Politics

Wow, Howard Dean really got his head handed to him on a platter in Iowa…

“With 87 percent of the precincts reporting, Kerry had 37.9 percent, Edwards 32.1 percent, Dean 18 percent and Gephardt 10.6 percent.”

Update: Man, this guy is losing it. Pretty funny!

Update2: The hits just keep on coming… “Dean breaks out into spontaneous Star Spangled Banner after being heckled…”

Talk about the epitome of pandering. He needed the conservative vote, so he wanted “the guys with the Confederate Flags”… he needed the Christian vote, so he found Jesus all of a sudden… About as low as it gets eh?

The Man of High Quality Punditry points out Bill Clinton’s obvious conflict of interest in advising Demo presidential candidates.

Didn’t anyone teach them not to seek medical advice from funeral directors?

Jonathan sent me this good snippet from Bruce Bartlett, one of the better economics commentators. Bartlett states that:

It has long been apparent to observers like myself that this is the most centralized administration since Nixon’s. Cabinet secretaries and cabinet departments seem to have less influence on policy than at any time in recent memory. All key decisions appear to have been made in the White House and the only job of cabinet secretaries is to sell the policy, get votes in Congress, and raise money for the president’s reelection. It has long been apparent to observers like myself that this is the most centralized administration since Nixon’s. Cabinet secretaries and cabinet departments seem to have less influence on policy than at any time in recent memory. All key decisions appear to have been made in the White House and the only job of cabinet secretaries is to sell the policy, get votes in Congress, and raise money for the president’s reelection.

My response was more or less as follows:

Not surprising. Bush runs a tight ship. He learned a lot of lessons from his earlier experience with his Dad’s administration, which was crippled by his Dad’s overly collegial and genial and too-trusting style, and by in-fighting and leaking and political posturing. So, he is like a CEO who dictates policy and it is up to the division chiefs to execute it successfully or get new jobs. W may be going to[o] far the other way. But in W’s experience the alternative is not a healthy airing of views, and the dynamic generation of innovative policy initiatives, but a rudderless executive presiding over ill-disciplined subordinates, leading in turn to stasis and disaster. Also, W has guts. He is not afraid to give clear orders. He is not covering his ass. If something goes wrong he cannot blame a subordinate. He is in charge, and everybody knows it, and there is nowhere to hide. And he wants it that way. He is willing to bear the costs of command to obtain the benefits. And as to the comparison with Nixon, the salient comparison from Bush’s perspective is that Nixon was reelected in a landslide. Maybe Nixon’s management style had something to do with that.

So, this doesn’t bother me too much. Maybe I should think it is awful that Bush’s administration is highly “centralized.” But I don’t see why. I think he’s doing pretty darn good, myself.

Watching the markets this morning. Third-quarter GDP report comes out stronger than expected. Stock indices and the dollar take off, bonds dump. Good times seemingly ahead.

Then Treasury Secretary Snow opens his mouth, asserting disingenuously that the U.S. still has a strong-dollar policy, and carping about how China and Japan run monetary policies that actually benefit their domestic economies. The second Bloomberg article linked above puts it well:

Even as he called on China and Japan to adopt policies that might weaken the U.S. currency, Snow insisted “a strong dollar is in the U.S. national interest” because “no country can devalue its way to prosperity.”

The contradictions in Bush’s politically-driven monetary policy are difficult to avoid and are having negative consequences for the securities markets. A usually mild-mannered trader friend of mine, with whom I was having an IM exchange during the Treasury secretary’s testimony, said that the way in which Snow lies about our weak-dollar policy is disgusting. I don’t think that my friend is the only one who thinks this. Stocks and the dollar sold off during Snow’s remarks.

As of 1:00 PM EST stocks have recovered some of their losses. But the losses were unnecessary. Stock market recovery is being held back by bad policy. (Bonds stayed down during all of this. That tells you something. Either there’s going to be continued economic recovery and bonds are going to get killed, or there’s going to be a weaker recovery combined with inflation and a weak dollar and bonds are going to get killed.)

I hope that the Bush people get their act together. Snow reminds me of G. William Miller, about whom an ex-boss of mine once quipped that the T-Bill market moved 50 points whenever he opened his mouth. That was back in the days when markets were opaque enough for insiders to profit consistently from politically induced price swings. Nowadays things are much more open, bid/ask spreads are tight, and unexpected volatility of the Miller/Snow variety is at least as likely to lead to trading losses as to gains. It would be in everyone’s interest for the Bush Administration to shut up, get out of the way, and let the economy follow the path of least resistance.

A group of NIMBY enviro lawyers in Florida is trying to generate support to amend the state constitution. They want to subject major zoning reclassifications to approval by local referendum.

While I’m generally opposed to zoning, for property-rights and practical reasons (zoning tends to ossify the civic status quo), I was initially sympathetic to these guys because I thought their scheme might introduce more openness, consistency and accountability into the politicized zoning process. Let citizens have only themselves to blame for major zoning decisions.

But then I looked at the group’s web site and realized that my initial impression was naive. I had thought that the idea here was to make the system more accountable. However, the referendum advocates appear to be most interested in making the zoning reclassification process so burdensome as to halt development. They want to limit development to only those projects which are approved by socialist master-plans drawn up by unaccountable local-government planning agencies. They believe that a referendum requirement for major zoning changes would make it extremely difficult to change those master plans, and that this rigidity would be a good thing.

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