Do You Know Your Enemy?

Green Day certainly does. This band has become one of the most important and lucid voices remaining in what used to be proudly known as rock music. Unfortunately, popular music has largely lost its bite and rock, its relevance. One of the biggest exceptions is the Berkeley band Green Day. Their previous album, American Idiot, was one of the most cogent rebukes of Bush-era doctrine and dogma in any form of popular artistic expression. Songs like "American Idiot" and "Holiday" were solid anthems of frustration and anger about the dominant culture in the US and the position of its youth within this disintegrating scheme.

Given this boldness and the band's courage to stand for something, it is no surprise that they now find themselves taking a stand against censorship. Wal-Mart refuses to sell Green Day's new CD, 21st Century Breakdown, without removing content that includes foul language and adult themes. So, the band said "No thanks." And still, despite its absence from the virtual and in-store shelves of the biggest music retailer in the world, Green Day's album debuted at number one on the charts. So far, the band has refused to compromise.

Green Day has achieved a significance and popularity that, I'm pretty sure, surprises even the members of the band themselves. Any artist with anything important enough to say to a broad audience should follow the band's example. There is a place in life for compromise. Truth, art, and integrity are not the place for this compromise.

Congratulations! You Sure Know How to Pick 'Em!

Just a quick note... The DJIA was up about 200 points today because for the first time in a long time a big bank made money. Wells Fargo says they will record something like a $3 billion profit. So pat yourself on the back for that $25 billion loan you gave them a few months back! Just as an exercise in stupidity, troll around the net and read some news items about this particular event. You will likely see several columnists and bloggers talking about what Wells Fargo is doing right. Well, they are just being a bank and doing bread and butter banking business--no astrophysicists from MIT concocting complex equations to value imaginary assets. Just loans, mortgages, refinancing, etc. So, somebody does what they're supposed to do and we are all ready to leap for joy? Is business that corrupt in this society?

Is it?

A Five Finger Discount

Pundits of late love to talk about our best dead economists: Adam Smith and John Maynard Keynes. The trouble is, nobody really seems to know what these guys actually said about macroeconomic behavior. Well, as someone who has read both Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations and Keynes’s The General Theory of Employment, Interest, and Money, I know what they did not say.

Essentially, the Obama administration says that they will ratchet up government spending to unprecedented levels to create jobs and prime the pump of consumer demand in the economy. This is basically like pushing Dad’s old Datsun pickup to get it started.

Stimulus opponents argue that the levels of spending will burden the economy with too much debt, the effect will not occur quickly enough to actually have any consequences in the larger economy, and so forth. This is basically saying that it won’t work and will leave our great-great grandchildren with massive debt.

The basic ideas as they are cited today are that Smith said that an invisible hand guides the economy to equilibrium. This is illustrated by the idea of a bubble. When investors begin to irrationally overvalue some asset (such as technology-based start up corporations), the market will self-correct and bring those values back to reality—the bubble bursts.

I don’t dispute this idea. I think a lot of what Smith said is still pertinent to where we find ourselves today. It is precisely because the markets self-correct that we find ourselves perched on the edge of a financial abyss. What Keynes later discovered is that in such extreme cases markets can overcorrect and suppress recovery to an equilibrium level. This happens because of very rational behavior by consumers and businesses in response to an extraordinary phenomenon.
So, as I see, as Keynes saw it, it isn’t entirely necessary to develop a spending package to prime the pump of economic activity. No, you just need to persuade 200 million of your friends not to horde money, delay plans, and proceed extra cautiously in all of their spending decisions. This will have the same effect

Larry Summers' Big Haul

Reuters reports that former Harvard president and current director of the National Economic Council Lawrence Summers was paid $5.2 million by a hedge fund. Summers is like Wolfowitz-lite; he's a Milton Friedman disciple who has no business trying to advise Pres. Obama in how to compensate for or possibly correct the financial mess people just like him have caused in the global economic environment.

Just because you have a conscience does not mean you are ethical.