Sorry I blew yesterday’s Jeremy Grantham link, now fixed.


Pass this on to your (mostly older) friends and relatives who are uncomfortable at the thought of granting civil marriage to same sex couples. It could melt their hearts. (Anybody have Miss California’s email?)


Arlen Long:Yesterday, you pointed us to ‘Four reforms for a better legislature.’ One of the reforms was fair districts ( It seems that our whole country would benefit from fair districts. I figure it would significantly reduce the excessive partisanship (“As a Congressman, I must vote for only whatever side I am on because my district is comprised only of that kind of people”) and might even bring back what used to be a representative democracy (“I must look out for both sides, because my district has people in it of differing views.”) Just as CA led the country into environmental discussions, perhaps FL will lead in the country into election fairness discussions. The current 10-year redistricting (gerrymandering) events (in Texas: anytime events) are outrageous. I am looking forward to the time when the idea becomes interesting enough that a reporter mentions it at one of the White House daily briefings.”


Yesterday I asked: If False Hope Is Self-Fulfilling IS It False? It certainly wasn’t in 1981, when Ronald Reagan rode into office. Back then interest rates were 15%, inflation 18%, and unemployment in double digits as well. Anyone who understood the situation knew (or at least I thought I knew) it was hopeless. If the Fed tightened money and credit to fight inflation, unemployment would soar still higher. If it eased money and credit, inflation would go through the roof. Disaster either way.

“Don’t worry! Be happy! It’ll be fine.” said our new President (more or less). And people – not fully understanding the box we were in – calmed down and started acting as though things would be okay . . . and that helped make things okay. (Ample doses of tax cuts and deficit spending helped prime the pump.)

Now comes a new President who radiates competence and calm, making clear that we’ll do what we need to to get the job done (which I believe we will) . . . telling the truth, no less (things will get worse before they get better; not everything we try will work) . . . and it is having a positive impact, as it should. The difference is that when Reagan took over, the National Debt was 30% of GDP, so he had plenty of room to take on more debt. As Obama takes over, the debt is more like 90% of GDP, so the situation is more precarious. It’s not a matter simply of weathering a bad recession and then going back to business as usual. We need to transform our economy into something leaner, more efficient, more competitive, more sustainable; saving and producing more, consuming less. It will make us more prosperous than ever – but not before we go through some pretty wrenching, extended readjustments.

How the stock market gyrates along the way . . . well, as noted yesterday, smart people disagree.


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