Playing it Safe, Losing it All

Two facts worth highlighting from Drew Westen's controversial NY Times piece titled 'What Happened to Obama':

1. Obama published nothing (except his autobiography) during his twelve years as a faculty member at the University of Chicago
2. Before joining the Senate he voted 'present' (instead of 'yea' or 'nay') 130 times

What is one to make of this?

I won't speculate on Obama's not publishing anything in an academic journal, but one thing presidential candidates are often attacked on is their voting record. During a heated political campaign a candidate's previous legislative votes are scrutinized and picked over for any possible controversy (see John Kerry). As an astute observer of political history and campaigns, Barrack Obama would be well aware of this.

Was his voting 'present' strategy all about playing it safe and as Westen puts it "dodging difficult issues"? Or is there another explanation all together?

From Westen:

Perhaps those of us who were so enthralled with the magnificent story he told in “Dreams From My Father” appended a chapter at the end that wasn’t there — the chapter in which he resolves his identity and comes to know who he is and what he believes in.

One of the hallmark qualities of Barrack Hussein Obama's rise to the presidency has been his exceptional risk aversion. That strategy worked well in the campaign but is not serving President Obama or the country well at a time when bold, visionary political leadership is needed.

Like many, I've been scratching my head trying to put my finger on what it is about Obama that just doesn't seem right. And then I remembered a comment made by fashion designer Karl Lagerfeld when he was asked to describe himself: "I don't want to be real in other people's minds. I want to be an apparition."

I completely agree with Westen that right now the U.S. desperately needs the gregarious optimism and energy of a Franklin Delano Roosevelt or Teddy Roosevelt type personality in the White House, and not the Lagerfeld-esque 'complete improvisation' we seem to have at present.

I will never wholly forgive and forget the missed opportunity in 2009 to conduct a perhaps once-in-a-century overhaul of the global financial system, along with Obama's decision to reappoint many of the same people who led us into the crisis - Larry Summers, Tim Geithner, and Greenspan protege Ben Bernanke.

With the way things are going at Bank of America and the Eurozone we may soon get a second bite at the financial system overhaul apple. Fighting to keep Timothy Geithner on as Secretary of the Treasury doesn't exactly instil in one a sense of optimism, but there is still time for President Obama to do what is necessary to restore American optimism.

The Xinjiang 13 and Chinese Appeasement

A disturbing report from Bloomberg about several elite U.S. universities not standing up to Chinese suppression of academic research freedom and free speech:

They call themselves the “Xinjiang 13.” They have been denied permission to enter China, prohibited from flying on a Chinese airline and pressured to adopt China- friendly views. To return to China, two wrote statements disavowing support for the independence movement in Xinjiang province. 

They aren’t exiled Chinese dissidents. They are American scholars from universities, such as Georgetown and Massachusetts Institute of Technology, who have suffered a backlash from China unprecedented in academia since diplomatic relations resumed in 1979. Their offense was co-writing “Xinjiang: China’s Muslim Borderland,” a 484-page paperback published in 2004. 

“I wound up doing the stupidest thing, bringing all of the experts in the field into one room and having the Chinese take us all out,” said Justin Rudelson, a college friend of U.S. Treasury Secretary Timothy Geithner and former senior lecturer at Dartmouth College, who helped enlist contributors to the book and co-wrote one chapter.
The sanctions, which the scholars say were imposed by China’s security services, have hampered careers, personal relationships and American understanding of a large, mineral- rich province where China has suppressed separatist stirrings. Riots and attacks in Xinjiang in July left about 40 people dead.

In the race to embrace China's riches the leaders of elite U.S. academic institutions (who should know better) seem to have forgotten that China is run by a brutal, freedom-suppressing dictatorship. Yet Stanford, the University of Chicago, Duke and NYU have or are in the process of building branch campuses in mainland China. Have many of the U.S.'s best universities forgotten that history has not looked kindly on those who have cozied-up to regimes like China's current one?

The Xinjiang 13 incident also smacks of the same problem in academia which Oscar Winning Director Charles Ferguson documented in his must-watch film Inside Job. Has the academy not learned anything about the importance of professional ethics these past few years?

Full article on the Xinjiang 13 here.

Video: The Commanding Heights - the battle between government and the marketplace

No less relevant today than it was roughly ten years ago when it first premiered, below is Part 1 of the must watch video series The Commanding Heights. Globalization, Keynes vs. Hayek, the future capitalism -- it's all here. Especially recommended for those interested in intellectual history. You'll find the remainder of the episodes at PBS here.

Barry Eichengreen on What Could Replace the U.S. Dollar

Professor Eichengreen explains the current state of the world's reserve currencies and makes the argument for GDP-indexed bonds here.

Video: Raise the Debt Ceiling Rap

A little late to spot this one, but it's well done and will be relevant again in a few months time when the debt ceiling vote comes up again.

Germany Pushing Greece to Exit the Euro

From the front page of today's International Herald Tribune are rumblings from some of Germany's leading economic intellectuals that the time has come for Greece to exit the euro.

Gold Price: Full Steam Ahead to $2,000/oz.

Over a year ago, on May 6, 2010, this blog launched with a first post on the attractiveness of gold as an investment. On that day the price of gold was just under $1200/oz, and as it became clear that the Federal Reserve was about to embark on another large round of money printing, which later came to be known as QE2, I felt compelled to grab the keyboard and start typing (see articles tagged 'Gold' both here and on SeekingAlpha for further reference).

During this time it has been amusing to watch the professional punditry drone on about a  "gold bubble" and observe various blogger bets about how gold's run couldn't last. The biggest amusement of all, however, has been the disparaging remarks from those such as Berkshire Hathaway's Charlie Munger, who belongs to a group I've taken to calling the 'gold haters'.

Suggestions from credible policymakers, such as the World Bank's Robert Zoellick advocating a return to the gold standard, have lit a fire under the barbarous relic's price this past year. Today, with gold pressing above $1700, or nearly 50% higher in just over a year, I can't help but comment on how we've heard nary a peep of late from the anti-gold crowd.

Where to from here? As long as three key fundamental forces persist then the rise in the price of gold will continue unabated. Those forces are:

1. Low interest rates, a hallmark of the current program of financial repression, which is only just getting started and should extend for many years to come.
2. Continued central bank purchases of gold by countries such as South Korea, Thailand, Russia, etc.
3. More money printing, which we've seen in spades of late with Italian and Spanish bond buying, Bank of Japan and Swiss National Bank currency intervention, and the Fed's rumored QE3.

Continue reading the full article at SeekingAlpha here.

Podcast: Keynes vs. Hayek Debate at LSE

Here's the podcast.

Framing Keynes vs. Hayek is a bit simplistic and perhaps even somewhat counter productive. Of Keynes, Hayek wrote posthumously "he was the one really great men I ever knew, and for whom I had unbounded admiration". Keynes was no socialist, and there is much these two great thinkers agreed upon.

For more on this and the type of thinker it would be more appropriate to contrast with Hayek see here and here.

Video: Margin Call Movie Trailer

The Root of All Sovereign-Debt Crises (and How to Prevent Them)

A good read and interesting suggestion from Professor Amar Bhidé and Nobel Prize Winner Edmund S. Phelps on how to put a permanent end to sovereign debt crises.