I just saw Ralph Nader on Bloomberg television. He is critical of the bailout of Bear Stearns. To the extent that the major party candidates defend the bailout Ralph Nader is more serious intellectually than they are.
Looking at the minor parties, the Libertarian Party has a free market, limited government orientation but is dominated by vegetarians, nudists and those who favor animal rights.
Ralph Nader is right about the problem of special interests, but he does not fathom the underlying cause, which is big government. Nader supports the disease but complains about the symptom. He was excellent this evening with respect to the Bernanke Fed, but he lacks the intellectual foundation to consider that the Bernanke Fed does what the Fed does, and if he doesn't like it he needs to advocate reestablishing a fixed monetary standard. Rule by minority whine is ineffective.
Now let's look at the major party candidates. Hillary Clinton believes that the problem is lack of regulation and if there were only more regulation, then the bailout can be forgiven. Barack Obama's position is less clear, but I do not sense that he has a coherent strategy, and it certainly is not a free market one.
That leaves us with John McCain. Although Mr. McCain is beholden to the same special interest groups that inspire the bailout, he is not a vegetarian and he, at least in symbol, represents free market impulses. I suspect that the differences among McCain, Obama and Clinton with respect to subsidies to Wall Street are small. Nevertheless, Mr. McCain represents the most free market orientation. If Mr. Nader decided that our seven decade experiment of unlimited freedom to the banks to print money has failed, then he would have my support. Conversely, if the Libertarians would only grow up and focus on a few adult issues, they would have my support. Alas, I am left with Mr. McCain, who is the most logical candidate. In honor of this inspiration, I have sent Mr. McCain my $500 donation.
Saturday, March 29, 2008
Friday, March 28, 2008
David Horowitz Freedom Center Fundraiser March 27
I attended David Horowitz's Freedom Center fundraiser at the Yale Club in Manhattan last night. I was pleased to meet David for the first time (we have corresponded a few times via e-mail). The speaker, Dennis Prager, is wonderful. I was delighted to learn that Mr. Prager is an alumnus of Brooklyn College and have extended an invitation to him to visit one of my classes. The esteemed Candace de Russy was there and I was privileged to dine with several outstanding students from Fordham, Columbia and NYU who work with David Horowitz. Horowitz originally comes from Sunnyside, which is not far from my neighborhood of Long Island City/Astoria.
Thursday, March 27, 2008
Schnorrers' Day on Wall Street
"Hooray for Chair Bernanke
The economic explorer
'Did someone call him 'schnorrer''?
...
This fact I emphasize with stress,
I never print a dollar unless - Somebody's buying.
---Groucho Marx (Ben Bernanke), Animal Crackers
Groucho Marx was, of course singing about himself, Captain Spaulding, in Animal Crackers, but with a small modification or two the lines sing of Ben Bernanke. In case your Yiddish is rusty, "schnorrer" means beggar or sponger, according to Wikipedia. Is it fair that John Q. Public is subsidizing multi-million dollar Wall Street salaries for guys who can't figure out how to run a business?
Please review the entire song:
(All on Wall Street)
At last we are to meet him,
The famous Ben Bernanke.
From climates hot and cranky,
The Chairman has arrived.
Most heartily we'll greet him,
With plain and fancy cheering.
Until he's hard of hearing.
The Chairman has arrived.
At last - The Chairman has arrived.
(Butler)
Mr. Horatio W. Jamison, Field Secretary to Chair Bernanke.
(Jamison/Zeppo)
I represent the Chairman who insists on my informing you of these conditions under which he camps here. In one thing he is very strict, he wants his women young and picked and as for Wall Street bankers, he won't have any tramps here.
(All on Wall Street)
As for bankers he won't have any tramps here,
There must be no tramps.
(Jamison/Zeppo)
The bankers must all be very old,
The women warm, the champagne cold.
It's under these conditions that he camps here.
(Voice off Screen)
I'm announcing Chairman Ben Bernanke
(All on Wall Street)
He's announcing Ben Bernanke
Oh dear, he is coming,
At last he's here.
(Chair Bernanke)
Hello, I must be going,
I cannot stay, I came to say, I must be printing.
I'm glad I came, but just the same I must be going.
La La.
(Mrs. Rittenhouse/Margaret Dumont)
For my sake you must stay.
If you should go away,
You'd spoil this party I am throwing.
(Chair Bernanke)
I'll stay a week or two,
I'll stay the summer through,
But I am telling you,
I must be printing.
(All on Wall Street)
Before you print,
Will you oblige us,
And tell us of your deeds so glowing?
(Bernanke)
I'll print as much as you say,
In fact I'll even stay!
I'll print dollars far and away!
(All on Wall Street)
Good!
(Bernanke)
But I must be going.
I must be printing.
(Jamison/Zeppo)
There's something that I'd like to say,
That he's too modest to relay.
The Chairman is a moral man.
Sometimes he finds it trying
To be printing and printing.
(Bernanke)
This fact I emphasize with stress,
I never print a buck unless - Somebody's buying.
I never print a buck unless - Somebody's paying.
(All on Wall Street)
The Chairman is a very moral man.
(Jamison/Zeppo)
If he hears of a high interest rate, He'll naturally repel it.
(Bernanke)
I hate a high interest rate I do.
(All on Wall Street)
The Chairman is a very moral man.
Hooray for Chair Bernanke, The economic explorer.
(Chair Bernanke)
Did someone call me Shnorrer?
(All on Wall Street)
Hooray, Hooray, Hooray.
(Jamison/Zeppo)
He went onto Wall Street where all the bankers pocket bucks.
(Chair Bernanke)
If I stay here I'll go nuts.
(All on Wall Street)
Hooray, Hooray, Hooray.
He put all his reliance, In courage and defiance,
And risked his life for economic science.
(Chair Bernanke)
Hey, hey.
(Mrs. Rittenhouse/Margaret Dumont)
You are the only Chairman to print money over every acre.
(Chair Bernanke)
I think I'll try and make her.
(All on Wall Street)
Hooray, Hooray, Hooray.
He put all his reliance, In courage and defiance,
And risked his life for economic science.
(Chair Bernanke)
Hey, hey.
(All on Wall Street)
Hooray for Chair Bernanke, The economic explorer.
He brought his name undying fame
And that is why we say, Hooray, Hooray, Hooray.
(Chair Bernanke attempts to speak)
My friends, I am highly gratified at this magnificent display of effusion and I want
you to know.........
(All on Wall Street)
Hooray for Bernanke, The economic explorer.
He brought his name undying fame
And that is why we say, Hooray, Hooray, Hooray.
(Chair Bernanke)
My friends, I am highly gratified at this magnificent display of effusion and I want
you to know.........
Hooray for Ben Bernanke, Wall Street's hero.....
Well, somebody's got to do it!
Hooray, hooray, hooray.
The economic explorer
'Did someone call him 'schnorrer''?
...
This fact I emphasize with stress,
I never print a dollar unless - Somebody's buying.
---Groucho Marx (Ben Bernanke), Animal Crackers
Groucho Marx was, of course singing about himself, Captain Spaulding, in Animal Crackers, but with a small modification or two the lines sing of Ben Bernanke. In case your Yiddish is rusty, "schnorrer" means beggar or sponger, according to Wikipedia. Is it fair that John Q. Public is subsidizing multi-million dollar Wall Street salaries for guys who can't figure out how to run a business?
Please review the entire song:
(All on Wall Street)
At last we are to meet him,
The famous Ben Bernanke.
From climates hot and cranky,
The Chairman has arrived.
Most heartily we'll greet him,
With plain and fancy cheering.
Until he's hard of hearing.
The Chairman has arrived.
At last - The Chairman has arrived.
(Butler)
Mr. Horatio W. Jamison, Field Secretary to Chair Bernanke.
(Jamison/Zeppo)
I represent the Chairman who insists on my informing you of these conditions under which he camps here. In one thing he is very strict, he wants his women young and picked and as for Wall Street bankers, he won't have any tramps here.
(All on Wall Street)
As for bankers he won't have any tramps here,
There must be no tramps.
(Jamison/Zeppo)
The bankers must all be very old,
The women warm, the champagne cold.
It's under these conditions that he camps here.
(Voice off Screen)
I'm announcing Chairman Ben Bernanke
(All on Wall Street)
He's announcing Ben Bernanke
Oh dear, he is coming,
At last he's here.
(Chair Bernanke)
Hello, I must be going,
I cannot stay, I came to say, I must be printing.
I'm glad I came, but just the same I must be going.
La La.
(Mrs. Rittenhouse/Margaret Dumont)
For my sake you must stay.
If you should go away,
You'd spoil this party I am throwing.
(Chair Bernanke)
I'll stay a week or two,
I'll stay the summer through,
But I am telling you,
I must be printing.
(All on Wall Street)
Before you print,
Will you oblige us,
And tell us of your deeds so glowing?
(Bernanke)
I'll print as much as you say,
In fact I'll even stay!
I'll print dollars far and away!
(All on Wall Street)
Good!
(Bernanke)
But I must be going.
I must be printing.
(Jamison/Zeppo)
There's something that I'd like to say,
That he's too modest to relay.
The Chairman is a moral man.
Sometimes he finds it trying
To be printing and printing.
(Bernanke)
This fact I emphasize with stress,
I never print a buck unless - Somebody's buying.
I never print a buck unless - Somebody's paying.
(All on Wall Street)
The Chairman is a very moral man.
(Jamison/Zeppo)
If he hears of a high interest rate, He'll naturally repel it.
(Bernanke)
I hate a high interest rate I do.
(All on Wall Street)
The Chairman is a very moral man.
Hooray for Chair Bernanke, The economic explorer.
(Chair Bernanke)
Did someone call me Shnorrer?
(All on Wall Street)
Hooray, Hooray, Hooray.
(Jamison/Zeppo)
He went onto Wall Street where all the bankers pocket bucks.
(Chair Bernanke)
If I stay here I'll go nuts.
(All on Wall Street)
Hooray, Hooray, Hooray.
He put all his reliance, In courage and defiance,
And risked his life for economic science.
(Chair Bernanke)
Hey, hey.
(Mrs. Rittenhouse/Margaret Dumont)
You are the only Chairman to print money over every acre.
(Chair Bernanke)
I think I'll try and make her.
(All on Wall Street)
Hooray, Hooray, Hooray.
He put all his reliance, In courage and defiance,
And risked his life for economic science.
(Chair Bernanke)
Hey, hey.
(All on Wall Street)
Hooray for Chair Bernanke, The economic explorer.
He brought his name undying fame
And that is why we say, Hooray, Hooray, Hooray.
(Chair Bernanke attempts to speak)
My friends, I am highly gratified at this magnificent display of effusion and I want
you to know.........
(All on Wall Street)
Hooray for Bernanke, The economic explorer.
He brought his name undying fame
And that is why we say, Hooray, Hooray, Hooray.
(Chair Bernanke)
My friends, I am highly gratified at this magnificent display of effusion and I want
you to know.........
Hooray for Ben Bernanke, Wall Street's hero.....
Well, somebody's got to do it!
Hooray, hooray, hooray.
Progressivism, Bureaucracy and the Limits of Government
In Search for Order 1877-1920 Robert Wiebe* argues that a bureaucratic philosophy emanated from the Populism; late 19th century Utopian visions of Henry George and Edward Bellamy; the social Gospel of Reverend Washington Gladden; the Utopian new order of Henry Demarest Lloyd; and the evolutionary historicism of Lester F. Ward (who argued that economic history followed four stages) and Richard T. Ely (who argued that history followed seven stages). The bureaucratic philosophy was not, in Wiebe's view, well-formulated. It combined elements of scientific management with pragmatism and an early version of Progressivism (Wiebe, p. 145):
"The ideas that filtered through and eventually took the fort were bureaucratic ones particularly suited to the fluidity and impersonality of an urban-industrial world. They pictured a society of ceaselessly interacting members and concentrated upon adjustments from within it...the rules, resembling orientations much more than laws, stressed techniques of constant watchfulness and mechanisms of continuous management...Bureaucratic thought made science practically synonymous with 'scientific method'. Science had become a procedure, or an orientation, rather than a body of results...The new ideas concerned what men were doing and how they did it. As Arthur Bentley said, the individual was meaningless as a unit for investigation: only men's social behavior deserved analysis...
"...The sanguine followers of the bureaucratic way constructed their world on a comfortable set of assumption. While they shaded many of the old moral absolutes, they still thought in terms of normal and abnormal
"...Endless talk of order and efficiency, endless analogies between society and well-oiled machinery, never in themselves supplied an answer. Instead of careful definitions, they offered only tendencies...One explained process through human consent and human welfare. The second construed process in terms of economy: regulate society's movements to produce maximum returns for minimum outlay of time and effort...Touching almost every area, this view appealed particularly to business, labor and agricultural organizations
(p.160)"the new political theory (progressivism) borrowed its most revolutionary qualities from bureaucratic thought, and the heart of these was continuity...Trained professional servants would staff a government broadly and continuously involved in society's operations...Above them stood the public man, a unique and indispensable leader. Although learned enough to comprehend the details of a modern, specialized government, he was much more than an expert among experts. His vision encompassed the entire nation...As the nation's leader the public man would be an educator-extraordinary. He bore the greatest responsibility for raising mass intelligence to the level of true public opinion. That, as Franklin Giddings explained, 'is rational like-mindedness...'
"...(p.161) the theory was immediately and persistently attacked as undemocratic, an accusation that never ceased to sting its defenders...the theory also presupposed an ethereal communion between leaders and citizens. As all citizens became rational they would naturally arrive at the same general answers...national rationality would assure consensus on big issues..."
What a brilliant 20 pages from Professor Wiebe. But here's the rub. The bureaucratic model as Wiebe construes it utterly misconstrues the cognitive limits of rationality. Processes of production require a degree of flexibility that is far greater than governmental processes permit. The degree is greater by orders of magnitude. There is no such thing as a priori rationality in real world produciton processes. Rationality is ONLY derived from continuous application of thought to specific processes. No one could arrive at a solution a priori. This is true with respect to production systems, which according to total quality management and continuous improvement require ever more refined adjustment that is only possible by operators with knowledge on the spot. It is true with respect to retail sales people who must make on-the-spot decisions to accommodate customers. It is true with respect to teachers who see that a given approach to education is not working with their students and need to adjust the approach. It is true with respect to Theodore Dalrymple, who observes that welfare policies established by central authority decimate low-income Britain but is powerless to change them. Bureaucratic thought overestimated the importance of statistical and theoretical, i.e., "scientific", knowledge to production processes, and it vastly underestimated the sensitivity of production processes to on-the-spot information. But on-the-spot information is not conducive to a unitary rational solution; a Volkish meeting of the minds between ruler and ruled; or a solution by bureaucratic experts.
*Robert H. Wiebe, The Search for Order 1877-1920. New York: Hill and Wang, 1967.
"The ideas that filtered through and eventually took the fort were bureaucratic ones particularly suited to the fluidity and impersonality of an urban-industrial world. They pictured a society of ceaselessly interacting members and concentrated upon adjustments from within it...the rules, resembling orientations much more than laws, stressed techniques of constant watchfulness and mechanisms of continuous management...Bureaucratic thought made science practically synonymous with 'scientific method'. Science had become a procedure, or an orientation, rather than a body of results...The new ideas concerned what men were doing and how they did it. As Arthur Bentley said, the individual was meaningless as a unit for investigation: only men's social behavior deserved analysis...
"...The sanguine followers of the bureaucratic way constructed their world on a comfortable set of assumption. While they shaded many of the old moral absolutes, they still thought in terms of normal and abnormal
"...Endless talk of order and efficiency, endless analogies between society and well-oiled machinery, never in themselves supplied an answer. Instead of careful definitions, they offered only tendencies...One explained process through human consent and human welfare. The second construed process in terms of economy: regulate society's movements to produce maximum returns for minimum outlay of time and effort...Touching almost every area, this view appealed particularly to business, labor and agricultural organizations
(p.160)"the new political theory (progressivism) borrowed its most revolutionary qualities from bureaucratic thought, and the heart of these was continuity...Trained professional servants would staff a government broadly and continuously involved in society's operations...Above them stood the public man, a unique and indispensable leader. Although learned enough to comprehend the details of a modern, specialized government, he was much more than an expert among experts. His vision encompassed the entire nation...As the nation's leader the public man would be an educator-extraordinary. He bore the greatest responsibility for raising mass intelligence to the level of true public opinion. That, as Franklin Giddings explained, 'is rational like-mindedness...'
"...(p.161) the theory was immediately and persistently attacked as undemocratic, an accusation that never ceased to sting its defenders...the theory also presupposed an ethereal communion between leaders and citizens. As all citizens became rational they would naturally arrive at the same general answers...national rationality would assure consensus on big issues..."
What a brilliant 20 pages from Professor Wiebe. But here's the rub. The bureaucratic model as Wiebe construes it utterly misconstrues the cognitive limits of rationality. Processes of production require a degree of flexibility that is far greater than governmental processes permit. The degree is greater by orders of magnitude. There is no such thing as a priori rationality in real world produciton processes. Rationality is ONLY derived from continuous application of thought to specific processes. No one could arrive at a solution a priori. This is true with respect to production systems, which according to total quality management and continuous improvement require ever more refined adjustment that is only possible by operators with knowledge on the spot. It is true with respect to retail sales people who must make on-the-spot decisions to accommodate customers. It is true with respect to teachers who see that a given approach to education is not working with their students and need to adjust the approach. It is true with respect to Theodore Dalrymple, who observes that welfare policies established by central authority decimate low-income Britain but is powerless to change them. Bureaucratic thought overestimated the importance of statistical and theoretical, i.e., "scientific", knowledge to production processes, and it vastly underestimated the sensitivity of production processes to on-the-spot information. But on-the-spot information is not conducive to a unitary rational solution; a Volkish meeting of the minds between ruler and ruled; or a solution by bureaucratic experts.
*Robert H. Wiebe, The Search for Order 1877-1920. New York: Hill and Wang, 1967.
Subscribe to:
Posts (Atom)
