Hyde Park Blvd

Last month, Fabrizio Ferraro’s post on his blog, orgtheory, hypothesized that Nixon policies, especially foreign policies continue to drive the agenda of both parties.

Will Wilkinson’s salty gloss on this interesting perspective:

This sounds about right to me. The free marketeers and the culture warriors are useful idiots thrown a bone from time to time to keep the Nixonite establishment entrenched. Moreover, I’d say the U.S. national security apparatus remains shot through with the Cold War Nixonite ethos of Hard-Headed Big Boys Who Keep the World Safe. If the will of the herd and their elected windbags are behind with the program, great. If not, too bad. Even (especially?) Democratic executives are flattered by all the secret briefings, etc. and the gravity of Hard-Headed Big-Boy World-Saving responsibilities into sticking with the program. You can fight the permanent national security apparatus and get nothing in return other than a reputation as a giant pussy existential threat to America who is going destroy us all, or you can let the apparatus publicly act like you’re in charge of it while it more or less runs itself, allowing you to focus on the trivial issues you care about, like nationalizing things and raising taxes. Cheney wiping the floor with Obama over torture is a sad sign that it’s all still just churning along. The message, I take it, is that the damn hippy kids can appoint bisexual robot Latinas to the Supreme Court and tell GM to make cars that run on fairy kisses as long as they know the Serious People will continue to control the power that matters. All signs point to Obama going along, which, as Nixon knew, is what you can expect from self-impressed Ivy League assholes.

Gary Goehl, writing a Times Op-Ed, reflects on the phenomenon that is Blago and offers a first person perspective on what Chicago politics is really all about:

My services to the city of Chicago throughout the 1970s included exuberant participation in corrupt practices for which I pleaded guilty in 1984 and spent 18 months in federal prison. My venality may have known no bounds — at the time of my conviction some said that I was the recipient of more illegal loans than any civic official in Chicago history — but I was a relatively low man on the totem pole: a deputy sheriff and deputy county treasurer.

There’s a lot of bluff talk about Chicago politics, Chicago corruption. The structure isn’t different from Boston politics or Washington politics. Some may say it’s more cut-throat, but I was in Boston during the reign of Billy and Whitey Bulger (the latter, lionized in Scorsese’s terrific The Departed, is still on the lam) and it felt pretty familiar. On a smaller scale, but Boston (especially in those years) didn’t have the big business or population density.

As for me, I’m looking forward to Goehl’s book. Thanks to reader TC.

Brad DeLong offers a reasoned analysis of the Geithner Plan, in particular the effort to enlist hedge/pension fund managers to buy bank assets. The devil is in the details, which NYT didn’t understand in their coverage this weekend.

Covey’s rule #1: Start with the end in mind:

A: The private managers put in $30 billion and the government puts in $970 billion. If we were investing in a normal hedge fund, we would have to pay the managers 2% of the capital and 20% of the profits every year. In this case, the private managers’ returns can be thought of as (a) a share of the portfolio’s total return proportional to their 3% contribution, plus (b) a “management incentive fee” of (i) 0% of the capital value and (ii) between 0% (if the portfolio returns 3% per year) and 9% (if the portfolio returns 10% per year)–much less than hedge-fund managers typically charge.

Q: Why do we think that the government will get value from its hiring these hedge and pension fund managers to operate this program?

A: They do get 17% of the equity return. 17% of the return on equity on a $1 trillion portfolio that is leveraged 5-1 is incentive.

Q: So the Treasury is doing this to make money?

A: No: making money is a sidelight. The Treasury is doing this to reduce unemployment.

With the benefit of a few days to recuperate and reflect, some thoughts about the Inauguration and the days since:

1. It’s hard to fault an event with as much good feeling as this one. Everyone smiled, talked to strangers on elevators, on the street, in the subway. Given the inherent instability of almost two million people, the police and military were polite to a fault. The enduring memory is of thousands of spirits, marching westward at 5:30am, smiling with the promise of delivery.

Short of a tourist falling in the Potomac on Sunday night, there were no incidents. Like Woodstock without the bad acid.

2. Most moving were the thousands of families on the Mall Sunday and Monday, introducing their children to a nation to which they had suddenly gained access. Not only African-Americans, but men and women of every color and from all over the world. This was their Inaugural, too; as Obama has been saying all along, this whole thing is less about me than it is about you.

3. When I lost it. Aretha singing ‘America.’ I will defer to my elders, but she’s a lot more than the Sophie Tucker of our generation. Reverend Franklin’s daughter, the greatest vocalist of our era. A video that captures the moment:
[youtube=http://www.youtube.com/watch?v=Mx6FlelXA-s]

4. Even Obama’s off-key speech couldn’t deflate the crowd. Yes it showed strength and it turned the page (in a not very generous way, even considering Dick Cheney’s Mr. Potter imitation). I’m no big fan of Paul Krugman but his NYT editorial strikes me as correct. Lots of bromide, not much vision.

5. The Administration is off to a fast start, despite the White House’s Atari computer infrastructure. But the stimulus package has already become the victim of political sausage-making. As of today, more than a third of the House package is tax cuts (appropriately so), with less than 20% for investments in infrastructure. The rest? Bailing out the states, in particular their healthcare and education systems. Important, but the sum total is less than what the package could have been. Everyone and their brother is getting their oar in the water; this may be the last time there’ll be real money for the foreseeable future. The concept of shovel-ready projects has elbowed out real infrastructure investment (rebuild the power grid, invest in bandwidth, rebuild roads and bridges, etc.), as evidenced by the sewer projects and environmental initiatives left on the cutting room floor.

One hopes for Senate leadership in the days to come.

Today’s WSJ Opinion Journal speculates on Cass Sunstein’s role as the Administrator of the Office of Information and Regulatory Affairs.

“Credit regulation raises immense challenges, and there is a serious danger that, in light of the current crisis, government regulators will overreact,” Mr. Sunstein wrote in an op-ed on these pages last August. “The fundamental line of defense should be improving market competition, not eliminating it. And to improve competition, transparency is the place to start.” That piece, co-authored with the University of Chicago’s Richard Thaler, argued that better disclosure, combined with technology, would be more effective than playing “regulatory whack-a-mole” with unpopular industry practices.

The world expects wholesale re-regulation; the smart money is on a more nuanced — and market-savvy — approach.

Fresh-water economics with a Democratic flavor. No wonder Powell called Obama a transformational figure.

Thanks to reader ASR for the heads-up.

For those of us who believe in keeping one’s attention on the road ahead (not on the rear-view mirror), here is Charles Fried from today’s NYT.

If you cannot see the difference between Hitler and Dick Cheney, between Stalin and Donald Rumsfeld, between Mao and Alberto Gonzales, there may be no point in our talking. It is not just a difference of scale, but our leaders were defending their country and people — albeit with an insufficient sense of moral restraint — against a terrifying threat by ruthless attackers with no sense of moral restraint at all.

Our veneration of the rule of law makes us believe that courts and procedures and judges can put right every wrong. But we must remember: our leaders, ultimately, were chosen by us; their actions were often ratified by our representatives; we chose them again in 2004. Their repudiation this Nov. 4 and the public, historical memory of them is the aptest response to what they did.

This is such a rich image that I don’t know where to start.

I guess I’m not surprised that GHWB and BHO are the only two who look like normal humans. The other three could be part of a permanent exhibit, maybe Disney’s Audioanamatronics at their best.