July 06, 2013
There were tapirs at Fleishhacker Zoo when I was a kid, as my grandmother took me there during those long weekends to see the same animals I had seen in captivity a few weeks before. A tapir looked like a Divine lab experiment gone 'orribly wrong, as if God wanted to make a pig, changed His mind, and tried to make it into an anteater. Two such animals make a bad conjunction of genetics; it would have been better if the same indecision had happened, for example, while mixing an impala with a deer. He probably did, in fact, and thus the antelope.
However, I think Ben Bernanke was not referring to the genus Tapirus, but to the idea of tapering Quantitative Easing, which is the chief American policy response to the ongoing problem of a slowly sinking economy. Regular readers already are familiar with the Federal Reserve's program of asset "purchases," where the FOMC engages with its cabal of Primary Dealers in a swap of hallucinated money-like electronic pixels for similarly notional things such as Treasury bonds and mortgage-backed securities which are guaranteed by one of the big government-like housing agencies, which are in turn backstopped by the U.S. Treasury, which is in turn backstopped by the Fed's ability to hallucinate money.
We're all clear on that. Ben Bernanke has been buying bonds and mortgages at a "pace" (his favorite word, along with "moderate," sometimes conjoining the words and coming up with "moderate pace") of about $1 trillion per year, or $85 billion a month, a number which I'm sure was chosen because 12 x 85 billion gives you just slightly more than $1 trillion a year. It's neat and tidy that way.
According to the Federal Reserve, inflation has remained "subdued," Ben Bernanke's third favorite word. All of this "money printing" has not created much inflation at all, let alone "runaway inflation," which was the prognosis of many conservative assholes such as Peter Schiff and Niall Ferguson, whom Paul Krugman skewers relentlessly in his columns and blogs. When I say "relentlessly," I mean on virtually a daily basis, sometimes more than once a day. It has, indeed, gotten a little unseemly. Paul Krugman did not think that QE would cause runaway inflation, and said so in debates as early as 2009. I think this was because Ben Bernanke, who had been the Chairman of the Economics Department at Princeton University before ascending to the Fed, took the time to explain to Mr. Krugman that the "exchange" of assets held by Primary Dealers for Treasury bonds and MBS would result in the hypertrophy of "reserve accounts" held by the PDs on the books of the Federal Reserve and nothing else, and this indeed is what has happened. The Fed pays the PDs 1/4 of one percent interest on these gargantuan accounts, which have swelled to well over $2 trillion in the last four years, out of a total Fed balance sheet of $3.4 trillion.
These "excess reserves" (amounts which by definition are more than the PDs need to maintain in their accounts under solvency rules) could be the basis of lending activity, and under rules of "fractional reserve lending," these reserves could result in the unleashing of a ginormous tidal wave of lending, if, you see, the American economy was not such a sick puppy. If such lending were to start up, then inflation would be the natural result of this vast increase in the money supply. No one borrows the money because we're all broke-ass to begin with and don't want no more debt, thanks just the same.
Recently, Ben Bernanke made various throat-clearing and harrumphing noises before Congress which suggested that the Taper was at hand: the Fed might ease up on this monthly orgy of electronic account hypertrophy, that the Fed might moderate its pace of purchases to a more subdued level, so to speak. The stock market reacted hysterically, interest rates shot up, and all Hell broke loose. Mr. Krugman chastised Ben Bernanke for his premature "tightening," which must have been galling to Mr. Bernanke since it was he, no doubt, who had explained to Mr. Krugman how QE worked in the first place, and corrected Mr. Krugman's idiotic solecism of 2003. However, I think Ben Bernanke is enough of a mensch to understand that Mr. Krugman needs such grandstanding in order to hold down the fort at the New York Times. Whatever happened, various Fed officials began recanting almost immediately, assuring us that no one meant anything, that moolah conjuration would continue until the economy continues to fail to improve.
QE forever does seem to have the effect, for now, of holding down interest rates, both for mortgages and for federal financing through Treasury bonds. It's phony, of course, but so is the American economy, which is based almost entirely on issuing the world's reserve currency. So why would we ever "taper," when the American economy looks, really, kind of a like a tapir? Former engineers are becoming bartenders, auto workers are taking jobs as janitors or Wal-Mart greeters, college graduates are moving back home with Mom 'n Dad, and there are vast uncounted millions who are living in tent cities, on the streets, in sewer systems, under bridges, in storage units and who have disappeared from official statistics altogether. The American standard of living continues to sag, as average compensation drops and the "new jobs" created are always at a lower stratum than those that they replace. We need the hallucinated money, Benji. We should keep creating it and adding it to the vast unused stashes on the Fed's reserve accounts. Which is to say, I agree completely with Mr. Krugman, and his insufferable criticisms. I disagree only with the thinking that this actually leads anywhere. It won't, it can't; America is not going to suddenly get "traction," it's not going to be 1964 all over again. But this at least is something, a silly and a dumb thing, at least QE is something, or we won't have anything at all. Save the tapir, but let the Taper become an endangered species.
July 04, 2013
When Brad says his life was "pointless" before, but now isn't, I conclude (naturally) that, post hoc ergo propter hoc, he is claiming his life now has meaning. This isn't altogether fair. See, the way I look at it, all Brad Pitt has to do in the morning, in order to be completely assured of outrageous wealth and stature in our society, is to wake up and resume another day of looking the way he does. That's it. American society makes no further demands on Brad Pitt. We just want him to keep looking like Brad Pitt for as long as he can.
I think his PR people, in order to earn their salaries, nevertheless take a more activist position. If they told Brad the truth, that all he has to do is walk around in the world looking like Brad Pitt, sign an occasional movie deal, go to an awards ceremony, fly over to Cannes for the festival, etc., even Brad Pitt would figure out that he doesn't really need them. So I think the PR flacks occasionally put a bug in his ear: it's time to diss Jen again. Brad has dissed her a lot, which, of course, has been materially to Jen's advantage. Whenever Brad disses Jen, Jen, holding back tears, appears on the cover of a tabloid in your checkout line, wondering out loud when the pain will ever stop, and if you read the story (which you won't, because a reader of Waldenswimmer is not likely to), you'll see where she is admired for her plucky response to this latest verbal assault from Brad's PR people, which has been carefully calibrated and choreographed, of course, by Jennifer Anniston's PR people working with Brad's PR people.
I don't have any people, which places me at a disadvantage. Also, my life remains pointless, another way in which Brad Pitt has left me in the dust. To console myself, I remind myself that in the sense that Fyodor Dostoevsky used "pointlessness" in his masterful Notes From the Underground (the greatest philosophical essay masquerading as a novel ever written, quite a bit deeper than Camus's L'Etranger, which was not too shabby), Brad Pitt's life in fact remains pointless too, Angelina be damned. What he sees as the meaning in his life, now that the life form Brangelina has sprung into existence, is an illusion, pure and simple. He hasn't found something that I can't find, no matter what he says. He invests way too much importance into his inane utterances and disses just because he has People and, of course, those looks. I concede the looks. There's nothing I can do about those.
The double whammy humans engineered is that not only do they find themselves philosophically adrift in a universe which silently rebukes their pleas for meaning (something which is not our fault, after all), but they have now succeeded in destroying the Earth as a habitat for living out that pointless life. I have often wondered whether there is not a strong nexus between those two phenomena, those two ideas, those two inevitable conclusions. In our mindless confusion and rage, we have engaged in a war of wanton spoliation of our natural legacy, as if to say, if our lives must be as pointless as Brad's with Jen, then we shall take it all with us when we go.
Posted by Harry Willis at 7:56:00 AM
July 02, 2013
My good friend can consider this a kind of response to his question posed by email.
To restate my position (to revise and extend my previous comments, as the pompous Solons of the Potomac would say), I think the problem that we have with "marriage equality" is that we insist on investing an emotional "bond" (often quite temporary, as we know) with legal ramifications. That is the essence of the confusion. We have perpetuated the faulty assumption that there must be some sort of "married state," sanctioned and adorned by the majesty of the law, or society as we know it will simply come crashing down.
Where did such a crazy idea come from? Now, mind you, I am not saying that two people, of whatever combination of sexes, cannot make some sort of permanent commitment to one another. But what do Social Security rights, hospital visits, alimony, divorce lawyers, and all the rest necessarily have to do with that? (Just putting the entire divorce lawyer bar out of business would be a major victory all on its own.)
So to answer my friend, who views things from a religious perspective: the origin of the problem is that we took an essentially religious concept, the "sanctity" of marriage, and we connected it to legal complications. This is the essence of the the First Amendment problem. We have institutionalized a religious practice in civil law. This is why a devout Catholic like Antonin Scalia goes into paroxysms of outrage at the prospect that "sodomites" can now marry, just like his beloved Opus Dei friends.
Critics of gay marriage often attempt various reductio ad absurdum arguments to illustrate their argument that gay marriage "undermines" traditional marriage. Rick Santorum was famous for this. People would want to marry their gerbils or parakeets next, he would warn.
That's stupid. There are abuses that are more practical and closer to home. For example, once you say that any two people, hetero, gay, whatever, can marry, then in order to respect their rights of privacy which are already established, you cannot inquire too deeply into their sexual proclivities. It's none of your business why they choose to get married.
Maybe you already see where I'm going with this. In the same way that we unconsciously associate marriage with religion, we unconsciously associate marriage with sex. Yet there is nothing in the recent Supreme Court decisions which compels this. Thus, why shouldn't two straight people get married, especially if they have no actual interest in marriage in a conventional sense? It's more or less like the "Seinfeld" episode where Jerry's dentist, a Gentile, converts to Judaism and begins telling Jewish jokes all the time. Jerry goes to the dentist's priest and complains that Dr. Whatley has converted "just for the jokes." ("Priest: And this offends you as a Jewish person? Jerry: No, it offends me as a comedian.")
I think I can almost guarantee that this will become a fairly routine practice as society's thinking about such things becomes looser and more liberated. As it evolves. If any two people can say they are "married" and succeed to a whole series of legal benefits; and they don't want to get married to a member of the opposite sex anyway; and society doesn't give a damn anymore about gender or sexual issues (we're rapidly approaching that point), then what's the difference? Two straight people of the same sex can certainly carry on a sexless marriage as well as two straight people of opposite sexes who have been married too long, and without the bitterness and resentment that the latter situation so often engenders. And while preserving their heterosexual options in the outside world, and taking advantage of the full $500,000 exemption on sale of a principal residence. Win/win, I believe this is called.
So, in a sense, the religious argument that gay marriage poses a "threat" to traditional marriage is correct, but not quite for the reason that is usually advanced. Throwing the doors wide open will have the unintended effect of exposing marriage as a travesty, as a mockery of a sham, of two mockeries of a sham. The concept of the "sanctity" of marriage has always been a joke, albeit a subtle one. It can't really be "holy matrimony" if you can file a document in court for no reason, wait six months, and escape the "sanctity." So society came that far: it recognized that the idea of "till death do us part" usually only applied if one of the spouses died unexpectedly. Disposable marriage made a virtue out of inevitability.
Allowing marriage for any reason, between any two kinds of people, will now toll the death knell for the whole religious-legal nexus represented by the marital convention. Humans are masters at abusing privileges, and this will be no exception.