Economics

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Where is the Center?

There has been a lot of chatter about Barack Obama “moving to the center” or “governing from the center”.   Victor Navasky wrote in a Comment  for the Nation reacting to all the pundits saying that Obama’s Cabinet appointments and Inaugural Address showed he was moving to the center:

First, as our friend and backer Paul Newman used to remind us, The Nation was valuable because it helps define where the center is. The center can shift. When Obama added to his ritualistic description of America as “a nation of Christians and Muslims, Jews and Hindus” a new category–“nonbelievers”–it was almost unbelievable, as he quickly helped redefine where the center was.

Second, based on what we know about Obama–his books, his initial intuitive stand against the war in Iraq, his Senate voting record, his campaign, his inaugural speech–I don’t believe it. At most, he seems to me a liberal wolf in centrist sheep’s clothing.

And finally, faced with the ever-more-dire economic crisis, his commitment to a Keynes-based economic stimulus and renewed regulatory rigor (see his inaugural reference to not letting the market “spin out of control”) suggests that, at a minimum, he flunked Centrism 101.

As Navasky (and Paul Newman) both know, the center moves.

Michael Tomasky writing in the Guardian (the whole piece is very interesting by the way) points out

Now we are in the age of Barack Obama. Now it’s conservatism that has broken down and contracted into a narrow ideology. And Obama’s project is nothing less than to revive this pre-1970s conception of liberalism as an ongoing civic project to which all contribute and from which all benefit. It was there in his inaugural speech when he spoke of “the price and the promise of citizenship”, and it’s present in his early proposals. The stimulus package that he began negotiating with congressional leaders last week is an audacious experiment along these lines. Let’s invest these billions together, he is saying, and in time the investments will bear fruit and benefit everyone.

I’m hoping that Navasky and Tomasky are right.  I’m hoping that just because John McCain is now whining about not liking the Recovery and Reinvestment bill, President Obama and the Congress will not cave.  When I heard McCain I started screaming at the radio, “But you lost!”

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Donkeys, Elephants and your money

I’m  still struggling to understand basic economics, but the New York Times had an op-ed chart today which was very revealing:

Since 1929, Republicans and Democrats have each controlled the presidency for nearly 40 years. So which party has been better for American pocketbooks and capitalism as a whole? Well, here’s an experiment: imagine that during these years you had to invest exclusively under either Democratic or Republican administrations. How would you have fared?

As of Friday, a $10,000 investment in the S.& P. stock market index* would have grown to $11,733 if invested under Republican presidents only, although that would be $51,211 if we exclude Herbert Hoover’s presidency during the Great Depression. Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years.

See the graphics here.  The author, Tommy McCall, used to work for Money  Magazine. http://www.nytimes.com/interactive/2008/10/14/opinion/20081014_OPCHART.html

So who has the better economic ideas?  Can it just be an accident that the Democrats do better even forgetting about poor Herbert Hoover?  I somehow don’t think so.  I think this means that a vote for Barak Obama is a good idea.  I’m starting to look at quarterly statements and see retirement fading off into the distance.

On a totally personal note, I had the closest brush with fire this afternoon that I’ve ever had in my 60+ years.  The house next door – separated by a narrow grassy area and a tree – caught fire this afternoon.  I had been at a conference and after a late afternoon meeting was cancelled decided to just drive home and stay there taking a personal hour.  Suddenly the doorbells to the house starting ringing frantically.  It was a neighbor trying to find someone to call 911.  There were flames shooring out of the roof of the house next door.   We rounded up our four cats and put them in carriers.  I found our passports and then went out into the park across the street to watch.  I have to say the Boston Fire Department was pretty amazing.  They wet down our house, the house on the other side which was attached to the one on fire and put out the active fire.  It took a suprisingly long time as they had to tear the parts of the neighboring roof and attic area apart to find all the fire.  I think they considered this pretty minor and routine, but I certainly didn’t.  I couldn’t even count the fire trucks on our little one-way street – 7, I think.  So three families are temporarily homeless…  The whole thing was really, really scary.