Dream of Californication

California has long led the country. Now, it's totally dysfunctional.

The reasons for California's problems are well-known. Democrats won't cut spending; Republicans won't cut taxes. Legislative lockjam prevents action even in the best of times, and in the worst results in governance catastrophe the like of which are almost impossible to imagine in a modern country.

Is the rest of the country so far off?

Consider: the government has barely raised taxes in decades. Bush I's decision to raise them, and go back on a pledge, is widely thought to have cost him a re-election. Clinton raised some, but Bush reversed those and extended them further. Better to raise the deficit. Obama's campaign took as a central plank that taxes would not rise for the middle class. Relative to the status-quo at the end of the Clinton years, this was actually a tax decrease for the vast majority of Americans. It is becoming virtual political suicide to raise taxes on anyone except the rich--and even they complain bitterly.

Meanwhile, spending is growing out of control. Huge outlays are certain to happen on healthcare, education, and energy. Health care reform promises to curb costs, but the missing step--the one between mandating coverage for all and lowering health care bills--is totally absent. No doubt the White House's technocrats have ideas, but Congress shows no signs of letting them pass. Even the Republicans are raising all hell about 'rationing' health care--even for government funded care, which makes no sense. Iraq is more peaceful, so the Defense budget is down a bit, but Afghanistan is still going. It's soon going to be time for America's decennial war--my bet's on an irregular war within Pakistan.

Obama's term so far highlights the crisis that the legislative branch has fallen into. One might reasonably think that after winning a decisive mandate, the Democrats would find it easy to pass their favored bills. One would be mistaken. Excepting Regan's first few years, no President in recent memory has managed to pass his favored bills. Clinton's major legislative achievements are all things Republicans would love--NAFTA and welfare reform. Bush could not privatize Social Security or pass health care reform even with his majority. And now Obama can barely get Congress to cut the number of GM dealers. The one agency that acquitted itself well during the financial crisis has been the Fed, a fact largely arising from the fact that it is not accountable to Congress. The more democratic our institutions, the worse they perform.

Congress can do two things well: spend and bail out. From Wall Street to Detroit, federal funds sustain corporate America, and corporate America in turn finances Congress. In other countries, we call this crony capitalism. The deficit is huge this year--which isn't a horrible thing--but projections in the future show trillion dollar yearly deficits trailing off into the future.

True, it's hard to predict the future. But suppose the economy fails to get better as scheduled. Say we've all been living beyond our means for the past years, and need to readjust to a more sustainable level of living. Unemployment will lag growth, and the rich will not contribute to the federal pot. Then we'll face poor government revenue, spending that can't decrease, and taxes that can't go up. The legislature can't do anything productive. We'll face government debts that will get harder to pay.

In other words: California. Of course, if America starts to look like California, where will California be?

Virtuality

Just saw the pilot of Virtuality, which is great. Made from the producer of BSG, kind of a cross between Total Recall, Cowboy Bebob, and Star Trek.

Of course, it looks like Fox isn't going to pick this one up.

Wimbledon

Wow, good to watch some good tennis again. Both were great--Roddick served amazingly, Federer pulled it off. Crazy to imagine them serving at 130 MPH after four hours of play.

The Future Is Already Here

This Economist article on flying cars--apparently, they're closer to reality than you might think--got me thinking about the future.

Take someone from 50 years ago into today. Show him your iPhone, with GPS, Google Maps, and all sorts of apps, to say nothing of the internet and email. Buy some books online with your credit card and have them delivered, or buy them on your Kindle. Put on your music collection, which contains a good chunk of the world's musical output over the last thirty years in something smaller than your cell phone--which is revolutionary enough as it is. Check out some TV shows, movies, and YouTube clips. Play some X-Box, or use your Netflix account to stream some video on your flat screen TV. Type up something on your blog, or work a spreadsheet. Use wikipedia or Google.

None of these things existed fifty years ago. Any person from back then, seeing this stuff, would be amazed and convinced that the future has arrived. Except for the flying cars. So let's get on that, people.

Rational Environmentalism

Suppose you really, really care about climate change. You think that global warming is the absolute biggest game changer in the world, one that will cause absolutely horrible damage throughout the world. Florida and Bangladesh will disappear under the seas, Arizona will erupt into flames, Chicago will become livable--Al Gore kind of stuff. What do you do?

You should favor a crash program to build as many nuclear plants as technically feasible to replace all natural gas/coal plants. Then you mandate that all cars be electric, and hook them up to the grid. It looks like that the vast majority of greenhouse gases in the US come from electricity generation or transportation, so at a stroke you could virtually make the entire country emissions-free.

Remember, all you care about is climate change. You know wind and solar can't scale up in time, and electric cars hooked up to coal plants just shift emissions elsewhere. Sure, nuclear waste is an issue, but it pales in comparison as a problem to Africa self-detonating.

This isn't pie-in-the sky--France did it in the 70s, with 70s technology. Today, they don't any fossil fuels for electricity. They didn't even care about the greenhouse gas angle--they just wanted cheap power and energy independence.

With the advances in nuclear power since then, it's even easier to get cheap, clean power for the entire country. Why doesn't anyone talk about that? Why do we keep looking at futuristic technologies that are too expensive or difficult to scale up? Why does energy have become an issue over guilt, rather than a place where we take the most cost-efficient solution and apply it everywhere?

In fact, environmentalists--the people who should be caring about global warming--have been the biggest roadblocks to this happening. This is a perfect example of letting the perfect be an enemy of the good--letting good, safe, clean technology become overlooked because "better" technologies exist. It's also a perfect example of an interest group trying its hardest to work against their own interests.

Environmentalism has always been a torn movement, divided between the sentimentalists (Emerson and company) and the more pragmatic (Teddy Roosevelt). Someday, I hope the latter crowd win and we get hyper-rational, capitalist environmentalists. People who don't just care about the environment for the sake of caring about things, but are actually driven to see improvements. They'll start venture funds, lobby to build nuclear plants, and pore over data. You'll have climate investors demand to see a return on their investment. The environment is too important a cause to be defended by environmentalists. If the Gordon Gekkos and Goldman Sachs of the world decided to care about the environment, you would see improvement very quickly.

This would make for a great political platform too, which could unite business interest (cheap energy) as well people who care about the environment, but don't buy into Greenpeace. It's a no-go area for the Democrats (because of Harry Reid, among other reasons), but some Republicans are talking about it (Mitch Daniels?). China and India realize that nuclear offers a great way to generate cheap, clean, energy and are rapidly building more. Assisting countries like that to make more nuclear power, and then turning all power at home into nuclear, is the only way to seriously cut down greenhouse gasses while keeping energy cheap. That makes for an amazing political platform--but you'll have to plow through the environmentalists first.

Are Women Better at Managing Risk

You hear a lot about those studies in which women make less risky financial decisions and end up as better investors in many laboratory experiments. This ties in with the fact that women tend to be less risky on a range of characteristics--driving, health, etc.

It's easy to extrapolate from here and suggest that finance is a horrible male-dominated world, and that's the cause of all of our problems.

However, I ran into this study, which says:

We examine the performance and investment behavior of female fixed-income mutual fund managers compared with male fixed-income mutual fund managers. We find that male- and female-managed funds do not differ significantly in terms of performance, risk, and other fund characteristics. Our results suggest that differences in investment behavior often attributed to gender may be related to investment knowledge and wealth constraints.

Does History Repeat Itself?

In Iran, some people apparently tried to steal an election. This caused protests, and a huge wellspring of support. Then some people tried to throw some cold water over the exuberance, claiming that Mousavi was no Gorbachev, and that history would repeat itself as Mousavi would reveal himself to be a stooge for the Iranian higher-ups.

Does history repeat itself? No, it doesn't, and Gorbachev is the best example of that. He spent his entire career with the Party, and was a committed party man. There was virtually nothing in his background that would suggest that he would embrace a path of reform; yet he did. Deng Xiaoping opened China, Manmohan Singh embraced economic reforms in India, Nixon went to China.

People don't always do the things you'd expect them to, even based on their past. Nor do historical events keep repeating themselves--we just tend to remember the times events echo, and tune out the wild swings that go on. The Islamic Revolution there kind of came out of nowhere, and used revolutionary new communication technology (cassette tapes).

This isn't to say that Mousavi, if he ends up winning, will or will not become a reformer. We just don't know. And that's about all you can say.

Misuse of Power

Remember how Steve Jobs was sick? Turns out he got a liver transplant for cancer.

From what I remember watching House, those aren't too easy to get. Turns out, they're not. Jobs managed to use his considerable wealth and power to jump the line.

Such is life.

(Written on my new MacBook Pro)

The Worst Part About Graduating Is

Meeting other graduates. You tell them where you went, then you see a spark in their eyes and a lift in their posture. They go, "Oh! Me too. So you got out alive, eh?"

It's not enough that a spirit combining self-deprecation and unbelievable pretentiousness about the nature of their education pervades life at the UofC. Or that this feeling is nurtured throughout graduation (no contingency for rain! That's how hardcore we are). But--this feeling has to apparently dominate every future interaction with other graduates.

I guess I could just avoid such people--but they're everywhere!

Ok--enough Chicago rants, back to regularly scheduled rants.

Live from New York, it's...

I really hate those blogs/articles/reports from some heavily populated part of the world. After all, millions of people seem to live there just fine, so what exactly is newsworthy about that? Not to mention the Survivor phenomenon, where people trek to obscure places--where people have been living just fine for tens of thousands of years--and pat themselves on the back for surviving. Even the drama, I'm sure, is more intense at the village ten miles over.

None of this will stop me from blogging about New York, or from repeating the cliches about it.

This place really is Trantor writ small. The insane density means that you get everything at your doorstep. The total cosmopolitanism provides insane levels of variety and diversion. While, somehow, every square block of the city maintains its own micro-local character. A random hundred yard stretch will yield more hustle, bustle, culture, and interest than a whole neighborhood in Chicago (or, at least, some other city).

And then there's the pizza. Chicago-style pizza is fine, but in Chicago fashion, you have to hit those traditional places which sell it at a price. New York has democratized the pizza, throwing stands and tiny shops city-wide. They've done it with street food too--this place has the food quality of somewhere far poorer (go immigrants go).

It also, apparently, has a transportation system likewise. I'm mildly amused by the prevalence of rickshaws. Why are hipsters biking tourists around, rain or shine, as if they were in Calcutta-while the guy who is actually from Calcutta is driving a cab? Our generation, bereft of challenges, has apparently decided to pretend like hundreds of years of economic development never happened. This absolves them of the perennial guilt they hold--the original sin of the left-liberal--while giving them something to occupy themselves with. I hope climate change washes every last green fanatic into the sea. I laugh inside every time they complain it's too cold.

Fortunately, as far as I can tell, the hipster rebellion here is just one of a million mutinies, rather than being a social experiment gone horribly, horribly wrong and dominant. Maybe I should check out Brooklyn though. [ed-or else stop being cranky]

Fun fact: the guy who came in to fix my door assured me that New York's decline in the 70s and 60s dated back to its failure to attract container shipping, which went (along with ancillary industries) to Jersey. Sounds plausible, and would also explains why Newark crapped out a bit after New York. But then they (again, a bit later) got a mayor with national aspirations! All you budding politicians out there--find some manufacture heavy part of the country about to decline, then offer to run and fix it. The people will love you forever, or at least until you fail the Florida primary (really, what was that strategy? Step 1: Get New York expats in the South to vote for you. Step 2: ??? Step 3: Win! Send that strategist back to powerpoint school).

I guess the people are supposed to be really rude, but the first time I was walking down the street, someone said hi. Go figure.

Even the cabs are more advanced. They have these nice LCD screens in the back showing the local news, from which I confirmed that local news is consistently horrible around the country. Difference, though is that the pseudo-sexual banter between the hosts here is just about subway etiquette.

Bottom Line: Hyde Park needs to die. Seriously, I don't care what the density is, throw down some retail and food, and a hotel too. And stay up past ten. If bumfuck, IA has fast food options at three in the morning, so should a (nominal) College town. While you're at it, connect to public transport like a reasonable part of the city.

Culture and the Bush Years

Blogging has been light. I've been busy promoting Mitch Daniels, here, and blogging at the Indian National Interest, here. I'll try to keep this place going too, though, for more whimsy stuff.

Now, I'm a huge fan of TV--I think we're in a Golden Age of television, with a whole slew of great dramas and sitcoms. If you look at the complexity or originality of shows in any other decade, even the 90s, I think you'll find that the average show in the last decade is substantially better, while the best shows are pretty amazing today and beat just about anything put out before.

A lot of this has to do with viewing styles. Now that people buy DVDs, show makers can expect their audiences to be paying attention, and so can put out something beyond the "monster a week" staples. The talent working on TV shows, I suspect, got a lot better, and overall it seems people have a much better grasp of the dynamics and possibilities TV gives you.

All this in mind, Newsweek had a bit a while ago about major television series in the Bush years. The mention some good shows, but miss out the absolute best representation of the Bush years ever: Arrested Development.

What better way to capture the neuroses and fixations of the last years then by looking at a dysfunctional family, in which the son desperately tries to fix a failing company? Add the facts that the father sold houses to Saddam Hussein, and that they are in the middle of the housing bubble in California.

And then there are all of the little touches, which get at every tiny bit of this decade. Michael Cera with his awkwardness, the overall meta flair, corporate fraud, insider trading, the "Mission Accomplished" banner, Abu Ghraib, the evangelicals, etc etc.

Now, you can say this just means that the show is rather topical. But beyond depicting events, it gets a good chunk of the mood and flavor of the nought years--the unbridled consumerism, general loss of faith in authority, failing institutions, and institutionalized bizarreness. The very absurdity of the show highlights how odd this decade was, when "truthy" could be a word, cell phones became ubiquitous, and anxieties and unresolved conflicts dominated.

Of course, It's Always Sunny in Philadelphia also lays some claim to the title.

Supreme Court Rules Itself Unconstitutional

In a stunning 8-1 decision, the Supreme Court has ruled, in the case of The Supreme Court vs. The Supreme Court against the constitutionality of the Supreme Court.

Justice Scalia said, "Every since Marbury vs. Madison, the Supreme Court has taken on responsibilities and powers wholly incommensurate with the intent of the Founding Fathers, and must be radically changed to preserve the Constitutional nature of the Republic."

Chief Justice Roberts, writing the majority opinion, wrote, "Of course, the lack of clarity about the Court's role in government stems from the vagueness of the Constitution itself.

Nevertheless, the politicization of the body and it's growing unchecked clout have resulted in a political crisis. The court has seen fit to establish entirely new rights and overturn state and federal statutes at will, and has shielded itself from popular accountability--and, frankly, comprehensibility--through complicated judicial legerdemain."

He added, "Hell, I'm not even sure that Kennedy has even read the Constitution."

Justice Ginsburg agreed, adding that "This is a bipartisan issue. The proliferation of both left-wing judicial activism and right-wing strict constructionism makes a mockery of the supposed non-partisan nature of the Court. We're accepting that the source of legal decisions lies not in precedent or established law, but rather in the political beliefs of justices. The Supreme Court is a de facto super-Congress, with additional powers over the Executive Branch, but one that operates completely without oversight or checks."

Newly appointed Justice Sotamayor also concurred, saying that "The acceptance of identity-informed decisions means that I may justifiably get a different ruling from a particular group of justices with one composition, and yet another from a court with different members. This virtually establishes the court as a political body, rather than one devoted to upholding a particular set of statues. As such, it must either be eliminated, or be held subject to the same principles of democratic accountability that underlie our other political institutions."

Justice Kennedy, known as the crucial 'swing vote,' was the lone defector, saying, "The last 50 years have seen more overturned federal statutes than the previous 150, many of then by narrow 5-4 votes. Issues of utmost national importance--from abortion, to the limits imposed on the President, or even the outcomes of electoral races--are essentially determined by my feelings on any particular day."

He added, "That's totally awesome."

When asked about pending cases, including those pertaining to controversial issues such as gay marriage, Justice Kennedy responded, "How the hell should I know? Let the people decide."

Economic Stability

A big reason why we have a Federal Reserve handle monetary policy is to smooth out the economy over time and prevent recessions and booms.

But interest rates aren't the only reason why economies fluctuate. These days, oil prices are really important--their spike last year is a big and underappreciated contributor to the current economic problems.

The reasons why oil went up that high haven't gone away. Much of the remaining oil is controlled by autocratic regimes with nationalized oil companies, who chronically underinvest in new production. The rest is barely accessible, poor quality crude, in deep sea deposits, or tar sands. Combined with price controls in important consumer areas--the Middle East, South and East Asia--this results in inelastic demand and supply.

And that means huge price fluctuations in energy. But today's economy is very dependent on energy prices--it made the crash worse, then low prices contributed to a quick rebound, and higher prices in the future might cut off a recovery.

That means, as long as the price of oil remains as volatile, America's economy will remain very unstable, and will respond to and drive the cost of oil. Especially now that monetary policy is very limited, being immune from world energy prices would really help stabilize the economy.

And that would require a very different energy source.

Memorial Day

Look, I respect fallen American soldiers--just as I respect those killed in action from other countries (every country?).

But, as a sometimes libertarian, it disturbs me a little how Memorial Day has expanded from an activity simply remembering fallen soldiers into one which equates their sacrifice with American freedom. This is the old "liberty comes from the blood of patriots" line. Something like this did happen in the Revolutionary and Civil Wars, and the American military did a lot to preserve the liberty of other countries in World War II.

But these actions, strictly speaking, only established the independence and unification of America. Plenty of countries are independent and whole--acts often achieved from the blood of patriots--but not free. Liberty in America came from something else: The desire of the property-holding class to limit the powers of government, and then from the continual actions of civil society to hold government accountable.

You have a similar situation in other countries. You could say that Britain "fought" to establish its parliamentary system, but really, liberty came when groups within society asserted their rights against Leviathan. Or look at the democratic transitions in East Asia, which generally happened without much bloodshed in response to political activism from the middle class. In India, democracy is boosted by an engaged and energetic professional elite, and sustained by enthusiastic participation by all sections of society. Soldiers weren't even necessary to liberate the country, while in neighboring Bangladesh and Pakistan, the Army constitutes the biggest threat to democracy.

Liberty doesn't, fundamentally, come from soldiers--who fight for a state which may or may not promote freedom. It comes from within, from the selfless actions of activists, journalists, and protestors, as well as from the selfish acts of the bourgeois class.

The Costs of Empathy

The buzz about Obama's nominee for the Supreme Court is that her diverse life background will add an important perspective to the deliberations of the nation's highest judicial body.  This may or may not be true, but it is also partially irrelevant--this is a choice driven to gain the votes of a particular demographic.  

But why do people keep assuming that high-profile minority appointments will translate into political gains?  The experience of the Bush Administration--which had posts given to the likes of Alberto Gonzalez and Colin Powell--comes to mind.  It's not as if Clarence Thomas, Antonin Scalia, or Ruth Ginsburg brought in their respective demographics into either party.  Voters simply don't make their decisions based on these types of issues--often, they are not even aware.  

But the cost of going with the best jurist who is a female Hispanic, rather than the most talented legal theorist, will be felt in the coming years.  Had Obama went with an intellectual hotshot, one who could rival Roberts and Scalia by establishing a liberal counterweight, and who could woo the centrists through competent jurisprudence, he could drastically change the temperature of the Supreme Court, even as the executive and legislature have gone through major political shifts.  This is the stuff of realignment.  

This appointment is symptomatic of the broader problem of short-term politics.  Politicians often seek to dominate the short-term news cycle, and gain the approval of the heads of interest groups.  But that's not what voters care about.  Throw away the weekly opinion polls, narrowly targeted policies, and stop talking to union bosses and teachers unions.  Focus entirely on offering good governance.  If employment is high, and inflation low--Obama will win a second term, no matter who his nominees are.