Ah, that's why I quit doing that
Posted by aogSaturday, 19 March 2005 at 03:15 TrackBack Ping URL

I made the mistake of picking up a physical copy of Newsweek magazine and was reminded by the first two article I read why I have largely abandoned Old Media.

The first was the Stephen Levy diatribe about the lack of “diversity” in the blogosphere. Instapundit’s already ripped it as it deserves but what I found most striking is that one of the key complainers (Halley Suitt) disproves the primary thesis of the article by stating that she broke in the top ranks by applying herself to the task1. So, even if one is a woman, one can still break in to the A-list through one’s own efforts? OK, so the problem is …? Of course, Levy does briefly mention the issue of the decentralized nature of the blogosphere, but misses the larger implication of that, which is that dominance is driven by individual choices. An Insta-lanche is nice, but it doesn’t bring in the consistent traffic unless there’s something worth going back to. Even more blinkeredly, Levy says that A-list bloggers should link to more diverse voices. Doesn’t Instapundit (for instance) do that on a regular basis with the Carnival links? A big, typical pile of Old Media cluelessness and insularity.

The other article was about the incredible shrinking dollar. Of course, as David Cohen cogently notes, “time spent thinking about exchange rates is time wasted”. Beyond that, however, hasn’t the conventional wisdom over the last few decades been that when the economy needs some turbo-boosting, a standard strategy is to talk down the exchange rate of one’s currency to boost exports and restrict imports? But now it’s the sign of a broken economy? When did that change — when the economy started to recover with President Bush still in office?

I should note, though, that the one letter to the editor I have ever had published (in The New Republic no less) was one mocking an article there for the previous conventional wisdom. Back then it was how the dollar falling against the yen would destroy Japan Inc. and rebuild the USA economy. I pointed out that, at the time, the yen had already dropped 40% with no noticeable effect, so just far would it have to drop in the future to make a difference? But now that kind of thing presages a economic collapse instead of a recovery.

1 And of course, being an Old Media column, no link was provided to her website! Here was a wonderful opportunity for Levy and Newsweek to promote a “diverse” voice and they couldn’t be bothered to waste the ink. That tells you how deep their committment really is.

Comments — Formatting by Textile
Clint Lovell Monday, 21 March 2005 at 19:56

I don’t want to sound like a monetarist or a moron to you people but…

The dollar is in trouble and it is something we have to pay attention to on an immediate crisis basis. After you’ve had a good laugh at my expense and grabbed your poison pen to tell me to tighten the tinfoil in my hat, I beg your indulgence, to wit:

1. The only solutions being considered to fix the Social Security Trust Fund insolvency issue are tax increases, very small benefit cuts, and more borrowings. No matter what combination the bozos on the Hill ultimately select, it can’t fix Social Security’s insolvency problems (trust me on this one, I’m a corporate bankruptcy consultant and know a thing or two about complex insolvency matters). Unlike the people on the Hill, the rest of the world has already figured out that American political rhetoric is no match for the laws of mathematics - especially when these laws are applied to Social Security. They know that we are headed down a slippery slope that will have to raise interest rates (continually for the foreseeable future) to support the to-be-funded additional borrowings and support the dollar. This is a vicious cycle that currency traders can’t possibly resist taking advantage of.

2. The Social Security Trust Fund insolvency matter is but a symptom of a much larger problem - the uncontrollable growth of mandatory federal spending as a percentile of the total federal budget. In 1964, mandatory spending was 26% of the total budget. In 1984 it had jumped to 42%. Last year it was over 54%. Economists can read the tea leaves on this as easily as factory workers and they do not see any leadership on our budgetary matters and no foreseeable way out of the mess being given serious consideration - just more of the same. This means that America’s national security is primarily threatened by itself and that fact is starting to be given weight as well in currency trading pricing models.

Oh, and if you are interested in how we can fix these problems please visit our corporate website and download one of the pending policy proposals on fixing Social Security without raising taxes, borrowing, or slashing benefits. Yes, it can be done but when you have politicians trying to do the equivalent of brain surgery you can expect a less than optimal outcome.

Annoying Old Guy Thursday, 24 March 2005 at 11:11

Although this seems to be spam, I’ll still note that our Social Security problems, while quite real as you describe here, are in fact quite mild compared to that of any of our current competitors, such as the EU or Japan. Moreover, despite the political resistance in the USA for reforming, at least it’s something a politician can propose here without riots in the street, as in France. Personally, I favor individual accounts and raising the retirement age, which from what I’ve read should take care of most of the problem.

End of Discussion