Slow decay or abrupt failure?

March 26, 2010

A question at Distributed Republic:

I’m young enough (34) that I’d rather deal with a lot of short term pain if there’s some hope for sanity afterwards. A government default would be painful for many, but I’d prefer that to spending the rest of my life in a European-style social democracy.

I’ll give my own answer, which is perhaps influenced by my age (29), by quoting Carlyle:

Great is bankruptcy. . . . Honour to Bankruptcy; ever righteous on the great scale, though in detail it is so cruel. Under all falsehoods it works unweariedly mining. No falsehood, did it rise heaven high and cover the world, but Bankruptcy, one day, will sweep it down and make us free of it.

Manosphere and marriage

March 26, 2010

Athol, on fire:

So much written in the Manosphere is anti-women and anti-marriage that I’m starting to feel a little worn down just reading it all. I do understand the risks in getting married, but the truth of the matter is that I am quite thankful for my marriage and most definitely thankful for Jennifer.

I couldn’t agree more.

As I understand it, the heart of the Manosphere’s critique of modern society is that it has undermined marriage and womanhood (or femininity, perhaps more accurately). If the goal of the critique isn’t to restore marriage and femininity, I don’t understand what the Manosphere stands for.

Thus, those of us that write on the subject should be careful to walk the line between out-right hostility and criticism.

Weekly Moldbug

March 26, 2010

There may be no post at UR, but there’s a nice discussion between Mencius Moldbug and Lawrence Auster at Auster’s place. Here’s a preview of Moldbug’s line of argument:

Eating certain kinds of foods to excess can cause certain kinds of cancer. However, if you already have cancer, you should not expect to cure it by eating less of those foods. Liberalism causes nationalized medicine. However, if you already have liberalism, you should not expect to cure it by repealing nationalized medicine. . . .

In reality, I would argue, America is still burning through cultural capital that very much dates to Tudor England–and before. Well before. The candle has been burning for quite some time, and is now quite short. It was originally very tall! . . .

Your [i.e. Auster's] parody of my remedy is: to repair government, first heal society. My [i.e. Moldbug's] remedy is: to heal society, first repair government. . . .

The natural order of government is not a secret. Aristotle knew it. It is natural for children to respect and obey their parents. It is natural for parents to guide and support their children. It is natural for the poor, weak, and ignorant to respect and obey the wealthy, strong and powerful. It is natural for the wealthy, strong and powerful to guide and support the poor, weak and ignorant. . . .

Because your conservative vision of the defeat of liberalism is in fact modeled on historical events in which liberalism prevailed over conservatism, it is a fantasy that can never succeed. Decay is an entropic, progressive process that feeds on itself. A little decay leads to a lot of decay. A little fire leads to a lot of fire. . . .

In the ruined house (picture America as an old mansion in Detroit), Powerline wants to start by cleaning and sanding one floorboard. This inspiring act will spread to the next floorboard, and so on, and eventually the house will be clean and new. Destruction works in this way. Renovation does not. You would like to remodel the kitchen. The whole kitchen! And the result will be–a ruined house in the slums. With a state-of-the-art kitchen. . . .

If you can think of any historical example of a decayed state being restored without effective personal government, I would love to hear it. I know of no such thing. And I am hardly an expert on everything and everywhere, but I do know a good bit of history.

Think of how those who lived in the age of Augustus saw the restoration of Augustus. The transition from Republic to Empire ended an age of bad government which had lasted for the entire lives of those then living, and began an age of good government which lasted for the entire lives of those then living. Does America deserve anything less?

The discussion is also pretty funny. My favorite part is from Auster: "Mencius sent a 700 word long extract of Carlyle which was too long for a discussion. You can read it at the link." Heh.


March 25, 2010

Alternative Right on "Why I’d be a Pagan"

I can’t speak for anybody else, but I have always considered my generation to have much in common with the pagan barbarians picking through the wreckage of the dead civilization of Rome in the Dark Ages. Like the Germanic barbarians of 1500 years ago, we inhabit the ruins of a dead civilization. We can see the past glories all around us, and we wonder at the fate of the giants who built the place. Yet, we know we’re doomed to never in our lifetimes reach the heights of those who came before us. It seems only natural we relate to the fatalistic gods of such men.

I understand sympathy with paganism, but I don’t really understand being a pagan.

Tomorrow’s news today

March 24, 2010

Looks like my prediction that the GOP would fold and begin to support Obamacare took less than 24 hours to come true. Anyone who opposed Obamacare should begin overtly supporting it so that they are not considered reactionaries in the near future.

More proof that we don’t have a free market

March 24, 2010

Check out this story. Corzine joints a small trading clearinghouse and the stock rises 15%. Start the countdown until federal laws require trades to clear through clearinghouses, just like this one. Cronyism at its finest.

A brief history of the 20th Century

March 23, 2010

There has been a lot of talk about how the US is now a socialist country (e.g.). It is and it isn’t.

First, communism has been popular in the US for a long time.

Second, the ship sailed a long time ago. A revolution has not just taken place, it took place a long time ago. As Garet Garrett put it, The Revolution Was.

The best author on this subject is John T. Flynn. Basically, it was agreed during the Great Depression – by the people who decide these things – that relatively free markets were longer acceptable. Nations had to find a new way. Russia, Germany and Italy pioneered new ways to organize society. What’s not recognized is that the US did so as well. Our mastermind was FDR. He admired Mussolini (this book has assembled enough information to convince anyone), but Mussolini-style fascism wouldn’t work in the US. We came up with our own version of . . . well, whatever you want to call it. I think it looks more like fascism than socialism.

(For example, under the health care, it’s safe to assume small health care companies will die and big ones will become highly profitable. The big ones will not be taken over as they would be in socialism, but they will act like arms of the state, as in fascism.)

The American Depression-era alternative to free markets is FDR’s own system. It’s easiest to call it the New Deal. As always, we can turn to the best historian of the 20th Century around:

Yes. FDR (like Lincoln) was a dictator. He governed America more or less personally by decree. Obviously, many people worked for USG in FDR’s time; but, as with a normal corporate CEO, none could flout his will and survive professionally. FDR was not quite in charge of the courts; Lincoln could disregard the judicial process, but FDR couldn’t. However, these exceptions should be seen as minor details in an overall pattern of general personal government.

Those who hanker for a New Deal 2.0 should remember that FDR invoked a permanent state of emergency in 1933, just like Hitler. And just like Hitler, he ruled for life. For the next 12 years, he and his minions governed America by whim, like Dick Cheney cubed. It’s true that FDR found himself constrained by the Supreme Court. It’s not (entirely) true that when he fought the Court, he lost. And there was certainly no one else in America who could contend with him!

(Nor was FDR, as commonly asserted, a "traitor to his class" – anything but it. FDR’s beliefs, or at least his speeches (in one so seldom praised for candor, the inference of any actual conviction is at best an exercise of imagination) can indeed be studied as almost perfect reflections of the intellectual fashions of America’s apex upper class, the socialite-socialist aristocracy. These fashions have changed somewhat since 1933, but not that much.)

FDR could not, it’s true, order someone arrested or shot for no reason at all. At least, not so far as I know. We still have a lot to learn about this era. FDR did not have the powers of Lincoln, who could have anyone arrested, and did – but not shot. Lincoln was no Lenin or Hitler. For the purpose of managing the normal operations of government, however, FDR, Lincoln, Lenin, Hitler, Henry VIII, Cromwell and Napoleon exercised more or less the same level of authority: personal sovereignty.

There were many opponents of FDR’s system. Some still exist, but they were purged from the mainstream Conservative movement by Buckley and then the rest were pushed aside during the Reagan era.

If Conservatives follow their normal modus operandi, they will object like hell to the health care take over and then roll over and accept it after a couple years. In the future you will be considered a reactionary-extremist if you opposed the health care bill. If you continue to object, you’ll be purged from the mainstream movements and no longer invited to the fancy cocktail parties.

Nurse Jackie

March 23, 2010

We’ve been watching Nurse Jackie. I think that it may be the most anti-male show ever, unless the whole thing is meant as a giant critique of the eternal solipsism of the female mind. (Spoilers to follow).

Jackie is a nurse who leads a double life. At work, she dates the pharmacist who slips her drugs to feed her drug addiction. No one at work knows that she is also married with children. Her husband does all the housework, runs his own bar, and effectively raises their two children.

So, our main character is a drug-addicted adulterer who leaves the task of raising her children to her husband. And, I think we’re supposed to find her character sympathetic – can you come up with a better short explanation of what’s wrong with the 21st Century?

The men – the pharmacist and her husband – are incredibly nice and supportive and helpful. In return, she lives a life that revolves around betraying them. It’s probably worth noting that all the other men in the show are gay.

It’s not clear why Jackie betrays her lovers. She doesn’t even seem to enjoy doing it.

In a way, the show sums up all that’s wrong with feminism. You can see the decay of society in tidy, 30 minute increments. I guess, with that in mind, I can recommend it.

GSE Reform

March 23, 2010

It’s been a couple years since I worked at one of the GSEs so I’m interested in all the talk of reform. My guess is that there is a zero percent chance that Geithner is going to call for an end to the GSEs.

There are two basic problems with reforming the GSEs and two additional political problems. The big problem, of course, is convincing the market that any reformed GSEs are, in fact, operating without government support. But, setting that aside, the business problems are:

1) The GSEs have never had a business model that is capable of making money absent relatively overt federal guarantees. In good times the GSEs still needed subsidized borrowing costs to make money. Now, when the risk premium required for a monoline mortgage insurer is many times higher than it used to be, the GSEs require even more explicit government support. If this support goes away, the GSEs fail instantly. What idiot would lend to a truly independent monoline mortgage insurer? No one unless the rates were incredibly high, at which point the GSEs have no way of earning a spread between borrowing costs and mortgage rates.

2) The only business model that was more thoroughly destroyed by the financial crisis than the investment banking business model, was the monoline mortgage insurance business model (e.g.). A scaled-down version of the GSEs would be a monoline mortgage insurer. No one wants to own a monoline mortgage insurer absent government support.

The political problems are:

1) No one besides the GSEs is buying mortgages right now. If the GSEs stop buying mortgages, mortgage rates will increase significantly. I got a 30-year mortgage 6 months ago at 4.75%. Only an entity that is being heavily subsidized by the government is willing to take on a mortgage loan at that rate in the current environment. If GSE subsidies go away right now, mortgage rates increase and home prices fall. (I think it would have been possible to get rid of the GSEs in 2005 without dramatically effecting mortgage rates, but there is no way that getting rid of the GSEs’ subsidies will not raise rates now).

2) At this point, the GSEs have to borrow more money from Treasury every quarter just to pay interest and dividends on debt and preferred stock that the GSEs issued to the Treasury. The interest and dividends on these instruments is so high that even if the GSEs return to pre-crisis levels of profitability, they won’t be able to pay back Treasury – ever. So, any serious plan to restructure the GSEs would require Treasury to take massive losses on these "investments." Politically, this means that the Democrats would have to acknowledge a huge loss of taxpayer dollars to help companies that they provided political cover for for years. Given what we’ve seen in health care, they may be this politically-unaware, but I doubt it.

I’ve heard several suggestions that they are considering giving the GSE’s an ownership structure similar to the FHLBs. Obviously, I don’t think this will work. Such a structure would not solve either of the business problems and it wouldn’t solve the first political problem. It could solve the second, if the Treasury is willing to acknowledge the loss. I also don’t see how GSEs owned by federally-insured banks would ever be perceived by the market as operating without effective federal guarantees.

The only option that I think is feasible is letting the GSEs muddle along until the mortgage market picks back up. At that time, the government could slowly wind them down and quietly acknowledge the losses. This is also what is de facto happening.

Patronage state watch

March 22, 2010

You’ll hear it’s about helping the uninsured, but it’s always about patronage.