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Yesterday we had Hoover Institute scholars speculating on what might have been Milton Friedman’s opinions of our present dilemma. Today Anna Schwartz who co-authored The Monetary History of The United States with Dr. Friedman, shows up in the form of the WSJ Weekend Interview.
… Most people now living have never seen a credit crunch like the one we are currently enduring. Ms. Schwartz, 92 years old, is one of the exceptions. She’s not only old enough to remember the period from 1929 to 1933, she may know more about monetary history and banking than anyone alive. She co-authored, with Milton Friedman, “A Monetary History of the United States” (1963). It’s the definitive account of how misguided monetary policy turned the stock-market crash of 1929 into the Great Depression.
Since 1941, Ms. Schwartz has reported for work at the National Bureau of Economic Research in New York, where we met Thursday morning for an interview. She is currently using a wheelchair after a recent fall and laments her “many infirmities,” but those are all physical; her mind is as sharp as ever. She speaks with passion and just a hint of resignation about the current financial situation. And looking at how the authorities have handled it so far, she doesn’t like what she sees.
Federal Reserve Chairman Ben Bernanke has called the 888-page “Monetary History” “the leading and most persuasive explanation of the worst economic disaster in American history.” Ms. Schwartz thinks that our central bankers and our Treasury Department are getting it wrong again. …
Robert Samuelson gives us the historical framework for taking a long term view of the credsis.
A dozen years ago, James Grant — one of the wisest commentators on Wall Street — wrote a book called “The Trouble With Prosperity.” Grant’s survey of financial history captured his crusty theory of economic predestination. If things seem splendid, they will get worse. Success inspires overconfidence and excess. If things seem dismal, they will get better. Crisis spawns opportunities and progress. Our triumphs and follies follow a rhythm that, though it can be influenced, cannot be repealed.
Good times breed bad, and vice versa. Bear that in mind. It provides context for today’s turmoil and recriminations. The recent astounding events — the government’s takeover of Fannie Mae and Freddie Mac, the Treasury’s investments in private banks, the stock market’s wild swings — have thrust us into fierce debate. Has enough been done to protect the economy? Who or what caused this mess? …
Canada’s National Post reports on the cooling earth.
In early September, I began noticing a string of news stories about scientists rejecting the orthodoxy on global warming. Actually, it was more like a string of guest columns and long letters to the editor since it is hard for skeptical scientists to get published in the cabal of climate journals now controlled by the Great Sanhedrin of the environmental movement.
Still, the number of climate change skeptics is growing rapidly. Because a funny thing is happening to global temperatures — they’re going down, not up.
On the same day (Sept. 5) that areas of southern Brazil were recording one of their latest winter snowfalls ever and entering what turned out to be their coldest September in a century, Brazilian meteorologist Eugenio Hackbart explained that extreme cold or snowfall events in his country have always been tied to “a negative PDO” or Pacific Decadal Oscillation. Positive PDOs — El Ninos — produce above-average temperatures in South America while negative ones — La Ninas — produce below average ones.
Dr. Hackbart also pointed out that periods of solar inactivity known as “solar minimums” magnify cold spells on his continent. So, given that August was the first month since 1913 in which no sunspot activity was recorded — none — and during which solar winds were at a 50-year low, he was not surprised that Brazilians were suffering (for them) a brutal cold snap. “This is no coincidence,” he said as he scoffed at the notion that manmade carbon emissions had more impact than the sun and oceans on global climate. …
On a tip from Mark Steyn, we have James Delingpole’s “ordinary bloke” focus group on climate change.
… Now I concede that ten drinkers round a table in a Worcestershire pub is not a large sample. And I suppose you could argue that any man (or woman — we had those there too, serving us tea in their sexy US Red Cross outfits) who chooses to spend his weekends impersonating C Company, 82nd Recon, 2nd Armored Division, is on a different planet anyway. But what I think I might have stumbled upon here is the sort of focus group we poncy Londoners don’t often encounter. A bunch of real people. Normal people. Ones who aren’t writers or minor celebs or politicians or the sort of metropolitan bien-pensants who think tootling round town in electric cars magically negates the carbon footprint they make flying to their farmhouse in Tuscany three times a year. And what they think about the environment couldn’t be more different from the version rammed down our throats by politicians of all parties, and by most of the media too. …
… So far, depressingly few of our politicians have understood this. The EU goes on railroading through its oppressive legislation on everything from waste disposal to the kind of lightbulbs we’re allowed to use. Buffoons like Ed Miliband and the head of the Environment Agency Lord (Chris) Smith continue to witter on about carbon capture and renewable energy, quite oblivious to the far more pressing and real threat of the ‘energy gap’ which will shortly lead to widespread blackouts. Conservatives who ought to know better either believe the cant because Dave does or delude themselves it’s not a voting issue.
But the tide of history is against this Green Terror and so, increasingly, are the people. We’ve had enough of its ghastly wind turbines, its fascistic recycling inspectors and its swingeing eco-taxes. We want lightbulbs you can see by, not horrid flickery yellow ones; we want weekly rubbish collections; we want countryside unblighted by vast Teletubby windmills. And we want Al Gore’s head on a plate.
David Warren from his perch in Ottawa looks at the two elections in North America.
I am very tired of electoral politics, and I would expect my readers are, too. This after a model five-week Canadian general election campaign, quickly resolved in a few minutes of vote-counting last Tuesday night — in addition to what feels like a century of still-unfinished jousting between presidential gladiators in the gigantic republic to our south (to say nothing of the bears, bulls, wild cats, donkeys and elephants in their congressional forum).
Indeed, I retired to bed last Tuesday evening feeling a nearly smug satisfaction in the day’s principal event, and muttering, “Vive le Canada!”
For, with all but one seat reporting before midnight, the Tories were then elected or leading in 140-plus, and quite unchallengeable. Most of those seats were settled away, without risk of nasty overnight swings, and the ones that weren’t didn’t really matter. All Tories I half-way liked had been re-elected, together with a selection of backbenchers I half-liked in other parties. And overall, the best available result: all party leaders farther away from power, except Stephen Harper, who wasn’t any nearer.
A boring election; an unsurprising result; no serious consequences. A vindication of everything our nation stands for.
A (seeming) century into the American campaign, where everything is (apparently) at stake, one comes to appreciate the pleasure in a good yawn. …
And Mr. Steyn has resumed his National Review column where he contemplates what the next few years might bring.
… As to his qualifications for remaking the world, my favorite moment of the campaign was when he got briefly touchy about having his minimal “qualifications” for the presidency compared with Sarah Palin’s. The senator huffily pointed out that he has too got executive experience. Unlike the governor, he’s never run a state or a town or a business, but, as he put it, for two years he’s been running a successful presidential campaign. In effect, Barack was acknowledging that his principal talent is for self-promotion. It requires some chutzpah to offer your skill at being Barack Obama as your main qualification for the job. The man who modified the title of Sammy Davis Jr.’s autobiography for his campaign motto — “Yes, we can!” — might have done better to cut straight to one of Sammy’s signature songs: “I’ve Gotta Be Me.” L’état, c’est moi.
These next four, eight (twelve? twenty?) years seem likely to be tough for us stilted cheerers. I doubt he’ll be lowering ocean levels. But, unlike King Canute, who at least arranged a useful demonstration to apprise the sycophants of his limitations in that respect, King Barack is in no hurry to disabuse his followers. So he’ll probably set up some cockamamie bureaucratic regulation designed hypothetically to lower ocean levels over the course of the next century or two. After all, there’s no point electing a megastar leader without mega-government to go along with him. You might think this is all profoundly unbecoming to a republic of free-born citizens. But these days that’s a concept you can barely raise a roomful of stilted cheers for.
Jeff Jacoby points out the basic problem with health insurance.
… During World War II, federal wage controls barred employers from raising their workers’ salaries, but said nothing about fringe benefits. So firms competing for employees at government-restricted wages began offering medical insurance to sweeten employment offers. Even sweeter was that employers could deduct those benefits as business expenses, yet employees didn’t have to report them as taxable income. For a while the IRS resisted that interpretation, but Congress eventually enshrined the tax-exempt status of employer-based medical insurance in law.
Result: a radical shift in the way Americans paid for medical care. With health benefits tax-free if they were employer-supplied, tens of millions of Americans were soon signing up for medical insurance through work. As tax rates rose, so did the incentive to keep expanding health benefits. No longer was medical insurance reserved for major expenditures like surgery or hospitalization. Americans who would never think of using auto insurance to cover tune-ups and oil changes grew accustomed to having their medical insurer pay for yearly physicals, prescriptions, and other routine expenses.
We thus ended up with a healthcare system in which the vast majority of bills are covered by a third party. With someone else picking up the tab, Americans got used to consuming medical care without regard to price or value. After all, if it was covered by insurance, why not go to the emergency room for a simple sore throat? Why not get the name-brand drug instead of a generic? …
Barack has campaigned about a shortage of scientists and engineers. John Tierney looks at the market and says. “What shortage.”
… The only “shortage” is of American-born scientists and engineers. But with so many talented foreigners competing for positions here in schools and laboratories, it’s entirely rational for American students to head into fields where their skills are in more demand — and harder to replace with foreign labor. Mr. Greenberg sums up their options nicely:
Consider the economic fates of two bright college graduates, Jane and Jill, both 22. Jane excels at a top law school, and after graduation three years later, is wooed and hired by a top law firm at the going rate–$125,000 a year, with a year-end bonus of $25,000 to $50,000.
Jill heads down the long trail to a PhD in physics, and after six Spartan years on graduate stipends rising to $20,000 a year, finally gets her degree. Tenure-track jobs appropriate to her rigorous training are scarce, but, more fortunate than her other classmates, she lands a good postdoc appointment–at $35,000 year, without health insurance or professional independence. Three years later, when attorney Jane is raking in $150,000 a year, plus bonuses, Jill is nail-biting over another postdoc appointment, with an unusually ample postdoc recompense of $45,000 per annum. Medicine and business management similarly trump science in earning power. …