The Sovereign Mind

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Archive for October 2008

My Predictions for 2012

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Making predictions is a no-lose proposition. If I’m wrong, I can point to all of the unpredictable things that occurred that threw off my guess. I’m a right, then I’m a genius. So here are my predictions for the 2012 presidential election:

  1. The race will be decided by those who are currently undecided about how they will vote in 2012.
  2. Humans will vote overwhelmingly for another human. Polls show that 100% of humans vote for their kind, making humans the most identity-driven voters of all other groups.
  3. To save money, and to maintain their first-in-the-nation status, New Hampshire will move up their primary election for the 2016 presidential election to November of 2012 to coincide with the 2012 general election. Why not kill two birds with one stone?
  4. The Republican party, not to be outdone by their counterpart, will create the concept of “Super-duper delegates”, who are least twice of powerful at the puny “Super-delegates” of the Democratic party (and they have cool capes). The two groups will clash in the ultimate struggle, punctuated by the exclamations such as “Kablooommm!” until eventually only one team will emerge from the rubble victorious and man-kind will be saved… at least for another four years…
  5. News programs will ditch the “magic” multi-touch maps (those are *soooo* 2008), in favor of old-school flannel boards.
  6. In the wake of Joe the Plummer, other industries will attempt to win influence by adopting their own political personas. Meet Sally the Accountant. Ben the Used Car Salesman. And Jeffrey the Microbiologist.
  7. The candidate who is behind in late October will continually downplay the importance of the polls.
  8. Barack Obama, if he’s elected this time around, will replace his “Change” message with his inspirational “Keep Things The Way They Are” message.
  9. In addition to the voter reaction graphs at the bottom of the screen during debates, there will also be heart monitors tracking the candidates’ pulses, complete with lengthy analysis afterward.
  10. The media will proclaim that 2012 is the most negative campaign season yet. What happened to the good ‘ol days where candidates ran on the issues? You know, like in 2008.

We’ll see if I’m right. Feel free to leave your predictions in the comments.

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Written by Mike

October 30, 2008 at 11:20 pm

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Snapshot of an Undecided Voter: T minus 6 days

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It’s been almost two weeks since my last update, and I am still undecided.  There were a few times in the past few weeks that I thought I might decide, only to be reminded of what I don’t like about the candidate I was about the choose.

I won’t post the chart I used last time that maps out where I stand on all of the issues.  Instead, this time I’ll focus in on the key factors that keep me on the fence.

Why I might vote for Obama:

1) I agree with Colin Powell when he said this:

On the Obama side, I watched Mr. Obama and I watched him during this seven-week period. And he displayed a steadiness, an intellectual curiosity, a depth of knowledge and an approach to looking at problems like this and picking a vice president that, I think, is ready to be president on day one. And also, in not just jumping in and changing every day, but showing intellectual vigor. I think that he has a, a definitive way of doing business that would serve us well.

Republicans have often pointed out how Obama speaks well in front of a teleprompter, but when speaking off the cuff his words don’t come as smoothly. They insinuate that this is a sign of his lack of knowledge on the issues. Listening to him speak in the debates and in other venues, I actually get the opposite impression. He seems like a man who thinks about what he is saying, and tries to get his words in line with his thoughts. That means he doesn’t often come up with zingers off the cuff, but when he speaks I at least hear real ideas. Heaven knows it wouldn’t be a bad thing to have a president that thinks before he speaks.

Incidentally, I have been struck by the level of detail outlined on Obama’s website regarding his positions, in comparison to McCain. He clearly has done a lot of thinking and researching these issues (and has assembled a team that has spent a lot of time doing likewise). If we are to reject the politics of bumper stickers, then I think Obama deserves credit for that.

On the other hand, the McCain campaign has been panicky. They have relied on old politics of culture war (“Obama’s a celebrity”), of misrepresentation (“Obama will raise your taxes”) and of fear (“Obama is a terrorist’s friend” and “Obama is a socialist”). They have not spent much time talking about issues, and when they do it’s mostly bumper sticker slogans (“Drill, Baby, Drill”) that don’t inspire confidence that they’ve done much thinking. Granted, Obama has done his fair share of spin (“McCain wants to stay in Iraq for 100 years”, and “McCain can’t use a computer”). I don’t think either candidate has lived up to his promise to run a “new politics” kind of campaign, but in the balance I think McCain has gone further. For Obama, such moments are the exception to the rule, whereas McCain’s entire campaign seems to be revolved around such tactics lately. Perhaps that’s just because he’s losing, but for a man of integrity that’s no excuse.

2) I don’t think Sarah Palin is qualified to be vice president, and especially not president. McCain claims to have picked her because she is a maverick and a reformer. I agree that she is a maverick, but the reform spin has been mostly nullified in my mind by the finding of the ethics report that she overstepped her authority as governor of Alaska. In addition, being a maverick and a reformer is not enough to be president. You need knowledge and experience, both of which Palin lacks. At first, I defended Palin in the experience category, noting that she has more executive experience than Obama. However, even though both Palin and Obama are relatively inexperienced, Obama has proven he is knowledgeable (see #1) whereas Palin has reinforced her inexperience. It’s true that Obama has made some gaffes, but that is to be expected in a long campaign. Some of Palin’s comments, however, don’t appear to be just gaffes but reveal a fundamental lack of knowledge on the issues and a lack of judgment on where talking points should end and real discussion should begin. If she can’t handle the media, how will she handle foreign leaders?

Palin’s inexperience scares me, but the choice also reflects negatively on McCain. I don’t know if McCain really chose her, or if he was coerced to do it by the Republican party powers that be. But either way does not reflect well on him. If McCain really thought she was the best person for the job, that calls into question his judgment. If the choice was forced upon him, then that’s even worse–that means he is not really a maverick, but is beholden to the old political forces of party politics.

Why I might vote for McCain:

1) Obama is trying to sound like a moderate now, but his legislative record is very liberal, and recent comments regarding “spreading the wealth” hint at this as well. If the congress weren’t also ruled by liberals, this wouldn’t bother me so much given the points I outlined above. However, I have little reason to believe that Obama would stand up for the voice of moderation against Pelosi and Reid. That could spell disaster in terms of running up the deficit and helping our economy recover.

The argument has been made that Republicans have done nothing to help the deficit either. I agree, but McCain has done enough to convince me that he is serious about cutting spending, even though I don’t believe he can live up to his promise to balance the budget in four years. Obama has not done anything to convince me that he is serious about reigning in spending.

2) Looking only at issues in general, I tend to agree with McCain more than Obama. I side more with McCain on taxes, energy, and social issues. That’s not to say that his ideas have no flaws, however, and that Obama’s have no merit in my mind. But on the balance I favor McCain’s policies. If the campaigns and candidates were just the sum of their policy proposals, I would have decided for McCain a long time ago. But it’s not, nor should it be. It’s also about the candidates and how they run their campaigns, which can be viewed as the ultimate job interview.

Why I might (probably not) vote for Barr:

I’d like to stick it to both parties. I’ve written before about why third parties can be important to our political process, even without winning. So I would have no problem voting for a third party, even if I knew the candidate wouldn’t win, if I truly believed that the candidate was the best choice. But I can’t bring myself to vote for someone I don’t think would be a good president. I have some libertarian in me, the libertarian party is just a bit too libertarian for my taste. I would welcome them to have a role in our political system, but not as president.

So how will I make up my mind

The main question I will need to answer is which side of the candidate is real and which is fake. If I vote for Obama, will he be the liberal that he was as a senator, or the uniting post-politician he claims to be now? If I vote for McCain, will he be the maverick that I’ve admired in the past, or the same-old politician I’m seeing now? So, in the end, the policy positions have been laid out and nothing new is likely to come around on that front. So for the candidates, it’s all about convincing me that I can trust them. The candidates have one week to convince me one way or the other. Let’s hear the closing arguments.

Written by Mike

October 29, 2008 at 7:25 am

Why the Credit Crisis: Greed or Fear?

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If you ask anyone why the credit crisis happened, you are likely to get a one word answer: Greed.

In some cases, that one word answer is followed by a rant about how the free market failed because of the greed of bank executives who tried to make money off of risky loans. But this argument doesn’t make sense to me. The free market is based on a balance of greed and fear. Greed provides the incentive for businesses to try to make money, while fear of losing money provides the necessary incentive to mitigate risk. In an ideal free market, these two forces balance out each other, promoting business decisions that appropriately balance risk and reward.

So how can greed be part of what makes the free market work, and at the same time be the cause of it’s current trouble? Greed caused executives to make decisions they thought had the potential to make a lot of money. There’s nothing wrong with that. The problem is that they apparently greatly misjudged the risk of the decisions they were making. In other words, they did not have enough fear to ensure wise financial decisions.

So, I don’t believe the cause of the crisis was too much greed. Instead, I believe the cause was not enough fear.

But the more important question is: how did so many people make such a bad choice? It would be understandable if just a few businesses suffered from this lack of fear, causing them to make overly-risky decisions. The free market accounts for those who make bad decisions. Specifically, the free market is designed to destroy them so that those who make better decisions take their place. So the fact that bad decisions were made is not surprising. What is surprising, and what the free market could not mitigate, is the fact that a large portion of our financial system was caught up in this. When one person makes a bad decision, we blame that person. But when many people make bad decisions, that indicates a systemic problem.

So, what systemic flaw caused so many people to be not as fearful as they should have been? I don’t have the definitive answer, but it seems to me that there are only two possibilities:

1) The Echo Chamber. Since everyone was saying the market was secure and growing, people got overconfident. That confidence spilled over to others, until you have an echo chamber where everyone is saying how great the market is, but no one has really done the research to find out for sure. So executives and shareholders didn’t have enough fear, which would have caused them to look into it sooner instead of assuming their investments were solid.

2) The Safety Blanket. Perhaps people didn’t have enough fear because there really wasn’t anything to fear. After all, if the government is going to step in when things get bad, then that minimizes the fear of risky investment that I would otherwise have. If I can get all the benefit when times are good, and a minimal amount of the pain when times are bad, bring on the sub-prime loans.

So which is it? Or is it some of both? Before we jump in head first to try to fix things, I think it’s important we fully understand what caused this. If the first reason is true, then we need to re-think the prevailing wisdom that the market is the ultimate regulator. In that case, we need more regulation (or, more accurately, we need the right regulation) to make sure that the market is not getting overconfident. If the second reason is true, we actually need less government involvement so that companies are responsible for there own bad decisions, which would promote less risky investment. If it is both, then we are in a tricky situation where we need both more regulation and less government intervention at the same time. That’s not exactly the kind of solution that lend itself well to sound bites and bumper stickers, which unfortunately is the primary political language that our country speaks.

If the credit crisis was caused by a lack of fear, I’ve got plenty of fear to go around: fear that–if we allow politics to rule this issue–we might not get this right.

Greed, meet fear. You two should talk.

Written by Mike

October 26, 2008 at 9:19 pm

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The One Reason I’m Still Undecided: Palin

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Just when I start thinking I’m deciding to vote for McCain, Palin says something like this:

Just say “Yes”. Please.

My simple definition of a terrorist: Anyone who attempts or threatens to cause death or bodily harm in order to promote their own ideology.

Ayers, check.
Abortion clinic bombers, check.

Written by Mike

October 24, 2008 at 10:44 pm

The Psychology of the Underdog

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I am an unashamed undecided voter. However, I am leaning toward McCain. The main reason I remain uncommitted is that I don’t really like either candidate. I think they are both great people, but I don’t like how they have run their campaigns, and I don’t agree with many of their positions.

As I’ve pondered who I might vote for, I’ve noticed an unsettling idea creeping into my head. Psychologically, it seems like it will be easier for me to pull the lever for the candidate I think will lose, because by doing so I won’t have any responsibility for what the new president might do. Now, don’t get be wrong. I’m not saying this is a valid reason to support a candidate, and I will be fighting this inclination in myself. But just saying that it is not right does not make it not real.

So am I alone in this? Could this be part of the explanation for why election polls tend to tighten as the race gets closer to election day, including this one? Will undecides (the majority of whom probably aren’t thrilled about either candidate) break toward the underdog?

I don’t know, but I came across this recounting of history that was interesting to this discussion:

There is a precedent for this kind of thinking in presidential politics. The most famous example came in the fall of 1976, when Gerald Ford battled his way back from a mammoth 33-point deficit against Jimmy Carter. Ford capped his methodical comeback the weekend before the election when polls showed him – for the first time in the entire campaign–pulling ahead of Carter. The prospect of Ford actually winning the election sparked some widespread second-guessing among his softest supporters. Hang on, they seemed to say, are we really going to give four more years to the guy who pardoned Nixon? After two months of steady gains, Ford’s support dropped that final weekend and Carter won the race by two points.

So electors increasing supported Ford, until it got to the point where he might win, and then backed off, allowing Carter to win instead. This seems to support my argument: it’s psychologically easier to support the underdog.

But if I’m right, it’s not all good news for McCain. After all, the underdog is only the underdog while he is behind, of course. If McCain is able to catch up to Obama, and there is not a clear expected loser, the psychological tendency to “wash my hands” will be nullified. So I still think Obama will win, but McCain could make it close.

Written by Mike

October 23, 2008 at 8:31 pm

Orson Scott Card: Democrats Caused the Housing Crisis

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I am always impressed with independent thinkers, which is what I strive to be, if you haven’t figured that out by the title of my blog.  This is probably why I was very impressed with Colin Powell’s endorsement of Barack Obama.  It wasn’t just the fact that Powell endorsed a Democrat, but I thought his explanation was extremely well thought-out, and showed that he had made the decision for the right reasons, without relying on any partisan talking-points (although some disagree with me on that).

Today my attention was drawn to an article by another independent thinker: Orson Scott Card. Although a Democrat, he has written articles before criticizing his own party. But this one’s a doozy:

This housing crisis didn’t come out of nowhere. It was not a vague emanation of the evil Bush administration.

It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans.

What is a risky loan? It’s a loan that the recipient is likely not to be able to repay.

The goal of this rule change was to help the poor — which especially would help members of minority groups. But how does it help these people to give them a loan that they can’t repay? They get into a house, yes, but when they can’t make the payments, they lose the house — along with their credit rating.

They end up worse off than before.

This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them.

He goes on in his scathing criticism of both the Democratic party, as well as the media for failing to report on the facts of the story.

I believe he is right as far as the media goes. Journalists have, for the most part, gotten lazy. It seems most prefer to regurgitate what some other news story said, rather than do real research. That’s no more apparent than in the current election, where the news only reports the horse race, rather than talking about real issues.

However, as far as the Democratic party goes, I think he goes a bit too far. I do agree with him that McCain and Bush did try to pass stricter regulation on Fannie and Freddie. But I don’t think it’s 100% accurate to say that the failure to do so was all the Democrats’ fault. After all, Republicans were in charge of Congress at the time. The bill passed the committee vote 9 to 11 (down party lines, with Republicans favoring the bill to add more regulation), but the Republican leadership did not bring it up for a full vote, despite McCain’s attempt to revive it by becoming a co-sponsor. You could argue that Republicans didn’t because they knew it would fail since no Democrats supported it. So there’s room for debate, but at least I don’t think it’s as cut-and-dry and Card suggests.

Additionally, his column points out that all of this started under Clinton. That is true, but Republicans had six years to correct it, and failed to do so. It seems there is plenty of blame to go around.

Still, I credit him for at least thinking for himself and holding his own party accountable. We could use a lot more of that.

Written by Mike

October 22, 2008 at 10:17 pm

The Rhetoric of Tax Policy: A Moderate View

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The rhetoric has heated up recently in the debate over tax policy. Should we tax the rich in order to reduce taxes on the poor (or even write them a check, in some cases)? Or should we cut taxes on the rich? I think it’s a very interesting debate, but I’m disturbed by some extreme comments I’ve heard from supporters of both candidates, and echoed by the candidates themselves.

“The rich can afford to pay more taxes”

True. One simple but reasonable definition of rich might be “someone who can afford more than they need.” In other words, someone is rich if he has excess wealth. Therefore, rich people, by definition, can afford a lot of things, including paying more taxes. However, by that logic we should always increase taxes on the rich, as long as there are rich people to tax. As long as there is a rich person, that person can afford more taxes, so we should tax him more. People who perpetuate this logic don’t intend it, but the logical conclusion of the argument is that there would be no rich people left, because they would have all been taxed to the point where they could not afford more taxes (which, be definition, means they are no longer rich).

“The rich should pay their fair share”

I agree. No one is arguing that anyone should pay more or less than their fair share. But to those who espouse this argument, I ask: How much is their fair share? Obama wants to change the tax highest tax bracket to 39% instead of 36%, as well as increase the capital gains tax. So I ask, Is that their fair share? Can you honestly tell me that if that were the current tax rate, you wouldn’t be arguing for higher taxes on the rich right now? How am I supposed to believe that after Obama implements his tax policy, there won’t be calls for more “fairness” in the tax system? After all, there will still be CEOs that make many times more than their mail-room workers. Are tax increases on the rich always fair, and tax decreases on the rich always unfair?

“Obama’s tax cut is socialism and/or income redistribution”

If any proposed tax policy that favors the poor is considered socialism, then any tax policy that favors the rich should be considered feudalism. Clearly, those are two extremes. Yes, perhaps it could be considered a step toward socialism, in the same way that a step down a mountain can be considered a step toward falling off a cliff. Clearly, if we label any tax policy proposal that cuts taxes to the non-rich at the expense of the rich as “socialism”, we have gone too far.

But many would point to the fact that Obama’s tax cut is really a tax credit which can go to people who don’t even pay taxes, or who pay very little. That is true, but that is really not that exceptional. Many people receive more from the government than they contribute to it, not only in the form of tax credits, but also public services. We would never adopt a system where a person is limited to getting no more benefit from the government than the amount of taxes they pay. That would defeat the purpose of government providing services (for the common good). Imagine if your house caught on fire and the fire department told you they could only fight the fire for a half hour, because you only paid enough taxes for that amount.

What really matters

So let’s get down to what really matters. To me, that means what tax policy is most likely to help our economy recover.

Conservatives argue (in addition to the rhetoric described above) that cutting taxes on the wealthy helps create jobs as rich people have more money to expand businesses and invest in other businesses. Liberals argue (in addition to the rhetoric above), that cutting taxes on the poor and middle class allows them more money to buy goods and services, which also helps grow business. So who’s right? They both are.

The key to both arguments is that money flows. The flaw of so called “class warfare” is that it does not recognize that wealth does not exist in a vacuum. Money is only worth something because it can be transferred, and most money is immediately transferred when it is acquired. When you get paid, you will use that money to spend (transferring to businesses), or save and invest (which again makes that money available to businesses and other individuals). How much money do you have just sitting around in a checking account or your wallet? That is the only real money you hold. The rest of your wealth you’ve either spent or loaned to others.

So wealth flows both from rich to poor and from poor to rich. So both trickle-down and bubble-up are valid economic philosophies. But which one is best for us now? Well, the answer to that question is above my pay grade. You didn’t really think I was going to solve that question in this post, did you? If I could do that… well… I’d be rich.

But one thing I do know: We can debate who to cut taxes on, but raising taxes on anyone during a recession is a bad idea. Obama, to his credit, has said that he will delay raising taxes on the rich until the economy recovers. But it doesn’t seem like a much better idea to raise taxes just as we are recovering. And, since he will not delay his massive tax credit to the poor and middle-class, that will run up the deficit greatly, which somewhat negates his argument that his tax plan is more fiscally responsible.

McCain proposes to cut taxes across the board, with a more modest tax cut to the middle-class than Obama is proposing. This seems more reasonable during a recession. However, my problem with McCain is that he has promised to balance the budget in four years, which seems like wishful thinking. Cutting taxes combined with a slowing economy mean much less revenue for the government, and as much as I like McCain’s commitment to lower government spending, I just don’t think it’s possible to cut that much so fast.

So there’s our choice, rhetoric free. I hope we choose well.

Written by Mike

October 21, 2008 at 9:35 pm