A Grand Illusion

In his own words:

As I look ahead, I am strengthened by family and friendship. So many of you have been with me in the happiest days and the hardest days. Together we have known success and seen setbacks, victory, and defeat. But we have never lost our belief that we are all called to a better country and a newer world. And I pledge to you — I pledge to you that I will be there next January on the floor of the United States Senate when we begin the great test.

For me this is a season of hope — new hope for a justice and fair prosperity for the many, and not just for the few — new hope.

And this is the cause of my life — new hope that we will break the old gridlock and guarantee that every American — north, south, east, west, young, old — will have decent, quality health care as a fundamental right and not a privilege.

We can meet these challenges with Barack Obama. Yes, we can, and finally, yes, we will. Barack Obama will close the book on the old politics of race and gender and group against group and straight against gay.

And Barack Obama will be a Commander-in-Chief who understands that young Americans in uniform must never be committed to a mistake, but always to a mission worthy of their bravery.

We are told that Barack Obama believes too much in an America of high principle and bold endeavor, but when John Kennedy thought of going to the moon, he didn’t say, “It’s too far to get there. We shouldn’t even try.” Our people answered his call and rose to the challenge, and today an American flag still marks the surface of the moon.

Yes, we are all Americans. This is what we do. We reach the moon. We scale the heights. I know it. I’ve seen it. I’ve lived it. And we can do it again.

There is a new wave of change all around us, and if we set our compass true, we will reach our destination — not merely victory for our Party, but renewal for our nation.

And this November the torch will be passed again to a new generation of Americans, so with Barack Obama and for you and for me, our country will be committed to his cause. The work begins anew. The hope rises again. And the dream lives on.

Excerpt from Kennedy’s speech at the 2008 Democratic Convention (emphasis mine).

Yes, I know. I’ve neglected the blog again. Though in my defense I was studying for the Florida Bar, which is kind of like totally by far the hardest test I’ve ever taken. But I’m back now; at least I hope to be. Though tonight will be short.

I’ve been reading Niall Ferguson’s The Ascent of Money, and I really wanted to share a great passage with the four people that still frequent this blog. Ferguson’s book is a phenomenal work on capital markets and debt, and how they have built empires. This particular passage speaks to the poor memory of market watchers:

Nothing illustrates more clearly how hard human beings find it to learn from history than the repetitive history of stock market bubbles. Consider how readers of the magazine Business Week saw the world at two moments in time, separated by just twenty years. On 13 August 1979, the front cover featured a crumpled share certificate in the shape of a crashed paper dart under the headline: ‘The Death of Equities: How inflation is destroying the stock market’. Readers were left in no doubt about the magnitude of the crisis:

The masses long ago switched from stocks to investments having higher yields and more protection from inflation. Now the pension funds – the market’s last hope – have won permission to quit stocks and bonds for real estate, futures, gold, and even diamonds. The death of equities looks like an almost permanent condition.

On that day, the Dow Jones Industrial Average, the longest-running American stock market index, closed at 875, barely changed from its level ten years before, and nearly 17 per cent below its peak of 1052 in January 1973. Pessimism after a decade and half of disappointment was understandable. Yet, far from expiring, US equities were just a few years away from one of the great bull runs of modern times. Having touched bottom in August 1982 (777), the Dow proceeded to more than treble in the space of just five years, reaching a record high of 2,700 in the summer of 1987. After a short, sharp sell-off in October 1987, the index resumed its upward rise. After 1995, the pace of its ascent even quickened. On 27 September 1999, it closed at just under 10,395, meaning that the average price of a major US corporation had risen nearly twelve-fold in just twenty years. On that day, readers of Business Week read with excitement that:

Conditions don’t have to get a lot better to justify Dow 36,000, say James K. Glassman and Kevin A. Hassett in Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market. They argue that the market already merits 36K, and that stock prices will advance toward that target over the next 3 to 5 years as investors come to that conclusion, too . . . The market – even at a price-to-earnings ratio of 3019 – is a steal. By their estimates, a ‘perfectly reasonable price’ for the market . . . is 100 times earnings.

This article was published less than four months before the collapse of the dot-com bubble, which had been based on exaggerated expectations about the future earnings of technology companies. By October 2002 the Dow was down to 7,286, a level not seen since late 1997. At the time of writing (April 2008), it is still trading at one third of the level Glassman and Hassett predicted.

(In case you’re wondering, I used my Kindle in order to transfer that ridiculous amount of text.)

Of course, it is short memory that causes bubbles and bursts. But it’s the same short memory that causes the phobia and capital markets bashing that follows the burst of the bubble.

That is all.

Oh yeah, Insurocorp would like to thank you for defeating Socialism!

Good night.

UPDATED: If you’re unwilling or unable to read the book–it is pretty hefty–you can watch the four-part PBS documentary based on the book here.

Via Penultimos Dias.

H/t to Jeremy Caverly.

The Birther non-controversy has stirred up a lot of malarkey, but this blog post in Slate by Joan Walsh takes the cake. However, not for the reasons you might think. Joan Walsh, like most serious people, doesn’t give a shred of credibility to the Birthers, instead she focuses on Liz Cheney’s contemptible tactic of refusing to repudiate them on CNN and then sending out a weak-kneed statement “clarifying” her position. Joan Walsh correctly points out that she’s trying to have the best of both worlds. She manages not to distance people suspicious of Obama’s birthplace and also to appear rational.

What was surprising was this:

“Several people in my letters made a point I wish I had: It’s rich of Liz Cheney to talk about Obama refusing to defend the country, when her father famously got five deferments from Vietnam service because, in his own words, he had ‘other priorities.’”

What is this sins of the father bullshit? What does Liz Cheney have to do with her father’s non-war record. You can’t call someone out for making a cheap political point and then present this as some sort of great argument you hadn’t thought of.

Then of course there’s this. This article makes  a lot of the fact that pundits like Bill O’Reilly and Anne Coulter have distanced themselves from the Birthers. It also suggests that they have been slow in doing so. The travesty here is not that they have been slow in repudiating them but that they are reporting on them at all. I mean any media outlet and not just those with a right wing slant. No one should have to repudiate it because it’s so obviously stupid and no one should be reporting on it because it’s so far on the fringe. Without a doubt more people believe in UFOs than subscribe to the Birther mentality (It seems to be more of a general outlook than an actual ideology; one that combines xenophobia, nostalgia and conspiracy theories).

My general point here is that this sort of ideological way of thinking very easily makes you look like a fool. Joan Walsh makes one nonsensical argument the sheer stupidity of which undermines the good point she’s making. Eric Kleefeld calls out Coulter and O’Reilly for not repudiating the Birthers but doesn’t think about why they would have to in the first place. Why do they do this? It seems to me the thought process is this. I do not think x, therefore I dislike anyone who does. Anything that can be said against the people who believe x is acceptable.