Reviving the Monroe Doctrine

On December 2, 1823, the fledgling United States scored its first significant victory in foreign affairs. As the Republic approaches the 185th anniversary of the Monroe Doctrine, its provisions are as important to national security now as they were in the early days of the nation's history.

 

In his 7th State of the Union Address, President James Monroe articulated that European powers were no longer to colonize or interfere with the affairs of the newly independent states of the Americas. The United States would not interfere with existing colonies or their dependencies in the Western Hemisphere. However, any attempt by a European nation to oppress or control any nation in the western hemisphere would be seen as an act of aggression and the United States would intervene (1). The Roosevelt Corollary of 1902 asserted American right to intervene in Latin America if a particular nation was internally unstable or mismanaged.

 

Today, as reported on NPR, the Russian and Venezuelan Navies will stage joint exercises. The same report also mentioned that Russia is keen on re-establishing ties with its Soviet-era, remote satellite state, Cuba. The United States has the most sophisticated and powerful navy in the world, and a military challenge from Russia and Venezuela is unlikely and foolhardy. However, Russian diplomatic overtures are taking place during the American inerregnum, and the incoming Obama administration will have to play some catch-up. Current State Department priorities seem to be Iraq, Afghanistan, Israel, and North Korea. Genocides in Congo and in Darfur have received ever shorter shrift. Latin American leaders and citizens still have reason to view the United States critically as emphasis shifts ever further from the geographic locus of the Americas. It is a shame, for Latin America holds several keys to continued American prosperity.

 

Policy towards Latin America has been abjectly benighted, and Latin resentment of the US will continue if little changes. Cooperation with Latin America is vital in areas of immigration, trade, drug, and energy policies:

 

Could the level of Mexican, Salvadori, Nicaraguan, and Guatemalan illegal immigration be reduced with smarter trade policy? Plausibly, yes. Free trade, in the short term, causes employment displacement, yet over time, the labor market ought to return to equilibrium. NAFTA is unpalatable because the tax concessions and loopholes granted to American firms have prolonged the labor market distortions both at home and across the Rio Grande. Latin nations must devote more resources to education and infrastructure, but it is not in America's interests to export an economic policy which has the unintended consequence of straining the public purse. Whatever immigrants the US absorbs will mean a new generation of voters in a generation, and future American presidents cannot afford to become part of a political culture aloof, disinterested, or even hostile to the home countries of their constituents' parents. 

 

Crime and the drug trade pose significant social obstacles to growth in Bolivia, Columbia, and Mexico. Despite the successes of Plan Columbia, the ultimate answer lies in curbing demand for the commodity. Stiffer penalties for powder cocaine offences - a smaller plank in the Obama platform - in the United States would be a start. At minimum, it would signal to Latin American countries that the violence engendered by rival drug gangs would decrease if demand would drop. Moreover, a Turkish approach would prove a good solution where pharmaceutical firms would buy the commodity. The benefits here would be manifold. International prices for anaesthetics and pain medicine would drop and hence be more available in places where it is still too expensive. Second, there would be no social or economic cost which eradication programs cause. Third, resources already allocated could go to protecting farmers from thugs and rebels, and such a program would win a lot of hearts and minds. 

 

Regarding energy, newly found petroleum reserves by PetroBras, the national oil concern in Brazil, could ease American reliance on foreign fuel. Moreover, when the current farm bill expires, domestically produced ethanol might die with it. Importing ethanol from Brazil was and will be economically prudent. Furthermore, the United States and Brazil have mutually aligned interests in environmental preservation. Brazilians have seen the benefit of eco-tourism, and Americans are keen on green. Calling more cooperation with a macroeconomically stable, large, emerging economy a good thing is a truism. It makes sense to pay attention to the most stable, most pro-American emerging market nation.

 

Though Latin American nations feel rightly neglected to an extent, the United States still provides military assistance, humanitarian aid in crisis, and donates billions to the IMF and the World Bank which fund projects in the developing world. However, continuing to ignore Latin America, especially as its people view democratic institutions and ideals ever more favorably, would be a grave error at this juncture. Eliminating trade barriers and engaging the governments of Castro and Chavez area a start. The last test of the Monroe Doctrine came during the Cuban Missile Crisis. The next one might not end so felicitously.

 

(1) Britannica 269 as reprinted on WikiPedia.

Does this signal deflation?

Boston City Councilman Chuck Turner was arrested for taking a $1000 bribe. State Senator Dianne Wilkerson is under investigation for corruption as well for having accepted up to $23,000. Allegedly, both politicians accepted payoffs to facilitate liquor licenses. Though race - both politicians are black - will eventually become a factor due to propensities to exploit the obvious, the key issue has to do with the price of graft. So why have politicians staked so much for so little? 

 

In Massachusetts, liquor licenses are both scarce and expensive, and as such pose barriers to entry for aspiring entrepreneurs. Since it is difficult to obtain a license from scratch, transfer of licenses is a more likely avenue to getting one. However, towns have their own zoning limits and liquor quotas. Because of the nature of the product sold, the market is not particularly volatile. Thus, the available number of licenses does not keep up with demand. 

 

At this stage, it is unknown whether Turner and Wilkerson were acting in concert. If the incidents are not part of a conspiracy, then they expose a glaring weakness in state law. Hearing about a political graft scandal will not shock even the least jaded. What is more alarming is how little politicians will sell out for.

 

Investigators have barely begun to discover the extent of the alleged corruption, but what they have revealed to the public ought to provide enough impetus to amend state liquor licensing procedure.

Fundamentally, a quota on licenses for anything is anti-libertarian and anti-market. Compelling state interest ought to exist for government intervention. There are no limits on the number of recreational hunting or fishing licenses, but the state restricts quarry numbers because of ecological concerns such as species population depletion. An age baseline for driver's licenses makes sense because of public safety. However, issuing fewer liquor license accomplishes little except putting an artificial brake on commerce.

 

Not all state liquor laws are incoherent, though. Some do provide a public benefit. According to Massachusetts statute, MGL CH. 138, SEC 15 regarding the number of licenses issued, "No person, firm, corporation, association, or other combinations of persons, directly or indirectly, or through any agent, employee, stockholder, officer or other person or any subsidiary whatsoever, shall be granted a total of more than one package store license in a town, two licenses in a city, or three licenses in the state." Such provisions limit the influence of organized crime and promote competition among the lucky that have licenses. 

 

So, why have politicians have sold out for such piddling amounts of money in such a high stakes, high margin industry? Helping someone procure a license that costs hundreds of thousands of dollars should come with a higher vig. Entrepreneurs aspiring to get a liquor license will have a sense of what the return on investment will be, and the timetable for actualizing the returns. Annual fee schedules in each municipality vary, but even the most expensive are no more than a few thousand dollars a year, so annual fixed costs are low after the initial investment. Getting the inside track on a brand new license should be worth a lot more. If the average cost of a liquor license in the state is a quarter million dollars (the license itself comes with the establishment, real estate, kitchen equipment, etc.), taking .o4% of the market price as commission hardly makes sense. Unless it was an installment in a residual payoff plan meant to keep police and authorities off the scent, taking so little was a bad play. Even if the amount concerned in the Wilkerson probe was for one liquor license, she still took less than 10%. 

 

Since the amounts in question are tiny compared to what was at stake, whatever information surfaces in the near future will shed light on the terms of trade for political favors in this state. Given what is known in the early stages, the bottom has seemingly fallen out of the political black market. That cannot be a good sign for all business, legitimate or not.

Everyone's champion

College football is an economic anomaly. Between hiring staff, providing financial assistance through scholarships or academic grants, and coordinating travel, uniforms, and training, subsidizing it takes up much of athletic departments' budgets. Yet, few schools with football programs profit from having the sport. Under Title IX, the statutory provisions regulating proportional financial outlay for men's and women's collegiate athletic programs, it has no counterpart. Consequently, some schools have cut certain sports to conform with this legislation. The University of Miami cut men's and women's golf as well as swimming and diving to accommodate its football program, typically one of the best in the country. Why do colleges, many of them state institutions, fund football when the costs of operation of and of participation in higher education increase every year at a rate much higher than headline inflation?

Many parts of the country regard its status as religious, as iconic. Student pride and campus morale are often cited as reasons why universities have continued their football programs. Such justifications seem to stretch the logical link between the presence of a football team and raising a school's profile, and only deep cultural entrenchment supports the validity of those claims. Would the benefits of eliminating football or 'privatising' it in state schools result in a better allocation of resources?

 

The structural shortcomings of college football economics further exacerbate atavistic clinging to the status quo in all aspects of the sport, particularly in determining a national champion in formerly Division I-A, now known as the Bowl Subdivision (FBS). The Bowl system itself is an anachronism. When rail travel was the norm, teams that could not play each other because of transportation logistics met during the winter holiday break for one last hurrah. 

 

Presently, technology makes getting across the country fairly cheap, and schools from different geographic regions routinely meet during the regular season. Hence, the old bowl system, which has grown to a level where roughly half of the teams in FBS compete in a postseason game, rewards mediocrity rather than pair two regional superpowers that could not face each other due to academic and technological constraints. When bowls were few, schools and fans could take pride, but few savvy fans and students will boast about participating in the Outback Bowl or any other game with a corporate title sponsor. However, bowl games are the fruit of a high priced gambit: sponsors pay money into a school general fund for getting to a bowl.

 

The Bowl Championship Series (BCS), a cartel of the heads of the major football conferences and Notre Dame, have co-opted the system further where teams that play in the BCS receive the largest payouts, national television exposure, and establish football supremacy. The BCS was touted as the solution to the arcane method of selecting a national champion through media and coaches' polls. Since its inception in 1998, the BCS has been fraught with controversy over which teams qualify. The BCS also failed to produce a consensus champion in 2003. One of the advantages of the BCS was to eliminate a split title, yet no consensus champion emerged that year. Arguably, since the BCS limits eligible teams to the power conferences and Notre Dame, no true consensus national champion emerges. The BCS only determines the winner of its series which might not necessarily represent national consensus. The computer formula will take input data from national polls and mathematical rating systems, but it has an inherent bias towards the conferences which stand to benefit most. If a school from a lesser conference went undefeated, scheduled perennial powers for its non-conference schedule and took them down in the process, it might not factor into the national championship equation. 

 

The lack of a college football playoff in former Division I-A and the proliferation of the bowl system diminishes the product that is supposed to instill pride in the student body and attract national and international attention. The following is a suggestion to the NCAA over how to solve the playoff problem and simultaneously restore the game to schools rather than to render that unto a money machine:

1. No preseason polls. First poll will come out after every team has played four games. Preseason rankings are subjective conjecture at best. The absence of a preseason poll will not impact how teams play or prepare. If anything, the first few weeks of the season are a good time for teams to prove themselves and vie for coveted spots.
2. In the first year of the system, any conference with 10 or more teams will be split into an Upper and Lower Brackets rather than on geographic lines. The five or six best will occupy the Upper Bracket. To be considered title eligible, each UB team has to play all the other UB teams. To complete a seven game conference schedule, each UB team will play two or three of the Lower Bracket opponents. This part of the schedule will be determined by athletic directors. After the end of Year One, the UB will relegate 2 teams. The LB will promote 2 teams. This will eliminate the need for a conference title game. Though a lesser team upsetting a favorite makes for good drama, it makes consensus - the much sought after purpose - impossible under the present system. Since there will be fewer regular season games, bracket games will have the same import as division games in professional football.
3. Given the prospect of relegation, a team which would like to compete for the national championship will have to schedule worthy non-conference opponents. If Oklahoma had an off year in the Big 12, non-conference games against SEC, Big 10, and ACC powers might salvage a season when its in-conference schedule is soft. The current system disproportionately favors teams lucky enough to avoid the toughest competition in its own conference. Wisconsin once skated through the Big 10 without having to play Michigan or Ohio State. Albeit rare, such phenomena would not occur with the bracket format.
4. No Cupcake Rule - Scheduling lesser competition for glorified scrimmages encourages bad sportsmanship and needlessly pads the statistics. Glorified scrimmages help no one. Scheduling Florida or Nebraska might look nice on a small school resume. It might get a recruit. However, no student, fan or alumnus can be proud of a 73-0 pasting. Any school scheduling an FCS opponent ought not to be considered for a national title.
5. Maintain a computer formula, but eliminate the incentive to run up the score. Including margin of victory in the ranking formula also encourages bad sportsmanship. Margin of victory is borderline irrelevant in the NFL, a league with much more parity amongst its clubs than even the top 32 college teams. Tie breakers will come down to bracket record, overall conference record, and head to head record. In a five or six team bracket, it is unlikely that three team will have the same conference record if they would share more common opponents than they do now. Moreover, multiple loss teams seldom merit national championship consideration.
6. An eight team playoff at the end of the season will determine a national champion. Seven of the marquee bowl venues will host the playoffs. The title game can rotate among the oldest established bowls, but few would quibble if the Rose Bowl hosted the last college game of the year. Moreover, a playoff system would not fragment the season between two academic terms. If the first weekend in December were to be the last in the regular season, then two weeks of playoff games following final examinations would make sense. The national championship could take place New Year's Day. Eight teams suffice for logistical purposes, and regression analysis using the BCS formula will show huge drops between the rating of the eighth and ninth teams each year. Also, elimination games produce great drama; the NCAA basketball tournaments provide good evidence of that.

The one argument against incorporating a playoff system is ironically an economic one. Demand for football is high, so why kill the cash cow? Decreasing the total number of games played would be economically unwise because demand is high and relatively inelastic. Therefore, limiting the total number of games played by each school reduces the value of future television contracts. However, demand and clamor for a playoff system to determine a champion are high as well. When observers and coaches find that the current system distorts competition, then change is appropriate.

Since the pressing need is to find consensus, perhaps protecting vested economic interests ought to matter less. College football does provide tangible and intangible benefits for even loss making teams. A model which would compel incumbent powerhouses to behave more competitively is in every one's interest. Though first person participation and the number of televised games would decrease at first, consistently good match ups each week would drive up the value of each game, and hence the price. If revenue for a good albeit flawed product is high, would revenue for an improved version though sold in slightly less quantity be higher? In principle, the answer is yes. Until one can prove that the status quo would continue to generate more interest, higher returns, and protect the integrity of the game, then the NCAA, the networks, and the schools themselves must review all possible ways of abandoning an anodyne, inefficient approach to determining a winner.

Stack and tilt economics

The great new fad in teaching the golf swing has been the method known as Stack and Tilt. The basic premise of this technique focuses on two positions: the back swing and the finish. Simply, from address, reverse pivot to reverse-C. For some players, it has worked well, for others, it has knelled the end of their careers. Stack and Tilt can work for some golfers, and many have made millions on Tour by following its principles. Adherents of more traditional instruction have been skeptical of this as an alternative and equal approach to teaching the golf swing. Stack and Tilt emphasizes a reverse pivot where the weight does not shift to the right side during the back swing; many regard as a flaw in an efficient swing. How, the question goes, can a flaw suddenly become a fundamental?

 

Economic policy over the past ten years has followed a similar trajectory except for the fact that economic purists were seemingly ignored while fiscal and monetary levers were manipulated in ways which only delayed the inevitable, current mess. If the undergraduate economics professors of the Fed board of governors knew that their students would one day make such policy decisions, they would have certainly flunked their charges on the spot. One can blame group-think or a culture of endemic callowness within the administration where clash was almost impermissible, where no one rocked the apple cart, but the central bank is independent and in position to stand up to claptrap. Granted, no economist wanted the blood of a potentially lost decade as the one Japan experienced after the collapse of its equity bubble, and panic moves never end well. However, embracing ideas such as soaring deficits, tax cuts, and prolonged periods of cheap credit while ignoring the inevitable consequences of excess was dumb and passive.

 

Fiscal and monetary policy have been both grossly irresponsible. During the first term of the Bush presidency, the executive and legislature inherited a budget surplus which ought to have been used to pay down the monetized national debt. Instead, public money was squandered on many ill-fated, ill-conceived initiatives ranging from missile defense to faith-based initiatives. Moreover, the legislature, with a majority united to the executive. approved tax cuts during a period of unprecedentedly prolonged economic growth. Foolish, arrogant and short sighted, the quick sop to a country still not quite convinced the right man was in the Oval Office was a cynical ploy to get the public on board with the new president. However, without a way of replenishing the public purse, the country was unable to gird itself for the shit storm caused by both endogenous and exogenous forces during the next eight years. Monetarily, the recent record of the central bank is not so glowing either. Lauded as a genius, encircled by a seeming personality cult, former Fed Chairman Alan Greenspan could do no wrong, but he has since admitted he was wrong in many respects from bailing out LTMC to keeping interest rates artificially low. Years of unnecessarily low interest rates facilitated rolling asset price bubbles as the monetary lever was used to keep the wheels greased and delay a reckoning. Little of this seemed prudent at the time, for it all seems reckless now, as the state had guaranteed against any moral hazard.

 

Echoing the timbre of the last days of Rome, John McCain's assertion about the fundamental soundness of the economy showed that we had bought the bullshit, and the people selling it were the very ones that had the professional, philosophical obligation to remain above the fray. Here are a few examples of when someone ought to have thought of drawing the brakes:

• In winter 2000, it was common knowledge that recession was imminent. Rather than brace for recession, Greenspan opted for a soft landing. In hindsight, when much of the lost wealth was in paper assets due to rampant equity speculation, the segment of the population hardest hit would have been the wealthy. Not a chance of a correction taking place with Republican dominance of executive and legislature.
• In winter 2001, when the fallout of the dot-com era exposed malfeasance from faulty business models to disingenuous analytics to plain, old book-cooking (Tyco, Enron, WorldCom), the hastilycobbled Sarbanes-Oxley Act did little to give regulators the resources and scope to deal with crises in the future. "Self-regulation," came the cry. Good job.

Now, when policy decisions have affected not just the leisure or investor classes, but people whose meager net worth is tied solely to the value of their home and the amount of debt they have against the property value, no one is quite sure which is an advantageous step. Concomitantly, high stock market volatility, huge drops in global commodity demand, unfathomable levels of foreign and sovereign debt for the developed world are all symptoms of the collapse in credit markets. Moreover, a coordinated bailout of American investment and retail banks simultaneously doubled the national debt ceiling. The last decade has created a culture within the financial services industry that it is their birthright to have high yield on anything they touch. How is any of this fundamentally sound?

At the most basic level, economics is a science of allocating limited resources. As a science, it cannot predict the future, but as a study of statics, it can indeed illuminate causal, logical relationships. More philosophically, economic analysis can provide clarity, both logos and ethos, a cool breath of reason to policy debate when hot rhetoric and emotional appeal sometimes make for a muddle in determining the best course of action. Like medical doctors take the Hippocratic Oath to do no harm, economists must implicitly not buy into the bullshit. Why else would central bank autonomy be regarded as generally good? 

 

To restore the confidence in economics, capitalism, and the institutions acting as their instruments, a return to status quo ante would be a rash error, but some old style remedies are certainly in order:

1. Offer higher deposit rates - Current interbank rates are higher than ever even as risk premium for safe investments. What better way to access a lending capital pool then by paying out more than a paltry 2%? If banks offered short term CDs one percent below interbank lending rates, many depositors would queue up in no time.
2. Scrap the Paulson plan - No Fed Policing. Plain and simple. An expanded Fed cannot act as uber-enforcer of the rules. It contravenes its original mandate which it has seemingly failed to fulfill as of late. A bureaucratic expansion would do no one any good.
3. Reconcile the tax base - Short term increases? Distinctly possible, but economic crisis exposes structural defects as well as cyclical. While existing efforts untangle the fiasco at hand, the incoming administration must come up with an alternative to income tax.
4. Leverage ratios for investment banks - Light touch regulation such as this may seem like a capital control, but when pension fund portfolios are exposed to highly leveraged firms Bear Stearns and Lehman Brothers, the onus of default adversely selects the wrong shareholder. Also, why should Goldman Sachs enjoy a 2000:1 leverage to asset ratio? No one ought to be able to borrow 2000 times above his worth.
5. Proportionate funding of existing regulatory agencies - Given the scale by which the federal government has expanded the last eight years, it would be interesting to see the percent change in annual budgets across the myriad agencies. The SEC, FTC, CFTC and DOJ Antitrust division probably did not receive much largess. Adequate funding would allow these regulatory agencies to do their job in real time, learn how to treat complex derivatives, and not be forced to act ad hoc during a crisis. The regulatory and legal framework does a lot to reduce the risk of default. It is a quasi-gold standard, and the country cannot afford to see it diminished.
6. Tight money - To keep foreign investors keen during retrenchment as well as to combat inflationary pressure, Treasury will buy back its securities. The Fed will raise interest rates. Consequently, the higher yield on our bonds is more attractive. It will have to be, if politicians balk at enacting the change which got them elected this year, though such structural change will be quite painful.

This nadir in economic history will end, though probably not soon. There are three asset price bubbles from which Western and developed economies not quite recovered. Economists and policy makers should stop reinventing the wheel and simply stick to true fundamentals. Then, everyone can benefit, for the culture of double dealing and lack of accountability ought to be coming to an end. Ditch the Stack and Tilt, and then things can get to the right side.

World tour at last

American PGA Tour superstars Camilo Villegas and Anthony Kim decided to join the European Tour officially. For elite players such as the aforementioned, the four Major championships as well as the three World Golf Championships - soon to be four with the impending addition of the HSBC Champions - count as events played on both the US and European PGA Tours. This means that to maintain, assuming neither wins but earns enough to keep status status on both tours, each would have to find eight more events in America and at least four more in Europe to continue playing both Tour. Given the scale of prize money offered, the US and European PGA Tours are the richest in the world, and hence attract the best talent. The Race to Dubai, the European Tour counterpart to the FedEx Cup, provided impetus for Kim, Villegas, and possibly Phil Mickelson to split time on both Tours. This poses a problem for the US PGA Tour as two, maybe three, of its biggest non-Tiger draws broaden their horizons, but the best playing all over the world is truly good for the game.

 

Globalizing an ostensibly leisure class pastime could not have come at a more opportune time. Despite downturns in the global economy, incomes around the world are still growing. Chinese, Indian, Brazilian, and even Russian golfers are playing in sanctioned Tour events. Granted the talent level of some is not as high as that of players from countries with longer traditions of instruction and growth of the game, continued increases in wealth in emerging market nations will naturally spread the growth of golf. Global saturation of the game is ultimately attainable. As such, the pool of possible sponsors grows, and everyone will benefit from more market opportunities.

 

Though Greg Norman envisioned formal establishment of a global tour, Tiger Woods became the standard and the icon of the modern, globe trotting touring professional, a role anyone would relish if given the opportunity. Though Norman has 69 international victories and Woods' contemporaries Ernie Els (44) and Vijay Singh (22) also balanced obligations on US, European, South African and Asian Tours, Woods has been the first truly international figure in the game because of his genealogical links to both America and the world. Anthony Kim is similar in that respect. Camilo Villegas attended and completed university in America, but he maintains strong ties and pride in his native heritage. Personified bridging of multiple cultures and ethnicities has given stars of this generation the broad appeal that the previous, mostly foreign born globetrotters did not. Others such as Vardon, Ray, Palmer and Player managed an international schedule, but private jet aviation has raised the profile of the profession even further.

 

Two concerns do emerge. First, how will the US Tour and European Tour business models coexist? Second and more glaringly, why is there a dearth of American players with seemingly few international ties willing to play away from home? 

 

The US PGA Tour receives a tax exemption from the US government because it is a non-profit organization - 501(c)3 status, in the parlance of the Internal Revenue Service. The European Tour runs its events on a for profit basis. One discrepancy between the two models is that European Tour events can pay appearance fees where a player may receive money for teeing it up. Sponsors with deep pockets can lure top players with financial inducements. It is unclear whether attracting players that way has an overall economic benefit of holding the tournament or merely strokes the egos of rich tournament organizers eager for prestige. Such practice might become de rigeur in a more global golf tour, for the Asian, Sunshine, and Australasian PGA Tours as well as the Europeans all follow for profit business models for their tournaments. Tee up money may seem grubby and anathema to the spirit of competition to Americans accustomed to golf tournaments enriching only the contestants and then otherwise raising money for charity. 

 

Perhaps revisiting the American business model is in order if Villegas and Kim, who will join young stars such as Trevor Immelman, Sergio Garcia, Justin Rose, Andres Romero, Brandt Snedeker, Adam Scott, and Aaron Baddeley, will play less in the States. Young and talented, in some cases single, men will take advantage of opportunity to travel, and the US PGA Tour will have to accommodate a partial talent drain. 

 

Second, American players seem loath to play overseas even with the newly dangling incentive before them. Some will argue that the presence of international players on the US Tour order of merit has crowded out American talent and eroded opportunities for native players. Some American players - Phil Mickelson with Barclays, Brandt Snedeker with Bridgestone - have international endorsement deals which oblige them to play abroad, though some would willingly play overseas out of a desire to travel and a personal sense of adventure. However, the duties of family take precedence, and most wives are not keen on having their husbands travel thirty weeks of the year to earn a living. Having to go internationally will not assuage such concerns. Aside from personal commitments, what is stopping American players from going overseas? American players are talented enough to compete with their international counterparts. Some complain about bad food, bad weather, language barriers, and other provincial grumbling. International players deal with assimilation in America because they know that such a sacrfice is little compared to securing their own and their families' financial future. 

 

Presently, the money on the US Tour blows away the pay scales in Europe, but that may shift because of talent flight and more tournaments following a for-profit financial model. When it happens, US players may be playing catch up and find the rules of tour membership further stacked against them. Such a scenario is probable, though not for some time. It took less than twenty years for the economics of a staid game with narrow appeal to expand to what it is now. Within any artificial system, culture and technology accelerate the rate of change itself and hence the time interval it takes for change to occur. American golfers have two choices: either play better or adapt and take a shot at playing a few real road games.

What else is there today?

"That's the problem with this country. Weather. All. Just hangs on too long."

William Faulkner, As I Lay Dying.

 

Had enough? What's one more day of discussion in a campaign cycle that seemingly began at the tail end of the 2006 midterm Congressional elections? One day too many. Today, professional and amateur observers, political junkies, concerned citizens will focus on who carries which state in the sprint to 270 electoral votes. However, a small diversion is necessary to keep things into perspective on why the process has left the public with the choices it has. 

 

Recently, Sundance Channel reran the satirical Tanner '88 series. As the narrative plot of fictional presidential candidate Jack Tanner evolved, it suggested that a purely absurd candidacy, one whose purpose was to make fun of presidential politics, began to seem more legitimate, more earnest than the campaigns of even the candidates who eventually wound up being the last men standing for the Democrats and Republicans.

 

The 2008 campaigns have the tinge of the Tanner mockumentary where the substance feels fictitious though the manner and style of its presentation looks real. Unfortunately, both lack the cinematic fine touch of Robert Altman's genius. Both Obama and McCain campaigns feel simulated, as products of media polish rather than substantive extensions of a coherent platform to address problems. Both men have played their respective parts without either measuring well against the touchstone of authenticity. This concept, abstract as it is, still is a definable commodity. Each line, each sound byte is crafted to be the one that does not lose rather than be the potential game winning shot. Watching the two senators spar is akin to seeing two passive opponents in a game waiting for the official to make the call to decide the outcome. The tactics might be somewhat grubby, but the overall strategies amount to the political equivalent of kissing your sister. They both may want to win, but neither seems to want the ball in crunch time, and that brand of sport - mincing, tactically passive - feels a lot like European soccer. The GWB campaigns attracted so many devotees because he played red-blooded, American hard ball. Though the strategic message was all politics, all the time, Rove, however odious, did want the ball with the game on the line. He merely played dirty aggressive, but he always scored when it counted.

This campaign has not seen the scale of dirty pool the previous two contests have had, and the restraint on both sides is a welcome change to the rancor of 2000 and 2004. However, remove the Obama phenomenon, and this election, though taking place during a period of uncertainty over the future of the collective identity, is astonishingly lackluster. Electoral politics and sports have the same high stakes, and like all games, much of the decisions on how to play stem from how much long the game seems to go. Why should the game be a two year long test match if the consensus among strategists is that the final two weeks are critical to deciding a close contest? The 2008 election will have as much historical significance not only because Obama is the first mainstream candidate of color, but also structurally as campaigns cannot continue to be seemingly interminable.

 

Since America has a result-oriented, sporting culture, public disaffection with the candidates has as much to do with the lack of substance as it does with the liberties the two main contestants have taken with playing a clock-grinding style which is unfriendly to spectators, even to the purists in the lot. If the electoral process measures preferences, all parties cannot take for granted that free speech and the social significance of the contest supersede that which the public wants. Responsive government depends as much on the terms of trade as it does on the currency of the issues.

 

The strain of the late Warren Zevon's savage guitar chords fade out the last few notes of "Lawyers, Guns and Money."

Drinking games and the debates

Last week's presidential debate between Senators McCain and Obama offered nothing new. Rehashed, repetitive yammering masqueraded as rhetoric. Moderator Jim Lehrer asked the same question three times before he received a marginally satisfactory answer. With luck, the vice presidential candidates who square off this evening might provide something which may pass as authentic, issue-oriented clash. That is a bit of a pipe dream, given the absurd tenor of the campaign so far. 

 

That being the case, perhaps television viewers looking for substance can use this bit of political theater as an expedient to drowning the collective sorrows of a nation that ought to be on the verge of revolt. Blank checks to fight foreign wars, mounting debt, a cocked-up bailout plan which holds no one to account for either past failure or for future performance - all cause concern that an elite plutocracy, what William S. Burroughs called, "a closed corporation of desirables," do not have much concern for future generations. Other than a few throw-away lines Saturday Night Live will doubtless carve up for its opening five minutes, this debate will have no watershed moment as Bentsen-Quayle. Without a disruptive third party or independent presence (read Perot), mainstream partisan show business, taking its cues from reality TV rancor, will foul the airwaves. 

 

So, drink up, the way we did in high school, when the taste of cheap vodka or bourbon embedded our faces in masochistic contortions. Each time someone refers to cosmetics, take a shot. Each time Biden fights off a stutter, take a shot. Whenever Palin starts in that catty, nasal rebutting tone of the superior omniscience of folksy, homey types - which is just about always - take a shot. Who knows, perhaps she'll flash some skin to make a point, to raise the stakes, and watch a confused, slightly aroused Joe Biden try to call the bluff. Shoot, anyone who may have been lucky or geeky enough to have debated in college or high school and partaken in a pub round knows the dizzying amusement of either constructing or following a syllogism after having a few drinks.

 

It is hard to pay attention to something important and relevant which is simultaneously absurd. Disaffection in the electorate is palpable, and few in the legislature and executive realize they are running AmericaCorp into the ground. We should be outraged. Instead, lassitude, malaise, and a defeatist realism have precipitated into a further fragmented society resigned to despair. So, fill up your glasses with whiskey and rye, with brandy and wine and see how one of the most inside insiders and one of the most outside outsiders propose we keep flying round the track with the pedal to the floor and not miss a turn. With a bleary-eyed nation looking on, perhaps Joe or Sarah might tap into the public sentiment, get up in front of the microphone, slam a bottle of booze on the podium, and, with a straight face, say, "I ain't starting til someone gets me a glass."

9/23/78

You signal silent, shining, shining sun-dressed girl, the day by the lake, of still water and flowing earth, the wind swept brown, command me to say nothing at all, ever again. I did abide at will, too early though, and your wish now was mine then, though we gave no damn about commands, or dared to utter them at all. So, shining shining, sun-dressed girl, standing firm in plain plane, harrying charges, reflecting dappled light of a long-gone lake, await the ever after of endless bedtime fairy stories, that fathers tell daughters to hasten them to sleep. But, I must abide, without choice, obey. I cannot speak now in right as I did not speak when my command was your wish, your dare. Content, shining, sun-dressed girl live thy nine lives and never hear the end of the story better left unbegun.

Ryder Cup Redux and Prospection

After three days of spectacular play by both sides and a contest closer than the final score indicated, all 24 contestants have much to be proud of. Some surpassed expectations while others did not play so well, and that mixture resulted in triumph for the United States. Several observations about the tournament itself. Both captains proved their skill as strategists. Neither Faldo nor Azinger made any dubious coaching moves, and, consequently, the contestants were put in places to succeed.

 

Arguably, with the American side having four captain's picks to Europe's two, the US held an advantage. Though meritocratic and fair, the points systems each sides use for qualification are imperfect quantitative methods. The two-tiered European and World Points system for Europe allows its top players to play their way on to the team without compromising their own income or commercial interests. America's method of qualifying players based on money is certainly an improvement over the byzantine top-10 based approach. However, the drawback to each approach is that this method does not account for the dozens of ultra-talented international players on both the European and American PGA Tours who finish well and hence reduce the point pool available to players vying for Ryder Cup spots. Thus, determining points ought to have a deflator or inflator relative to the strength of the field in each event. On a theoretical basis, any evolutionary dynamic - biological, economic, social, or political - which is more fluid and adaptable than a comparable system has a greater probability of success. (Since the publication of this post, European Ryder Cup stalwart Colin Montgomerie averred that Europe ought to have 4 wild cards as well).

 

Luckily, golf enthusiasts will remember the 37th Matches for what they were rather than for what they were not or what they ought to have been. Even without the most successful player in the world, the tension of anticipation, quality of play, spirited support, and sportsmanship by both sides surpassed even optimistic expectations. With no shortage of skilled, colorful sportsmen, the future of the game in a sooner rather than later post-Tiger era is not in doubt. Moreover, these matches may be the first watershed moment golf has had since Tiger Woods emerged over eleven years ago. 

 

In the same way that new formats in cricket have broadened the appeal of a staid, conservative sport, these matches knocked some of the dust off of the Royal and Ancient Game. They can serve as a catalyst to examine how to capitalize on such popularity. Perhaps American junior golf programs may stress aspects of team play rather than individual achievement. If anything, Ryder Cup golf is the most fan-friendly, for it can optimize technological innovation cost effectively. It would be expensive to have a camera follow every pairing in a 156 man field, but it would be feasible for broadcasters to have a cameraman follow each match. Such coverage could be sold on a pay-per-view basis over digital and satellite networks. Players may balk at more people inside the ropes, but limits on audio transmission and ever-improving video technology could make such recording unobtrusive to the playing of the match. Also, with soft greens, firm fairways and more than enough greenlight pins, the course set-up encourages aggressive play. Major championship golf has lately been a test against par, but the match play format is perfect for a hit it close style of play. Moreover, with no paychecks on the line, players are more liberal in opening up their arsenals of shots. With millions on the line and a one shot lead down the stretch, a high cut to a draw pin might be an unnecessary shot. However, with a chance to close a guy out, hyper-competitive, skilled golfers will more often that not hit "a shot with balls." 

 

The euphoria of reclaiming the Cup will soon wear off, but three days where everything went right was a brief, welcome escape from a world where lots of things are going wrong. Three days of dignity, pride and professionalism did much to cleanse some of the grubbiness and concern from the collective psyche. 3:1 says Captian Azinger gets a book deal soon. Reserve a copy today. If you need some help writing it, Zinger, here's hope you're reading.

3 imperatives for the next administration

According to Aristotle, a younger generation will try to correct the mistakes of its forebearers by adopting an opposite position. If X is wrong, and Y is the opposite of X, then Y must be the correct tack. Such radicalism is often misplaced, but after eight years of the George W. Bush administration, it might not be a bad idea. There are three areas where either a return to the status quo ante or outright repudiation of policy mistakes are crucial regardless of which party wins the executive in November:

 

1. Close the prison at Guantanamo Bay - Without question, this short-sighted, wrong-headed policy in the War on Terror has provoked more anti-American backlash than some of the prize pigs for which the Defense Department, CIA, and US Armed Forces are responsible. As awful as shoddy preparation and armament, extraordinary rendition, and the shame of Abu Ghraib have been, the ongoing detention of terror suspects at Gitmo embodies everything that was wrong with this administration. Gitmo signifies both how little the administration regards human rights and an utter disrespect for the rule of domestic Constitutional law and the spirit of international conventions. In addition to being neither compassionate nor conservative, the military detention center has not produced any significant counter-terrorist intelligence. All it does is piss off allies, disaffected Muslims, and Americans who still give a dman about the laws of the land. The glimmering hope that one of the suspects would provide valuable information to stop a ticking bomb never materialized. Shut Gitmo down. Apologize to the aggrieved. Find a better way.

 

2. Simplify taxation - Americans are not opposed to taxation if the proceeds to the public purse keeps the roads paved, the levies sturdy, and the country safe from military threat. What makes taxes so galling is the way legislators allocate tax receipts in the budget. A shift away from income and investment taxation towards consumption based taxes eliminates the size and scope of a government bureaucracy (IRS), will reduce the influence of lobbyists who grub for breaks for their corporate clients, and compel firms towards more efficient, externality-limiting means of production. Markets and consumer demand have signaled more preference of sustainable development and green technology. Rather than further complicate the tax code with breaks and subsidies to spur such investment, simplification of the tax code will result in a natural gravitation towards such ends.

 

3. Respect the office - Every policy blunder and scandal amount to a fundamental lack of respect for the presidency because every policy blunder and scandal - tax cuts, gross farm subsidies, unilateral military intervention in Iraq, torture memos, opaque secrecy, capricious use of executive privilege, the Plame affair, federal attorney sackings, sweetheart nuclear deal for India - seemed to stem from an extreme desire to advance pet, political agendas. They certainly did not tangibly benefit the American people. Few Americans find little in politics redeeming, and engendering such cynicism will erode confidence in an ostensibly successful, admirable institutional framework. Attempts by the executive to act above the laws he is intended to uphold are callow and disingenuous, and even after eight years, W demonstrated he is both incompetent at winning battles on his own and incapable of being accountable for his mistakes. What is worse is that he has left not only the country, but the office of the presidency in far worse shape than he found it. It is hardly surprising he managed to run another business into the ground despite having a highly connected support system. Whoever occupies the Oval Office next year must strive earnestly to restore faith in the presidency by distancing himself from the notion of all politics, all the time.

 

In short, the next president must take care to act within the framework of laws and favor a best practice approach rather than see what he can get away with. The bar ought to be higher for someone with such great power and responsibility, but Americans, tired of eight disingenuous years of Republican greed (big shock) may just be ready for someone who will not act like he is better than anyone else or the job he is supposed to do. Whoever comes next, please have some respect for the job you are trying so hard to earn, and, pretty please, with fucking sugar on top, carry yourself with the dignity the position deserves.

Family friendly tickets

In response to John McCain's selection of Alaska governor (and granny to be) Sarah Palin as his running mate, public opinion varied. Some cynically sneered that the Republicans were pandering to the electorate, merely copying the Democratic party's youth movement. Few were even surprised and confused by the selection, but the whole country knows McCain likes younger women, so where's the shock value? Another seeming middle ground majority fancying itself as the voice of reason expressed a more neutral, open-minded view that her background made the Republican ticket more family friendly - more to come on whatever the heck that means. 

 

What stands out is the lack of consensus over the Palin selection, and that seems queer to Yardage. French doctor, author and crackpot Louis-Ferdinand Celine wrote, "Public opinion is always right, especially when it's really idiotic." Selecting a female running mate is a watershed moment in the history of the political party known as a rich, old, white, male preserve. To be fair, the Democrats have their share of that breed, but they are more ashamed to admit that any entrenched political party truly stands for the preservation of the status quo, and its members fear egalitarian upward mobility of lower classes. The public response should have had some more unity such as, "It's about time," or "Finally." Instead, a female figurehead, the governor with gorgeous gams and a killer smile, come off the pine to invigorate a campaign which trails in preliminary polling. 

 

As governor of a geographically vast state, as head of the Alaska Oil and Gas Conservation Commission, Palin has accomplished much at a young age. There is no question regarding her administrative competence or at least her ability to rise quickly from local to state office. So, why is so much import placed on a family friendly ticket? Moreover, what on earth might that be?

 

For society to function, good government fills in where people, cooperation, and markets cannot. Sound infrastructure, public safety, and predictable regulation provide a conducive environment for families to thrive. When commutes are efficient, the laws enforced equally and schools free of violence, families do well. Totalitarian governments in Soviet Russia and Nazi Germany were surprisingly family friendly. Had the domestic economy not imploded due to excessive central planning or limited trade, the models might have endured. Perhaps linking the concept to the fundamental duties of government is not the best proof, but carping about populist issues does not solve policy and market failures.

 

So, in modern America, a family friendly political party ticket must constitute rhetoric about schools, healthcare, tax breaks. Wrap it up with a pretty, prolific lady, and the party has a product. As long as wages stagnate, no long term incentive to save exists, and no commitment to the well-information of the citizenry predominates, the concept of the family faces assault practcially and ideologically. Governor Palin certainly brings with her a telegenic phenotype of the family concept, but what in her gubernatorial record qualifies her as a champion of working families? According to Andrew Romano's Stumper blog, the record is "still pretty thin." Other than her vehement anti-abortion position, little ink has been spilled over her policy notions on government and market involvement in healthcare, national educational curriculum standards, and the expansion of benefits for the poverty stricken.

 

For someone who will represent the deciding vote in the Senate, how reassuring is it to middle class Americans that she is a dyed in the wool conservative with no discernible agenda? Such factors are of greater consequence given that Senator McCain may succumb to the vicissitudes of average life expectancy, and Mrs. Palin may wind up in the top job. She cannot remain a political enigma, and her slight record on 'bread and butter' issues only confirm a madman's epigram.

Sabbatical ends. Macky's back in town.

Dynamite has returned from self-imposed exile. Many of the events and occurences of the past 60 days - Olympic games, PGA Tour playoffs, FOMC meeting, Democratic convention - would have made brilliant topics for this space, yet topicality in extrema is like too much of any good thing. Applying the principle of declining marginal utility to being well informed is not quite so simple.

 

The principle of declining marginal utility states that a consumer as he consumes more of one good, while keeping consumption of all other goods constant, he will receive less utility from each unit consumed of that good. 

 

If a person prefers being well-informed to uninformed, he will consume information to satisfy that preference. However, the pursuit of being well informed as well as what one must consume to do so is forever dynamic. Moreover, the individual units of "well-information" are highly variegated. When one particular news item ceases to be of interest such as ongoing election coverage, the consumer can tune it out in favor of another area of interest. Once enough time has lapsed where the information he possesses about the presidential election has exhausted its utility outright, the desire to accumulate a greater reserve of election knowledge will renew the cycle. Shifting amongst the subpreferences within the overarching goal of being well-informed does not change the level of one's well-information so long as consumption is constant. However, what happens when even a rational, sensible, well-informed person has had enough?

 

The presidential election in the United States is a perfect example of how an ongoing, major news story crowds out some lesser, though more significant events such as the transfer of security to Iraqi forces in Anbar province or the high-level discussion held by international military leaders regarding the border between Afghanistan and Pakistan. 

 

When information can spread quickly and easily, separating wheat from chaff without missing small, important items becomes ever more difficult. Press freedom is invaluable to a democracy, but its overabundance, the shrillness of its tone, its sometimes amateurish democratization do turn off even those who value the benefits of knowing more about the world around them. Given editorial biases, well-information requires consumption of information from sources with opposing ideological perspectives. Often, the editorial articles in the New York Times and the Wall Street Journal have similar subjects, and it is interesting to see how each side, each point of view might apply the same factual evidence. 

 

As the quadrennial presidential thrill ride hurtles into the fourth turn, as the harvest moon approaches, and the hunter's moon inaugurates the apex of the political season, media outlets will vie ever harder for commercial and professional prominence. Scooping, topping, breaking a story first will fuel what the late HST called the 'feeding frenzy.' Greed from all corners, the burning money machines of campaign drives and the sound of countless Faustian bargains being sealed will make for one bloody fall. Remember to vote and help the needy.

Specious reasoning

Democrats have failed their constituents often over the past few years in many respects, but their approach towards Iraq policy has been particularly wrong-headed. Yesterday, General Wesley Clark, in his opinion well-versed in strategic command, made some peculiar and contradictory remarks regarding Senator John McCain's capacity to be an effective wartime leader. Couched in the remarks was a noteworthy, hidden bit of rhetoric justifying a staged withdrawal of US troops from Iraq, for it echoed a muddled conclusion drawn by Senator Barack Obama as well as Senate majority leader Harry Reid and House Speaker Nancy Pelosi: withdrawing US troops creates the incentive for an Iraqi government to take over running the security environment. 

This is the most recent example of prominent Democrats perpetuating the naive caricature of themselves on matters of national security. The first strike against the Democrats was their supine response to a Bush administration beating the war drums. Rather than risk being assailed in the press as unpatriotic cowards, Democrats chose their reputations rather than the public good. They had the opportunity to take the moral high ground, wave the flag even prouder than the Republicans, by arguing on Constitutional principle that only the Senate could legally declare war. Even in a climate of fear, apprehension, and the interfering traffic of shoddy intelligence, a standoff pitting liberty versus security would have at worst stalled the Rumsfeld-Cheney clique, at best brought forth this generation's equivalent of union versus states' rights. 

Secondly, Having abandoned both the moral high ground and pragmatism, the Democrats' self-relegation to sit silently in the backbenches permitted the administration to proceed unfettered in what have become international scandals in the handling of prisoners and suspects. Closer scrutiny may not have prevented extraordinary renditions, Guantanamo military tribunals or Abu Ghraib, but the office of the Vice President and Defense Department could not have operated without impunity as it seemingly did. So, having failed to question the initial case for war, Democrats voted for war, thereby trading credibility to save a public image. That the US found itself in an intractable conflict which has cost the lives of soldiers and civilians because politics took primacy over best practice is repugnant. What is truly vexing is that Democrats have espoused a withdrawal strategy. No evidence points that hastening the Iraqi government to responsibility and self-determination, though laudable goals, will work especially since the gains of the Surge are potentially reversible. 

Greek philosopher Aristotle, in his Politics, argued that when confronted by the perceived transgressions of parents or the status quo, the tendency of a younger generation (or in this case second actor) is to expiate the sin by going to the extreme. Rather than confronting its own collective cowardice to challenge administration claims or to investigate them more thoroughly, Democrats opted to go with the flow, and when the plan started to go a little crooked, the only way to right their and the administration's wrongs would be to pull the troops with no regard for the compound error. Now, Iraq policy, along with the economy and energy policy, is one of the crucial issues of the November election. 

One wonders where the logical link is that if the US withdraws its troops, then Iraqi government forces and police will fill the void. Iraqi soldiers are still ill-equipped and ill-prepared to maintain order without assistance from coalition forces. Moreover, leaving the security environment unresolved is as reckless as destabilizing the country in the first place. Without acceptable terms of mineral resource revenue division, human rights law, and a legal and coherent constitution, Iraqi government officials will have neither the trust of their peers or their people. Without adequate infrastructure, efficient delivery of basic services, and greater assurance of public safety, American intervention will be for naught. Coalition presence is necessary until the economy can stand without a prop. The ultimate goal for Iraq is independence and a greater sense of sovereignty, but it is dangerous to think the prospect of a coalition withdrawal will make the fledgling Iraqi federal government act faster. Moreover, an impatient approach smacks of disingenuous high-handedness where the Iraqis must adapt to being on their own based on an American ultimatum. 

The strategic signal of staged withdrawal for the purpose of prodding Iraqi politicians into action is incoherent to the mutual aims of Iraqis and coalition forces. Ideally, Iraqi services, law and order will catch up to the vacuum to be left inevitably by troop withdrawal. However, accelerating the rate of change of autonomy is not a simple exercise. Such reasoning is as dangerous as that of administration war hawks who believed that bringing democracy will be a cure all. Iraq is a complex situation that is the doing of American politicians. 

Brave servicemen have died obeying a commander in chief who believed the bullshit. The sense of duty and courage of all the fighting personnel is indeed commendable, and their continued efforts in civilian defense and nation building are necessary to ease hostilities. Prolonged military presence in the Persian Gulf is necessary, for any alternative will compound the initial error. To avoid the strategic quicksand, Democrats ought to examine not the potential effect of withdrawal, but muddled logic presupposes the readiness of Iraq to stand on its own against internecine strife and pressure from its eastern neighbor, Iran. The stance taken by Democrats is more posture, more fake toughness. Most worrying is how ill-conceived the idea is given that the fundamental reasoning is so egregiously flawed.

Go C------e Yourself

While driving to work today, I heard a fun little ditty from my youth, "Bonita Applebaum" by A Tribe Called Quest. I was confused, however, when one of the words was edited. Radio DJs censor 'explicit' lyrics in popular songs, but since when does one have to scratch over 'prophylactic?' 

 

It sounds more clinical than dirty. Why expurgate it especially when STDs and unwanted pregnancies are still endemic social problems, particularly in urban, ethic communities - precisely the demographic which listens to hip-hop stations? 

 

In context, the lyric goes, "And if you're with it, I got crazy prophylactics." How does this promote promiscuity? If anything, the lyric suggests that the woman has a say in matters of sex and is not an object and that the man is responsible for birth control and disease prevention. As far as rap lyrics go, it is very tame and mature. 

 

What is more puzzling is that 'jimmy hat' or any other euphemism for condom is not edited in rap played on the radio. Why permit the street argot and censor the proper term? Though petty and slight, this is indicative of a benevolent, priggish ignorance on the part of radio management or even the FCC. Continued prurience, textual misinterpretation, and inconsistent editing of terms infantalizes the subject of sexuality. Moreover, such censorship insults listener intelligence and sensibilities. Time for craven PC types to realize that such a move has the adverse effect of irresponsibility to the public and to the arts.

Fear of a Black Candidate

After winning the South Dakota and Montana primaries, Barack Obama secured the requisite number of delegates to become the Democratic nominee for the presidntial election. notwithstanding that Hillary Clinton has yet to concede defeat. Unlike Jesse Jackson or Al Sharpton, Obama broke through the primary season as the party choice, and, thus, he has a fair shot of winning the top political post in America. As a candidate, he is a charismatic orator. As political operations go, his campaign has raised millions through internet contribution whereas Hillary Clinton ran up huge debts. Such credentials and popularity through triumph will make the presidential race far more interesting than the last contest despite its closeness. 

 

Obama versus McCain is a duel of many obvious contrasts: young against old, innocence versus experience, fire versus ice. In the forthcoming presidential debates, the electorate will see how Obama's passion and flair hold up against the patient voice of reason of the McCain brand. But what does the Obama candidacy mean?

The junior senator from Illinois dubs himself as an agent of change. He holds the moral high ground over the Iraq War, for he voted against the invasion in 2003. In last night's victory speech, he appeared polished and passionate. No recent Democratic cnadidate has displayed both characterisitcs authentically let alone simultaneously. With his wife, adorned in a Chanel dress and pearl necklace, beside him, he cuts a figure of the new JFK. 

 

Yet, while stoking the fervor and hopes of Democratic partisans, who compare his febrile ascendance and its concomitant excitement to the ill-fated RFK, Obama realistically seems more likely to be Alfred Smith rather than JFK. Kennedy may have been the first and only Roman Catholic to hold the presidency, but Smith was the first Catholic candidate from a major party for the office. Smith lost to Hoover in 1928. 

 

'Firsts' are a good thing for all aspects of society, for they reflect attitudes of tolerance, pluralism, and meritocratic mobility. However, it is difficult for a 'first' to be elected, and appointment has been the route typically for ethnic minorities and women from Brandeis to O'Connor to Scalia to Gonzalez. This election will be a good measure of how tolerant and plural American democracy really is, and Obama faces demographic obstacles in key swing states such as Ohio, Michigan, and Pennsylvania which he failed to carry in the primaries.

 

More interesting will be how former Confederate states vote. No Southern state has ever elected a black man to the US Senate. The only black man to have been elected governor of a Southern state was Doug Wilder of Virginia. Though racial sentiment may be associated with Dixie, in alll cynical likelihood, whites all over America may vote McCain simply because of an atavistic opposition to a black man becoming president. 

 

However flimsy the pretexts may be for keeping Obama out of office, one thing is certain: the amount of buzz he has created will mobilize the electorate to go and vote. Young voters, who see him as an agent of change and promise, as someone who has cast off their disaffection with politics, will get over their apathy and themselves and pull the lever on his behalf. Racists will turn out in droves and be the barrier. The DNC and Obama campaign will take great legal and practical measures to make sure that the black community - itself split over whether Obama is good for his own people - does not suffer the shameful chicanery of 21st century disenfranchisement which dotted the last two contests. 

 

Voter turnout ought to be high this November. Even if Obama goes the way of Smith rather than Kennedy, the consolidation of American democracy and popular interest in politics will benefit everyone.

Open to the public, too

The USGA begins its championship season next week with local qualifying for the 108th U.S. Open. Though this stage is only the first, it is still one of golf's best kept secrets. Here is a link to a list of the sites that will host an eighteen hole qualifier during the weeks between May 5 and May 19. 

 

Competitive golf has few shoot-outs, and this format has both subtle and noticeable differences from multi-round events. There is more of a match-play feel. If you are not beating your playing partners, chances are you will not get through. Such is the case for all tournament golf, but the shoot-out makes that fact more overt, more palpable. It is worth checking out if time permits.

 

With luck, the host clubs will allow spectators who are not members to follow some of the players. Certain sites may have Nationwide, PGA or European Tour players who are not exempt into the sectional stage. Even if a site does not have any notable names attempting to qualify there, anyone who appreciates golf ought to inquire about going to watch anyway.

Stab at Journalism

The Economist magazine in conjunction with the Marjorie Deane foundation offers an annual internship to aspiring journalists interested in writing on topics of finance and economics. I figured I took a shot despite my paucity of journalistic experience. The blog and an unremarkable stint on my high school newspaper are the extent of my experience. So, this is what I managed to cobble together. The specific news item is old, but the broader subject of an interventionist Federal Reserve is still quite topical. Though it is likely that someone sprightlier, with better style, sources and credentials to boot, will wind up spending summer in London, I am proud of what I wrote. Hence, I am taking another chance and submit for the approval of my very narrow and sporadic readership. Enjoy.

 

Feed your Fed 

 

Washington D.C. On March 31, citing needs to revitalize competitiveness and to fix the ills of the American economy, Treasury Secretary Henry Paulson unveiled “The Optimal Financial Regulatory Model.” In a speech, he outlined plans to provide the Fed, “…with a different, yet critically important regulatory role with broad powers focusing on the overall financial system.” 

 

The administration is keen on granting the Fed more authority to examine the practices and the accounts of hedge funds and investment banks. Mr. Paulson said, “The Fed would have the authority to go wherever in the system it thinks it needs to go for a deeper look to preserve stability.” Strangely, he has chosen an inauspicious time in the history of the institution to raise its profile, for the Fed did much to precipitate instability.

 

Loose monetary policy made credit too available, and that is to blame for much of what is wrong. Cheap money has been causing inflation, simultaneously depressing the value of the dollar. The resulting rolling asset bubbles have caused unnecessary employment displacement. 

 

At issue is whether the Fed as super-regulator is indeed the “optimal” choice. By pumping up the value of the Fed, this proposal comes off as a no-confidence vote in existing regulatory bodies. Critics of the administration claim adequately funding agencies such as the Justice Department Antitrust division, Securities and Exchange Commission, and Federal Trade Commission makes more pragmatic sense, but the language in Mr. Paulson’s speech points to a clear favorite.

“The premise of our optimal structure is that clarity of mission and objective will lead to strengthened regulation and improved capital markets efficiency,” added Mr. Paulson. Yet, closer scrutiny reveals the more likely chance that “clarity” will result in muddle and inefficiency for three reasons. 

 

First, bigger does not preclude better, especially if the objective is to streamline. Increased influence over financial market activity conflicts with the first order statutory missions of the Fed to maintain price stability, full employment, and an elastic currency. These areas command priority; adding to the load will only make the Fed unwieldy. 

 

Secondly, ‘Fed policing’ is useless without enforcement. Instead of agents, it would have the authority to go where it deems necessary. However, the blanket warrant will have to pass legal muster, and this is unlikely. In practice, even with greater supervisory powers but without an enforcement mechanism, the Fed would still have to coordinate efforts with other agencies. This means fundamental changes to the intellectual and professional cultures of the Fed where economists will start behaving as bureaucrats. Consequently, the Fed stands to jeopardize its status as a credible, politically independent institution. 

 

Lastly, new powers for the Fed do not deter moral hazard on the part of investors, borrowers and creditors. Supervising hedge funds and investment banks may even exacerbate risky behavior if the Fed extends to them some of the privileges and rights as retail banks. Such new powers in no way provide a deterrent to the behavior of aggressive firms. Moreover, that sort of behavior was a response to the loose credit conditions the Fed created in the first place. Nothing in the new model addresses the root cause of the systemic fracture. 

 

Though Mr. Paulson concluded his speech by saying, “As a nation we have placed great faith in the powers of market discipline,” there were no allusions to a potential, painful, endogenous market correction. Further deferring the consequences of a fifteen year borrowing binge will cause deeper damage that even a beefed-up Fed could not forestall. Little wonder that the most attractive models are the thinnest.