Miscellany: 1/27/13

Quote of the Day
A wise man will make more opportunities than he finds.
Sir Francis Bacon

Political Potpourri

• Sarah Palin Back in the News. This blog has been a critic of Ms. Palin since the infamous botched media interviews in the 2008 campaign. I'm not interested in the various defensive responses, e.g., the interviews were heavily edited. The one on media sources she reads to keep current is the one that really stuck with me; she basically sidestepped the question. As I recall, she later explained that she was offended by the questions, inferring the interviewer was motivated by a stereotype that Alaskans don't read.  (I think Fox New later predictably gave her a do-over.) In job or project  interviews, say, for instance, if I haven't done a certain type gig for a while, it's not unusual for them to ask what I've done in the interim, i.e., to keep up with the technology. In this context, the interviewer was simply asking how she managed to remain current on national issues. I thought she might reference a local newspaper, maybe a news magazine like Time, an Internet news portal, etc. (I can't imagine any governor not being aware of what media were saying about her, especially since she once worked for media.) What disturbed me was her choosing this battle: don't sweat the small stuff.

What's odd is that Sarah Palin is both charismatic and politically savvy. She defeated an incumbent governor, a popular former US senator, as an underfunded political maverick and managed to beat a former Democratic governor in an election cycle that saw the Democrats take back both chambers of Congress. She had sky-high approval ratings (Democrats loved her going after the GOP establishment)--until McCain nominated her. Her decision to give birth to a Down Syndrome baby rather than abort him met with approval from pro-life groups and families with disabled children. Unlike McCain, who had spent almost 3 decades in Washington and was deeply distrusted by conservatives on the early Bush tax cut votes and his leadership on campaign finance reform and immigration, Palin was a fresh face, colorful and likable--and she drew bigger crowds.  She took to the VP attack dog/red meat political  role like a duck to water; she realized, of course,  that her bipartisan coalition and approval ratings would be badly damaged. One news account during the campaign said she was fixated on her Alaska approval ratings during the campaign--for good reason. McCain/Palin has held a lead in early September before the full brunt of the economic tsunami hit, making economic security (and traditional Democratic program relief support) the de facto real issue. I knew the race was over then . The Dems had momentum from the 2006 campaign, McCain had painted himself into the corner by emphasizing his support for Bush policies during the tough nomination battle, and his campaign had a fraction of Obama's war chest. Palin sounded detached from reality during the VP debate pushing energy reform just as oil prices were dropping in recognition of the deepening recession. Palin was right, of course, from a longer term perspective but she didn't respond, for example, to Biden's false charge that McCain was an ideological deregulator.

Returning to Alaska, Palin found her coalition had collapsed. State Democrats did not like her campaign performance, her relations with the GOP legislative leadership  were never good because of her anti-establishment rise to the governor's mansion, and state revenues were dropping along with world oil prices: one is always more popular spending money than cutting spending. On the other hand, she was now a political phenomenon outside Alaska; she took none of the blame for the loss, and she was automatically a contender in 2012. I'm not a fan of David Letterman's one-sided political humor, and delivering a sex joke about Palin's eldest daughter, an unwed mother, was offensive. (To be honest, the jokes had started, including other comedians, during the campaign.) Palin seized on the fact the joke writer had identified the wrong daughter (the middle preteen) at the baseball game and went after Letterman. I understand why the populist conservative base, which always resented the vicious partisan personal attacks against the Palin family in the aftermath of her VP selection, went after Letterman's job. To this day, I dislike the way she handled the situation: from hearing an alleged conservative lapse into ideological feminist rhetoric to giving publicity to a bad joke (and trying to make the joke seem worse than intended). It set off red flags: I had a vision of Nixon's enemies list, this one consisting of media personalities.

The Palin resignation surprised me; I know she was trying to deal with a flood of questionable complaints, but that was an issue the legislature should have dealt with. I think it's clear she had limited shelf life as a celebrity: lucrative book and appearance fees. I had predicted a Fox deal  before it happened. But the resignation also killed her 2012 ambition: i.e., could she face the much greater responsibilities of being President?

I see her role since then as merging her anti-establishment rise to power in Alaska with populist conservatism. Whereas she had some success in 2010 promoting certain candidates for party nominations, one 2011 poll had her approval ratings in Alaska in the upper 20's, nearly half of what they were in leaving office. Ironically, Palin, who was offered  former Gov. Murkowski's old Senate seat and turned it down, could potentially run for Begich's seat next year, but the only thing I've heard is Miller, who lost to Lisa Mutkowski in 2010, is considering a second campaign. The Wikipedia post on the 2014 race doesn't mention Palin. It's difficult to see how Palin can otherwise sustain a national impact, especially now she's giving up a role at Fox News. (I have no doubt she could land a gig with another network.)

I think Palin lost a lot of her maverick and kingmaker reputation by backing Gingrich (about as ultimate an establishment insider as you could get) whom had no shot of beating Obama. She's blaming "Romney, the Moderate" for losing to Obama, but the fact is that Romney won every state McCain won, plus North Carolina and Indiana. He lost several states by 5 points or less, and Obama got several million fewer votes, with a much narrower margin of victory. The fact is that it's very difficult to beat an incumbent, especially if there is any hint of growth in the economy, never mind a $1B war chest and no viable partisan challengers.

What I heard was that Fox News did offer a renewal contract but with considerably lower terms--Palin hasn't brought in the viewers to justify sustaining the original terms. Some of that is not her fault; I would have used her differently--but FNC has never contacted me for advice. For example, I could easily see Palin doing  a variation of Charles Kuralt's "On the Road" segments, say, as a regular feature on 60 Minutes. Or a reality series based on her stumping for candidates.

• Senate Races Next Year. Retiring Jay Rockefeller's and Tom Harkin's seats open up very winnable seats. A recent poll suggests that Brown would easily win Kerry's seat over Markey; the downside is that Brown would have to run for the fourth time in 5 years next year against a likely tougher candidate. Of course, Brown could run for Senate now and Governor next year. I wonder if Pawlenty would consider going after Franken's seat? Quite a few red or purple states with Dem incumbents are doable--Louisiana, Alaska, South Dakota, Colorado, Arkansas, Montana, North Carolina, New Hampshire.. On the GOP side, Chambliss of Georgia's retirement opens a vulnerable seat. With two former Presidential candidates from Georgia, Cain and Gingrich, it could be interesting. Five GOP Congressmen, including Price, have near perfect ACU ratings and one should coast to victory.

NO Birthday Cake For You!
Cato Institute,  "The Federal Reserve Turns 100"

Germany recently raised eyebrows by asking for the return of its gold held in the US. Let's be clear: gold is money (although it also has functional commodity uses, e.g., jewelry). As long as the US Treasury churns out trillions of dollars in bonds and the Fed keeps printing money--tripling its reserves over the recent past, we can't expect the rest of the world to rely on our currency. China and India have been building large gold reserves, and although this excerpt is several months old, it makes a valid general point: "The central banks of the following countries are showing increasing gold purchase this year: South Korea, The Philippines, Kazakhstan. Russia, Mexico, Turkey, Argentina, Ukraine, along with several others. The central banks are buying gold to reduce their reliance on the US dollar as a reserve asset. The purchases made by the central banks of developing countries have been increasing in recent years, as those nations diversify holdings, partly because of rising foreign-exchange reserves through export-led growth, but also, more recently, as a reaction to the sovereign-debt crises affecting traditional reserve currencies, like the U.S. dollar. The fact that so many central banks are increasing their gold holdings shows that they believe that considering its actual price, gold is a good investment, which will preserve its value."



Boudreaux/Perry, "The Myth of a Stagnant Middle Class" 
(WSJ): THUMBS UP

I believe I mentioned this in a prior post: my late OLL curriculum adviser, the math department chair, mentioned buying a minimally functional calculator for $150 a few years earlier; of course, even years ago you could get a solar-powered more functional one as a perk for a magazine subscription or renewal. I've bought maybe a half dozen laptops over the past 15 years and it seems each purchase has been about the same or lower in price (general trend lower price) with faster and/or multiple CPU's, more RAM, a bigger hard drive and more integrated functionality (e.g., a webcam). So even if my income has not gone up that much over the Bush/Obama era, I've been  able to buy more from my discretionary income. A related concept is behind this article: "Household spending on food, housing, utilities, etc. has fallen from 53% of disposable income in 1950 to 32% today."

Progressive economists like to talk about "stagnant wages" but we are really talking about apples and oranges. Before going further, the column is written by two of my favorite bloggers and free market economists, Don Boudreaux of Cafe Hayek and Mark Perry of Carpe Diem. Boudreaux has some interesting followup posts where he points out there is a price/quality trade-off, particularly in discussing health care. I'll give a minor example: I was near-sighted and required glasses or contact lens through my academic career. I had Lasik done while I was in California; my quality of life has improved in ways people with regular eyesight can't understand.  I've had contact lens pop out--or refuse to pop out at night; and it can be painful putting them onto irritated or tired eyes (never mind an eye infection). And, of course, you have to maintain your lens, buy expensive solution, etc.  Or you break or misplace your glasses. The major part of the operation takes seconds; and your life changes. I don't need to put on my glasses to check the time on my alarm clock. I don't have to worry about where I put my glasses when I go for a swim.

There are other things. For example, I have wide feet and have clothing sizes that are hard to find. Many stores have websites which will let me know if a desired item is in stock, saving me a trip.  Is everything like that? No. There are purchasing power implications to the the Federal Reserve's money printing.

Musical Interlude: My Favorite Groups

Steely Dan, "Rikki, Don't Lost That Number". One of the best crafted pop songs ever: the musical hook is irresistible, the arrangement  sparkling, the vocals spot on.