Ian Welsh's blog

Why Obama Doesn't Care About the Netroots And Why He Wasn't At Netroots Nation

Wed, 23 Jul 2008 06:23:54 -0700

Short form: He doesn't need us and he thinks were wrong about the most important things. K? Thanks. Bye.

Long form:

#1: Bloggers did not, as a group, endorse Obama until their audiences had already gone for him in large numbers. Rule #1 of political influence - if I can get your constituency without your help, I owe you nothing.

#2: Obama's own internet outreach has been stunningly succesful, and it is essentially a pyramid with the campaign controlling it and able to milk it for funds and volunteers. Obama can directly milk the netroots without going through gatekeepers like ActBlue or bloggers.

More after the jump DIGG IT!

Ok, Enough With the Stupidity About Clinton's Kennedy Statement

Fri, 23 May 2008 19:45:23 -0700

Ok, based on Hilary's mention today that RFK was still campaigning in June when he was assassinated, I'm hearing reasoning that Clinton is staying in because if Obama gets assassinated, then she'll get the job.

Enough. Does no one think these things through for two seconds before setting fingers to keyboard?

So follow with me down the following logic chain. Clinton drops out this very second and does not release her delegates. Obama is assassinated before the convention. Who has the most nominees? Who is most likely to get the nod?

It is, in fact, damn near unthinkable that Clinton would not get the nomination in that case. Hilary Clinton does not need to stay in the nomination race in order to be the nominee if someone assassinates Obama.

Cutting Through Primary and Election Crap

Thu, 22 May 2008 23:54:27 -0700

1) Neither Clinton nor Obama is a progressive or a liberal. They are both centrist democrats with the voting records of centrist dems. However, between the two of them, Clinton is the more liberal.

2) Obama is less electable than Clinton. The Clinton campaign is correct to say that "it's not the math, it's the map". You have to win specific states to win the election, and the states are winner take all. Virtually every series of electoral vote counts on MyDD's election tracker (look top right and left), which uses state rather than national polls, for the last month or more has shown Clinton walloping McCain. Obama is only occasionally ahead.

Why Obama Doesn't Bother With Blog Outreach and Why McCain Does

Mon, 19 May 2008 18:02:00 -0700

The Washington Times published an article on how McCain is allowing bloggers on his conference calls. And not just conservative ones, but non-political bloggers and even liberal bloggers.

This has caused a certain stir amongst liberal bloggers, because Obama doesn't invite us to his calls, and never has. Clinton does, but she certainly doesn't invite conservative bloggers.

So, let's lay this out simply and get past the "participation" BS.

Progressive national bloggers as a group did not go pro-Obama until Edwards dropped out. Also, in most cases the readers were pro-Obama first, not the other way around. Obama reached our audience without going through us, and sees no reason to bother with outreach to us. Bloggers who now support Obama do so despite the fact that Obama can't be bothered to do blogger outreach.

Obama only works with groups who can deliver votes he can't easily get on his own. So SEIU has a voice. We do not because we did not deliver our readers, he got them on his own.

Did Bob Barr just give Obama the White House?

Mon, 12 May 2008 13:36:19 -0700

Word is that Bob Barr is probably going to accept the Libertarian party nomination. Up until this point I had assumed that the battle between McCain and Obama was roughly even, because:

1) Many Americans don't like Blacks. Yes, you're a liberal, and you don't want to hear this, and everyone hates the media for talking about it. But, y'know, it just happens to be true. When resumes with black names get two thirds the interview requests as otherwise identical resumes with white names, no one can tell me racism doesn't matter in America. Americans won't hire blacks for normal jobs, but they will hire one as President?

2) McCain's brand is Maverick Man of Principle! That's a powerful brand. Sure, it's BS. But then Bush wasn't a compassionate conservative, and Kerry wasn't a coward. Reality and American elections don't even have a passing acquaintance with each other.

Balancing that, is:

1) Obama is an amazing speaker.

2) McCain's a Republican and he is going to get tarred with Bush's unpopular occupation of Iraq and Bush's lousy economy. Normally any Democrat could win the election due to those two things. Of course, mind you, the economy was lousy leading up to 2004 too, and by all normal metrics Kerry should have won, so I take such things with a grain of salt these days. The media was for the war, and they really didn't mind Bush's economic policies that much—the elite opinion makers, after all, like their tax cuts.

But Bob changes things. If the Paulites rally to him and if his popularity in Georgia causes it to flip to Obama, well, it's a whole new ball game. McCain could get buried. This election is close enough that even a couple percent in a few key states could turn it into an Obama landslide.

The Obama Squeeze

Fri, 09 May 2008 02:20:47 -0700

Lambert doesn't like what Matt Stoller saying about how Obama ran his campaign and how he's now consolidating power. He thinks Matt's kissing Obama's boots.

What Matt is saying is simple:

Obama is taking over the party and cutting out everyone who isn't in his camp. He believes in post-partisanship (this doesn't contradict having Daschle as your bud, y'know). Money flow is going to come mostly from Obama going forward, unless he loses the election. The independents-folks like MoveOn, ActBlue, the netroots, etc... are being cut out or marginalized, whether they realize it or not (and I know that some don't.) Obama doesn't feel he really needed them (sorry MoveOn), and he isn't planning on giving them any real say or power.

Obama's Clinton Dilemna

Tue, 06 May 2008 21:09:57 -0700

As Dave Neiwart points out over at FDL, the results for Hillary in North Carolina and Indiana were less than she needed, and may have destroyed her chances with the superdelegates. Her speech sounded suspiciously like a concession speech. Now anyone counting Hillary out until she formally says she's out is taking a big chance, this is the energizer bunny of candidates. But let's assume she will decide the gig's up and to throw in the towel and turn our eyes forward.

Obama has his work cut out for him. The possibility that a lot of Hillary's white working class base could turn to McCain or stay home should be a real worry for him. There's been a great deal of bitterness and anger on both sides of the fight. And, to be crass and point out the unpalatable truth, there isn't a lot in it for Hillary to back Obama in a more than pro-forma "going through the motions" fashion. If he loses, she's the presumptive nominee in 4 years, after all. If he wins, she probably has to wait 8 years, and she's not getting any younger. If she really wants to be president, well, Obama's still in the way. Now I'm not saying she won't help Obama even if such thoughts are going through her mind, no doubt she understands what another 4 years of a Republican presidency would mean. Still, there's help, and there's going all out. And there's a lot of space between the two.

So if I'm Obama; if I'm one of Obama's advisors, no matter how much I may share the view of some associated with the campaign about Hillary, I'd be thinking real hard right now about what it's going to take to bring her and Bill onboard in a big way, so that they do everything possible to really deliver the votes of their supporters.

For Bill, probably a seat on the Supremes if the opportunity comes up (and it will, if Obama is elected.) For Hillary? Probably Senate Majority leader—it's not like Harry Reid really likes the job anyway.

For our hopes of there being a Democratic President taking office in 2009 I trust that similar thoughts are going through Obama's mind. Because he's going to need all the help he can get.

The Judgement of Craig Newell

Mon, 21 Apr 2008 08:46:09 -0700

A few weeks ago I received the news that my old coach and math teacher, Craig Newell, had died. I haven't written about it till now because I've been thinking of him since then. He was an odd man, spare and lean, with the whippet body of a greyhound, and he had a way of cocking his head when he looked at you which was inevitably parodied every year when the seniors did their annual play.

I spent five years around him, in high school, a boarder in an all boys school. It was an excellent school, well run, with fair rules and no brutality, but I hated the place and was miserable most of the time, though still happier there than I would have been at home. Mr. Newell was my grade 9 math teacher, but I didn't really make a connection with him till a few months into the year.

The End of Cheap Food and the Era of Food Shortages

Fri, 18 Apr 2008 12:30:11 -0700

The end of cheap food, and absolute shortages are on the way. There are a number of reasons, which include the following:

1) The early instability caused by global warming, whose first effects are less increased temperatures than unpredictable weather patterns has lead to key areas having lower crops than in the past.

2) Aquifers in large parts of the world are being drained at unsustainably fast rates. This includes most of the American southwest, large parts of China, huge swathes of India and many areas in Africa. In India there are already villages that have had to be abandoned because no matter how deep they drill, there's no water. This is only going to get worse.

3) Desertification and reduced fertility. US farmland fertility is less than half of what it was 50 years ago. Large areas of China are deserts, with dust storms boiling out of them on a regular basis. It is only a matter of time before we have full on dust bowls in many major food producting regions, just as we did in the 20's and 30's.

4) Modern agriculture is actually very dependent on oil, and the demand and supply curves for oil are not looking good. Reduced soil fertility has been made up for by increasing the amount of energy used. That energy, at the very least, is becoming more and more expensive and will continue to do so. That will drive up food prices significantly, or force a return to the use of much more human labor. Probably both.

5) In the short run foolish subsidies for ethanol have driven up the price of food staples as farmers switch to corn to sell for ethanol.

I hardly expect the current administration to do a great deal about this, but I still encourage people to sign the ONE Campaign's petition for Bush. Making it very clear that this is an issue that matters to a lot of people is the only way that politicians will take it seriously. The sooner we start, the better, and the life you save (or the pocketbook you help) will as likely be your own as anyone else's.

So please take a few moments and go sign.

There Isn't a "Pareto" Optimal Solution to This Financial Mess

Mon, 07 Apr 2008 06:53:11 -0700

Seeking Alpha has up a pretty good history of the last 30 years of deregulation. It's worth your while to read, but was I find most interesting is this:

Is this what we have reduced our financial system to? Where it is so weak and fragile that the failure of a single investment bank threatens a widespread financial calamity. If so, how did we let it reach this point? In my mind, extremist laissez-faire deregulation surely played a heavy part.So where do we go from here? By no means am I advocating that we turn back time and reinstall the regulations that previously existed "as is".

Remarkable. Lists the history, says he doesn't have a solution but doesn't favor going back to old regulations. No one has ever explained adequately to me in what way the old regulations were worse than the repeated bubbles and bailouts (the S&L crisis was bailout 1, the 2001/2 tax cuts were the bailout for the stock collapse, and we're now onto bailout 3).

The fact of the matter is that very sophisticated financial instruments are not necessary for the functioning of a modern economy. Simple stocks, bonds, futures and insurance of vanilla varieties handle the vast majority of real needs. Nor is there any evidence I am aware of that mega-banks/investment houses/brokerages/insurers serve customers better than the older businesses which were forced to concentrate on just one area.

Certainly we can't just roll back the clock, yet the truth is that much of what happened would never have happened if the old rules had been enforced. They were, in fact, specifically put in place to avoid exactly what has happened, by people who were around for the last big clusterf*ck in the 20's and 30's. And if you read a history of the period, the parallells aren't just echoes, they are so close it's like reading the script for a movie remake.

A good chunk of the old regulations should, in fact, simply be reinstituted. It'll cause some hardship for Wall Street, but my heart doesn't bleed for people who paid themselves more than the raises of 80 million Americans and now want the taxpayer to bail them out.

The Paulson Plan

Tue, 01 Apr 2008 03:56:25 -0700

So Paulson has come out (pdf) with a plan. It's primarily a reorganization plan, pushing the Thrift regulator into the SEC, creating a federal mortgage regulator, giving the Fed the right to inspect the new firms that now have access to its liquidity. There's some talk about being objectives based. It's almost always a bad sign when the primary "reform" is to create new agencies or merge old ones and Krugman is right to ridicule it as The Dilbert Strategy. What don't I see here?

Leverage Explained

Mon, 24 Mar 2008 08:44:11 -0700

I recently had an acquaintance ask what leverage was, which made me realize that many of our readers without financial backgrounds may be scratching their heads.

Let's give a simple example (when I used to trade I was shocked and astounded when I first realized just how much leverage they allowed).

Let's say that you have a trade or investement that you expect will make 5%. Say you've got a $1,000 to trade with. Your normal profit would be $50. Not bad, but meh, you want more.

So, borrow more money against it - borrow $29,000. Now you have $30,000. By $30,000 worth of the stock. Your profit? $1,500.

Bear Sterns Shareholders Demonstrate Why Letting Bear Sterns Go Under Would Have Been Salutory

Mon, 24 Mar 2008 08:26:24 -0700

JP Morgan is considering increasing their offer by $8/share to $10/share after Bear Sterns shareholders threatened to sue. Many of those most hard hit, of course, were Bear Sterns employees who held a great deal of stock. The whining from Bear Sterns shareholders is beginning to grate on my nerves, especially that some of them are blaming the Fed, who apparently didn't want JP Morgan to offer more than $2.

The thing is that if the Fed hadn't intervened Bear Sterns shareholders would have lost everything. Absolutely every cent their stock was worth, because they were bankrupt and when you're bankrupt stock holders get in line last. There would have been nothing left after all the folks who Bear Sterns owed money to got through with them. $2/share was more than Bear Sterns was worth, it was worth nothing. This sort of special pleading is one of the reasons why some think the market should just be allowed to take companies down. JP Morgan would not have offered 2 cents a share for Bear Sterns without the Fed's funds and guarantees.

The Important Thing In A Bailout

Mon, 17 Mar 2008 12:43:58 -0700

contra Paul Krugman, is not so much this:

As I said, the important thing is to bail out the system, not the people who got us into this mess. That means cleaning out the shareholders in failed institutions, making bondholders take a haircut, and canceling the stock options of executives who got rich playing heads I win, tails you lose.

But is instead to make the condition of any bailout structural changes to the financial system that make another financial bubble impossible. We had the S&L in the 80's. The nineties ended with the Naz bubble and now we have this. The reason is that there were, and are, structural incentives for executives to gamble, because "head I win, tails the taxpayers lose". If taxpayers are going to have to essentially wind up owning the financial sector, and they are, then taxpayers should insist that the financial sector that comes out of it serves the real economy, is not prone to bubbles and is under tight and brutal regulatory control.

The Bernanke Bind

Mon, 17 Mar 2008 04:00:07 -0700

One problem with Central Banks is that too many people think they're all powerful. For years the Fed chairman was considered America's economic manager, and folks suggested that what the rest of the government did mattered little. So, in the 90's, we had adulation of Alan "the Maestro" Greenspan.

And it's true that central banks, and especially the Fed, are very powerful. Practically the first piece of investing advice I ever received was "don't fight the Fed." But the Fed, while powerful, is not all-powerful and the Fed's instruments are rather crude.

The Fed's main economic management tools all fall under what is known as "monetary policy." The Fed controls, to some extent, how much money there is in the economy and how much you have to pay for it. (Interest rates are the price of money.) It doesn't just have monetary powers, of course, it also has regulatory powers over banks, but mostly, if the Fed wants to accomplish something it does that by manipulating how easy, or how hard, it is for folks to get short term money (the supply of long term money is much less under Fed control). In addition to changing the price of money through changes in short term interest rates, the Fed can also engage in open market operations in which it buys or sells securities and it can also simply "print money."