Fool's Gold, Trust the Poor, First Among Equals, As It Should Be, NATO
People will believe the strangest things.
Having spent an afternoon wandering around Temple Square in Salt Lake City this past weekend was testimony enough to that.
The fool's gold of Sarah Palin's political punch, the promise by Wall Street bankers that they could quantify risk out of investing, and what's behind the price of a real piece of gold.
Also rethinking poverty in Canada, America's company at the top, the myth of currency wars, and NATO -- Never Allow Terrible Oppression-- 's new mandate.
First of all, Palin's political power is real because she speaks to the rising unfairness in American society and the geopolitical shift that has made the US a diminishing first among equals. She also saw through the hype around Obama's candidacy and said so.
Her rhetoric, however, is the stuff that fool's gold is made out of, and the best hope for her eventual fall is America's well honed skill at elevating people to the greatest of heights only to eviscerate them on the strength of one fault. The question is whether it will come in time. History is funny that way.
- So oft it chances in particular [wo]men,
- That through some vicious mole of nature in them,
- By the o'ergrowth of some complexion,
- Oft breaking down the pales and forts of reason,
- Or by some habit grown too much that these [wo]men -
- Carrying, I say, the stamp of one defect,
- Their virtues else - be they as pure as grace,
- Shall in the general censure take corruption,
- From that particular fault ... Hamlet Act I Sc IV
Frank Rich explains.
New York Times -- Could She Reach the Top in 2011? You Betcha THE perception I had, anyway, was that we were on top of the world,” Sarah Palin said at the climax of last Sunday’s premiere of her new television series, “Sarah Palin’s Alaska.”
How the Palin machine works, exactly.
New York Times -- Inside Sarah Palin's Inner Circle On the night of the midterm elections earlier this month, Sarah Palin stayed up until 3 in the morning.
Steve Brodner on Palin's political genius, 'vote for me'.
PBS -- Sarah Palin's Alaska Sarah Palin’s new reality show drew the biggest audience the cable channel TLC has ever had for a show premiere.
Quote worth quoting.
"Her brilliant revelation? That politics can now be completely divorced from policy."
Getting voters to focus on 'me' rather than what I think is particularly useful in an era when saying what you think is dangerous.
The New Statesman -- Why Politicians Can't Tell the Truth Here's a Tale of Two Tories.
The fuel in Palin's tank has a lot to do with the increasing unfairness in the economic, education, community and health outcomes in the United States.
Since the emergence of global economic rivals to American capitalism -- Japan and Germany in the late 1970s, China and India in this century -- there has been a decline in mobility in the United States because ideology prevented the state from investing in different outcomes.
At the same time that the shift global economic power bore down on America's middle class yet rewarded a small percentage of the society.
A view from outside the United States.
The Guardian -- For White Americans, Things Aren't What They Used To Be Pity George Bush.
How revolutions in communication, transportation, manufacturing and financial technologies without sustainable invest in world class education, health, and community outcomes has resulted in a shift in wealth away from the middle class to the super rich.
Financial Times -- The Crisis of Middle-Class America Technically speaking, Mark Freeman should count himself among the luckiest people on the planet.
The numbers speak for themselves.
Economist -- Social Mobility and Inequality AMERICANS are an optimistic lot.
Long time observer of the American scene Richard Gywn fills in the 'declining American middle class' story.
RSN -- End of the American Dream a Nightmare A was bound to happen, an article has just appeared, in the Washington Post and so in a respected, mainstream newspaper, calling on President Barack Obama to declare he will not run for re-election in 2012
Speaking about fool's gold, Gillian Tett shines the light on 30 years of 'shadow banking.' At the centre was the belief that mathematical modelling could predict risk in financial assets to the benefit of the investors. Damn those fat tail risks! Thanks to John of Toronto for sending this in.
Financial Times -- Road Map That Opens Up Shadow Banking This week, a senior banker friend gave me a poster that had been created by downloading a chart recently produced by economists at the New York Federal Reserve.* It was shocking stuff. Entitled The Shadow Banking System, the graphic depicts how money goes round the modern world, particularly (but not exclusively) in the US.
Pdf below, 'Shadow Banking'.
Pdf below, 'Shadow Banking, Financing and Financial Stability'.
A review of Tett's book Fool's Gold.
New York Times -- Rewriting the Rules To understand the calamity on Wall Street, we need erudite financial analysis and good old-fashioned stories about human fallibility.
While on the topic of gold, a very powerful analysis of why gold is over valued, and why it may become more so.
McClellan Financial Publications -- Is Gold Overvalued? The Fed is printing money, and so gold prices are rising. It's a simple matter of dollars per ounce, is it not? If more dollars are printed, but the amount of gold on the planet stays the same, then the price in dollars per ounce should increase, right?
McClellan Financial Publications -- The One Real Fundamental Factor Driving Gold Prices The gold coin commercials that are becoming ubiquitous on radio and TV are full of lots of reasons why you should buy their product. Celebrity spokesmen tell us about gold's behavior in "bad economic times". They even allude to gold's supposed role as a "currency of last resort", if things ever get really bad.
Quote worth quoting. (ed's note -- the power of opportunity cost, zero interest rates have a bigger impact on savings while balance sheets are being deleveraged -- savings are encouraged -- than on investment.)
""The reason is that if an investor buys gold, he foregoes earning interest on the money he invests. The higher the interest rate, the more he misses out. So having high "real" rates means that owning gold costs a lot more in terms of missed opportunity. Conversely, low or even negative real rates make owning gold seem like a better idea."
The Globe and Mail asks a hard question about a guaranteed annual income? Is it the right one?
Globe and Mail -- To End Poverty Guarantee Everyone in Canada $20,000 a Year. But Are You Willing to Trust the Poor? Nicole Gray, a 24-year-old single mother living in Victoria, feels like a “beggar” every time she has to go into a government office and ask for help to pay her bills.
There is a better way.
Canadian Citizenship Wage One simple step to an excellent Canadian future is to provide sufficient income to every Canadian in order to eliminate poverty if only because of the high cost of persistent worst in class education, health, community and economic outcomes that poverty breeds. Building on the ideas of a negative income tax, guaranteed annual income, guaranteed adequate income, and earned income tax credits we consider the Canadian Citizenship Wage.
America now among equals.
Financial Times -- A Paralysed, Diminished America This weekend’s Nato summit in Lisbon concluded a flurry of top-level international meetings that, from President Barack Obama’s point of view, were frustrating, unproductive, or plain embarrassing. However, his advisers wish you to know that US standing in the world is not the least bit diminished. Really, they say, there is a great deal of misunderstanding about this.
Still, the other guys may not be as formidable as you think.
Project Syndicate -- China and India Exposed Chinese Premier Wen Jiabao’s forthcoming trip to India, following hard on the heels of President Barack Obama’s recent visit, will provide another opportunity for the media to gush about the growing global economic clout of China and India. We can be sure that the soft underbellies of both economies will be kept hidden from view.
Goldman Sach's uber-economist now Chairman of the firm's asset management arm Jim O'Neil brings some facts to the currency war thesis.
Financial Times -- Time to End the Myth of Currency Wars In recent weeks, the phrase “currency war” has been used liberally. Let us hope this is a passing fad: it is inappropriate, and actually a fiction. In truth there are no real currency wars, just normal currency markets responding to events.
NATO not 'North Atlantic Treaty Organisation' but 'Never Allow Terrible Oppression'.
Under the present circumstances Canada should get out however painful the reality on the ground and the sacrifice made to date.
New York Review of Books -- NATO's Dangerous Wager with Karzai At the close of its summit meeting in Lisbon on Saturday, NATO announced it had reached an agreement with the Afghan government to continue combat operations in Afghanistan for years to come.
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Twin Virtues: Inequality of Outcomes & Equality of Opportunity©
Ultimately, the most successful societies find the balance between the twin virtues of inequality of outcomes and equality of opportunity.
The new politics must marry the twin virtues of unequal outcomes and equality of opportunity.
When too few get too much everybody loses.
Feminism is about women living their lives on their own terms, marshaling the resources of the society to make that possible, and men embracing this as vital to a successful society and their own liberation.
Can it be that striving for equality of opportunity however imperfect the process not only benefits the individual but also creates benefits for the society that are unintended but wonderful?
Economics must be a 'moral enterprise' as much as politics claims to be. Economic outcomes need to be framed in terms of right and wrong not just efficiency if only because these often align in surprising ways that are good for society and the economy.
My vision of Canada is that any Canadian child from a family of limited circumstance can expect to have a chance at lifetime of unlimited opportunities.
Tax policy should be founded on the principle of generating steady tax revenues sufficient to maximise environmentally sustainable economic growth in order to fund fair government.
Public policy should be designed to decrease inequality before the law and increase equality of opportunity.
Capitalism is not the problem; the problem is what we do with capitalism.
Content is always more difficult to argue than conspiracy.
Let the state regulate and the market operate (most things).
Welfare strategies are best designed as a hand up, not as a hand out.
Political debate should not be fact free fighting.
Explanation lasts longer than eloquence.
Always favour empowerment over dependency.
The most enduring public figures are embraced for the causes they fought for and not the concept of themselves they hoped others would remember them by.
Find your voice and don't be the echo of somebody else.
It is possible to operate on two different levels: the practical, cautious and conservative; and the realm of ideas, open, free, and radical.