Wednesday, November 23, 2011

Let the Games Begin

The Christmas shopping season is about to begin, and the executives at Wal-Mart, Target, Amazon, Best Buy, J.C. Penny, Sears, Macy’s, and hundreds of other big retailers are ready to offer us all bargains that are absolutely irresistible, even in these tough times. You won’t see this, or anything like it, in Moscow or Beijing or anywhere else. It’s the magic of free-market capitalism. Yes, it has its flaws, but no one in all recorded history has ever found a better system for distributing wealth. You offer customers a better deal, you win; you don’t, you lose. Over the next month, we’ll see a lot of deals, and we’ll vote with our wallets.

This year there’s a different spin: The customers are hurting, but the retailers are hurting, too. In a nearby mall (see my blog “Overmalled”) the latest casualty is Lowe’s. That closure follows the shuttering of Old Navy, Chili’s, TGI Friday’s, and Linens and Things. It’s only a matter of time before other stores in that unneeded mall throw in the towel. So there will be signs of desperation in the sale prices. Sony and Panasonic have already cut back TV production under withering competition from Korea, and the pressure will be on to slash TV inventories.

Some say the national sport is baseball; some say it’s football. I say it’s shopping, and my guess is that, recession or no, this will be a barnburner of a Christmas season. The retailers’ bottom lines may not look pretty (free shipping costs money), but their top lines will look fabulous.

Will a robust Christmas season kick-start the economy? It’s possible. Pessimism about the economic outlook is sky-high right now, and a jolt of good news might be just the tonic we need.

Saturday, November 12, 2011

They're B-a-a-a-ck!

After Vietnam, Americans thought that if there were any silver lining in that awful cloud, it was the fact that this country had learned a lesson, that never again would we be snookered into a foreign war where national defense was not an issue. North Vietnam was obviously never going to attack our homeland, so the hawks had to invent a domino theory that they sold to the public and three presidents. Well, we hoped, never again!

But the hawks, now rechristened as the neocons, never gave up, and after 9-11, the ducks were in a row for them. All they had to do was sell the public a story about weapons of mass destruction, and once again we went to war against a far-away country that posed no credible threat to the United States. Over a hundred thousand lives and a trillion dollars later, we are skulking out of Baghdad and Kabul. Some of us were hoping that this time we had truly learned our lesson.

But no. The neocons are at it again. This time they have seized on an ambiguous UN report to make their case for an attack on Iran or at least to green-light an Israeli attack. In this political season, the Republican presidential candidates are all peddling a muscular response to Iran’s nuclear program. All except Ron Paul, who doesn’t see why we should start a new war with any country that doesn’t credibly threaten the U.S., especially after the experience of the past decade. But Ron Paul isn’t going anywhere politically, so the question on this voter’s mind, as I survey the Republican field, is this: Which candidate is most likely to initiate a new war? Who is the least likely?

It isn’t as easy as it sounds. The American psyche doesn’t automatically embrace peaceniks. Few politicians will call the Iraq War a mistake, because to do so would dishonor the brave soldiers who were killed in that remote land. Politicians like Chuck Schumer grandstand by verbally attacking the Chinese. And the anti-Iran hysteria is phrased, not as a call to arms, but as a noble defense of little Israel, surrounded by hostile neighbors. The politicians of both parties know that Americans want their leaders to sound heroic in matters of national security. Of course, it all depends on how one defines national security.

Last night I watched, once again, The Americanization of Emily, a terrific movie scripted by Paddy Chayefsky. As you probably know, the hero (or anti-hero) is a Navy officer in WW2, played by James Garner. Garner’s objective is to skate through D-Day without getting killed, and in the course of the film he delivers a powerful argument for survival, a case for not celebrating heroism, because that only feeds the pro-war propagandists. Garner’s apologia for survivalism might have come right from Ron Paul, if Paul were as skilled as Paddy Chayefsky.

Anyway, the Republican primaries are worth watching as a gauge of the national pro- or anti-war fervor. To measure the temperature, watch the neocons. Watch for op-ed pieces by John Bolton, Douglas Feith, Paul Wolfowitz, Richard Perle, and of course Dick Cheney. Do not sell them short. The lessons of Iraq and Afghanistan are already fading.

Wednesday, November 02, 2011

Democracy and Catch-22

Europe has now captured the attention of the entire financial world. Here, the stock market soars one day, plummets the next, depending on the news from Greece or Spain or Italy. At the moment, the market is in plummet mode, as Italy’s 10-year bond yields have run up to over 6 percent.

The central problem in Europe is that the strong, mostly northern economies are unwilling to bail out the weaker, mostly southern members of the Eurozone unless these countries swallow some hard medicine, much of it involving tax-collection procedures and the size of their public sectors. In Greece, Prime Minister Papendreou said okay at first, then decided to put the question to the voters in a referendum. Most people expect the public to defeat austerity resoundingly, and that is the current crisis du jour.

Now, it is clear that Papendreou is putting austerity to the vote, not because he has an abiding love of democracy, but because he knows he is not strong enough to force his people to swallow the castor oil. Neither is Silvio Berlusconi, Prime Minister of Italy. So all a weak leader has to do is call for a referendum. Vox populi, right? The problem is, the public will vote, not for what is necessary to save the Eurozone, but for a continuation of what some call a Club Med culture.

That brings us to the Occupy Wall Street protests, in which the self-styled 99 percent want the other 1 percent to pay higher taxes. Well, of course they do, especially when half of them pay no income tax at all. If you put the issue to a vote, 80 percent would vote to raise taxes on 20 percent. President Obama knows this ("it's not politics, it's math") and is campaigning accordingly.

Democracy is a two-edged sword. That’s why the founders of our country designed a constitutional democracy, framed to prevent the 99 percent from ganging up on the 1 percent. But Thomas Jefferson and George Washington did not have to contend with polls, in which CNN and the New York Times and CBS tell us daily that 78 percent of the public believe such and such. With such precision, who needs elections?

The Occupy crowds, like the Greek voters, may not have the specialized knowledge needed to design a solution to a frustratingly complex problem. But they are loud, and in this political season their voices will be amplified by vote-hungry politicians. One hopes that there are enough sensible people out there to keep the world from sliding into a de facto pure democracy, because that way lies Catch-22 and chaos.