Headlines always try to cram a lot of information into a small number of words, but some Bloomberg headlines are in a class of their own.
Lululemon Sheer Yoga Pants Undetected Until Bend-Over Test
someone’s having fun
Sweaty Boxers Jostle War Horror, Native Americans in U.K.
The assault weapons ban
The assault weapons ban was stripped from the gun bill. The headlines say this is a victory for the NRA and a defeat for the Obama administration. I’m not so sure. Here are a pair of facts about an assault weapons ban:
It’s really popular. solid majority support it.
It’s a political non-starter. A very solid majority of both houses of Congress oppose it.
Neither of these facts is a secret. So why would the Obama administration push for an assault weapon ban? The Obama administration knows as well as any administration that politics is the art of the possible. Why spend political capital on a push that everybody knows won’t succeed?
Did the Obama administration just miscalculate the amount of support in congress? I don’t think it’s plausible.1 The whole way through, there was about zero chance that the Obama administration was going to sway more than a couple votes in Congress. Can you really believe that nobody in the Obama administration bothered to count the definite no votes?
There are a few other possibilities. Maybe the Obama administration was cornered. Maybe it felt pressured to fight on this one. Maybe it put in the effort knowing the end result. Or maybe it just felt like putting in the effort was the right thing to do, even though the effort was doomed. But … the Obama administration doesn’t generally burn political capital on lost causes.
I think the motivation is fairly simple. The administration forced the NRA to take a highly public stand on an issue that most people support. This pushes the NRA toward the partisan fringe and damages whatever bipartisan credibility it retains. It didn’t really cost the Obama administration much—but it cost the NRA a lot to oppose it. When the next election rolls around, that NRA endorsement is going to be a bit less coveted in Democratic primaries. And those moderate Democrats who are going to vote against the ban are going to have some explaining to do. Unwavering support for the NRA may be a political liability in 2014.
Or maybe it was just a distraction. Maybe universal background checks and penalties for straw purchasers was the goal and the assault rifle ban was proposed to draw the fire of the NRA. But I think it was a much more calculated move in a much longer game. What do you think?
Feel free to tell me if you disagree. Am I just rooting for the home team? ↩
It’s a political winner for Democrats if the Dems remember to campaign on the issue. Democrats have a loooooong history of forgetting about or fumbling issues that should be winners for them. And remember it’s a long way to November 2014. So it’s a good strategy, but only if they follow through, which being Democrats there’s an overwhelming likelihood that they won’t.
It is a slow day in a little Cyprus Village. The sun is beating down and the streets are deserted.
Times are tough, everybody is in debt, and everybody lives on credit. On this particular day, a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.
The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.
The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers’ Co-op takes the €100 note and runs to pay his drinks bill at the Taverna/Cabaret.
The Cabaret/Taverna owner passes the money to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit.
The prostitute then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.
The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.
At that moment the German traveller comes down the stairs, picks up the €100 note, says that the rooms are not satisfactory, “Your version of 4 star is not my version of 4 star”, pockets the money, and leaves town.
No one produced anything.
No one earned anything.
However, the whole village is now out of debt and looking to the future with a lot more optimism. And that, Ladies and Gentlemen, is how the bailout package will work
Findingcyprus.com (via FT). It’s meant as a joke, but this is essentially how most “bailouts” (including in the US in 2008-09) actually work. In fact in a wider sense it’s how monetary (or even fiscal) policy works in a downturn.
Note also that the 100EUR liquidity injection was used solely to reduce everyone’s “debt overhang” - it did nothing by itself to increase aggregate demand. But it set the stage for a recovery anyway. This is why the argument of folks like Krugman, to the effect that monetary (or even fiscal) policy is less effective in conditions of high leverage, is wrong. If everyone uses the new money to reduce debt, you may not see the effects immediately in higher demand but you do set the stage for recovery by cleaning up balance sheets.