Belmont Club

December 22nd, 2008 6:46 pm

Going forward

James Howard Kunstler argues that the current Crisis — for want of a better word — has undermined trust and therefore legtimacy in American institutions. It isn’t that people don’t see the problems, it is that they don’t see the solutions.

The tipping point seems to be the Bernie Madoff $50 billion Ponzi scandal, which represents the grossest failure of authority and hence legitimacy in finance to date in as much as Mr. Madoff was a former chairman of the NASDAQ, for godsake. It’s like discovering that Ben Bernanke is running a meth lab inside the Federal Reserve. And out in the heartland, of course, there is the spectacle of Illinois governor Rod Blagojevich trying to desperately dodge a racketeering rap behind an implausible hairdo.

What seems to spook people now is the possibility that everybody in charge of everything is a fraud or a crook. Legitimacy has left the system. Not even the the legions of Obama are immune as his reliance on Wall Street capos Robert Rubin, Tim Geithner, and Larry Summers seem tainted by the same reckless thinking that brought on the fiasco.

I had the same feeling back in September, which motivated me to actually post a screed on YouTube. Kunstler goes further, arguing that losses in legitimacy have historically led to huge changes, when the distrusted Ancien Regime is changed with something else. While I don’t know the situation is as bad as he describes it, here’s what someone the Kunstler site says (thanks to the commenters for the correction):

We have moved beyond the point where swings in confidence in a system implicitly recognize that system as credible. We have moved to a regime of disbelief in the system, and this disbelief is growing by the hour, and there is nothing that can be done to stop its momentum. On some level we have reached a moment of crisis in our identity as a nation not entirely unlike that which we faced in the mid-19th century. We have reached a point where disbelief in the credibility of the current system will become a force that will tear us apart. How we will survive is a matter for the seers. But make no mistake about it: this is no Recession, and there will be no Recovery.

Back in 1971 I was caught up, along with many teenagers, in the doomed effort to save a clearly dying Philippine democracy through a Constitutional Convention. Little did I realize then, that the Convention itself was sentenced to death. There are probably a few dozen people who still remember the hopes that were attached to that footnote in history. The 1971 Convention was held in the fading hulk of the Manila Hotel (before it was rebuilt); then a haunted kind of place eschewed by the smart set in favor of the newer Hilton, the potted plants looking like they were left over from the days of Somerset Maugham.

About a year later Ferdinand Marcos declared Martial Law and arrested a good many of the Constitutional Convention delegates. In retrospect the declining legitimacy of the situation was correctly diagnosed, but maybe we were wrong in thinking that a Convention might solve the problems, though in the long run, not completely. Every rivulet becomes part of the waters. The intervening years were dark ones, pathetic and funny times which are best described elsewhere. But even the separate threads ran together when you followed them long enough; imagine my surprise when, in the dying years of the Marcos regime, I met some of the very same Constitutional Convention delegates in exile in the United States. One I remember, was supporting himself by selling insurance or something. They were all in one form of disrepute each with a kind of shabby gentility which once prominent men wear when they are in the dumps. I remember hearing that the salesman died from a massive stroke one day while at work, and somehow it convinced me that, well, what the hell. I decided to go back and take up the old threads.

Eventually legitimacy was restored. A decade of instability followed the fall of Marcos. But eventually things happened; though it took decades and came through twists and turns which no one at the time could have foreseen. Things which are a long time in breaking are a long time in mending. Kunstler is right to worry; but no one is right to despair. Troubles come to all this world; and we get over them. It just takes some time.

I left the old Army surplus sleeping bag in the same San Francisco basement I had lived in for three months. It may still be there. But before taking the plane back, I invited my host and his wife to watch Local Hero. Then I left to pack my ruck, but not before looking up at the Flag, at whose sight I was moved to tears at the Cambridge Post Office two years before. It flies still for those with eyes to see it.

The theme from Local Hero.

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69 Comments

1. Jim in Virginia:

Wretchard, the perfect movie and perfect music for your thoughts.

Dec 22, 2008 - 7:09 pm 2. olde fogey:

There is an article by Christopher Caldwell in the current issue of The Weekly Standard called “The Unwisdom of Crowds” that also seems to argue for long-term economic optimism but for uncommon reasons. The article also seems to argue that the present bailout strategy is probably the correct action (even if it says nothing about the execution). What’s more, the author bases his assumption on a book written in 1873.

“Neither Barack Obama nor John McCain had much of value to say about the financial crisis as it raged through the headlines this fall. Rather than shred their campaign strategies, they played it safe, as most politicians would have. But in the name of justice we ought to recall that there was one candidate who did foresee our predicament with considerable accuracy when it still lay far in the future. Ron Paul, in almost every speech he made during the Republican primaries, spoke of bubbles, reckless credit growth, and the “unsustainability” of present policy. So why isn’t there more demand for the common-sense solutions he put forward? Because common sense is not much use in a financial panic.

This was the great discovery of Walter Bagehot, the prolific 19th-century essayist and journalist, who was editor of the Economist from 1860 to 1877. … Ninety-nine percent of the time, common sense is a synonym for practicality. But in a serious banking crisis, doing the commonsensical thing–hunkering down and counting your pennies–has proved to be not practical at all. Bagehot’s Lombard Street is an insider’s look at the Bank of England, and at the principles on which political and financial leaders act when advanced economies come under pressure. Those principles are depressing in the extreme for anyone with an uncomplicated idea of how a democracy works. But they are effective. That is why, in the so-called Anglo-Saxon world, Bagehot’s book still provides the bedrock of policy thinking during financial emergencies, including our present one.”

I don’t know how to do links so here is the url:
http://www.weeklystandard.com/Content/Public/Articles/000/000/015/921taekw.asp

It’s worth a read.

Dec 22, 2008 - 7:20 pm 3. John H. Farr:

Re this: “this is no Recession, and there will be no Recovery.”

You have quoted a COMMENTER on Kunstler’s site, not Kunstler himself…

Dec 22, 2008 - 7:51 pm 4. evan:

Things which are a long time in breaking are a long time in mending. Kunstler is right to worry; but no one is right to despair. Troubles come to all this world; and we get over them. It just takes some time.

The U.S. Constitution was designed to hold the waters back in times like these. We will soon see if it can hold up.

Because if it can’t, what follows will be much worse.

Dec 22, 2008 - 7:52 pm 5. slade:

Re this: “this is no Recession, and there will be no Recovery.”

You have quoted a COMMENTER on Kunstler’s site, not Kunstler himself…

And what some of us have been trying to say.

Dec 22, 2008 - 7:57 pm 6. Demosophist:

Local Hero is my all time favorite movie. I’ve probably seen it two dozen times, although not in awhile. One of my favorite scenes is the one where the “newcomer” asks who the father of the barkeeper’s wife’s child is, and there’s just total silence… and a collective shrug.

I’m not sure I agree with you regarding your rant. “Reform” is probably not the key. As you know Weber identified three primary sources of “regime legitimacy” and none of them were associated with reform in the “nitty gritty” sense, although the reform thesis fits with Dahl’s “polyarchy” concept. Regime legitimacy is established by charisma, institutionalized through tradition, and finally rendered robust to some degree by legal rationality. The problem that Weber identified was that the final stage led to a kind of “gaming” that he describes at the end of The Protestant Ethic in scathing terms as an “iron cage.”

But we’ve broken out of the “iron cage” several times. In the early years after the Revolution legitimacy was “restored” (or perhaps created) by George Washington, and transferred to the regime when he stepped down. That willingness to surrender power that could easily be capitalized is one of the key successes of the US. Something similar happened at the end of the Civil War with the election of Grant. Even though neither Grant nor Washington were unanimously acclaimed, they were acclaimed with great enthusiasm by their majorities. And Grant wasn’t a particularly good President. In fact, Grant’s legitimacy was amplified by Sherman, who refused to run for Presidential office. Legitimacy doesn’t require electoral consensus.

I have my own reservations about whether Obama will fulfill that role, but it’s too early to say for sure. I doubt it. Both Grant and Washington were supported by a network of “local heroes” who had fought in the two “revolutions,” and who organized to support the charismatic leaders. There was a “charismatic network” of these people, in the case of Grant organized and perpetuated by the Grand Army of the Republic: a fraternal organization of Union veterans. The latter helped not only to re-establish institutions in the burned out border states, but also during the frontier expansion in the 1880s and 18890s. Most of the school boards and cemetery associations, as well as literary societies, were started and organized by “G.A.R. men,” or their wives and sons.

Where is the analog to that now? Conservative Republicans have lost the thread, and the Democrat Copperheads never had it (much to the chagrin of the Kos Kidz). If there is going to be a new generation of “local heroes” they’re going to come from the crop of Iraq/Afghanistan veterans. They’re the ones who are taking the “Revolution” to the next stage.

Dec 22, 2008 - 8:05 pm 7. X3NA:

Despair is the opposite of faith, gentlemen.

Americans in “flyover country” aren’t going to stop getting up in the morning to go to work because a bunch of fat cats are getting burned by a Ponzi scheme in New York City. The credit freeze will thaw when banks realize they only have one business model after all, which is lending money at interest.

Dec 22, 2008 - 8:18 pm 8. twobyfour:

Please do whatever you did tonight, xena, whether you took meds, or haven’t taken them at all… seems to be working.

A quip, tho. Despair is auxillary to the lack of faith, but not its opposite.

Dec 22, 2008 - 8:35 pm 9. rickl:

I’m not sure what to make of that site. Many of the commenters speak of a return to an agrarian lifestyle and some of them are positively gloating about the coming collapse. I saw one comment that pointed out that such a society would be unable to support our current population and the writer didn’t seem to think that would necessarily be a bad thing.

Dec 22, 2008 - 8:40 pm 10. Alexis:

Life goes on.

True legitimacy is not measured in the core of an empire, but in its periphery. All too often, institutions have more legitimacy than the leaders of those institutions may imagine. It is for that reason that men from the periphery tend to lead a nation in crisis while those from the center wring their hands.

When those of the center give up on an empire, the periphery will do what it can to keep the empire running. When those of the periphery give up on an empire, there is little the center can do to keep the empire together.

Ponzi schemes come and go. People remain. Productive capacity remains. Brainpower remains. The natural aristocracy still exists.

There often comes a time when scions of powerful families turn against the society they think they have a right to rule. (Kim Philby comes to mind.) All too often, a powerful man with a death wish seeks to not merely kill himself but also seeks to ensure that his empire takes the trip with him. (Jim Jones comes to mind, as well as early Sumerian kings who would have their palace entourage killed as a funerary sacrifice.)

This is precisely why the Jeffersonian ideal of the natural aristocracy is so important. A natural aristocracy seeks to revitalize the nation it seeks to govern, while an heir apparent to a throne may spurn the title of “Defender of the Faith” because he has (or is reputed to have) converted to Islam.

America has not lost legitimacy. America’s political system has not lost legitimacy. The smug self-righteous know-it-alls who think they have a divine right to rule America have lost legitimacy. It is no accident that the New York Times has dropped like a rock. The internet isn’t killing the New York Times. At worst, the internet is delivering a coup de grace.

Dec 22, 2008 - 8:53 pm 11. Lifeofthemind:

The King is dead, long live the King. The question is, who is going to be the King? The Copperheads spent, depending on your reading, from 40 to 130 years tearing at the foundations of the Republic. Will Obama create a new legitimacy? Will he put the wild beast that threatens to be unleashed into the iron cage. The cage for Weber was the narrow materialism of Marxism. It is possible that the panting beast of the polis, the true Sovereign, will reject the desperate efforts of the NY Times to paint lipstick on Obama and decline to swallow the effort to transfer to him the charisma he seeks. The election is over but his regime begins maybe fatally crippled and with little legitimacy. If the Grand Army of the Republic could communicate the message that they have not governed for the last twenty years, that the disasters that the Democrats are using to justify their destruction of the Old Regime were in fact engineered by those same Democrats, then the people may swing away from Pelosi and Reid and Franks. Either way it could get ugly for whoever loses this struggle. The pressure for show trials against Cheney and others will be intense.

Dec 22, 2008 - 9:03 pm 12. slade:

I’m not sure what to make of that site. - rickl

Part - maybe the most part - of the Kunstler site is driven by Hunter Thompson steam. The trick is to strip the prose of hyperbole and digest the message, which is more often than not something to chew on.

RE: Madoff and legitimacy

Madoff is a pimple on this country’s butt. Part of me is seeing conspiracy and distraction in every direction and part of me is waiting for the tide of distraction to go out. Blagoyevitch, Carolyn Kennedy, and Madoff are high drama that roil the populist sentiment. Will the banal detail of regulatory and financial reform be abandoned as the high drama of Oprah-esque soap opera dominates public attention?

Legitimate question I think.

Dec 22, 2008 - 9:16 pm 13. Lifeofthemind:

@rickl,
The people who raised Obama and who he associated with, like Davis and Ayers, were perfectly capable of reading Nineteen Eighty-Four, seeing themselves as O’Brien and saying OK. That does not mean that he shares their fantasies. They may be his dupes. He seems to have an unnatural gift for deceiving and manipulating beyond that of most politicians. He may be mare adept at creating his own reality than Bill Clinton

Excellent comments all around.

Dec 22, 2008 - 9:25 pm 14. twobyfour:

@ 11. Lifeofthemind

The pressure for show trials against Cheney and others will be intense.

Yea, far left fringe will pull Lord of Flies and scream “Kill, kill!”.

But who would want to set a really bad karmic precedent?

Show trials are for real enemies–those that betray and plot behind one’s back (as it were, they are just unfortunate to have a potential crack on power, and there can be only One).

If you look at history, the more equal ones went first, as a rule, for their own malcontent fringe.

Dec 22, 2008 - 9:27 pm 15. jaymaster:

And here you are still, spinning those threads in ways no one could have possibly imagined.

We can all read it now, and your hard earned wisdom will not go to waste.

Dec 22, 2008 - 9:30 pm 16. Dave:

Show trials for Bush and Cheney, eh?

Wonder what part of “Not Guilty” do they not understand?

Dec 22, 2008 - 9:37 pm 17. twobyfour:

@ 15. jaymaster

Geebus, jaymaster! I hope that whoever is the addressee of your comment is nor readily giving in to peacocky puffery. ;-)

Dec 22, 2008 - 9:37 pm 18. twobyfour:

nor = not, pimf, pimf.

Dec 22, 2008 - 9:39 pm 19. Lifeofthemind:

@twobyfour,
Lord knows I am not saying it makes sense in any Operational sense. In the fantasies of the Kos Kiddies and people marching around in silly uniforms and alphabet soup parties (mix and match people’s revolutionary new alliance youth brigades party and socialist) they think that Cheney is Czar Nicholas or maybe Rasputin. The Internet has served to network and empower significant numbers of people who in the past could be tolerated as local cranks or harmless family lunatics. Basically they have been turned loose. Strictly speaking they should have been identified and certified but we traditionally did not do so. As they were known they had no impact on politics in small communities, the cost in possible civil liberties abuse of having large numbers of competency hearings was best avoided, finally it was seen as a sign of gentility not to label people. Think of it as the Boo Radley exemption. There were always more disturbed people voting in urban centers but the constant influx of new residents partly reduced the effect.

Dec 22, 2008 - 9:45 pm 20. jaymaster:

twobyfour,

The addressee would be wretchard.

I’m not expecting much peacockery, though.

Dec 22, 2008 - 9:51 pm 21. twobyfour:

@ 20. jaymaster

Neither would I, in that case.

Dec 22, 2008 - 10:10 pm 22. twobyfour:

@ 19. Lifeofthemind

First, the stratagem changed. It’s those pesky little things that despite grandiose planning have the tendency to get in the way.

The 2-year plan is off the table. For now. Maybe later, in the second half of the term. But is is off, for now. 0 got damaged more than is apparent and has to speak softly and carry a small stick. He would not jeopardize his tenuous hold on power by appeasing fringers, the risk of unanticipated discovery is too great. For crying out loud, even SCOTUS justices are now wobbly and will discuss the BC issue on January 9, 2009. They will likely decide Berg does not have standing–which is not certain, or find another reason to sweep it under the rug for time being, and simmer it on a backburner. Why aggravate things?

There are only two ways to deal with your fringe…
a) you can make them into Ortsgruppenleiters, but not too many of them, they are rather unreliable.
b) being an unruly bunch, you take their names and wait and when the opportune moment comes, the night would be full of long knives.

Everyone knows since French Revolution that uber sans-culottes can’t be let lose for long, they are only productive at destruction.

Dec 22, 2008 - 10:54 pm 23. Lifeofthemind:

@twobyfour,
Let us bring things around to our hosts topic. The “Copperheads” destabilized the image of the Old Regime to slide Obama past the election. My argument was that they did this, possibly with financial manipulation by allies depending on how much of a conspiracy aficionado you are, to conceal from the public that the demonized Old Regime was not even in power. You say that Obama can not move for major structural changes. History shows that a President gets anything done in the first two years and does nothing for the remaining 2 to 6 years. So to return to the question at hand for this thread, what happens “Going Forward?” Can the Grand Army of the Republic restore the traditional constitutional regime? Will the radicals of the left, with or without outside help, push for a radical change? Is Alexis right, the Treason of the Clerics by our Best and the Brightest will allow a new aristocracy to emerge and America will resume it’s successful path?

Dec 22, 2008 - 11:11 pm 24. Bobal:

The Sumerian kings didn’t have a death wish as we might understand it, rather they thought that act to be in tune with the movement of stars, to which their minds had become attached, as a revelation of the meaning of the cosmos.

Dec 22, 2008 - 11:12 pm 25. Charles:

I’m currently sending around In The Bleak Midwinter
I sang that a couple years ago in choir. Its pretty moving to sing. Its also a pretty good listen.

On Sunday I sang in choir Agnus Dei. This one listens as well as it sings. Here’s a Michael W Smith version of Angus Dei.

Dec 22, 2008 - 11:40 pm 26. twobyfour:

@ 23. Lifeofthemind

Well dunno, I may be risking I’d bore you to death if I elaborate and I am rather fond of reading your snippets. ;-)

OK, but you have to wait a tad for a riposte, probably sometimes tomorrow… I don’t get it why I am always getting too much work around xmas…

Dec 23, 2008 - 12:00 am 27. Alexis:

bobal:

Well, I don’t particularly want our nation served up as a sacrifice to commemorate our solar system’s alignment with the galactic black hole on December 21, 2012.

Dec 23, 2008 - 12:34 am 28. Ledger:

Ask a Climatologist:

Donor: Where will my money be spent?

Climatologist: It will be spent at the Al Gore Institute of Climatology, a 501(c)(3) tax exempt organization.

Donor: Who will manage my remaining funds?

Climatologist: My associate, Bernie Madoff.

Dec 23, 2008 - 12:46 am 29. Bobal:

To have the king, queen, brothers, sisters, sons, daughters, servants and all sacrificed willingly every twelve years on the completion of the revolution of Jupiter might not be a bad idea, when you think about it. Consider, we’d have no Kennedy dynasty, nor Bush, nor Clinton. We’d be done with the Obamas as well. It might be worth the extra four year term of suffering.

Dec 23, 2008 - 1:36 am 30. John Sabotta:

Kunstler is like a stopped clock - if you predict nothing but inevitable disaster 24/7 for years and years on end, eventually some kind of disaster will come along to prove you “right”. What is repulsive about Kunstler is the malign pleasure he takes at the prospect of a disaster that will empower his particular political fantasies. His hatred for the vulgar masses - who dare to live above their means and who live in houses that James Howard Kunstler finds tacky - poisons every word he writes.

This doesn’t mean that Kunstler’s hoped-for disaster has not, at long last, finally arrived. However, in that case, Mr. Kunstler would be better advised to leave off dreaming of some vague neo-19th century agricultural future where the humble common folk defer to the local squirearchy (i.e. Jsmes Howard Kunstler) and instead start reading Issac Babel.

And in that time I got to know life through and through. With shooting - I’ll put it this way - with shooting you only get rid of a chap. Shooting’s letting him off, and too damn easy for yourself. With shooting you’ll never get at the soul, to where it is in a fellow and how it shows itself. But I don’t spare myself and I’ve more than once trampled an enemy for over an hour. You see, I want to get to know what life really is, what life’s like down our way.”
- from “The Life and Adventures of Matthew Pavilchenko” by Isaac Babel, RED CAVALRY

Some wishes are better left ungranted.

Dec 23, 2008 - 2:42 am 31. Jim in Virginia:

The Eeyore attitude- (perhaps there is a bit of it in all of us) wants to believe thet things are Really Bad and they are getting worse. It’s the End of the World as We Know It. Eeyore is in full meltdown at Kunstler’s blog and in Biden’s statement that the economy could “absolutely tank.”
Unlikely as it seems, Biden could be wrong.

Peter Linneman is an economic guru a la Kiplinger- a newsletter, speaking gigs, consulting. It’s the sort of career that should survive any recession. I saw him last week and he made several interesting arguments:
1. The current recesssion is not the worst since the Great Depression. Right now we’re on par with 1990-91. It may get as bad as 1973-74, (”which was so bad that the American people elcted Jimmy Carter.”)
2. Bad ecomomies always seem to be the worst we’ve ever seen because we have more responsibilities than when we were in the last recession. For most of us, we’re poorer than we were a year ago but we’re as rich as we were four years ago.
3. The government response may make things worse. Right now there are no rules. The Feds allowed IndyMac to fai; they forced Wachovia to merge; they bailed out Citi. There is no predictability.
4.Obama may not be better tha Bush on economics but he can’t be worse. Paulsen is a deal maker; Volcker and Summers are policy wonks. Rules- even bad rules - provide predictability. And Obama is unlikely to mess much with the tax code for at least a year.

Is Linneman right? He has as much chance at being correct as Kunstler does.
We’ll muddle through. We always have. Jimmy Carter brought us Ronald Reagan, the incurable optimist.

Dec 23, 2008 - 4:41 am 32. Don51:

When the Pew polls on trust consistently list your military was one of the few institutions that garner 50% or better in the public’s view, it does not bode well for the Republic. When other institutions fail, there’ll be no coup. According to Shakespeare, Caesar was offered the crown three times. Three times he refused it. Will ours when we ask?

Dec 23, 2008 - 5:22 am 33. Ledger:

Here is a serious discussion on the current financial problems in the Business sector – not the housing sector (which is regulated up by ignorant leftists’ politicians).

‘Washington Is Killing Silicon Valley’
By Michael Malone

America’s most effective engine for wealth and job creation is being dangerously — perhaps fatally — compromised… For more than 30 years the entrepreneurship-venture capital-IPO cycle centered in Silicon Valley has generated new wealth…the great companies created by this process — Intel, Apple, Google, eBay, Microsoft, Cisco, to name just a few — have propelled most of the growth in the U.S. economy in the last two decades… The IPO can reward the founders and venture-capital investors, and enables the general public to participate in the company’s success… From the beginning of this decade, the process of new company creation has been under assault by legislators and regulators…For all of this, we can first thank Sarbanes-Oxley. Cooked up in the wake of accounting scandals earlier this decade, it has essentially killed the creation of new public companies… as one of America’s most dynamic business executives, T.J. Rodgers of Cypress Semiconductor, recently blogged: “My financial statements are a mystery, even to me.” FASB’s “mark-to-market” accounting rules helped drive AIG and Bear Stearns into bankruptcy, even though they were cash-positive.

FASB’s biggest crime against the economy and the American people came when it decided to measure the impossible: options expensing. Given that most stock options in new start-up companies are never worth anything, this would seem a fool’s errand…Not to be outdone, the SEC has, through the minefield of “full disclosure” requirements and other regulations, made sure that corporate directors would never again have financial privacy and would be personally culpable for malfeasance anywhere in the company. This has led to a mass exodus of talented people from boards of directors [back to Sarbanes-Oxley type of over-regulation – you cannot bomb an out-house without the Presidents signed order – ed]… during this year’s campaign, Barack Obama made increasing the capital gains tax the centerpiece of his economic policy… combined with all of the other impediments put up this decade by government against new company creation, an increase in the capital gains tax could end most new (nongovernment) job and wealth creation in the U.S. for a generation. If Mr. Obama is serious about getting the country out of this recession using something more than public make-work projects, he should restore the integrity of the new company creation cycle: rewrite full disclosure, throw out options expensing, make compliance with Sarbanes-Oxley rules voluntary, and if he won’t cut it, then at least leave the capital gains tax rate alone… Mr. Obama might end up being remembered as the second Herbert Hoover…

See the WSJ: Washington Is Killing Silicon Valley’
http://online.wsj.com/article/SB122990472028925207.html

I mostly agree.

Here is short list of my suggestions:

No more taxation. It’s high enough.

Stock Option expensing is misleading and puts a Chinese Wall between the employee and the employer.

Basically, an employee can never be a part owner of the company with his/her agenda aligned with the company – without becoming an expense. That is bad policy.

Further, all option costs were shown in “full diluted earnings per share” in the past. The solution is to roll-back the rules to the old method.

The abuse of employee stock options has its roots in the Big Three stock exchange’s mechanism of horribly stale “short position” reports.

A person could basically sell or nullify his stock grant position in a company via short selling and derivative instruments and still legally state he owned the actual stock. This misleads investors, manipulates pricing and was a classic case of “legal fiction” over “economic substance.”

The Big Three Stock Exchanges must provide daily short sale data to the public (market makers and other insiders can get that information).

Sarbanes-Oxley basically plunged every public CEO into a spider web of red tape and constant meetings with lawyers. It has got to go. It’s a law which spreads like cancer. It only enriches lawyers and compliance officers and SEC employees.

As to Auditors, they must grow a backbone and quit using lawyers as a crutch. In fact, most auditors should fire their dead wood con-artist lawyers and hire new lawyers with solid educations in accounting. A lawyer without an accounting degree is almost useless to an auditor and can give bad advice.

There rest of the problems of capital formation in the USA will be discussed in another day.

Dec 23, 2008 - 6:26 am 34. slade:

Roubini, Nyquist, and Kunstler - the Armageddon Trifecta.

I would feel better about “muddling through” if a couple mortgage lenders went to jail, a few bankers went bonus-less, if not replaced, and a few members of Congress found themselves unelected. But I’m not holding my breath.

Dec 23, 2008 - 6:34 am 35. dan:

Aristotle argued that habits - not institutions, which are a reflection habits - are fundamental to the character of the polis. This is true, and cognate, on a social scale, with Kant’s insight that there is nothing good in this world but a good Will. Personality is fundamental, and personality is expressed through institutions. Where the people have reached the point where their faith in the effectiveness and wisdom of institutions falters, more rigid states than the USA would be stricken with paralysis and threatened with collapse or at least crisis. One of the basic geniuses of the Anglo-Saxon spirit as epitomized and rarified in the US political experience is that its institutions are remarkably supple and responsive, however slow it may seem to any individual unaccustomed to reckoning things in institutional time. One of the great things about law school is that you are forced to be engaged in a close study of the transformation of US law as it responds to the various large and small facts facing the national paradigm existing at any one point in time. This particular history demostrates remarkable resilience. The country is not yet at stake.

But what happens when the people’s habits have been altered? This is the danger decadence poses. Not every man is a scholar, and not every scholar is an honest one; the virtue of respect for tradition is that it humbles the individual personality enough that the wisdom which inheres in institutions is communicated to him, however gradually, and the fundamental order persists. But when the media sensibility replaces the pulpit, or the rostrum; when individuals are so “empowered” that their need to submit to institutional discipline and thereby interface with institutional memory is reduced to some unknown minimum - where then are the habits of the people which the institutions originally expressed, the establishment of which they were meant in part to preserve? This is a dangerous decoupling. The cultural moment is dangerous because the fruit of the 1960s social revolution has culminated in a political revolution whose victory, amid abundant but substantially illusory affluence, has cast into ridicule and doubt the very institutions that comprise the nation - like all other revolutions before it. The problem is - the result is - that the people are beginning to lose faith in the people.

Dec 23, 2008 - 7:01 am 36. Peter Boston:

The only institution that has suffered a mortal blow to its legitimmacy is the MSM. Most people have come to the realization that you have to be an idiot to accept a NYT front page story, or a network news piece, at face value. Future historians will marvel at how quickly and how deliberately an entire industry engineered its own destruction. Good riddance to bad company.

I do not believe that American have lost faith in their institutions although that seems to have been the goal of the Democrats and the MSM over the past 8 years. Bush and the Republicans share responsiblity for failing to stand up to the onslaught. A slander not responded to becomes a truth.

The inmates have gained control of the asylum but the foundation is solid and the building is sound.

No meaningful changes are going to come about from the electoral process. Not at the national level anyway. If we are going to restore the US as the commercial republic that brought liberty and prosperity to so many then it will have to start by changing the culture in your neighborhood and your town. We have to start pushing back hard or we will get overwhelmed.

Dec 23, 2008 - 7:18 am 37. Doug:

The City Where the Sirens Never Sleep
The graduation rate is 24.9 percent, Detroit schools haven’t ordered new textbooks in 19 years.

In a city often known as the nation’s murder capital, with over 10,000 unsolved murders dating back to 1960, the police are in shambles through cutbacks and corruption trials. (They have a profitable sideline, though, as one of the nation’s largest gun dealers, having sold 14 tons of used weapons out-of-state.) Their response times are legendarily slow. Their crime lab is so inept that it has been closed. One Detroit man found police so unresponsive when trying to turn himself in for murder that he hopped a bus to Toledo and confessed there instead.

Detroit schools haven’t ordered new textbooks in 19 years. Students have reported having to bring their own toilet paper. Teachers have reported bringing hammers to class for protection. Declining enrollment has forced 67 school closures since 2005 (more than a quarter of the city’s schools). The graduation rate is 24.9 percent, the lowest of any large school district in the country. Not for nothing did one frustrated activist start pelting school board members with grapes during a meeting. She probably should’ve reached for something heavier.

An internal audit, which was 14 months late, estimates next year’s city deficit to be as high as $200 million (helped along by $335,000 embezzled from the Department of Health and Wellness Promotion). With a dwindling tax base–even the city’s three once-profitable casinos are seeing a downturn in revenues (the Greektown Casino is in bankruptcy)–the city has kicked around every money-making scheme from selling off ownership rights to the tunnel it shares with neighboring Windsor, Canada, to a fast food tax. It’s perhaps unsurprising that Detroit now has the most speed traps in the nation.

It also has one of the highest property tax rates in Michigan, yet has over 60,000 vacant dwellings (a guesstimate–nobody keeps official count), meaning real estate values are in the toilet. Over the summer, the Detroit News sent a headline around the world, about a Detroit house that was for sale for $1. But it’s not even that uncommon. As of this writing, there are at least five $1 homes for sale in Detroit.

The city council has been such a joke that one former member demanded 17 pounds of sausages as part of her $150,000 bribe. Its prognosis for respectability hasn’t grown stronger with Monica Conyers, wife of congressman John Conyers, taking the helm. She has managed to get in a barroom brawl, threatened to shoot a mayoral staffer as well as have him beaten up, and twice called a burly and bald fellow council member “Shrek” during a public hearing.

How bad is Detroit? It once gave the keys to the city to Saddam Hussein.

Dec 23, 2008 - 7:18 am 38. dan:

Since realizing I was on a particular part of the political spectrum due to my cultural and strategic sensibilities I have been thinking about what this great divide means for the coming era in which the babyboomers are gone and we, their descendants, become the national personality until we too pass it on. It has been interesting to observe several things. First, the babyboomers were raised by the WWII generation; however much they diverged, en masse, from the mores of their parents, their parents nonetheless exerted a decisive influence on the character of even the freest citizens ever produced in the world. I suppose it must be said that “the revolution” is less a truly mass phenomenon and more a media, mass-marketing phenomenon, but through the success of this combination and the commercial growth of the media it has in any case become a mass phenomenon. So, their traditional Leave It To Beaver parents. Second, despite their anti-institutional activities and aspirations, there was in the collective effort a generational coherence which has acted something like an institution - an institution in which the influence of the Depression/WWII parents was also expressed. But the problem is that the traditions of the parents have been passed along in such diluted form and something else contrary to it has taken up such promiscuous residence in all the facets of social expression that the revolt has become the tradition to an extent that harasses and deforms the development of natural American habits. Political correctness, a Soviet import, is just a name for that basic destructive, chauvanistic impulse. And without that self-conscious, often obnoxious generational cohesion, what characterizes our institutional, social consciousness? Vaguely, unknowingly Leninist principles whose cultural resonance - whose appearance as flashes of institutional memory - gradually wastes away the natural familial sense and aesthetic sense. They do not understand the provenance of their own ideas and opinions. If I said: Why is the Iraq War bad? And then showed them the same passage from Stalin’s The Foundations of Leninism, they would blink at it like Last Men. I fear the result will be a kind of fragmentation - urged on by political cleavages - that will exert very difficult stress on this country. The institutional rot reflects this creeping decadence among people. There are no forces, only people.

And I do not at all agree that people know The New York Times is just a venue of subversion. Most of the people I know regard it something like an enthusiastic undergradute regards Plato or Marx or some other authority. In fact the other day I overheard friends of mine - parents of friends of mine - talking about how much they Loved Keith Olbermann and Rachel Maddow, two truly terrible people. The arbiters of culture, for them, are the renegades and the avant-guarde which The New York Times and The New Yorker and organs like that lionize. That is a fact, however melancholy.

Dec 23, 2008 - 7:50 am 39. Mark:

Alexis writes: “Life goes on. True legitimacy is not measured in the core of an empire, but in its periphery.”

Alexis’s reference to the periphery reminds me of the great and prescient “Foundation” series by Isaac Asimov. The center of any empire experiences a turning inward. The planet Trantor literally takes on a metal carapace.

An engineer keynote speaker I heard recently said that he foresaw in 1995 the extent of the internet, connectivity, and wireless communication. But he never predicted the revolution that gave us a trillion mini-electronic devices. That mini-device entrepreneurial direction came out of the blue, so to speak. And it’s just the beginning of what Asimov referred to as the “atomics,” i.e. the mini-devices. Perhaps an energy source breakthrough will precipitate be the next revolution. Without a new economic revolution, Congress will just be slicing more and more off of the old economic carcass.

Dan writes: “But what happens when the people’s habits have been altered? This is the danger decadence poses.”

Another science fiction classic, “Dune,” traces the “global jihad” that precipitates the end of an Empire. Talk about being precient! The analogies to the present age are painful to contemplate. When old values are hollowed out, the cultural vacuum invites new values. The current “new” values are actually the old secular, spend and tax liberalism. The solution will fail since it is pouring water on sand. But what the following wave of values in-flow will bring is anyone’s guess.

Global South Christianity is one possible next wave that could fill the political and moral vacuum of the country. If the US had been systematically cultivating immigration of Global South Christians and nationalities susceptible to Christian conversion, that would be an interesting trend. Instead we are as likely as not to invite into the country nationalities ultimately opposed to Christian culture and to the very foundational values of the country.

The reaction of the MSM and hollow-chest liberal culture to Sarah Palin was instructive. She was like a snake under foot that every liberal had to try to stomp. Personally I’d like to see her stay on the periphery since she is a polarizing figure, but she helped to bring into focus some of the conflicts and contradictions of the culture.

Dec 23, 2008 - 8:46 am 40. buckets:

While Kunstler may be a perpetual doom-monger, I would have to agree with our good host that the legitimacy of the regime has taken huge hits lately. I think what pushed me into acknowledgment of this was not the treatment of Sarah Palin, but the “Joe the Plumber” situation.

Joe’s crime was asking a tough question of the “Light-Bringer,” after Obama walked into his neighborhood and offered to take questions from the residents. Joe’s question wasn’t a softball, but it was eminently respectful and reasonable. In fact, Joe’s question was representative of the proud nature of American political discourse. Unfortunately for Joe, Obama’s answer was clumsy, truthful, and recorded on video.

Joe’s life was destroyed. The Kos Kiddies and others found his divorce records and posted them online, speculating that Joe was a wife-beater to boot. They also found he owed some tax money, and immediately labeled him a crook and a cheat. Government officials illegally pried into his private records ad leaked them to the press and sympathetic Lefties. Joe’s plumber union spoke of firing him because his paperwork might not be in order (the union supported Obama).

And that was when I was truly horrified at the State of the Union. We saw what happened when the Party Line was even slightly questioned. Anyone who thinks that was a one-time phenomenon is fooling themselves. A would-be future whistleblower is deterred, because who wants to risk public humiliation and destruction of their lives? And just like that, true public discourse is ended by the machinations of the Left.

That, my friends, is the start of something terrible.

Dec 23, 2008 - 9:14 am 41. Jay:

I helped create a national political survey in 2006. One question we asked was: is the Federal Government very corrupt, corrupt, mildly corrupt, not corrupt, very honest (I forget the exact wording now. 87% or the randomly selected respondents said that the Federal Government was corrupt or very corrupt. Later a Zogby poll found than over 90% of Americans distrust the Feds. The center of American politics collapsing.
In 1932 the US was a big creditor. In the recession of the 70’s we were still a creditor. Now we are a massive borrower. The leveraging used to have the boomers spend beyound their means has to be eliminated. This means that the recession has to work its way out.
But the folks with debt want a free ride at the expense of us old savers. There are a lot of distortions in our economy that link to other economies. The political economy has been changing and the rate of change is going to increase.
Most of us are going to pay for idiot optimism of the boomers.

Dec 23, 2008 - 9:52 am 42. RWE:

When the crooks get into office they try to cover their own actions by de-legitimizing everyone else. In the Clinton years we were told that lying was a good thing; it spares people’s feelings, that all of those curious coincidences, convictions and untimely deaths were isolated incidents, and that everything else that looked unsavory was just an honest mistake or series of misunderstandings. And, hey, everybody does it, so what’s the problem?

In the Reagan and both Bush Administrations we had the Left getting riled up about nothing over and over again, prosecuting the innocent and crying tears over suspected terrorists locked up without due process. And nothing real ever came of any of this. Ollie North’s actions were in the end, a good idea, and done in the same spirit that smuggled weapons to Great Britain against the Neutrality Acts. Valerie Plame’s and Joe Wilson’s accusations are now accepted as lies by even the New York Times.

When you deliberately act to increase the cynicism of the American people by false prosecutions in order to cover over your own illegal actions, well, sooner or later the dam breaks.

Dec 23, 2008 - 10:42 am 43. Roderick Reilly:

It may seem a little bit OT, but the growing skepticism about global warming/climate change will help fuel the skepticism and resentment of America’s and the West’s arrogant leadership and the elite it stems from.

The current cold spell, and the possibility that there may be a few years of generally cooler temperatures, does not “prove” that global warming theory is wrong, but the average Joe observing snow in October or April is going to see the whole thing as a crock, and its proponents as charlatans. They will couple that assumption with the fact that they are being told to make major sacrifices in the name of a charade, and that the people telling them to do so are the same ones who brought about the financial collapse and also run the information/entertainment organs that spew contempt for ordinary citizens and their values.

Something may give in the near future.

Dec 23, 2008 - 11:24 am 44. Eggplant:

Slade quoted Rick1:

“I’m not sure what to make of that site.”

Then Slade said:

“Part - maybe the most part - of the Kunstler site is driven by Hunter Thompson steam. The trick is to strip the prose of hyperbole and digest the message, which is more often than not something to chew on.”

I read Kunstler’s website for entertainment but could never take it seriously. I knew there was something about Kunstler that was familiar but I couldn’t put my finger on it. However Slade could see it. Kunstler is a Hunter S. Thompson retread. Kunstler pushes the same set of buttons that Thompson pushed in “Fear and Loathing in Las Vegas” and his Rolling Stone articles. Kunstler unwittingly punctures the illusion at the end of his articles when he hustles for his books (If we’re all doomed then why does he try to sell his books?). Thompson’s stories could never be taken seriously because they were in Rolling Stone, usually sandwiched between some article about a rock star who just overdosed from heroin and a long essay concerning left wing politics. However both Thompson and Kunstler are amusing to read.

Dec 23, 2008 - 11:25 am 45. ws1835:

Dan @#38 -

You have hit a theory of mine directly on the head. The “Leave it to Beaver” environment in which the Boomers where raised left an indelible mark on their perspective. A mark that has endured (at least at a subconscious level) despite their rampant anti-establishment behavior since their childhood. That mark limits their extremes and guides their sensibilities even though they don’t realize it. Hence, they have delegitimized and degraded the overall culture for three decades, but have never completely swept the foundation away. So although I blame the Boomers for much of the nation’s ills, it won’t be their generation that truly crashes the current culture. It will be their kids.

Why? Because their kids were raised and nourished on the Boomers’ raging anti-establishemt attitude. Just as the WWII generation left a defining mark on the Boomers, the Boomers have left a mark on Gen-X. A generation that has never had a safe Leave it to Beaver base to work from. The Boomers raised their kids to know only single parent households, divorce, disrepect for authority, mistrust of tradition, and disdain for religion. The children of Gen-X? No hope in hades for any meaningful for link to traditional Americana at all outside of small conservative enclaves.

I live with two teenagers, and can clearly see the complete social disconnect and dysfunction two generations down from the Boomers. I don’t think it is hopeless. As Wretchard says, we will muddle through and reform on the other side. But I am certainly not looking forward to the muddling.

Cheers and Merry Christmas.

Dec 23, 2008 - 11:51 am 46. NahnCee:

buckets - we have a three-pronged system. Joe the Plumber’s life can be considered to be destroyed if and when the legal prong lets him down when he sues everyone involved for a million billon dollars. If he doesn’t win his lawsuits, his life has been destroyed. If he does win, the legal prong has worked again to rein in evil-doers, and entities like that Child Services cow are the destroyed ones.

///

I sometimes wonder to myself if Wretchard ever feels sadness that the wars and intrigues and sturm and drang he reports from the Phillippines really have not mattered a whole lot in the greater scheme of world affairs.

There’s something to be said for American hegemony because when the smallest butterfly gets stamped on in Peoria, the resulting fluctuation in the Force is felt world-wide. Somehow, it makes *our* sturm and drang worth it, when we look up and out and about and realize that, literally, everyone else on the globe is affected by what we are going through and doing about it.

And that they plot to take down our skyscrapers are their own peril.

Dec 23, 2008 - 12:21 pm 47. Taeda Inflammus » Blog Archive » Trust? Them? Why Would Anyone Do That?:

[...] enough, Wretchard notes the same thing from another direction, that the current crisis has undermined trust …. He references Kunstler, author of The Long Emergency. James Howard Kunstler argues that the [...]

Dec 23, 2008 - 12:31 pm 48. Alexis:

But the folks with debt want a free ride at the expense of us old savers. There are a lot of distortions in our economy that link to other economies. The political economy has been changing and the rate of change is going to increase.

Most of us are going to pay for idiot optimism of the boomers.

Your sentiments would have been shared by Whigs in the 1830’s. Jacksonian fiscal policy was based upon easy money and promoting the interests of the borrowers (the “common man”) against the lenders (and savers). Andrew Jackson’s national Ponzi scheme’s bubble burst just in time for the Van Buren administration in 1837.

For that matter, Indian removal was also about people demanding a free ride at the expense of those who were dispossessed. Watch out for how the federal government treats Indians at any given time because that’s how the federal government treats everybody else a few generations later. It was a bad sign when President Jefferson called himself “Great White Father” toward Indians because the federal government presently perceives itself as “Great White Father” toward all Americans. Okay, make that “Great Father”.

One wonders why Thomas Jefferson couldn’t have promoted republican values in his Indian diplomacy. “Great White Father” is a strikingly monarchist moniker, especially given its similarity to how English, French, and Spanish monarchs were presented to Indians by their emissaries. Use of such language leads one to consider whether Thomas Jefferson harbored monarchist pretensions.

Dec 23, 2008 - 12:32 pm 49. Demosophist:

Basically, an employee can never be a part owner of the company with his/her agenda aligned with the company – without becoming an expense. That is bad policy.

?? Think about that a little. Is he really saying that employees who participate in an ESOP are expenses rather than assets? Even if that were true in an accounting sense (although it’s their stock that’s a liability not their person or their employee status) an employee with a stake in the company he/she works for is, almost by definition, a more valuable employee. Moreover, in a larger sense as more people make a majority of their income directly from capital as opposed to labor the big peaks and valleys of the “business cycle” will be reduced, because the feedback between income and production is tighter. This isn’t to say that “stock options” aren’t abused, but killing the baby because it’s a little dirty isn’t the appropriate way to address such problems.

Dec 23, 2008 - 12:42 pm 50. Spindok:

@ ws1835

“So although I blame the Boomers for much of the nation’s ills, it won’t be their generation that truly crashes the current culture. It will be their kids.”

Or saves it. We dont know. Either way it well be them when the former passes away.

Wretchard’s youtube vidio post is a nice solid tune. Cant get past that kind of Fender guitar work. The ‘kids’ still play those.

I think this one from the past was played on a Fender Telocaster (or is that a Strat? - doesnt matter). Doesnt get better.
http://www.youtube.com/watch?v=hUokMbJC3P8

Let ‘em go.

Educate

Liberty

Freedom

Dont worry about ‘traditional links’. This is not your world. They will be fine.

Spindok

Dec 23, 2008 - 12:42 pm 51. Mongoose:

Jay: That debt is mostly caused by government social spending, not some amorphous concept of “boomer optimism”. Cut all that off, stop subsidizing the unproductive and the marginally productive, and let the productive keep their hard earned monies and then we will be creditors once again siin enough. Boomers that were leveraging their own net worth using just their assets that got taken, well, to the extent it is not due to government inflation of the markets, They got what they deserved and the money only just changed hands. In any event, they were hardly alone in this. The real story here — the real wealth destroying disaster — is government intervention and the derivative “business” used to support it, a business that was often in open collusion with government interests. How you can mark this up to “boomer optimism” is beyond me. As a group, very few boomers work on Wall St. The divide is a political one, not a generational one.

The real pace of change quickened with LBJ, and while the Democrat half of the Boomer generation exacerbated the social spending in this country, it was the two generations before that really got the ball rolling. the Boomers hardly elected FDR, JFK, LBJ or even Carter. The Boomers, I might add, were instrumental in electing Reagan and the Bushes. The Boomers alone did not keep the Congress democratic for most of the post war years. In fact, it was the Boomers that kept the GOP in the majority for all but the Ike years in our post war political history. I would also point out that it was the younger generations that were the decisive generational vote in this current election.

Really, this Boomer hashing is getting out of hand here — it is at odds with the facts, and it about as spurious a polemic as the Left’s use of “evil corporations”. The Boomers gave us the most life enhancing part of the high technology revolution (with help from the legacy they inherited, of course). Why should they not be optimistic? Conservative boomers were in large measure the foot soldiers for the conservative movement, and that movement met with bome of the greatest political and econmic successes of the last 60 years. Today the conservative movement is largely a Boomer movement. The young as a group appear to show absolutely no interests in conservative politics at all, the younger conservatives on this blog notwithstanding. X-ers and later cadres are one of the most politically ignorant bunch we have ever seen. To the extent that they are openly political, they are on the left, often on the very far left.

The real problem is the general decline of the USA toward nihilism and socialism, and away from the traditions of its civilization. At least half of the Boomer generation have fought against this trend. In any case, this has been going on for several generations. It is just more obvious with the Boomers because there were so many of them.

Who do you imagine fought in Viet Nam? (I will remind everyone that during the Veit Nam years there were 8 million Americans under arms in the wide world.) Who were the senior officers during the First Gulf War? Who stood steadfast throughout the Cold War? It was not the boomers that cut off the aid to the NVA in the early 1970’s, it was the generation before that.

People exaggerate the worth as a cadre of the so called “Greatest Generation”, the vast majority of whom did not wear a uniform during ww2 and, even of those that did, never saw combat. In any event, the “sacrifices” of most the “Greatest Generation” was about three years. We must recall that this generation was one of the strongest constituencies for the Democrat party. They were more than happy to avail themselves of government redistributive programs after ww2 and profited much from government market control and government union support in the post war years. The returning veteran were hardly a model of social and moral probity. Divorce rates soared, college standards suffered and church attendance declined. They dranka lot of booze and chased a lot of skirts (I will point out that Hugh Hefner was born in 1926).

Much of this “Greatest Generation” stuff comes from 2nd generation New Dealers in the Media and is a mixture of nostalgia for that time, Leftist propaganda and general Democrat electioneering.

The whole fabric of American life changed a great deal under under this generation, perhaps more so by some measures than what has occurred during the Boomer period. For example, the senor management, corporate enablers of feminism in the work place in the corporate world were of this generation, not boomers (and they did it mostly to hold down wages, IMO at least). The 1960’s and 1970’s just added more wood to the fire. The “greatest generation” was the first generation of American men to trust the government to take care of their sons and not themselves. For many it was a case of “I gave of myself for 3 years”, it is about me from now on”.

It was not the boomers that created the mindset of the UAW. Most Boomers would not be caught dead in a labor union.

The Boomer hardly created all of the negative aspects of the world that we live in. The two generations before that that supported the collectivist policies of the Democrat party– and all the nonsense that goes with it — can take a good deal of credit for our current predicament too.

If change is to be effected, the boomers will have to be involved: There is no time to wait for some sort of die off.

We really need to get out there and turn the tide. Those people here that say that we cannot effect change in Washington should be ashamed of themselves. This is not the first time we have faced political crises in this country, or political corruption. The machine politics of the immediate post Civil War years, or of the 1920’s through the 1950’s was no less corrupt than today — most likely it was far worse than today. Whatever the case may be, political machines have been a constant throughout our history.

No, we need to work hard to reform the conservative moevement, take back the Hill in two years and the WH in four.

Let us stop this defeatist nonsense, it is just what the Democrats are hoping for. Every generation has it challenges. If our comercial republic goe away, it is all of our fault, not just “the Boomers”.

Are we to be defeated by idiots like Obama, Pelosi and Hillary? If so then there was not much to save in the first place.

Dec 23, 2008 - 12:51 pm 52. Mongoose:

bome=some

Dec 23, 2008 - 12:57 pm 53. Roderick Reilly:

“”"”"”"If change is to be effected, the boomers will have to be involved: There is no time to wait for some sort of die off.”"”"”"”

Correct, we boomers are still very much here, and most of us are under 60 years of age. Considering that this is the 21st century, and NOT the Neolithic, we are not dead yet by a long shot.

Dec 23, 2008 - 1:15 pm 54. Roderick Reilly:

“”"”"”It was not the boomers that created the mindset of the UAW. Most Boomers would not be caught dead in a labor union.”"”"”"”"”

It was also not the boomers who created what most people think of as “The 60’s,” they were merely the primary participants. It was the “beat generation” and WWII-era radicals and libertines who laid the foundation for the Aquarian Age.

Dec 23, 2008 - 1:17 pm 55. dan:

The fact is, the US’s radical prosperity is in large part a predicate of the facts of the First and Second World War, which were European suicide. Boomers began being born in 1946. In 1980, a Boomer was (generously) 40 years old. Now, do even 40 year olds run a business, the country? It’s almost as ludicrous as “the boomers” claiming credit for the civil rights movement: the 1964 Act was passed by old men in 1964. “The Boomers” is just shorthand, and useful enough in a blog comment considering the enormous number of individuals it refers to. The Boomers are the heirs to this grand fact, of which even the most educated are generally totally unaware. Secondly, the Boomers were not in power - real, old-man power - until the 1980s at the earliest. Thirdly, nihilism and socialism infected precisely the boomers - all those majority of the country under the age of 25 during the mid and late 1960s. “Nihilism and socialism” do not proceed from the language or experience of “government spending” and all that policy hack language. I guarantee you that if the ghettos were being drowned in federal money and but those children and adults were being taught Shakespeare, Edmund Burke, and Einstein there would not be the problem there is today. Blues music and electric guitar and marijuana did not create decadence. LBJ’s spending habits and 40-year Democrat majorities in Congress didn’t create the nihilism and socialism. It’s “the ideas.” “The Boomers” are the appropriate shorthand for those who bear along the wave of destruction because they are those who accepted and promote the ideas, individually. It is their fault because they are responsible for criticizing their own minds, which they have not sufficiently done. It is wonderful that American prosperity - again, easily the product of the World War II fighters - flowered with them. But it is pretty clear that since 1995 or so this country has been kidding itself as to the way the wealth of even the average life relates to the true economic facts. In 1995 my father, who is now 60 years old, was 47 years old. Sorry bud, this *now* is the baby boomer economy.

Boomers don’t need to *apologize,* for god’s sake. But you know what the worst thing is? Republicans and conservatives have only had to say NO. We don’t need a counter-ideology, “we” don’t need some goddamn counter-revolutionary marketing strategy. We need men as leaders, not cowards or salesmen or the idiot Huckabee - what the f*ck is Huckabee but some goddamn sugary preacher kumbaya dipsh*t?

Really the evangelical movement in this country should all convert to a real religion with some intellectual discipline and an actual cogent philosophical tradition, like Catholicism. Not this Christ-in-a-plastic-manger shopping mall babytalk. It’s like you idiots think you’re worshipping a cartoon character or something.

Any. Boomers. All your fault. Suck it up. Make a contribution by exposing it or f*ck off. You’ve done quite enough already. Thanks.

Dec 23, 2008 - 1:32 pm 56. Zim:

Not to get into a generational flame war, but the problem with the boomers is their size. Even the most mild mannered elephant wreaks havoc, with every step, on the smaller inhabitants around it.

I’m a GenX’er. We’re a small group, mostly under 40 and a reflection of our grandparents, if anything. The flamboyance of our parents will not be carried on by most of us.

Now Generation Y, those young upstarts, they’ll be the end of us all:)

Dec 23, 2008 - 2:46 pm 57. ws1835:

Couple of good ideas above…..the following commetns are generalizations of course, but I think they contain a good bit of truth.

Forget the politics and party affiliation, the Boomers (and the “ME” generation attitude) have driven American culture since the early 70’s. Name a pop culture trend and the Boomers were at the vanguard. As said above, their numbers virtually guaranteed it would be so.

It doesn’t matter that the original trajectory of the 60’s was chosen by older radicals. among their peers those radicals were hardly even respected. It took the teen/20 something Boomers to lap up the idealogy like cheap beer. And then instead of growing up philosophically, the Boomers ran with it right through the next 30 years. The Greatest Generation in general were builders and savers and mostly traditional. Whereas the Boomers as a whole have been spendthrift and morally relative and perpetually adolescent.

As I said above, the Boomers could be easier survived if they hadn’t raised their kids in a complete values vacuum. I am a member of Gen-X and I gotta say my generation is not only small, but are really not up to the task of cleaning up after the Boomers. Gen-Y? So far I can’t get any of them away from their texting and myspace page long enough to have a discussion.

Dec 23, 2008 - 4:50 pm 58. Bobal:

Actually Jefferson’s relationship with the Indian tribes was mixed.

In his later career as President, Jefferson would oversee the process of gradual Indian removal that culminated in the Indian Removal Act of 1830 under Andrew Jackson. But at this earlier stage of his career Jefferson aligned himself squarely behind the Washington and Knox initiative to preserve Indian enclaves east of the Mississippi.

One of this first acts as secretary of state was to draft a memorandum arguing that all the claims of the Yazoo Companies were illegal because Georgia had ceded all its western land to the Federal Government upon joining the Union. At Knox’s request, he also drafted another legal opinion, arguing that the Creeks, like all Indian Tribes, should be regarded as foreign nations….

At a deeper and less legislative level, moreover, Jefferson brought the most fully articulated sense of the underlying moral issue at stake at this defining moment in the shaping of American policy toward the Native Americans. He had written the most compelling defense of Indian culture by any American of his time….Though it is likely that both Knox and Washington shared Jefferson’s basic convictions about the integrity of Indian culture, neither of them ever expressed themselves so fully or publically on the issue.

The Treaty of New York, 1790 was a failure.

The unmaneagable problem was demographic. Settlers on the Georgia frontier kept pouring across the newly established Creek borders by the thousands, blissfully oblivious to any geographical line drawn on the maps by some faraway government, cheered forward every inch of the way by the Georgia Legislature, which saw them as foot soldiers in the Yazoo campaign for control of the southern frontier….

Washington recognized the strategic dilemma right away. “Unless we can restrain our own borders it will be in vain to expect peace with the Indians–or that they will govern their own people better than we do ours.”

Washington took the failure personally, believing that his signature on
The Treaty of New York was his pledge of honor as well as the solemn word of the United States goverment. Both were now being exposed as worthless.

from “Amercan Creation; Triumphs and Tragedies At The Founding Of The Republic”
Joseph J. Ellis

They didn’t have the troops to hold back the white settlers.

Something we might think about today in regards to our southern border, where we do have the troops but don’t use them.

Dec 23, 2008 - 7:11 pm 59. Unsk:

I must agree strongly with Mongoose. The ‘Greatest Generation” crap is way overdone. The Greatest Generation is the biggest generation of leaches ever. Their parents endured the depression as adults. The Greatest generation were children and adolescents during the depression.

I am a boomer. The boomers and succeeding generations were not given the government largesse than the GG was. When the GG came back from the War, they were given the GI Bill. Through it they became vastly better educated than their parents and they took over everything. The GG ran the country from the 50’s to the 80’s. They were rarely conservative politically. Congress was almost exclusively Democrat during their reign. They gave themselves great schools, great infrastructure,VA and FHA Housing, Medicare, and great social security benefits. The GG gave us the concept of really big government, the Great Society, the War on Poverty, the Peace Corp, the Peace movement, the Vietnam War defeatist attitude, inflation, affirmative action,public housing, the Warren Court, Roe vs Wade, the environmental movement and the beginning of almost social of our present society ill you can think of.

I am not saying that succeeding generations were much better. However, one thing that really sticks with me is that I been on several boards the Greatest Generation, and after all the medicare and Social Security . they are hardly ever generous as far as policy to the families of suceeding generations.

Dec 23, 2008 - 7:13 pm 60. twobyfour:

23. Lifeofthemind:

The “Copperheads” destabilized the image of the Old Regime to slide Obama past the election. My argument was that they did this, possibly with financial manipulation by allies depending on how much of a conspiracy aficionado you are, to conceal from the public that the demonized Old Regime was not even in power.

Well, that is almost wheels within wheels. There was not much of purposeful concealment going on. Just demonizing, in spades, hoping that most of it would stick. Creating a scapegoat is a serious business, and if done well, you can conceal anything. This works on a personal level, where a sociopath can seriously damage your reputation. Sociopathic ideology just takes it to the next level. Works the same. The stated goals are really means, the real goal is power, pure and simple. And privileges that come with it.

Wish I could elaborate in a concise manner on this, but it would still amount to a decent length paper, so for now I skip it although it is a tempting subject. Not because how conspiracies work, but rather how they don’t usually work.

You say that Obama can not move for major structural changes. History shows that a President gets anything done in the first two years and does nothing for the remaining 2 to 6 years.

Sigh. He, of course, can. But the question is how is that likely. There seem to be a consensus, amongst powers that be, about conditions that would be desirable for a serious structural changes biz. It is a matter of untied ends and unintended consequences. There is not enough public support for sweeping changes yet. The pro/con distribution is approximately 50/50. Pushing it at this moment would lead to a serious disruption of the present order and it is hard to predict what path that may take. The generated economic crisis got sort of out of hand already, beyond the intended results (voter manipulation), and thus it may be desirable to keep things on a slow, imperceptibly incremental burn. The required demographics are 2/3 of voter pool. That would create the proper base for pushing the agenda. But today, it is not the time. It is not the time to create the civil force, too. The public reacted very negatively. The idea was rolled back almost as fast as it appeared.

That is not to say that 0 can’t go rogue, to a degree. He is a narcissist and thus a bit harder to control. But I have no doubt that he can be disposed of very fast, by turning the media poodles against him, if he tries something “innovative”. The system was primed and tested on Bush, and can be deployed tomorrow if needs to be. In fact, there may be a sort of a funder remorse going on already. 0 is not exactly the best tool for the present conditions. He would be an ideal tool if there was a better ratio of voters’ enthusiasm for structural changes. So, it is not beyond the realm of possibility that prior to the coronation, something really nasty would hit the pravda channels. A minute chance, but would not surprise me.

So to return to the question at hand for this thread, what happens “Going Forward?” Can the Grand Army of the Republic restore the traditional constitutional regime? Will the radicals of the left, with or without outside help, push for a radical change? Is Alexis right, the Treason of the Clerics by our Best and the Brightest will allow a new aristocracy to emerge and America will resume it’s successful path?

That depends. If the slow cooking is under control, meaning the economic situation does not get entirely out of hand and some positive correction is apparent after 2 years, a more rapid change may be on the go. But the risk is still that if it is initiated too early, then the resistance may be too strong and lead to breakdown in the society. So, it may have to wait for the whole term, to get people used to 0 as a “moderate” leader and kick it off when the mandate is there. That means they have to contain radical lefties’ enthusiasm somehow. No problem infiltrating radical blogs, money is there, just recycle the PR people with a new script and apply peer pressure.

I would rather see them to make a mistake and show their hand. That would result in stronger reaction and chances would be better to restore the former glory. With a slower process, though, rescheduled to 4 years, even possibly 8 years, they would only gain advantage and the process may be then irreversible. For generations.

Dec 24, 2008 - 2:54 am 61. 3Case:

Until it is understood generally that the Ancien Regime is the Democrats, and their fellow travelers [the bureaucracy and the media] and useful idiots [RINOs and "moderates"], there can be NO CHANGE. period.

Dec 24, 2008 - 6:15 am 62. twobyfour:

@ 61. 3Case

Sure. But then you have to define for everyone what Ancien Regime means. Why not use the direct definition? Still an uphill battle, though, because the language has been un-moored by shifty manipulators to such a degree, that no one can be certain about meanings anymore. A liberal now really means a totalitarian-lite with a “compassion” mimicry. A progressive is really a regressive, longing for the times when there were just two classes–the rulers and the ruled…and who would be better rulers that them, o the haughty ones with Ivy League degree in Gender Studies?

Itsa orwellian world out there. I know that, you know that. But many don’t. Until spades are again spades, not much chance for a way out of this asylum.

Dec 24, 2008 - 7:58 am 63. Unsk:

3case is absolutely right.

Conservative solutions and conservative ideas have largely been abandoned by most of the Republican leadership for the last three presidential election cycles.

Obama is going to screw up. HIs stimulus package ignores most of the private sector problems. It won’t work. Blago will cast a bad odor for a long time, and Resko is allegedly singing. Blackhedd at Redstate thinks that the Big 3 will back by March or April for yet another bailout, and that there will be much complaining about bailing out the autoworkers who paid double the average US wage.

So there will be opportunities.

Dec 24, 2008 - 10:49 am 64. Whitehall:

The genius of the American constitutional system is that we, the people, have methods to change our elites without killing them.

The classic methods (guillotine, defenestration, axe and chopping block, bullet to the back of the head, etc, etc) have been replaced with free markets, free internal movement, and the ballot box.

Elites have the wherewithal to cling to power and can adapt. Smart ones do but too many fight to the bitter end.

Our current set of elites is feeling the heat. The market for advertising should soon bankrupt the New York Times. The power of the ballot box is causing countervailing pressures that delegitimize voting - see Franken’s effort in Minnesota. Academia seems pretty immune at the moment due to their institutional insulation - that’s why so many leftist flock there and have chosen it for their base.

Our task as citizens is to push for elite responsiveness if not turnover. If some adapt and respond to popular will, good for them. If not, we need a plan to push them off the stage.

A key indicator of how seriously Obama tends to fight this struggle is how he “right-sizes” the military. He could do political purges of the mid-rank officers and senior non-coms. The top brass is already so politicized that they will scramble for power under Obama in a value-less manner.

As others above have noted, the military returning from our current wars offer a rejuvination of our political will as a people, much like the Grand Old Army after the Civil War. Turning them out of the government employment will mean that they will enter politics as independents. Having fought shooting wars for our country, they seem to know WHY they fought. Most civilians are apolitical since a stable democracy has always been a given, in their lives. Our military are largely under no such comforting delusion.

If you want a specific example of a former military man entering politics, look to Assemblyman Chuck DeVore in California. His current ambition is to replace Barbara Boxer in the Senate. There are thousands like him across the country. This is where the hope of the Republic lies.

Dec 24, 2008 - 10:57 am 65. twobyfour:

@ 64. Whitehall

Dunno… I miss defenestrations. ;-)
Does not have to be with pikes below the fenestrum, and the first floor is fine too. I would just love to hear those exclamations: “He (she) flies!”

One can dream… no? ;-)

Dec 24, 2008 - 3:36 pm 66. Barry 0351:

Any one who favors a return to the old agarian lifestyle obviously never farmed with obsolete ground breaking tools to survive.
daylight to dark toil in the fields is not your weekend garden spot hobby work.

Dec 25, 2008 - 9:58 am 67. no mo uro:

The main points being made here all revolve around the economic doings of a future Obama administration. This seems to have gripped everyone, cognescenti or not, as the primary thing.

A closer look at cabinet appointments indicates that the economic theater of operations will be one where very little change from the past eight years will be seen. Most of O’s appointments, while not free market enough to make clubbers all that happy, are nonetheless within the realm of what can be tolerated.

O will do the backpedaling he needs to do to keep the lunchpailers and regular-folk dems in the fold in the arena of economics.

Where he will repay the debt he owes to the Kos/DU/moveon/academic leftists is in the area of the cultural war on the West. Here is where he will reserve his energy and focus for radicalism. Greenred environmentalism, escalationg the war on conservative Christianity, promoting speech codes and hatecrime legislation, bringin back the “fairness” doctrine and extending it to the internet through net neutrality or some equivalent, limiting firearm freedom, increasing abortion, mandating a cultural Marxist public highschool curriculum - these and other areas of Gramscian termite damage will be where he stepss way out and does the radical thing.

Watch both hands of the magicican, folks, and don’t get too caught up in the economic thing.

Dec 26, 2008 - 2:23 pm 68. Chucks:

Re 50, thinking it might have been a telecaster.

No, Mr Alvin Lee always played a Gibson ES-335. He was a Gibson man to the core.

I loved that album, btw.

Chucks

Dec 26, 2008 - 3:35 pm 69. Ben Franklin:

Perhaps it is not surprising that in a time when no institution is trusted, and when no principle is shared, we have elected the man we have.

Thus far in his life Obama has stood for nothing and believed nothing. He has bragged about being able to impersonate nothing so acutely and with such lack of detail that others are forced to project onto him a set of beliefs or a personality as if he were a practitioner of that useless school of psychotherapy that requires its shamans to wear black and to blend in with the background so as to be — absent. Obama has managed to achieve so much nothing in his short life that he has had to write not one but two books to contain it all. No means have served to force him into the daylight. Whenever presented with a difficult issue that might reveal his core beliefs he has simply voted “present.” Likewise, no method has been found to persuade his admirers and sycophants in the press to inquire of him as to his true inner nature. They do not wish to shatter the illusion they have created — not of him, but of Him.

And now this cipher, this enigma will lead the most powerful country the world has ever known. The question is… where?

Dec 28, 2008 - 7:34 pm

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