The convergence of our economic woes and the presidential election is producing some of the most creative and entertaining soundbites from those in the public eye. Sarah Silverman, always hilarious, campaigns here to help get out the bubby vote in Florida. She’s also the spokesperson for an impressive grassroots campaign called The Great Schlep to influence the Florida vote.
What a time we live in. The past few weeks have been fascinating, historic, scary, depressing, opportunity-laden, transformational and ominous all at the same time. The convergence of the economic meltdown with the presidential election is a one-two power punch combo. Since the two topics are virtually intertwined at this point, I think the handling of the economic situation will probably go a long way towards determining the outcome of the election, though that’s nothing particularly new. I’ve had a bunch of interesting conversations over the past week about the economy and felt like jotting down a few (sometimes disconnected) thoughts on it.
My dad forwarded me this article by William Chafe (a Duke prof) on the parallels between 1929 and today. I find it quite frightening. Similarities between the two eras are:
- Growth in salaries of workers fall way short of growth in executive pay (480x difference in current wage rates).
- Strong Wall Street growth fueled by only 10% in equity.
- No consumer savings, consumption growth on credit (living beyond our means).
- Employment decline causes tightening of credit beginning downward spiral.
There are multiple possible solutions to fixing any problem, but two high-level approaches are (1) pump a bunch of money into the economy to prop it up or (2) focus on the structural weaknesses in the overall system and fix them. The first approach is faster and easier, but might only be a short-term fix. The second is harder and more rigorous, but could set us up for the future. Of course, a combination of the two may also be best.
The article digs into the differences between McCain and Obama’s approaches, and to avoid making this post too partisan, I’ll let you read it yourself if its of interest. There are several other structural questions that have arose in recent conversations though, that I want to raise for discussion:
FDIC Insurance – The current FDIC insurance cap of $100,000 was set in 1980. Inflation-adjusted, $100,000 then is worth approx $250,000 today. By keeping the cap at $100,000, the program discourages saving and encourages investing. Since a predominant form of investing is in the stock market, the bond market or mutual funds, keeping this cap low serves the economy well and fuels growth at the expense of savings. I’d argue that growth under those circumstances is somewhat artificially produced.
SBA Governance – On the surface, the SBA is a great program that gives citizens the opportunity to be entrepreneurs and start business, something I support. From what I understand though, in recent years, the SBA has been judged by the number of loans issued, rather than the quality or credit-worthiness of those loans. This smells a little fishy to me given the current credit crunch and rate of default.
Tax-Free Housing Sales – Since 1997, Americans have enjoyed the benefit of claiming up to $500,000 in real estate appreciation tax-free on sale of a home, provided they’ve lived in the house for two of the past five years. First, this really benefits the wealthy, because the average home doesn’t cost anywhere near half a million dollars, let alone achieve that in appreciation. Second, this makes selling a home easier and more attractive, which encourages flipping and discourages stability. Third, since you can live in two separate homes for two years each, it encourages second home consumption. It also encourages borrowing, building and increase in housing supply. When the supply outstrips demand, we have problems.
Finally, on a political note, undecided voters keep telling me that Obama wants to spend, spend, spend. Yes, its true that Obama probably plans to spend more than McCain. I’d argue that much of that investment in domestic programs is long overdue. Regardless of one’s opinion on that issue though, what’s planned and what actually transpires during a presidential term are often very different things. To use the past eight years as an example, Bush certainly didn’t have a spend philosophy when he came into office. He brought a classical Regan Republican small government approach to Washington. But look what’s happened since he’s been there. We’ve spent more annually during his administration (inflation-adjusted), and incurred more debt, than during any administration in the country’s history. Now, he’s pressuring congress to approve a somewhat hastily assembled plan that would increase the cap on national debt from $10.6 trillion to $11.3. The morale of the story is that making poor, short-sited decisions costs far more in the long run than spending money intelligently today. This is as true in the startup world where I operate as it is in the national government. Given the circumstances our country finds itself in, every American should vote for the candidate he/she believes is best equipped to (1) represent our country on the international stage and (2) invest the necessary resources to setup a framework that will assemble the sharpest minds, open dialogue, explore and make the best decisions possible. That is the primary role of a president so let’s put everything else aside.
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It was a beautiful spring night at the Prospect Park Bandshell and my chance to see Bob Dylan, thanks to a tip-off earlier this summer to the advance sales password on Ticketmaster.com. A woman I met in line during the show summed it up best when she told me, “I don’t care how badly he sings, I’ll love the show no matter what.” I think she pretty much summarized how the majority of people there felt. Gersh had a great review and write-up of the show this morning on The Brooklyn Paper, and he appears to be more of a Dylan aficionado than me. There were definitely two Dylans in attendance last night. His new songs were upbeat and melodic. His older hits were sung hum-drum and monotone. I wondered if he intentionally made an effort to sing them differently, just to mix it up after 40 years. Based on the enthusiasm with which he performed the newer stuff, I find it hard to believe that “he can’t sing anymore” as Gersh and others explained. He can still sing, but chooses not to, not coincidentally on all the songs with which you want to sing along. This left me feeling frustrated, a frustration that I think I shared with many others there last night. Some of his hits were barely recognizable, were it not for the fans who forcibly sang along to the traditional melody, which he fought off tooth and nail. That same woman who I met in line also told me that “Dylan never gives his fans everything they want.” Apparently, he thrives on the push/pull relationship, perhaps a relic of his 60s and 70s coming of age years. Either way, I had a great time and it was a thrill to see Bob Dylan live. No matter how badly he sang, I would have had a great time. Unfortunately, the mess of garbage left by fans after the show (pictured here) was disappointing to me, particularly on a night that we all came to see an artist who stands for socially responsible action.
Someone forward me this today and it’s worth reading (and doing!)
New York Governor David Paterson has opened a phone line to determine
how much support there is for his directive to recognize same-sex
marriages from other states and countries. The call is simple and takes
about 5 seconds. Here’s all you have to do:
Here’s what happens:
Person on the Other End of the Phone: "Executive Chamber, may I help
You: "I want to voice my support for Governor Paterson’s same-sex
POTOEOTP: "OK, what’s your zip code?"
You: "11231 (or whatever it is)."
POTOEOTP: "OK, thanks, goodbye." —
Like most people I spoke to, I was moved by the news of Tim Russert’s death. I became an avid fan of Meet the Press, just within the past year, and began recording it religiously and looked forward to watching the episodes Sunday nights, especially as the political season blossomed. Tim Russert was the uncontested best political journalist of the day and probably the single-best television journalist on the air. I will truly miss his insight, commentary and unmatched ability to ask the difficult questions directly without mincing words.
Watching numerous shows and commentary about his life over the past few days, what strikes me as most unique about the man was his disposition and approach to work, life, family and faith. His preparation and commitment to journalistic excellence and being the very best at his profession are clear, but he did it with a casual, hearty and just fun thread weaved throughout the experience. He often referred to people affectionately as "brother", whether they were much older or much younger. He was masterful at delivering lines, often witty and clever, as his recent appearance on Conan O’brien showed. Despite his success, it was pretty clear that his family always came first and he spoke affectionately about his father, son and wife often. It turns out he was a deeply religious man as well, during a time in which religiosity has fallen out of favor. One of my favorite quotes from the coverage of his death was by Jon Meacham, who in a Newsweek article, described Russert’s personal appeal for him to debate Christopher Hitchens. "You gotta come down and defend the faith, Brother," Russert said. Meacham had an old rule that he would never debate Hitchens about anything as he
is one of the great intellects and wits of the age and there as no
chance he could ever win, so he protested. Russert won him over by saying "It’s the faith, Brother," he said. "I can’t do it—I’m the moderator. But it’ll be great."
I’m realizing that Tim Russert was an truly inspirational figure for me. He achieved greatness on so many levels that I value….in his profession, as a father, as a son, as a husband, as a friend. He was the leading journalist of our time and yet the topics he chose for his two books were his father and father/son relationships. And despite being a somewhat public personality, he achieved his greatness kinda quietly. That’s a rare accomplishment for anybody, but should be an inspiration for us all.
Below is a clip of Bruce’s personal tribute at the memorial service today and Luke Russert’s beautiful eulogy to his father….