December 2009

2009: Banner Year for Stocks:

The U.S. stock market is poised to end the year with a comeback of historic proportions, with the Dow Jones Industrial Average up 61% from its March nadir and 20% on the year…..

With one trading day remaining in 2009, the Dow is on track for its biggest annual gain since 2003, when it rose 25%. It finished Wednesday up 3.1 points, at 10548.51, a fresh peak for the year and the highest since October 2008.

See also:

Dow 30,000 : Zuccaro, 2008.

Dow 30,000: Sharma, 2008 (astrological finance).

Earlier estimates were overoptimistic, though Glassman wasn’t too far off:

Dow 100,000: Kadlec, 1999.

Dow 40,000 : Elias, 1999.

Dow 36,000 : Glassman, 2000.

In fairness, even the WSJ felt the need to insert a hedge:

But the history of such comebacks suggests the biggest gains may already be over, making it hard to expect a blockbuster 2010.


This year, next year, Santa Claus bring cargo. Trust me. Happy Holidays.

P.S.: Frum cargo cult. David denies involvement, just like he always does.


Even if an atheist Senator did it, I doubt that this would be regarded as civil. But these motherfuckers really believe in the power of prayer. They’re seriously trying to kill him.

I say that we treat them the way we’d treat a Muslim who tried to kill a U. S. Senator: first, waterboarding to get information about other members of the conspiracy, and then solitary confinement for the duration.

If you try to shoot someone with an unloaded gun, that’s attempted murder if you thought the gun was loaded. Because Coburn, Bachmann, Brownback, and Demint are delusional, they’re guilty of attempted murder. Murder by God.

An insanity plea is their only hope.

P.S. Robert Byrd, I mean, not Harry (1887-1966). I’m not in the Audubon Society, for Christ’s sake. They all look the same to me. (Corrected).

Don’t wait, do it now. Our work is cut out for us. We’re facing a healthcare reform crisis and immediate action is imperative!

(NOTE: This is a variant of a piece below. The two pieces diverged so far that I’m leaving both up.)

The Third Breakdown of Rationality

If there are two or more possible compromises, of which the one most favored by player 1 is not the one most favored by player 2; then to choose a sure-thing strategy is to be a sucker that capitulates entirely to the other side.

Nigel Howard, Paradoxes of Rationality, MIT, 1969, p. 181

Always explain to your adversary exactly what’s at stake, because that’s the only way that you can be sure that you understand things better than he does.

Confessions of Zeno, Italo Svevo (de Zoete translation, paraphrased by me), Vintage, 1930/1958, p.89.

You gotta know when to hold ’em, know when to fold ’em, know when to walk away, and know when to run

Kenny Rogers

“Shut up!”, he explained.

Ring Larder

Our friends have been explaining things to us ever so kindly during the last few days:  “Don’t let the best be the enemy of the good”, “politics is the art of the possible”, “politics is the art of compromise”, and just recently “We must obey he ethic of responsibility”.

Nigel Howard explains a different political principle: don’t be a sucker. Suppose that you’re planning an auction, and someone comes up and offers to save you the bother by giving you a lump sum for the lot. Should you take his offer? After all, it’s money in the hand, and if you go ahead and hold the auction you might not sell anything, or might not get good bids…. just take the offer. Right?

Wrong. If he’s a sharp guy, you’re better off with the auction. Furthermore, if you take his offer he’ll make similar offers every time, except that the offers will be successively worse, since he knows that you think auctions are a nuisance and that you don’t know how much your stuff is really worth.

This isn’t about purism vs. compromise, as many on both sides seem to think. In the end you’re going to get a compromise. This is about fighting for the best compromise.

But playing the game involves risk. In the example I just gave, over a run of auctions you’re going to come out ahead, but now and then it will happen that you would have been better off with the easy deal. If you play, sometimes you lose, but if you don’t play, in the end you lose more.

Democrats don’t want us to play. For at least the last twenty years, Democratic negotiations have been defined from the start as finding the middle, with the progressive positions surrendered even before bargaining begins. And now, one more time, we’re being advised to surrender before the game is played.

This leads to a second question: who are we bargaining with? Well, we’re not bargaining with the Republicans or the conservative Democrats — our representatives are in Congress to do that. We don’t have to figure out how to handle Joe Lieberman or Olympia Snowe or Ben Nelson or any of the other boodlers and rightwingers stinking up Congress. We’re bargaining with our own representatives in Congress, not the other side’s representatives.  And in practice this means that we’re bargaining with our representatives in Congress, the Democratic leadership, and Barack Obama (as represented by Rahm Emmanuel).

We obviously shouldn’t take bargaining tips from the people we’re bargaining with. Progressive bargaining with the Democratic Party has been stuck at the “Shut up!” level for a good long time, and Obama has not changed that.

Centrists are always assuring us that they’re really on our side but are continually forced to compromise by the political realities. This is not true, however. Centrists are committed to centrism — some for ideological reasons, some for corrupt reasons, and most for both reasons. Along with the Republicans we are one of their two main adversaries, and we shouldn’t be too sure that they’d side with us at crunch time. Beating us is one of their primary goals.

Democratic pros and Republican demagogues tend to speak of progressives and intellectuals as tiny, effete, inconsequential minorities, but that’s just bullying. Progressives comprise about 15-20% of the population, and their share of the actual voters is bigger than that. College graduates make up 28% of the population and post-graduate degree-holders 10%, and these two demographics are the most likely of all to vote. The Democrats can’t win without intellectuals and progressives, but they don’t want to give us much, and that’s why we are continually having these dog-and-pony-show debates about purism and realism and moral seriousness and the ethic of responsibility and so on.

This post hasn’t really been about the health care debate, but it applies. We should play the game to the end, and make our choices piecemeal as we go along. And remember — anything less than Medicare for all counts as a compromise.

*P.S. I am often regarded as advocating anti-intellectualism, but that’s not quite right. I do think that the preponderance of the educated in the Democratic Party has had some negative effects, and I think that intellectuals in politics make far too much of their own superior intelligence. But my main message is an inclusive one. I’m mostly just asking the intelligentsia to realize that they are People too, and inviting them to come on down to join the rest of the dispossessed peasantry. A lot of adjuncts and grad students are already here.

This is a mental experiment. Do not try it at home.

Suppose that the hundred members of the present U.S. Senate were trapped on a desert island with a man-eating dragon and only you could save them. In which order would you save them, and how many would you save before you decided to quit?

I’d save six right off and then think about the next eleven. After eighteen at the most, I’d just sit in my boat and watch the dragon movie.

NOTE:  Man-eating dragons define the word “man” in the old-fashioned male chauvinist way….. laydeez. Also, John Kerry just got himself kicked off the boat.

Matt Yglesias’s comments section has been a fratboy shithole for years, and all that time I’ve been suggesting that he monitor them. Apparently he finally listened to me, so I won’t need to be commenting there any more. Unfogged, Crooked Timber, Yglesias, The Valve…. only DeLong remains.

The Third  Breakdown of Rationality

If there are two or more possible compromises, of which the one most favored by player 1 is not the one most favored by player 2; then to choose a sure-thing strategy is to be a sucker that capitulates entirely to the other side.

Nigel Howard, Paradoxes of Rationality, MIT, 1969, p. 181

In discussion of healthcare negotiating strategies at Yglesias’s site, the whole “don’t let the best be the enemy of the good” / “politics is the art of the possible” / “politics is the art of compromise” meme  came up another god damn time.

Democrats and liberals have learned that lesson far too well, but they seem to have forgotten the other set of lessons: don’t make your final offer at the beginning of negotiations, and don’t let the other guy know how desperate you are to make a deal.

Politics is the art of compromise and the art of the possible, but it’s also the art of fighting for the best compromise and the best possible. Democrats never fight and Republicans also do, and for that reason Republicans can dominate with tiny majorities and Democrats lose with 60 Senators.

Gingrich lost a lot of fights on his way up, and he kept coming back. In other words, he was thinking of the future and had a long-term strategy. The Democrats don’t. It’s always “the best we can get right now”.

I’m always hearing Democratic wonks saying “We know we’re not going to get that, so why even talk about it?”  The fact is, you never know how a game will turn out until after the game has been played. You don’t know how much the other guy knows, and he’s not going to let you know what his weak spots are. Smart people who try to figure out the final score in advance are really dumb people. The little tastes of social science that they’ve had in school tend to make the wonk demographic think that they know what’s going on and how things will turn out, but they’re just fooling themselves.

I’ve been arguing for some time that the heavy influence of the highly educated on the Democratic Party has been harmful. One of the most harmful aspects of this domination is a trained incapacity at dealing with situations where where bargaining, bluffing, bullying, and and deception are required. I’ve never been in the business world, but from friends I have I understand that big-time negotiations are feints,  bluffs, and bullying all the way to the end, with the two parties fighting for every nickel and every dime right until the pens come out — not a gentlemanly search for a consensus fair to both parties. And that’s how the Republicans play.

P. S. My leftist friends explain to me that this is all silly, and that the Democrats are just corrupt. Yeah, a lot of the big-time Democrats are corrupt, and those Democrats certainly do know how to play hardball. But there are a lot of Democrats who aren’t in on the take,   and far too often they end up surrendering to the hard bargainers without even knowing what they’ve done. And one way the tough-minded realists befuddle these nice idealistic Democrats is by telling them, over and over again,  that politics is the art of the possible, but never cluing them in that anyone who chooses the sure-thing strategy is a sucker.

The Democrats have to learn to fight the Republicans, and we have to learn how to fight the Democrats.