Thursday, October 23, 2008

Republicanism unites owners and workers!

Matthew Yglesias recently posted this interesting chart from Andrew Gelman:

The graphs show support for Republicans compared to the national average by occupational group for the last 50 years. An upward slope means increasing support for Republicans. Business owners and skilled workers show the largest increases in Republicanism, with non-skilled workers not far behind (though they are still slightly more Democratic than the national average).

Meanwhile, professionals and office workers have become more Democratic.

Monday, October 20, 2008

Dr. Doom and Dr. Meta-Doom

Nouriel Roubini, an economist at New York University who predicted the current financial crisis as the housing bubble collapsed, was sometimes called "Dr. Doom" because of his pessimistic forecasts for the economy. Although he believes current efforts to salvage the banking system are "going in the right direction," they are too late to keep the world from sliding into the worst recession in 40 years. "We're going to be surprised by the severity of the recession and the severity of the financial losses," he told Bloomberg Television:
The economist said the recession will last 18 to 24 months, pushing unemployment to 9 percent, and already depressed home prices will fall another 15 percent.
But that's nothing compared to sociologist Immanuel Wallerstein's prognosis of a world-wide depression followed by a 20-50-year period of turmoil until a new order emerges to replace the capitalist world-system that has dominated the globe for 500 years:
We can assert with confidence that the present system cannot survive. What we cannot predict is which new order will be chosen to replace it, because it will be the result of an infinity of individual pressures. But sooner or later, a new system will be installed. This will not be a capitalist system but it may be far worse (even more polarizing and hierarchical) or much better (relatively democratic and relatively egalitarian) than such a system. The choice of a new system is the major worldwide political struggle of our times.
We are moving into populist government-led redistribution, which can take left-of-center social-democratic forms or far right authoritarian forms. And we are moving into acute social conflict within states, as everyone competes over the smaller pie. In the short-run, it is not, by and large, a pretty picture.
Wallerstein is the doyen of World-systems theory, which analyzes history in terms of large-scale economic cycles. In his view, the capitalist system has been winding down since the late 1960s, has the US has declined as a hegemonic power, and as capitalist enterprises have gradually maxed out possibilities for increased profits in production.

I don't pretend to be a far-sighted theorist, but it does seem virtually certain that we're entering some new phase of world history. The free-market-├╝ber-alles ideology that has gained power for the last three decades or so is now on the decline. I'm perhaps more optimistic that Wallerstein seems to be about what comes next, though I do worry that depletion of natural resources (like oil and water) could make the next century pretty brutal. It does seem, though, that recently our politics are moving in the right direction. In any case, the next fifty years should be pretty interesting.

Wednesday, October 15, 2008

How's that bailout working out?

Let's see... The Dow's up 900 points! Wall Street loves the bailout! Woohoo--crisis averted! Oh, wait. That was October 13. Today the Dow is down again, about 700 points as of 4:00 p.m. Hey, you guys need another bailout? I guess not everyone is happy with the sweetheart deal Paulson gave his old friends in "forcing" them to accept government investment. Besides, the bailout wasn't really supposed to make stock prices higher, it was supposed to free up lending among financial institutions. I haven't heard from informed observers how that's working, but the TED spread remains pretty high, as shown in the chart from Bloomberg below.

And whether the bailout works or not, it's too little, too late to prevent a pretty severe recession. The Democrats ought to be thinking about a much bolder, much bigger stimulus package than the $150 billion plan they've publicly discussed. Unfortunately, they don't seem to be in a hurry even with their too-small plan.

Thursday, October 09, 2008

Lumpenlogocracy word cloud

From, a word cloud of this blog. Have we really been talking about McCain so much?

Saturday, October 04, 2008

Why such a lousy bill?

So the big bailout has passed and been signed into law. As the NY Times points out this morning, now the Treasury has to figure out a price for all those mortgage-backed securities so it can start buying them up. These are the securities that more pessimistic observers refer to as "worthless" and "toxic." Whoopee.

It's striking that even supporters of this bill don't like it, and recognize its key flaw. Former labor secretary Robert Reich calls it "a lousy bill. It doesn't do the most important thing--help distressed homeowners avoid foreclosure." Paul Krugman says "the plan on offer is a stinker," and that "at best, the plan will buy some time to seek a real solution to the crisis." Even the CEO pay limitations that some Dems insisted on are just window dressing, and not likely to have a real impact on excessive CEO pay.

So why was a better bill impossible? All the right-thinking people in Washington and the punditocracy have been reassuring us that this bill, bad as it is, needed to be passed, and passed quickly. But has anyone explained why a bill that actually addressed the root of the problem, and provided more direct help to distressed homeowners and the middle class, was never even considered? There might be a good answer as to why alternatives were not considered. But no one with access to a prominent op-ed page seems to be wondering why. It's just taken for granted that a bad bill was the best we could hope for.

Wednesday, October 01, 2008

Forecasting the global electoral college

The has asked its online readers around the world which candidate for US president they would vote for. The results are weighted by population according to the rules of the US electoral college. The results so far? Obama 8,202; McCain 15. Only Andorra--a place I've always wanted to travel, actually, ever since I read about Richard Halliburton's visit--is in the "strong McCain" category. El Salvador leans McCain.