On Partisanship
Sorry, this is just too good to pass up.
This is not a defense of Sarah Palin. Disagreement with one side does not imply agreement with the other.
But here is Menzie Chinn attacking her comments on the Freddie Mac & Fannie Mae chaos:
And this is not to mention the fact that, as a politician, Gov. Palin is pretty much using "taxpayer" as synonymous with "citizen" or "person". In light of the chaos now going on in world financial markets, in which these government-created entities arguably have some non-trivial responsibility, implying that these entities have real costs is not that far-fetched. Whether this is at least balanced by the good they have done (making housing more affordable) is a fair argument, but no such argument is proffered by Dr. Chinn in this post.
But look also at what others are saying (gleaned from the comments at Econbrowser):
In light of those last four quotes, Chinn now insists that the problem is that Palin did not distinguish between explicit and contingent liabilities. Note to self: if ever a candidate for public office, make no public remarks except from prepared text that has been peer-reviewed for publication in an appropriate journal because partisan hacks and others will insist on parsing as such.
Dr. Chinn further compounds the error by linking to others for support that this is a very serious situation, only for us to find that remarks at the links aren't remarkably different than Palin's unprepared text:
This is the kind of bipartisan Coke-v-Pepsi nonsense that really drives me to despair this time every four years (and not infrequently between). The ability to microscrutinize the other guys without so much as a glance in the mirror is astounding. The fake outrage, the one-upsmanship, the tit-for-tat, the pettiness of it all is just flat depressing. I just don't understand how otherwise intelligent people can place so much of their being at the disposal (in every sense) of flawed politicians who inevitably betray them in their lunge for power. The betrayals force these partisans into rhetorical and moral contortions as they excuse their side of its deceptions, faults, and failings, and simultaneously find or create fault in the imperceptibly different "other" side. Wake me when adults are in charge.
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[1] Apparently, the real problem here is that the Bush Administration has not exercised enough authority? Wow, yet another example of government failure attributable to, "That's not what we meant!" Solution? More central control, of course. But only if our guys are in control.
[2] Is "failure to collect a tax" a "cost", Dr. Chinn? Let's remember your answer the next time the topic turns to tax cuts. Same question to Gov. Palin, with the same caveat.
[3] Somewhere out there is a Republican gloating that his party is in the minority here: newsflash: that's because your party is currently in the minority in the House and Senate. If we look back, we'll find that your guys were the big recipients back when they held control.
This is not a defense of Sarah Palin. Disagreement with one side does not imply agreement with the other.
But here is Menzie Chinn attacking her comments on the Freddie Mac & Fannie Mae chaos:
Menzie's criticism centers on the assertion that -- up until recently -- taxpayers have not spent one dime on these institutions, thus Gov. Palin's use of the past tense makes her ignorant. This criticism might make sense if Sarah had made those comments several years ago. But she wasn't speaking several years ago, she was speaking in the wake of $300 billion worth of chaos. It's called "context".In response to the largest de facto nationalization in US history, we have this example of Governor Palin's comprehension of this issue (ABC News):
Saturday in Colorado Springs, Colo., Alaska Gov. Sarah Palin said, "The fact is that Fannie Mae and Freddie Mac have gotten too big and too expensive to the taxpayers. The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help."
I can't even start to dissect what's wrong with this statement, so I will let the reader assess Palin's understanding of the role of the GSEs in the financial system. From my perspective, I would have hoped to have more comprehension from a candidate at a time when the estimate of a resulting $300 billion taxpayer liability is viewed as plausible.
And this is not to mention the fact that, as a politician, Gov. Palin is pretty much using "taxpayer" as synonymous with "citizen" or "person". In light of the chaos now going on in world financial markets, in which these government-created entities arguably have some non-trivial responsibility, implying that these entities have real costs is not that far-fetched. Whether this is at least balanced by the good they have done (making housing more affordable) is a fair argument, but no such argument is proffered by Dr. Chinn in this post.
But look also at what others are saying (gleaned from the comments at Econbrowser):
- Barack Obama: "These entities are so big and they're so tied into the housing market that it is probably true that we have to take steps to make sure they don't just collapse, because the housing market, which is already weakened, would be in even worse shape if we didn't take some steps."
- William Poole, former St. Louis Fed president:
"There are more general economic reasons for liquidating Fannie and Freddie, the biggest being that it is very dangerous to maintain such a large role in any market for only two operators." - Alan Greenspan
"Limiting the systemic risks associated with GSEs would require that their portfolio holdings be significantly smaller." - Alan Greenspan
"Federal Reserve Chairman Alan Greenspan suggested downsizing [Fannie's and Freddie's combined portfolios] to $200 billion." - Arnold Kling, former senior economist at Freddie Mac
"The growth of Fannie and Freddie has been such that they are beyond too big to fail. They are actually too big to bail." - Janice Revel, Fortune Magazine
"Way too big--far too risky. Those have always been the major worries when it comes to Fannie and Freddie."
In light of those last four quotes, Chinn now insists that the problem is that Palin did not distinguish between explicit and contingent liabilities. Note to self: if ever a candidate for public office, make no public remarks except from prepared text that has been peer-reviewed for publication in an appropriate journal because partisan hacks and others will insist on parsing as such.
Dr. Chinn further compounds the error by linking to others for support that this is a very serious situation, only for us to find that remarks at the links aren't remarkably different than Palin's unprepared text:
- Nouriel Roubini: "One cannot even exclude systemic risk consequences if the housing bust combined with a recession leads to a bust of the mortgage backed securities (MBS) market and triggers severe losses for the two huge GSEs, Fannie Mae and Freddie Mac. Then, the ugly scenario that Greenspan worried about may come true: the implicit moral hazard coming from the activities of GSEs - that are formally private but that act as if they were large too-big-to-fail public institutions given the market perception that the US Treasury would bail them out in case of a systemic housing and financial distress - becomes explicit. Then, the implicit liabilities from implicit GSEs bailout-expectations lead to a financial and fiscal crisis. If this systemic risk scenario were to occur, the $200 billion fiscal cost to the US tax-payer of bailing-out and cleaning-up the S&Ls may look like spare change compared to the trillions of dollars of implicit liabilities that a more severe home lending industry financial crisis and a GSEs crisis would lead to." [emphasis changed from the original - EH]
- From the Frame and White paper: "One critic, Richard Carnell (2004), a former Assistant Secretary of the Treasury, has suggested that the two companies' growth is at least partially a consequence of a "double game" that they play: "[They] tell Congress and the news media, 'Don't worry, the government is not on the hook' -- and then turn around and tell Wall Street, 'Don't worry, the government really is on the hook.'" Sheesh, no wonder Gov. Palin is confused: they and their supporters are two-faced liars! And guess what: It looks like the government is going to act as if it was on the hook.
- state taxes [2]
- local taxes
- corporate income taxes
- SEC oversite
- Dodd, Christopher J S D-CT $133,900
- Kerry, John S D-MA $111,000
- Obama, Barack S D-IL $105,849
- Clinton, Hillary S D-NY $75,550
- Kanjorski, Paul E H D-PA $65,500
- Bennett, Robert F S R-UT $61,499
- Johnson, Tim S D-SD $61,000
- Conrad, Kent S D-ND $58,991
- Davis, Tom H R-VA $55,499
- Bond, Christopher S 'Kit' S R-MO $55,400
- Bachus, Spencer H R-AL $55,300
- Shelby, Richard C S R-AL $55,000
- Emanuel, Rahm H D-IL $51,750
- Reed, Jack S D-RI $50,750
- Carper, Tom S D-DE $44,389
- Frank, Barney H D-MA $40,100
- Maloney, Carolyn B H D-NY $38,750
- Bean, Melissa H D-IL $37,249
- Blunt, Roy H R-MO $36,500
- Pryce, Deborah H R-OH $34,750
- Miller, Gary H R-CA $33,000
- Pelosi, Nancy H D-CA $32,750
- Reynolds, Tom H R-NY $32,700
- Hoyer, Steny H H D-MD $30,500
- Hooley, Darlene H D-OR $28,750
This is the kind of bipartisan Coke-v-Pepsi nonsense that really drives me to despair this time every four years (and not infrequently between). The ability to microscrutinize the other guys without so much as a glance in the mirror is astounding. The fake outrage, the one-upsmanship, the tit-for-tat, the pettiness of it all is just flat depressing. I just don't understand how otherwise intelligent people can place so much of their being at the disposal (in every sense) of flawed politicians who inevitably betray them in their lunge for power. The betrayals force these partisans into rhetorical and moral contortions as they excuse their side of its deceptions, faults, and failings, and simultaneously find or create fault in the imperceptibly different "other" side. Wake me when adults are in charge.
-----------------------------------------------
[1] Apparently, the real problem here is that the Bush Administration has not exercised enough authority? Wow, yet another example of government failure attributable to, "That's not what we meant!" Solution? More central control, of course. But only if our guys are in control.
[2] Is "failure to collect a tax" a "cost", Dr. Chinn? Let's remember your answer the next time the topic turns to tax cuts. Same question to Gov. Palin, with the same caveat.
[3] Somewhere out there is a Republican gloating that his party is in the minority here: newsflash: that's because your party is currently in the minority in the House and Senate. If we look back, we'll find that your guys were the big recipients back when they held control.
Labels: centralization, politics, state-capitalism
