Wrapping up the week
Palin came out swinging last night, and won the first part of the debate hands down. Some of her language about a “whole team of mavericks” was pretty laughable, but it was effective, and Biden had his work cut out for him to avoid losing the debate altogether. Ultimately he beat her in the post-debate polling, largely because the more the debate wore on, the more obvious it became just how scripted Palin was. Still, the debate was definitely a strategic win for her, in the sense that she avoided meltdown and ended any chances of her being removed from the ticket. (Indeed, the rumor that keeps on circulating is that Biden will the one who steps down; this is almost certainly disinformation, but then again, the VP candidate has yet to release his medical records, so it can’t be ruled out.)
Meanwhile the bailout bill has passed both Senate and House and is headed for the pen of the Decider even as I write this. After that, Paulson can start spending like there’s no tomorrow. And there may not be, since at least one school of thought says that the bailout could be the very thing that delivers the coup de grace to the economy, undermining the only thing propping up what’s left of the world financial order: the once mighty dollar. In which case, we officially become the butt of the joke of the gods, and Paulson and Bernanke will both spend the rest of their lives in prison, along with anyone else various torchlit mobs can round up.
But as to how likely a Shock Medicine Kills the Patient Scenario is . . we’ll just have to see. My instinct says that when you’re in a giant bubble, the last thing you do is inflate it still further. But the real problem is that economics is fraught with all the uncertainty of any open system, particularly when you get down to the system’s axioms (e.g., is a Keynesian approach even valid anymore?). Were the next great depression to begin tomorrow, everyone would have lots of reasons why, but no one could have predicted it with 100% surety. And if things turn around and cruise back to normal, same thing: lots of reasons will be handed out, but there’s no way anyone could have known for sure in advance. Some say that capitalism is an awesome thing; I prefer the word “precarious.” And getting ever more so.
