A G K Y R A

“Alaska is a small state,” or so I hear from people who haven’t bothered to look into it. But Barack Obama, by contrast, has run a big national political campaign. Let’s compare the state of Alaska to Barack Obama’s campaign:

Alaska has 15,000 employees and an annual budget of $9.7 billion. If it were a business, that would put it at #271 on the Fortune 500 ahead of some companies you may have heard of:

• Starbucks ($9.4 billion)
• OfficeMax ($9 billion)
• Campbell Soup
• eBay
• Nordstrom
• Dole Foods
• Yahoo
• McGraw-Hill
• NCR
• Harley-Davidson
• Foot Locker
• Barnes & Noble
• and a couple hundred more of the 500 biggest companies in America

If the CEO of Starbucks were running, do you think people would say, “Oh, but he’s the CEO of a small company“?

What about Barack Obama’s experience?

His campaign has raised, all told, an amount approaching $700 million over two years, which includes the primary campaign. Obama’s campaign is therefore about 40% smaller than Anchorage, Alaska — the city — which reported revenues of $515 million last year (that link opens a big PDF of financial statements, so don’t click it unless you’re genuinely interested).

How has it become common knowledge, then, that Palin doesn’t have enough “experience,” when it simply is a fact that she has more experience in city and state government (though not federal) — and much more important experience — than Barack Obama!

When people say that she lacks “experience,” I think what they really mean is she lacks knowledge. She didn’t know what the Bush Doctrine was, if you recall. To that, let me reply with a story about Henry Ford from Napoleon Hill’s old book Think and Grow Rich:

An educated man is not, necessarily, one who has an abundance of general or specialized knowledge. … During the world war, a Chicago newspaper published certain editorials in which, among other statements, Henry Ford was called “an ignorant pacifist.” Mr. Ford objected to the statements, and brought suit against the paper for libeling him. When the suit was tried in the Courts, the attorneys for the paper pleaded justification, and placed Mr. Ford, himself, on the witness stand, for the purpose of proving to the jury that he was ignorant. The attorneys asked Mr. Ford a great variety of questions, all of them intended to prove, by his own evidence, that, while, he might possess considerable specialized knowledge pertaining to the manufacture of automobiles, he was, in the main, ignorant.

Mr. Ford was plied with such questions as the following: “Who was Benedict Arnold?” and “How many soldiers did the British send over to America to put down the Rebellion of 1776?” In answer to the last question, Mr. Ford replied, “I do not know the exact number of the soldiers the British sent over, but I have heard that it was a considerably larger number than ever went back.”

Finally, Mr. Ford became tired of this line of questioning, and in reply to a particularly offensive question, he leaned over, pointed his finger at the lawyer who had asked the question, and said, “If I should really want to answer the foolish question you have just asked, or any of the other questions you have been asking me, let me remind you that I have a row of electric push-buttons on my desk, and by pushing the right button, I can summon to my aid men who can answer any question I desire to ask concerning the business to which I am devoting most of my efforts.”

… Any man is educated who knows where to get knowledge when he needs it, and how to organize that knowledge into definite plans of action.

Palin has more and better quality experience than Barack Obama — and he’s campaigning to be President! If McCain doesn’t drop dead in the first two months, she’ll have vastly more experience than Barack Obama does now. There is also no question that she has enough general and specialized knowledge to do the job of Vice President. But I grant you this: if McCain-Palin are elected and if McCain drops dead immediately and if everyone else in the executive branch suddenly dies of bubonic plague so that she’s running the whole show all by herself, with no one to advise her, then yes, she might not have enough experience or knowledge right now to handle that situation with aplomb.

That’s a lot of ifs. And, should it turn out that the sky really is falling, you have bigger problems than whom to vote for tomorrow. Setting that thought aside, let’s also set aside the silly question about Palin’s experience.

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One of the first questions Gwen Ifill asked Joe Biden and Sarah Palin at the 2008 Vice Presidential Debate last night was about the polarization between parties in Washington. It’s not just Washington that has been polarized, it’s ordinary Americans too. I’ve been on the streets of Manhattan trying to gather support for the McCain-Palin ticket, and while lots of people like ‘em, the ones who don’t genuinely hate them and hate anyone who supports them — including me. I’ve been yelled at, cursed at, called filthy names, and seen people who otherwise appear to be decent respectable folks turn into hideous venom-spitting monsters right before my eyes. I have no doubt that some Obama supporters have experienced the same thing from McCain partisans, though I wish I could believe otherwise.

What is behind the polarization? The void left by religion in our culture is being filled with political programs and promises, or politics-as-religion, to borrow a phrase I heard my wife use the other day. That’s a big story, and I’ll save it for when I get back to more theological writing after the election is over.

But lobbying is the other big cause. And I don’t just mean registered lobbyists representing big bad corporations. I mean you, as a voter, lobbying government to give you goodies. Isn’t that what you’re doing when you ask the candidates to help you out? If voters weren’t lobbying, we wouldn’t have any touching anecdotes for campaign rallies and debates! Whose health care proposal will help me and others most? Whose energy plan will lower my bills? Whose tax plan will benefit me? Whose education ideas will meet my and my children’s needs?

If Americans accept that all the ideas being tossed around by the candidates are legitimate for consideration, that they should even be on the table for us to consider, then they will have brought American federalism to an end, for all important purposes. The states will more and more be creatures of the federal government. If not legally or constitutionally, at least financially. The federal government is more and more where the money and the power will be concentrated, and that means the spoils for whoever controls the federal government will get bigger and bigger, leading to corruption, wasteful oversight and investigation motivated either by partisan acrimony or the need to forestall it, and less productivity.

Democrats are at the vanguard of raising the federal umbrella over every area of American life. More money and more responsibility for our health, safety, and economic prosperity, means more power and more control over us in those same areas. You can’t be responsible for someone if you can’t control them.

When all that money and power gets concentrated in one place, the most ambitious and greedy people will swarm to it like ants to honey. When the spoils get big enough, people will resort to all kinds of corrupt and evil things to get what they covet: true no less in government than in Agatha Christie stories.

The big spoils lead to more corporate lobbying, more extravagant promises by candidates, more Utopian expectations of their government by a naive electorate, more disappointment when those expectations don’t materialize, and a nagging sense that somebody else must be getting all the good stuff I’m not getting. Enter the blame game: corporations, CEOs, Wall Street, Dick Cheney, the religious right, the wealthiest. The next decade, new candidates set the table and ladle out the stew of disappointment, envy, and suspicion all over again.

That’s why Americans are so polarized. The stakes could hardly be higher. If McCain wins, some liberals say they’re moving to Canada (they always say that, and they never do). If Obama wins, I just might move away!

But it doesn’t have to be that way. Our federal system of government was well conceived. Consider these two facts: smaller communities tend to be more homogeneous, and an individual voter has more power in local elections. If we concentrated power in state and local government, rather than at the federal level, these two facts have four important ramifications:

1. You yourself, individually, would have more political power at the ballot box and influence over your elected officials. A representative in the U.S. House has nearly one million constituents. A state legislator has far fewer.
2. Since political power would be distributed rather than concentrated, it would be harder for corporations or special interest groups — whoever it is that you’re afraid of — to get their way. They would have to expend a lot more resources in far-flung efforts, only to get less results than they do now, when the wealthiest is, in reality, Congress.
3. There would be less polarization and strife simply because smaller groups are more homogeneous, and tend to share values. That’s why there are such things as red states and blue states!
4. If you didn’t like the way things were going in your state or county, you wouldn’t have to move to Canada. You could move to the state or county next door. How much easier would that be!

If Americans are going to come together as Americans, then we’ll have to go back to an earlier way of thinking about our federal government, the way the Constitution was originally intended. If Americans are going to be united, the government that envelopes all of us — the federal government — can’t be asked to do more than what we all agree that it should do. And that amounts to only those things that the private sector and state and local governments cannot or will not do: interstate commerce, national defense, and diplomacy.

Until we agree to restrict the federal government to the lowest common denominator — the way it was envisioned — we’re going to be divided against each other as a nation. But there’s no reason blue states or blue cities can’t implement the programs for themselves that they want so badly from the federal government. If the people who keep demanding the federal government do more would just relax maybe all of us could.

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Obama and McCain both did well last night.

The first question Jim Lehrer asked was sharp: as a result of the $700 billion financial aid package being worked out right now, what programs that you’ve been promising voters will have to be scrapped?

Weave, dodge, distract, grunt, mumble, smile.

To his credit, McCain proposed an across-the-board freeze on spending increases except on essential services and entitlements. I don’t know how realistic a proposal that was, but it was a real answer. And he said he’d review every single federal agency to determine what we needed to keep and what could go, who were doing their jobs well and should stay, and who weren’t and would be fired.

Obama’s response to McCain: that’s using a chainsaw where we need a scalpel (or something like that). There are some areas that are underfunded now that Obama wants to increase no matter what, like early childhood education.

Isn’t that nice. Who wouldn’t want better early childhood education resources in this country!

The problem is, he’s apparently proposing $800 billion in new spending — and not just one-time capital expenditures, but additional spending of nearly $1 trillion year after year. What about the $10 trillion national debt? What about the $700 billion bailout? And Obama won’t say what he doesn’t want to do, only that he wants to increase funding for early childhood education! Lord have mercy.

This is where Obama’s spending record comes into play. His record of signing onto pork-barrel projects is a clue to his mindset. He can’t say no! He wants more money for senior centers. Don’t we all! He wants more money for ECE. Don’t we all!

Obama sees government as a lifestyle enhancer. He wants to fund every good hearted, noble minded human service project conceivable. And he can’t say no to any of them. Especially since his appeal has been based on his personality and promises, not the principles of a coherent philosophy of government.

Obama’s vision for the federal government is exactly analogous to the homebuyers who contributed to this mess. Who cares if we don’t have the income, let’s grab the lifestyle on easy credit!

The President is the head of the household of our federal government. We need to elect a President whose first priority will be to get the government’s financial house in order. When government is living within its own budget and has a surplus, then maybe we can talk about new programs.

(As an aside, I hope people noticed Obama’s considerably watered down promise that under his administration, everyone will have access to “basic health care.” News flash: everyone already does have access to basic health care, but I won’t dwell on that. I don’t point this out to criticize Obama. If he is beginning to realize that his health care proposal is unfeasible or won’t produce the Edenic results he’s been promising people on his website, he’s to be commended for coming clean. I just hope people pay enough attention to notice.)

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Washington Mutual collapsed last night, the largest bank failure in U.S. history. Who would want to see McCain and Obama debate foreign affairs?

Fine, you say, they should have debated economic policy. You think that would be helpful, to bring campaign politics into the limelight in Mississippi at a time when the real work is being done in committee meetings in Washington?

You think McCain and Obama don’t have a stake in what’s being decided? Think again: one of them is going to be President in January and have to administer the plan being decided right now. If they’re both present, neither of them can blame Bush or Congress and claim “I had nothing to do with the lousy bailout plan that hamstrung my presidency.”

They ought to be there, both of them, even if just to monitor how the process unfolds.

What kind of person, applying to us for the job of President, wouldn’t want to be involved!

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To this point, John McCain has maintained that the “fundamentals of our economy” are sound. But with the almost daily announcement that another of America’s most important finance firms has failed, McCain seems to be changing his position, just like Obama once did on the Surge, public financing of election campaigns, and other issues. McCain said this on Tuesday morning:

We are in crisis. We all know that. The excess, the greed and the corruption of Wall Street have caused us to have a situation which is going to affect every American. We are in a total crisis.

I understand that he’s trying to strike a populist note. But real leadership means contradicting and correcting the masses when they’re confused, not capitulating to the conventional wisdom. McCain should have kept quiet.

How many of your average Obama supporters can explain what the “fundamentals of the economy” are and offer up some real evidence that they’re not sound. Preferably something more than a shoulder shrug.

Yes, there is a crisis in our economy, because the money market isn’t in its own little bubble. It’s connected to the labor market and the market for goods and services. The turmoil in the financial sector threatens the other areas of the economy. But that doesn’t mean that the fundamentals of the economy are not strong: people are still working, businesses are still producing, consumers and businesses are still buying goods and services. I hope that doesn’t change.

But Obama’s, and now McCain’s, telling people that the economy is going down the toilet will only worsen the situation by convincing them to alter their behavior (e.g., stop buying) contrary to the real intuitive economic indicators in their own communities. Then the economy really could go down the toilet. Obama would find a scapegoat, of course, namely Bush.

A far bigger problem than the short-run performance of the economy is the precedent being set for government intervention in the private sector. How many young Obama zealots have spent five minutes pondering the implications of that?

When Barack Obama stands up and over-confidentaly tells a crowd of salt-of-the-earth types that John McCain is out of touch and the economy is in crisis — and they at least know that — Obama is pandering to them. They don’t know any such thing. It’s an old trick: get people to believe something by treating them as if they know something that everybody else knows, and in order to avoid appearing as stupid as they feel, they accept it. It’s peer pressure. People: just say NO!

McCain shouldn’t succumb to peer pressure from Obama on this point. That’s not leadership. Instead, he should point out to people that Barack Obama is manipulative and doesn’t know what he’s talking about. And, to try to win a few points in the polls, Obama is genuinely endangering the economy with his baseless economic jeremiads.

McCain has adopted the greed motif that has become a commonsense explanation of what’s happening in the world of finance. That’s an adequate explanation in some contexts, exactly as if I were to say that the problems in the financial sector are caused by sin. True enough, but without immediate application to questions of public policy. Likewise with greed talk.

Who can explain where “greed” enters into the picture of what’s happening on Wall Street? Answer: it doesn’t. Greed has nothing to do with it, at least not that any of us can ever detect. Which of us can look into someone’s soul and judge?

Are the taxpayers greedy for not wanting to spend money to help liquidate these firms? Are the voters greedy because they’re listening to Barack Obama tell them that they don’t deserve this? Are you greedy for wanting free health care? “Oh no, I deserve that.”

The hypocrisy takes my breath away!

Not that there’s even a person in view here. Nobody talks about the greed of Mr. So-And-So. It’s just “corporate greed” or “Wall Street greed” or some such nonsense. (I’m going to start talking about voter greed regularly.)

What is corporate greed, pray tell? A corporation may be a person for legal purposes, but certainly not for moral purposes.

So what real person’s greed caused the problems for these firms?

Were the governors of the Federal Reserve Board acting on their greed by keeping the money supply too large, keeping interest rates too low, and making it too easy for banks to lend to people?

Were mortgage brokers and salespeople being greedy when they tried to provide mortgages for homebuyers? They wanted too many big commissions, and so they put our entire economy and all the taxpayers on the line for the sake of a few extra bucks. Is that the story?

Was middle management at these firms being greedy? What was their incentive, I wonder.

Was top management and the CEOs of these firms motivated by greed? They made their decisions just based upon how it would affect their bonuses, with nary a care about how their employees, shareholders, or other people would be affected?

Were the boards of directors of these firms being greedy? What was their incentive, I wonder, to recklessly endanger their companies.

Or perhaps the shareholders were being greedy.

(I’m just waiting to hear some liberal nut try to blame everything on Bush, Cheney, Haliburton, and Al Qaida — all working together!)

Who in this big chain was motivated by greed? The homebuyers, the mortgage salespeople, the managers, the top executives, the boards of directors, the shareholders, or the government?

It’s easy to talk about greed in the abstract. You don’t have to blame any particular real person. Chest out, smug expression, finger wagging, tone of self-righteous indignation: “It’s all due to corporate greeeeeed.”

And even if a person is greedy, why do you care? What matters is whether they make sound decisions, isn’t it? Isn’t the problem facing Wall Street due to bad decision making? Greed doesn’t bring down a firm. Bad decisions do. Bad decisions might be motivated by greed — or ignorance, or confusion, or bad instincts, or bad information — but since it’s bad decisions that have created the problems, why talk about greed and not foolishness or bad luck?

The problem is that when you look at every one of the players — the homebuyers, mortgage salespeople, managers, executives, directors, and shareholders — there’s no evidence that individual people in any of these groups made foolish decisions because they were greedy.

The homebuyers were trying to get the best value for their money. What’s wrong with that? Did some lie about their income or assets? If so, the problem isn’t greed but dishonesty that induced the lenders to make a bad lending decision, out of ignorance.

The salespeople were trying to make the best living possible. What salesman doesn’t try to sell as many of his products as he can? Is that greed? I call that doing your job well. But, if the salesman lies or misleads, whether the homebuyers or the bank’s managers, then the problem isn’t greed but dishonesty that induced homebuyers and lenders to make foolish borrowing and lending decisions — out of ignorance.

Were the managers motivated by greed when they didn’t clamp down on all the loan originations? They’re taking instructions from the executives. I don’t think middle management can possibly bear any responsibility here.

Now we’re getting to the real bogey men: the CEOs, those evil greedy CEOs who swim in pools of money, while Lazarus, covered in sores, lies begging for a crumb at their doorstep. Surely they were motivated by greed. (How many people who believe this have ever known a CEO, I wonder. How many people who repeat this hogwash don’t know what CEO stands for, I wonder.)

Let’s get this straight: someone works his entire life finally to end up in the driver’s seat of a major corporation, only to trash the company for the sake of lining his own pockets. Is that the idea? Of course not. There is no idea. That’s my point. If CEOs made foolish decisions, call them foolish. There’s no basis for moralizing and talking about greed. CEOs are responsible to their customers, their employees, and most of all to their shareholders, and they answer directly to a board of directors. I don’t believe there are any CEOs who aren’t doing as good a job as they know how to balance the best interests of all those parties.

“Oh, but they weren’t personally greedy. They were greedy for the corporation. Trying to maximize its profits.”

Is that so? Here’s news for you, kid: that’s called doing a good job. If they tried to maximize profits now at the cost of future earnings, by taking too many risks that ended up causing the firm to fail, that’s called foolishness or ignorance, not greed.

The same applies to boards of directors.

Now finally we come to the shareholders. And that includes you and me, unless you’re a bona fide socialist who expects Barack Obama to house you in a government Quonset hut and feed you MREs in your golden years.

Shareholders are mostly ordinary folks. They’re saving for retirement. Or their children’s college education. And they want the best return on their savings possible. Just like the homebuyer wanted the best house value, the salesman wanted the most commissions possible, and so on up the line.

So here’s a question for you, Mr. Shareholder: if your investment in Firm X returns you 5% per year, but Firm Y’s shareholders have been getting 10% per year, what are you going to do with your investment in Firm X, ceteris paribus (which means, all else being equal)? You’ll liquidate it and put it into shares of Firm Y. That’s not greed, it’s doing a good job in managing your investments in pursuit of your retirement goal or your child’s education fund.

What if it turns out that Firm X is only returning 5% per year because they have a very strict mortgage lending policy, whereas Firm Y lends to all and sundry? After all, housing prices keep going up and up and up, and there’s more than enough money to go around. What happens is that Firm X’s stock falls in price as its investors sell it to buy Firm Y’s stock instead. It’s all supply and demand, and if X and Y are subsitutes but Y has better features (a higher return), demand drops off for X, sending its price down,

Now the Board of Directors at Firm X is in a bind. Their responsibility to their remaining shareholders is to deliver the best return possible over the long run. But the share price is falling. Shareholders aren’t happy. They have a retirement to save for! They have a college education to finance! The shareholders are going to replace the boardmembers with new ones if they don’t generate a better return. So the board wants the CEO to adopt a more liberal lending policy, and pretty soon the return of Firm X is comparable to the return of Firm Y.

You see, there’s competition in both markets: the market for capital (the market the shareholders are participants in) and the market for final goods and services (the market the homebuyers are in). Firm X has to adopt a liberal lending policy to attract business, generate a good return for its shareholders, and help them to finance their retirement or college education.

Nobody is being particularly greedy. Everybody is making the best decision they know how with the information they have available to them.

Or, we could look at it from the opposite angle and say that everybody is being greedy, including the voters and taxpayers! If it’s true of one group, it’s true of all of us, because we’re all in analogous positions and making analogous decisions.

But greed is a red herring. The real problem is ignorance and foolishness. The question is whether some people are culpably ignorant, culpably dishonest, or culpably reckless with other people’s assets. The problem with moral hazard is that people who engage in it are behaving rationally from their own standpoint. And whether greed is the motivating force is irrelevant to our public discourse. If you’re talking about greed, you’re not critically distinguishing political rhetoric from reality.

Getting back to the presidential election now, what we need is more leadership from both John McCain and Barack Obama. Obama is a motivator, never a leader. McCain has been a leader until recently. Leadership means being willing to be unpopular. If that means he doesn’t get elected, then hopefully Americans will at least learn something for the future. And if they won’t abide correction, maybe they’ll have to learn the hard way. But leadership means telling people things they don’t want to hear because it’s for their good — something Barack Obama has never done in his entire life, so far as I can tell.

John McCain should not have adopted the moralistic self-righteous greed talk of Obama and his young untutored devotees. We need someone who will help our confused electorate think more carefully about these important matters.

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“John McCain’s ads are a tissue of lies,” we’re being told. “Barack Obama never supported sex education for kindergartners. And he wasn’t comparing Sarah Palin to a pig.”

I haven’t read the sex-ed bill Obama supported in Illinois, and I don’t know if he had Sarah Palin in mind when he made the joke. No contest, I plead.

But Barack Obama has been lying about John McCain for a long time.

“John McCain wants the Iraq War to last 100 years.” C’mon, Barack, I did see that speech, and that’s not what he said, and you know it.

“John McCain thinks you’re only rich if you make $5 million a year.” Barack, I watched him on live television, and that’s not what he said. You were there too. Why do you keep lying?

I don’t know if the McCain ads are false. I do know that Barack Obama’s statements are false, because I saw McCain make the statements that Obama refers to. Obama’s version doesn’t come within 100 miles of the truth.

This is not to defend the McCain ads. If McCain’s ads are wrong or misleading, then he’s wrong to approve them. But Obama has been lying for a long time now. Here’s a lesson for you, Barack: if you punch somebody, you can’t cry foul when he punches you back.

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