Feb 272009

This was fun to watch, but I should have paid more attention to the title: “1933 Pro-Inflation Propaganda Film.” Up until almost the end I thought it was making fun of the “Inflation is Wonderful” idea. But it wasn’t. Maybe Obama could use it as part of his sales campaign.

I enjoyed some of the pronunciations, such as the way Nineteen Thirty-Three is pronounced — especially the first syllable of “thirty”. I wonder if that’s a pronunciation that’s still heard anywhere.

Feb 222009

I need more books like “Wednesdays with Diether.” Maybe the Kalamazoo Gazette will publish another such collection of Diether Haenicke’s columns.

On Monday when I heard of Dr. Haenicke’s passing, I read a few random articles in my copy. But then I discovered it’s a good book for reading while running on our new elliptical machine. The book is small enough and the font large enough that I can read it even when my glasses start to get foggy. In fact, I can read it without glasses. That’s more than I can say for a bilingual Russian book I sometimes use for the purpose. Some combinations of Cyrillic characters get difficult for me to decipher toward the end of a run.

Actually, I’d rather watch a Big Ten basketball game while running, which is what I’ll do tonight. But other times I like to read.

The elliptical machine is a Nordic Track Autostrider 990. I’m mostly pleased with it so far. It would be better if I could attach some sort of articulating arm to hold a book, or a laptop computer to play movies. But I can rest a small book on a little ledge, and still see part of the display over the top. But most books I’d like to read are too big, or have printing that’s too small.

The Haenicke book is especially good in that when the display says “Slow down” I can see the word “Slow” above the book. But “Speed up” and “Speed OK” both look the same. All I can see is the word “Speed”. I definitely don’t want to miss a directive to slow down. If I miss an occcasional speed-up instruction, that’s not so bad.

Actually, I don’t have a lot of trouble with my cadence, probably because I’m used to a relatively high cadence when riding my bicycle. But I think I’ve slowed it down a bit in the last couple of years, so I hate to miss an actual command to do so.

Unfortunately Diether Haenicke’s book is an easy read, good only for two more sessions at the most. It’s a shame in many ways that we won’t be hearing more from him.

Feb 212009

An article at wowowow.com summarizes Obama’s first 30 days:

…so far the reaction to the new administration’s programs has been decidedly negative. Investors, among others, have panned the plans; the stock market is off nearly 10% from the day before the inauguration, or more than 800 points on the Dow Jones Industrial Average.

That made me wonder what happened to the stock market in FDR’s first hundred days. I didn’t find the kind of chart I was looking for, but I did find this summary in Washington Business Journal:

On March 4, 1933, Franklin Roosevelt inherited a Dow that had lost 82 percent of its value in the previous four years. That was the day Roosevelt famously declared that “all we have to fear, is fear itself.” Once Wall Street reopened after the bank holiday immediately imposed on Inauguration Day, the Dow Jones rose 15 percent in the first day of trading March 15, 1933, and rallied 75 percent in the first 100 days of Roosevelt’s presidency.

So is the market telling us that we already tried these Keynesian theories once, and unlike last time we now know what to expect? That’s probably not it, exactly, because in a way they have been tried more than once.

But I did find an interesting tangent at realclearmarkets.com, in an article by George Bittlingmayer and Thomas W. Hazlett titled, “The market is shorting Obama’s ‘stimulus’.”

Many claim that World War II brought us out of the Great Depression, but the lesson to be learned is still being debated. Federal budget deficits soared (reaching 26.5 % of GDP in 1942 as calculated by Harvard economist Robert Barro), providing Keynesians an argument for spending as stimulus. But WWII also brought a profound shift in the New Deal’s regulatory policies. Attorney General Thurman Arnold’s vigorous campaign to break-up “the bottlenecks of business” in major industries like steel, chemicals and electrical equipment was shuttered, and America’s largest corporations enjoyed a respite from threats of dismemberment (Arnold was kicked upstairs to a judgeship). As Thomas K. McCraw writes in his superlative Schumpeter biography, “Under the life-and-death pressure of war mobilization… the Roosevelt Administration, which had been hostile toward alleged monopolies, now decided that big business must lead in the job that had to be done.”

What’s interesting about this is that phrase about a “shift in the New Deal’s regulatory policies” with the onset of World War II. I had recently come across references, I don’t remember where, that suggested the national government had great difficulty making itself unregulate the economy after WWII was over. So if WWII-era regulation was itself a respite from New Deal regulation, then I need to learn more about 1930s’ regulation.

Despite having been brought up from childhood on a steady diet of anti-New Deal sentiment, I either wasn’t told about this aspect of the New Deal when I was young, or I wasn’t paying adequate attention.

Feb 182009

When I saw the portrait of Andrew Jackson, I was expecting John Steele Gordon’s article, “A Short History of the National Debt,” to compare the national bank of Jackson’s day — the one he abolished — with the nationalized banks we’re getting now. (See “Bank nationalization gains ground with Republicans“)

Gordon didn’t go into that, but he did talk about the big real estate bubble that burst in 1837. And that made me think of another comparison between then and now.

In 1837, a real estate bubble burst, causing 6 years of economic contraction. The State of Michigan drew the lesson from it that it should never again get involved in running and owning private businesses, and even should draw back from public infrastructure projects. (It had lost the money it had invested in railroads and canals, not entirely unlike the way Fannie Mae an Freddie Mac have lost money.) When it rewrote its constitution in 1850, it included these provisions:

  • The state shall not subscribe to, or be interested in, the stock of any company, association, or corporation.
  • The state shall not be a part to, nor interested in, any work or internal improvement, nor engaged in carrying on any such work, except in the improvement of or aiding in the improvement of the public wagon roads and in the expenditure of grants to the state of land or other property.

So now in 2009 we’re having another economic collapse. Again, public investment in private business has turned sour. And again, there is talk of changing the role of government. Except this time, instead of doing less of the government activity that contributed to the collapse, we’re going to solve the problem by doing more of it.

Feb 162009

Tonight at the dinner table I was informed that Diether Haenicke, president emeritus of Western Michigan University, has died. I am glad to be alone now with the news, behind a closed door where the others can’t see me.

He was one of the best public university presidents, ever — certainly the best one I’ve known of. He never stopped being a professor and a man of learning when he became an administrator. I don’t work at his university, but Haenicke’s influence has benefited us all.

We don’t live in Kalamazoo, but for a few years I picked up a copy of the Kalamazoo Gazette once a week — on the day his column was published. I now just went to my bookshelf and took down his published collection of columns, “Wednesdays with Diether,” so I can re-read it.

Here is the opening paragraph of an article titled, “Revisiting books of youth may lead to a rediscovery of self.”

One of the great luxuries which I currently enjoy is having time to read for pleasure. For over twenty-five years, I held academic positions which forced me, day in and day out, to peruse financial statements, office memos, funding requests, general office correspondence, or accreditation reports. Although their respective authors undoubtedly put great effort into these communications to the president, none remain memorable or trigger the wish to re-read them. These days I read exclusively what I want to read, not what I must read, and the treasure trove of history, biography, poetry, and novels again lies open before me.

In “Musings on bans, censorship, and biased rationale,” he gave twenty examples of things that people requested to have banned on his campus. He ended with:

Finally, for good measure, my all time favorites:

19. Do away with the outdoor sculptures on campus. They are so abstract, no rational being can figure out what they represent. This is not art.

20. Do away with the Bronco sculpture in front of Athletics. It is so representational, everyone can see immediately what it is. This is not art.

If one ponders the list, one will no doubt find one or more items that meet one’s own biases. But who would still want to be on our beautiful campus and in our intellectually rich university if all the above requests had been granted? Certainly not I.

Immediately following that article in the book is one titled, “A tenured radical visits Kalamazoo.” It was Bill Ayers. Haenicke responded to Ayers’ self-justification:

I beg to differ. While I strongly support political protest and free speech, I fail to see any “merit” in throwing bombs, no matter how itsy-bitsy they are. And the argument that America’s alleged violence abroad deserves to be countered with bombing federal buildings sounds too much like the hollow justifications of our radical Muslim attackers.

And just now I found the most memorable paragraph in all of his articles. I’m not sure why it was so hard to find. Perhaps it’s because I couldn’t make myself just scan titles and paragraphs — I had to stop and re-read. But my copy has an orange sticky-note at the location of this one, so it shouldn’t have been hard to miss. It’s in an article titled, “Indoctrination is a crime against children.”

I was deeply affected. Just a few weeks earlier, I had come across a class photo taken in my elementary school in Germany in 1941. My first grade teacher smiles benevolently at her forty little charges, all of them with soft, beautiful children’s faces. I took a long look at myself, a nice, pleasant looking little boy sitting in the front row right under the big photograph of a stern, watchful Adolf Hitler on the wall above me. The classmate behind me, slightly mentally retarded, later unexpectedly died of pneumonia. Actually, he had been murdered through the euthanasia program for the ‘eradication of unworthy life.’ What a class photo!

I never met Dr. Haenicke. I once sent him an e-mail, and he responded. He had written about his trepidation at driving through Alabama to get back to Michigan, which matched some of my feelings about preparing a bicycle ride to Alabama.

Only once did I see him in person. A few years ago he was at the opening of a history exhibit at the WMU library, milling around with the other attendees. It seemed that he was an accessible enough person that I could have walked up and introduced myself, but I didn’t know of anything worthwhile to say to contribute to his evening. He has had much to say to us, though.

Here is the Kalamazoo Gazette news article about his death.

Feb 162009

So the Obama administration is trying to downplay expectations for the outcome of the stimulus package. (NYT: “White House says stimulus won’t be a quick fix.”)

I think I understand it now. If we didn’t get the big government stimulus package right away quick before anyone had a chance to examine it, we’d have a terrible catastrophe. But if we do pass it, we should not be so quick to expect things to get better.

I guess it’s better than the alternative, which would have been to go a little slower and pass a stimulus package that would have quick results. For example, a tax holiday on the FICA tax. And not only would it have provided the quickest of all possible stimuli, it could have been a logical first step to a reform by which ALL income would be subject to FICA tax, which was an election promise of Obama’s, but one which would be very dangerous to his agenda. (It’s one of his campaign ideas that I would support if it would be netzero.)

But if Obama kept that campaign promise, it would lead to expectations that he meant what he said at other times, too. No, it’s much better to move quickly, without thinking and without transparency, to pass a stimulus that will work slowly, at best.

Feb 162009

SCSU Scholars explains how in exchange for financing Obama’s big “stimulus” package, China will want a quid pro quo from the U.S. in the form of monetary policy. I would also expect some other pressures to be put on the United States:

  • We will need to quit providing public support for dissidents in prison
  • We will need to allow Cisco, Google, and Yahoo to support increased efforts by China to censor internet content and identify dissidents
  • We will need to shut up about Tibet

I would expect the Obama administration and the Democrats to be more than willing to help out with item 2, because they could use the moral cover in doing a little censorship of their own, e.g. with a revived “Fairness” Doctrine.

Feb 142009

Well, the stimulus bill has finally passed. Now our long, national nightmare is officially underway.

It’s as if the kids from “Lord of the Flies” landed not on a deserted island, but in a deserted strip mall. The larger faction has looted the place, starting with Best Buy and ending with the liquor store. Everything is in piles out in the parking lot, and they’re all pigging out. Now the Republican kids who held back (and the 7 Democrats) want some of the goodies, too.

The Washington Monthly says, “NOW THAT IT’S PASSED, REPUBLICANS LIKE THE SPENDING.” The comments are especially revealing. Here is what I posted in response:

I second Vincent’s opinion. Republicans who voted against the stimulus should be punished. Their districts should be cut out of as much funding as possible. This will demonstrate that the bill was not for the purpose of stimulating the economy, but for political aggrandizement. We already knew that, but it’s extra nice when we have constant, visible reminders long after the bill is passed.

Actually, I hope those who voted against the bill get as much of the loot as they can. I guess it’s a win-win situation. If they get some of the goodies for their own districts, then people can use some of it to contribute to dis-electing those who enacted the bill. If they don’t, we’ll have the constant reminder that the bill was not about the economy, after all.

Not a bad plot for a national nightmare.