rising about their legs.

            Israel is one of the ultimate us vs them messes. I sure hope that their sleeping majorities clue in before it’s too late or, barring that, that somehow a peaceful multiethnic state somehow comes about despite my pessimism.Report

            • Avatar Kris in reply to North says:

              Yeah, this is a genuinely open question that I don’t really know anything about. But assuming a two state solution, do you really think Israel is at serious risk of some sort of implosion that results in a very different kind of political system.

              I don’t know one way or the other, but I have never heard Israeli friends express a worry that their country is dissolving from within, though there is always the threat of the West Bank turning into a permanent apartheid situation,Report

              • Avatar Kris in reply to Kris says:

                I also agreed with some of this, and most of it in spirit, but not all of it:

                “Let us first dispense with the truisms. Keynes was a man of his time and his truest disciples are all fiscal conservatives.”

                I get that the definition of “liberal” is pretty malleable. Maybe some in the Marxian tradition think Paul Krugman isn’t a liberal. But Keynes’ disciples are pretty hardcore liberals. And the conservatives have moved pretty hard from Keynes (though once we were all Keynsians).

                “When push comes to shove, as it did in 2008, the Conservatives were obliged to apply Keynes’ monetary solutions, if not his regulatory solutions.”

                Yeah, but they didn’t really engage in the kind of or level of stimulus that Keynes would’ve wanted and that his disciples were arguing for, There was almost no fiscal stimulus and far too little monetary stimulus, especially once it was determined that the the Recovery Act was insufficient and QE3 was being debated.

                “For all their much speechifying about the salutary effects of the so-called Free Market, its advocates refuse to address the unhealthy tendency of corporations to pervert and abolish regulations via the consolidation of power”

                Agreed.Report

              • Avatar BlaiseP in reply to Kris says:

                The enemies of Liberalism became Keynesians when every other option had failed. They watched, aghast, as they allowed Bear Stearns to fail. The market took such a gigantic shit, in the immortal words of Dave Barry, describing his colonoscopy:

                MoviPrep is a nuclear laxative. I don’t want to be too graphic, here, but: Have you ever seen a space shuttle launch? This is pretty much the MoviPrep experience, with you as the shuttle. There are times when you wish the commode had a seat belt. You spend several hours pretty much confined to the bathroom, spurting violently. You eliminate everything. And then, when you figure you must be totally empty, you have to drink another liter of MoviPrep, at which point, as far as I can tell, your bowels travel into the future and start eliminating food that you have not even eaten yet.

                We don’t know what Keynes would have proposed in light of the 2008 disaster. We do know what the banks were doing. Spurting violently. We’re still recovering from the mess Hank Paulsen allowed to happen on his watch. I remember watching the news when Paulsen, once the proud head of Goldman Sachs, noted Free Marketeer, had his bald head pushed down hard against the deck and was made to admit the only solution was a Keynesian bailout. It would have been a precious moment if the financial world wasn’t spurting so violently. McDonald’s and IBM were lined up at the discount window, trying to get money to make their payrolls. Most people have no idea how bad it really was.

                It was the largest outlay of government cash at one time in the history of the world. Nothing else even comes close. We also got Cash for Clunkers and some mortgage bailouts and unemployment extensions, none of which came cheap. We bailed out the European banks, not many people know the extent of those bailouts. We shouldered the weight of the world in those few days.

                Yeah, it could have been bigger but I don’t see how. It’s a good thing the banks absorbed all that cash as a balance sheet bolus and didn’t let it out into the world at large: inflation would have gone through the roof. I thought Bernanke did as good a job as could be managed. Had the bailout been much larger, those consequences could have been even more devastating.Report

              • Avatar Kris in reply to BlaiseP says:

                “It was the largest outlay of government cash at one time in the history of the world.”

                WWII?

                “Yeah, it could have been bigger but I don’t see how.”

                By borrowing more money at interest rates that are almost negative. Easy.

                “We also got Cash for Clunkers and some mortgage bailouts and unemployment extensions, none of which came cheap.”

                I’d argue those specific things were pretty cheap. Cash for clunkers was about 3 billion IIRC. The mortgage bailouts were too paltry. UI extensions have a cost, but paying them is the absolute minimum that you can do to stimulate the economy. It’s necessary.Report

              • Avatar BlaiseP in reply to Kris says:

                Note I said “at one time”. Gosh, I’m glad you can say this is Cheap. I wouldn’t say any of this was cheap. Maybe you’re right, we could have done more. Maybe it would have worked. Maybe a larger bailout was needed.

                But the fact remains, Liberals have been trying to say market regulations are important and nobody else thinks so until the markets go crazy.Report

              • Avatar Kimmi in reply to Kris says:

                Mortgage bailouts are now being had atthe expense of Europe.Report

              • Avatar Kimmi in reply to Kris says:

                Zandi and Romney are in the same boat, Keynsians alike.
                I wonder at the observational skills of those who fail to see the hand of the military industrial complex, along with the endtimers of ye old christian religion, in our upcoming war with Iran.
                (well, if Romney gets elected, which be unlikely at best)Report

              • Avatar North in reply to Kris says:

                If we assume two state solution then, yes agreed, the outlook gets much better though the devil there is in the details. But as the economists in the lifeboat with the bags and bags of tin cans say “Assume a can opener”. If you assume away the difficult part what is left is by default easier.Report

              • Avatar Kimmi in reply to Kris says:

                Don’t assume the impossible.Report

  3. Avatar david says:

    How are mass public housing projects that are successful, succeed at all?

    Thinking of East Asia and such. The extreme is Singapore, but Hong Kong had public housing before, through, and after so-called ‘benign neglect’.Report

    • Avatar BlaiseP in reply to david says:

      We’re really not sure, but we have some pretty good ideas. There’s a concept called Section 8, a cobbled-up mess which really doesn’t help anyone. It’s not even particularly good for the landlords who run Section 8 dwellings. The paperwork filed by the renters and the landlords resembles nothing so much as War and Peace, a vast fiction. Section 8 houses drive down the property values of the houses around them, municipalities hate them.

      In a sense, all mortgages in the USA are subsidised through the mortgage interest deduction. We’re not sure how truly private housing would operate in the real world. Presently, the mortgage interest deduction is a monstrous impediment, a huge distortion in the market for real estate.

      Me, I’d reform the public housing system through a system of rent-to-own. Unless the inhabitant views his dwelling with any sense of ownership, he will not maintain it. I’ve done some analysis of this, well, my son did more of it than I did — but we concluded it would actually be cheaper to have built Cabrini-Green and installed occupants on a rent-to-own basis. When Cabrini-Green was first built, it was a lovely place. And segregated, too. Took a big court case to desegregate Cabrini-Green, which set in motion the horror story which followed.

      But there was more to Cabrini-Green than the high rises. There were row homes, still standing. I know that area pretty well, used to go by it every day when I lived in Old Town. It didn’t have to be that bad.

      I believe the key to “public” housing is to get rid of the “public” part. Get ownership into the equation, somehow. Rent-to-own seems like an effective strategy.Report

  4. Avatar wardsmith says:

    Blaise bemoans the status of the Democracy but there is a fundamental difference in outlook that needs to be addressed and understood. Foxworthy supposedly said the following, it might be mis-attributed but it rings of truth especially concerning not so much Democrats and Republicans but Liberals and Conservatives, although the distinction is disappearing:
    If you ever wondered which side of the fence you sit on, this is a great test!

    If a Republican doesn’t like guns, he doesn’t buy one.
    If a Democrat doesn’t like guns, he wants all guns outlawed.

    If a Republican is a vegetarian, he doesn’t eat meat.
    If a Democrat is a vegetarian, he wants all meat products banned for everyone.

    If a Republican is homosexual, he quietly leads his life.
    If a Democrat is homosexual, he demands legislated respect.

    If a Republican is down-and-out, he thinks about how to better his situation.
    A Democrat wonders who is going to take care of him.

    If a Republican doesn’t like a talk show host, he switches channels. Democrats demand that those they don’t like be shut down.

    If a Republican is a non-believer, he doesn’t go to church.
    A Democrat non-believer wants any mention of God and religion silenced.

    If a Republican decides he needs health care, he goes about shopping for it, or may choose a job that provides it.
    A Democrat demands that the rest of us pay for his.

    If a Republican reads this, he’ll forward it so his friends can have a good laugh.
    A Democrat will delete it because he’s “offended”.
    Report

    • Avatar Burt Likko in reply to wardsmith says:

      Then, contrary to available evidence, I must be a Democrat because I don’t think this accurately describes either party’s positions on this spectrum of issues particularly accurately.Report

    • Avatar ktward in reply to wardsmith says:

      Blaise bemoans the status of the Democracy but there is a fundamental difference in outlook that needs to be addressed and understood.

      I totally agree. But the silly e-tripe you posted doesn’t remotely speak to said difference. (Maybe it was a joke that went over my head?)Report

      • Avatar Wardsmith in reply to ktward says:

        And yet it does kt. You don’t like the shoe pinching. This “e-tripe” has it legs precisely because of its truths not falsehoods. This IS how the other side perceives the Left and it is the Left’s own damn fault. I could post 100 more just like it and you’d claim – “bbbbut I’m not like THEM”. And yet you are, more than you realize. The rest is just tribalism.
        I liked where I thought Blaise was going when he brought up the abject failure of “the projects”. The creme de la creme of liberal thought. He glosses over the failure by dropping the subject with no denouement. What have liberals learned from failed social engineering? Kimmie and I had this conversation before but she is no equal to Blaise.Report

        • Avatar greginak in reply to Wardsmith says:

          ward this what you see because it is what you want to see. It has legs because it is easy to remember and plays all on stereotypes. It makes you feel good and mocks those bad , bad people. Most of those claims are so silly its hard to believe people buy into them. Tribalism indeed. This forum can be much more productive that this stuff.Report

          • Avatar wardsmith in reply to greginak says:

            Here’s another one then Greg, you tell me where the shoe pinches and where it doesn’t. The Left telegraphs its signals loud and clear. In my own OP just a few clicks from here you can see the Left saying no to guns loud and clear. There was less of a blowback after this shooting than in AZ so perhaps the Left is a little “gun shy” this time as Mike surmised. Have liberals tilted so far Left that they then deny that they are even Liberals, proffering instead the illusionary label of “Progressive”? You be the judge, I’ve seen it here on this site time and again including from your own keyboard, but you’re welcome to pretend it is all on me.

            And these aren’t even my OWN feelings, I’m pointing out the disconnect, don’t blame the messenger. The right certainly has its own baggage and even if I try to self-identify as “right”, as Hanley’s test showed, I’m as Libertarian as they come. Blaise “believes” in regulation all evidence to the contrary. I recognize “regulation” for the chimera it is, like locks on doors it only keeps the honest honest, the criminals and sociopaths ignore regulation just like they ignore laws in general. Aa Madoff and a dozen more scandals since have proven, the regulators aren’t worth a single one of their collective paychecks. The 2008 meltdown happened primarily because all those AAA rated securities weren’t worth shit. No regulation is going to solve that, for a time there were HUNDREDS of investments with AAA ratings. Today there are 5 corporations with AAA ratings and I’ll bet you can’t name 2 of them without rushing to your genius friend Google.

            Democracy supposedly means, “We the People”. As long as it is Us vs Government there is no such thing. Points glossed over in my OP, such as the poor women who were raped and tortured for 14 hours while the DC cops didn’t do shit are going to continue to be glossed over by those who pretend that “government” exists to “take care of us” better than we can take care of ourselves. I don’t buy it and I never will. You’ll probably claim I’m paranoid, I’ll continue to understand I have intelligence borne of a long life of harsh lessons.Report

            • Avatar greginak in reply to wardsmith says:

              oh ward…have a good rant. its so fishing easy to find things that back up your own beliefs…so so easy. What is much harder is to balance all those things that not only support your beliefs but those that don’t. nobodies precious beliefs work in every case or don’t fall flat at times. Liberals, conservatives, left hand dentists…all our ideas have problems. Ward, bitterness and hate will eat your soul.Report

        • Avatar BlaiseP in reply to Wardsmith says:

          If there’s any Denouement here, it’s Bismarck Brand Sausage. To get his War on Poverty, LBJ did some horse trading. He did a lot of that. LBJ really wanted to build ordinary houses, much like the old progressives had done with the slums of New York. LBJ couldn’t get anyone to agree to that, so the poor were warehoused in the projects, where things went bad very quickly. High rise ghettos. I’m not going to blame the Conservatives for what happened there. But they were responsible for the high-rise ghetto instead of ordinary houses. And the Conservatives were directly responsible for cutting the juevos off the poor man. They did NOT want black families in those high rise ghettos. They thought if they only helped the fatherless, they would be behaving morally. We know how it all ended.

          And LBJ wasn’t the only one doing it. Nixon did a lot of that sort of thing. It’s always amused me, when these so-called Conservatives get elected, they do lots of un-Conservative things.

          The core failure of Public Housing was desegregation. Pruitt-Igoe, the worst of the public housing projects, was originally segregated. Once it was desegregated, the whites moved out and it became a half-empty horror story.Report

          • Avatar wardsmith in reply to BlaiseP says:

            Did I really read you right? The single “success” you as a liberal can point to in your OP is civil rights and yet you claim the housing projects would have been “successful” only if segregated? Your claims about LBJ and conservatives I dismiss out of hand, citations needed. For everyone to have a nice house with a yard and picket fence would have required how many thousands of acres, coming from where? This experiment has gone on long enough

            I thought I was being obvious, but apparently my communications skills failed me. The problem in today’s democratic society in the US is that the “conservatives” on the one hand have witnessed countless “experiments’ foisted upon the nation by the “liberals” on the other hand and are concerned that they don’t wish to continue life as lab rats. You’re admitting it here and Kimmi even admitted that the track record for liberals is not so great. Civil rights notwithstanding (and as you allude above, the track record there ain’t so great either).

            I went to an investor’s conference years ago, might have been at Robertson Stephens when they were still living large on IPO’s and bubbles. Someone gave a hilarious presentation with two people, one playing the CFO and the other playing the controller. The CFO had a green sign he would hold up that said, “Go!” and the Controller had a red sign he would hold up that said, “Stop!” It was hilarious because the CFO would spin up all these crackpot ideas and would claim money was no object, while the controller would counter with how this wasn’t going to be economically feasible on this or any other planet. The CFO got to live in dreamland where anything is possible but the poor controller has to live in reality where bills get paid and creditworthiness matters.

            The lesson for the businesses and investors in attendance was probably lost in the memory hole, but it struck me for how spot on they were. It isn’t just companies that can misbehave like that (and companies have a built-in failure mechanism called bankruptcy). Countries do the same thing and bankruptcy isn’t really the outcome, unrest and revolution are.Report

            • Avatar BlaiseP in reply to wardsmith says:

              I’m not drawing conclusions. I’m laying out how and why Public Housing failed. I don’t have a solution. I’m laying out a problem. When public housing was desegregated, the whites left immediately. That’s a fact. Public housing was foisted off on the municipalities in patronage schemes. Maintenance wasn’t done. Criminals weren’t evicted.

              True story. So the principal at my kids’ school was running for mayor. I liked the guy, did some work for his campaign. Three of my kids went through his school. Good man. So Ed gets elected mayor and I start taking my kids to city council meetings, you know, civics lessons. There’s some Section 8 housing down on Ann Street, turning into crack houses. The mayor says “we need to get felons evicted out of there, let’s pass an ordinance to that effect.”

              So my kid, Smartass Junior, is listening to his teacher rattle on about discrimination and how people should be allowed to live where they want. SJ sticks his hand up and says “The principal doesn’t believe that.” Outraged, the teacher sends SJ down to the principal’s office. He calls me up, laffing his ass off. “Stand by, I need you to hear this, wait for the teacher to arrive.”

              She comes boiling into the office and Ed just lights her up. “Here I am, trying to close down the crack houses on Ann Street and I have no idea what you’re teaching those kids down there, but you need to stop it right now. People can’t live just anywhere they want, not in my town. I want every successful felony prosecution to result in an eviction from my Section 8 dwellings.”

              I believe home ownership is the key. If that doesn’t suit you, I have no idea what will.Report

            • Avatar Kimmi in reply to wardsmith says:

              Summers and your crowd of conservative deregulators took us to more than a 10% chance of guns and cigarettes.

              For all that there was some unrest near King’s assassination, liberal policies haven’t come ANYWHERE CLOSE to the amount of havoc potentially created by money no longer having any set, established value.

              I love how you and everybody else considers the only possible liberal policies to be implemented by the government… Apparently anything else is libertarian …Report

              • Avatar BlaiseP in reply to Kimmi says:

                I don’t think that was Ward’s point. He’s pointing to a real problem, one acknowledged by Actual Conservatives, not the current bunch of poseurs. This ain’t No True Scotsman, an actual conservative understands what happens when Private Failure becomes Public Debt. When you want more of something you subsidise it. When you want less, you punish it.

                The financial industry was deregulated to the point where everyone was leveraged to the hilt, with no clear picture of the ruinous interdependencies thus created. The worst evils are always done with the best of intentions: we want competition in the marketplace, we need it, capitalism is utterly dependent on credit. But by deregulating the credit default swap and allowing the risks thus engendered to hide in the dark, Congress had created a monster.

                More precisely, they’d recreated the monster. Before the Depression, everyone was waist deep in the stock market, leveraged beyond any rational level. But the stock market was corrupted. Too much was going on in the dark. Creating and bursting bubbles were how all those Gatsby-era mansions were built. Stock market reforms built a dividing wall between investment banking and the rest of the banking industry. Insurance was regulated through the states, with reserve requirements. All those necessary regulations were abolished over time. The investment banks began to secretly insure each other against risk through credit default swaps.

                The Libertarians are always carrying on about Bubbles. But bubbles are always a byproduct of unmanaged risk. Sure, reward varies with risk, but when Ward says these CFOs are dreamers, there’s a measure of truth in that statement. These are the pie-eyed idiots who dream up these exotic, synthetic instruments. If you look at ’em, as advertised, there’s always some illusory aspect of soundness to them. But really, they’re bets and people who welch on their bets destroy markets. They need to be punished by losing Real Honest to God Money.Report

              • Avatar Kimmi in reply to BlaiseP says:

                I was merely responding to ward’s point that “liberals ahve given us countless experiments” , and the corralary that upset people revolt.

                The conservatives have given us one experiment, which performed abominably, and can be quantified as such.
                (rant-pasta: http://delong.typepad.com/sdj/2012/08/things-wrong-with-hassett-hubbard-mankiw-and-taylor-the-romney-program-for-economic-recovery-growth-and-jobs.html)Report

              • Avatar Roger in reply to Kimmi says:

                “I’m talking about a revolution that sounds like a whisper.”Report

              • Avatar BlaiseP in reply to Kimmi says:

                Well, look, I’m not the great authority on macro econ. I’d be a month just reading all the reports he’s citing and coming to terms with his conclusions. It seems fair to say Brad DeLong’s a neoliberal and I’m not. I’m considerably more fiscally conservative than most of my Liberal counterparts.

                Let’s stipulate to a few terms here: the Conservatives damn the Liberals for what they call Experiments. The Liberals damn the Conservatives for tearing down what we call regulations written in blood. Both charges are true, by the way.

                How can Liberals and Conservatives, maybe even Libertarians can join in — reach any consensus on fiscal and regulatory policy? We ought to start with the past and acknowledge where our opponents are right.

                All the Liberal predictions about deregulation came true. The Libertarians are now fumbling about, trying to rescue their positions like so many unrepentant Marxists. Not even the Conservatives, who went along with the Libertarian arguments about deregulation at the time, are ready to let them back into polite company. There will never be another Alan Greenspan to pull the wool over our eyes. The world won’t tolerate it.

                But the Liberals suffer from Krugmania. We won’t admit the Conservatives are right about the role of government in our lives, again, with the stipulation that we’re talking to honest Conservatives willing to talk seriously about how we might rebuild the dikes to get Capitalism, that River of Sorrow and Prosperity both, back into its bed.

                If Liberals are Foxes, Conservatives are Hedgehogs. They know one Great Thing: that government cannot solve all problems. The rest must be solved by markets. Poverty cannot be legislated away, as surely as Free Markets cannot bring prosperity to all. We need a balance. The Conservatives could be convinced to invest in America, not by rosy scenarios of shiny happy people singin’ Kum Ba Ya, but by solid analysis of Return on Investment.Report

              • Avatar wardsmith in reply to BlaiseP says:

                Now THIS is the OP I wish you’d have written Blaise!Report

              • Avatar wardsmith in reply to BlaiseP says:

                Blaise that was a fair and charitable synopsis of my point, thank you. Section 8 is a term best confined to the military, and there were a number of problems inherent in the act of 1937, the “projects” being just one of them.

                At its root the economy in this country relies first and foremost on land. The land is where Americans sense their wealth and once the new gentry have money the first thing they do is go out and acquire some. Ted Turner has probably lost track of how many gazillion acres he owns. The dustbowl cost countless American countless acres and yet even the dustbowl can be partially attributed to failed government programs like the federal Homestead Act. Just giving someone land isn’t enough, giving them /enough/ land is the key. At least today due to superfarms we don’t worry so much about where our food comes into our cities from, how it is produced and by whom. An ownership society would certainly be a major step towards reducing urban blight, but I’ve also seen rural blight. Ownership alone doesn’t guarantee /pride/ of ownership.Report

              • Avatar BlaiseP in reply to wardsmith says:

                I’ve got a theory about ownership which I developed driving the back roads of New Mexico from Albuquerque to Lubbock. You can find ghost towns along the still-busy rail tracks: the trains don’t stop there any more. As you get closer, into north Texas, you can find a few head of cattle on the land but it won’t support many.

                But as you proceed eastward, heading toward Sherman suddenly you will find beautiful ranches, lovely cattle, Cadillac ranches. Superb horses, too.

                Towns and cities come and go. All over the Middle East you find tels, the compacted rubble of ancient towns built up layer by layer, century by century. We’re kinda short-sighted, here in the USA. We haven’t been here very long. What we call Blight is just some town or neighbourhood losing relevance. Give it another twenty years, it might become relevant again.

                Our rural states are emptying out. The kids are headed into the cities. Land isn’t the issue, it’s the ability to survive on that land, to live a meaningful life out there. Some while back I said the rail roads were built by entrepreneurs who made their fortunes selling a dream to unsuspecting Europeans, to whom the wide open spaces were heaven on earth. The dream is over. The range is fenced in. Agriculture has become an industry.

                We need a new dream. It’s not land any more. We move too often, anyway. The world’s gotten too small for old timey dreams about Amber Waves of Grain and Purple Mountains’ Majesty. The plains aren’t so fruitful these days, they’re dry as a chip. And we’re losing hope as a nation and a people. We don’t belong to each other any more. We’re slaves to a dream that died years ago. We tolerate poverty and injustice and hunger. We’re waging wars we can’t afford. Even the most patriotic among us hate the idea of The Government. Why can’t it be Our Government? It could be, you know.Report

      • Avatar Jason M. in reply to ktward says:

        E-tripe is so much fun, and easy too! Just mix a healthy portion of Weak Man Fallacy with your Straw Man Fallacy, and Fwd: fwd: fwd: your way to self assured bliss.

        If a Democrat doesn’t like guns, he moves to a neighborhood filled with other people like him.
        If a Republican doesn’t like guns, he keeps that tidbit to himself, or ,begrudgingly, he too moves to the Democrat’s neighborhood.

        If a Democrat is a vegetarian, he doesn’t eat meat.
        If a Republican is a vegetarian, he buys a gun to compensate.

        If a Democrat is homosexual, he quietly leads his life.
        If a Republican is homosexual, he stays in the closet and loudly protests his disapproval of homosexuality.

        If a Democrat is down-and-out, he thinks about how to better his situation.
        A Republican blames it on Pelosi, Reid, and Barack Hussein Obama.

        If a Democrat doesn’t like a talk show host, he switches off the TV and streams NPR.
        If a Republican doesn’t like a talk show host, he patiently waits for Bill O’Reilly’s show to conclude and so he can watch the more right thinking Sean Hannity.

        If a Democrat is a non-believer, he doesn’t go to church.
        A Republican non-believer goes to church anyway, if only to piss of all those dab-gum atheist liberals.

        If a Democrat decides he needs health care, he begrudgingly accepts the kludgy compromise that is the ACA, and wonders why we can’t have nice things like every other 1st World nation.
        A Republican demands that the government keep their hand off their Medicare.

        If Ward reads this, he’ll either be offended…or have a good laugh.

        Like this if you agree. Kony 2012Report

        • Avatar Jaybird in reply to Jason M. says:

          For my part, I don’t support Kony in 2012.

          Then again, I’m not a Democrat.Report

          • Avatar Jason M. in reply to Jaybird says:

            Had to put that in in the end, if only to remind myself that E-tripe isn’t the exclusive domain of conservative baby boomer chain emails.Report

          • Avatar greginak in reply to Jaybird says:

            I guess that means, as a liberal, i should…ummm…know who Kony is.Report

            • Avatar Jaybird in reply to greginak says:

              There are a bunch of youtubes out there about Joseph Kony’s Lord’s Resistance Army… essentially child soldiers. “Invisible Children” made a youtube called “Kony 2012” that was controversial insofar as there is reason to believe that it was fake but accurate… thus allowing opponents to focus on the fake and not on the parts that, seriously, are messed up about what’s going on in Uganda.

              The joke involved mistaking “Kony 2012” as being analogous to “Obama 2012” or “Romney 2012” rather than as the title of a “documentary”.Report

        • Avatar Jason M. in reply to Jason M. says:

          Damnation…I forgot to falsely attribute this to Robin Williams or George Carlin.Report

    • Avatar BlaiseP in reply to wardsmith says:

      … and this relates to the issue of the viability of liberal democracy, how?

      Oh, I guess this must be pointing out that Us versus Them trope I was talkin’ about. Never mind, completely relevant.

      As for Jeff Foxworthy, stupid’s always been reliably funny. Back when the Greeks were puttin’ on shows, they would have clowns running around on stage with these gigantic phalluses strapped to the front of ’em, farting away. No different now than then. They even had redneck jokes back then.Report

    • Avatar Jesse Ewiak in reply to wardsmith says:

      Wow. E-Mail chain letters? Wow.Report

    • Avatar Jason M. in reply to wardsmith says:

      If a Republican has a huge log in his eye, he smugly castigates a strawman Democrat.Report

    • Avatar Don Zeko in reply to wardsmith says:

      Oh look, it’s the Fairness Doctrine! Is that also going to be enacted by executive order after Obama is sworn in for his 2nd term?Report

    • Avatar Kimmi in reply to wardsmith says:

      yes, if a republican is homosexual, he leads his life quietly in gentle abashed loathing of himself — and goes home and fucks his wife, even though he can’t stand her.Report

  5. Avatar Burt Likko says:

    Blaise posits: “Where democracy advances, it creates positive rights in law.”

    Yet the United States of America, one of the oldest democracies on Earth, remains predicated largely on a system of negative legal rights: our most profound and important rights are those which function to prevent the government from acting, not those which compel the government to act. The government may not deprive someone of liberty until it has afforded them due process first. The government may not restrain speech or religious worship. The government may not confiscate private property without offering fair compensation to the former owner.

    Functionally every claim that the government is obliged to act in a particular way towards an individual or a group of individuals (e.g., the government must pay Social Security to this or that person) is founded upon statutory law and not the Constitution; statutes are much more malleable and subject to the political desires of the majority than the Constitution, which requires a substantial supermajority to alter.

    Is the United States an outlier? Or is my point about the difference between negative and positive rights a quibble, a distinction without a difference?Report

    • Avatar BlaiseP in reply to Burt Likko says:

      Revolutions are reactions. A cursory examination of our constitution reveals a profoundly conservative bias: the Founders had just crushed Shay’s Rebellion and were in no mood for any more of that sort of thing. We remain a fundamentally conservative nation to this day.

      As you say, positive rights in our society are created in law. The enemies of Liberalism have always accused such lawmakers of overreaching. But democracy does advance despite such criticism and all these advances are of a positive nature — not positive in the sense that all such advances are wise or good — but in the sense that our government does have obligations to establish Justice, insure domestic Tranquility, provide for the common defence and promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity. That business about general Welfare never gets the attention it deserves.Report

    • Avatar david in reply to Burt Likko says:

      Arguably pre-Incorporation (and pre-Civil War), the negativity of legal rights reflected a system where state discretion was rather unrestricted. Certainly governments regularly deprived liberty or restrained speech. The First Amendment was explicitly held not to apply to the states until well into the 20th century, and states restrained speech as they willed.

      So the choice of example is a bad one. The situation where the negativity of the federal government’s constitution is actually largely reflective of life as she is lived on the ground is fairly recent. Throw in another four odd decades of expansive New Deal/Great Society federal government and it is even more recent.Report

  6. Avatar Kris says:

    ” inflation would have gone through the roof. I thought Bernanke did as good a job as could be managed. Had the bailout been much larger, those consequences could have been even more devastating.”

    Inflation fears have proven entirely unwarranted.Report

    • Avatar BlaiseP in reply to Kris says:

      Heh. I used to do some quant work for this old shyster. Here’s his game in a nutshell. We bought all the historical data available for MERC and CBOT. He’d go out and peddle a scheme to traders who wanted more winning trades. He’d take their trade book, put all their trades on the timeline and we’d “examine” the wins and losses. If there was anything we could derive, post-hoc, we’d bundle it up and label it as propter-hoc. We’d go back and build a trading model, looking for instances of that post-hoc “trend” and pretend to trade it. We’d sit there and let this model trade overnight, come back and look at its win-loss record. We’d tune it until it was making pretend money, hand over fist, and sell it to this guy for Big Bux.

      As all those prospectuses say, “Past performance is not indicative of future results.”

      Kris, nobody had any experience with a crash of that magnitude. Nobody. I’m only glad Bernanke was around to deal with it at the time. He’s a scholar of the Depression. So anyone who says Past Fears Were Unwarranted in the Light of Present Evidence is fair game for the sort of scam run by my old boss. I eventually quit that gig, the level of dishonesty and misapplication of logic was appalling.Report

      • Avatar Kris in reply to BlaiseP says:

        His colleagues have pointed out that he failed to stimulate the US economy to the samed degree than he himself had recommended in writing about Japan.

        Bernanke failed by his own standards.

        BTw, if a.) the banks had spent cash in the way you’re imagining, and b.) that spending had created more spending in the economy, leading to inflation, we would have also had big economic growth and reduced unemployment. The scenario you’re afraid of involving inflation is the scenario by which we escape the crisis.

        Instead, all Bernanke does is worry about theoretic inflation.

        Total failure.Report

        • Avatar BlaiseP in reply to Kris says:

          Ecch, it was somewhat more complicated than I think either of us can describe. You’re not wrong to say the stimulus could have been larger. In point of fact, given what we now know, you’re probably right.

          Truth is, this was completely new territory for everyone. Congress was aghast. They had to trot that appropriations bill through in a few hours. Hours! There was no debate, everyone knew the bottom had fallen out and nobody had a clue how far we’d fall.

          So Bernanke made a WAG, based on what he knew at the time. Hank Paulson was zero help. He was in complete denial. Had we managed to intervene before Bear Stearns imploded, the stimulus would have been about the right size. I’m not a macro-economist. Lots of macro- is bunk anyway.

          The 2008 collapse came in two parts: before the Bear Stearns collapse, which was its own problem. Then there was the fallout from what happened to Bear Stearns. That’s what really frightened everyone at the time.

          You’re missing the point about the bailout. Had the bailout been too big, we wouldn’t have big economic growth. Those dollars would have flowed out into the currency arbitrage markets and it wouldn’t be to America’s benefit. That bailout money was created against the Fed, it appeared on the cash assets balance sheets and banks could start interbank loans and open lines of credit again. You completely misunderstand Bernanke’s motivations. It was that old idiot Alan Greenspan who worried too much about inflation. He steered the Fed onto the rocks, allowing the investment banks to run unregulated insurance operations.

          And no, it wasn’t a total failure. Bernanke saved the world. Might not be to your complete satisfaction nor to mine, but I’m glad he was there and not that old fool Greenspan.Report

        • Avatar Kimmi in reply to Kris says:

          Bernanke is out of options, at ZIRP, kiddo. HE supported a bigger stimulus than Obama asked for! He Did!

          Bernanke’s a good guy, for all that he’s in a horrible untenable position. Draghi and company are dragging the rest of us into a worldwide depression (45 seconds left before it’s baked into the cake)…Report

          • Avatar Kris in reply to Kimmi says:

            Just like Japan we’re out of monetary options? Bernanke supported extraordinary monetary stimulus past the zero interest rate bounds for Japan. Why didn’t he do the same for the U.S.?Report

  7. Avatar Roger says:

    Blaise,

    “A viable liberal democracy cannot exist where all political debates resolve to Us versus Them. Where there’s no allowance for We in the discussion, we shall never have Liberalism. The litany of grievance against Them will always trump any larger considerations. It can’t be helped. Liberalism can only work when everyone admits they’re in the same lifeboat.”

    I agree. Indeed, that is why I recommend limiting democracy where possible to WE discussions.Report