It’s the big question. The weirdness of the current economic situation, however, makes it tough to answer. As Alan Blinder pointed out in the New York Times yesterday – in a rare moment of fair commentary on that page – the market may be crashing but the economy is doing fine. When the economy could be growing by around 3 percent this year, real estate booming and unemployment falling, it’s hard to see a huge political backlash in the wings. And yet the stock market crash inevitably freaks out many ordinary investors, especially those approaching retirement. Whom will they blame? It seems to me the logical object of blame are those executives who engaged in real corruption. The other justified blame-objects are those people who hyped the bubble, or presided over it (Greenspan, Clinton). My liberal friends think that the public will nevertheless blame Bush and the GOP. But why? It doesn’t matter, they claim. Bush is guilty by association – he’s a classic example of the crony capitalism that this burst bubble has helped expose. Besides, any business scandal will hurt the Republicans, almost by definition. Even David Brooks says the dearth of Republican domestic policy initiatives gives a key edge to the Democrats this fall. I guess all these people may be right. Maybe people are that irrational. It’s about as unfair a rap as the first Bush got, but look what happened to him. The alternative scenario goes something like this: the worst is probably over. The market may endure some more losses but is over-sold and will recover somewhat this fall. Consumers haven’t been spooked so far and they’ll hang in there. Bush will sign a tough, probably overly-tough, law to counter some of the abuses. Another terrorist strike will focus people again on the real menace. Democrats may overplay their hand by whipping up a dumb anti-business populism that will undo some of the good things Clinton achieved by aligning his party with wealth-creation in the 1990s. There’s the wild card of some unknown scandal, such as the one Chris Caldwell is worried about. But barring that, I’m not sure which scenario is more plausible. I’d put it at 50-50, which means the difference will be made by the political skill of both sides. Gephardt or Bush? Who would you pick?
IS OSAMA DEAD? This somewhat stunning essay from an Arab News staffer says so. The reasons given for the death of Islamism in the Arab world are also eye-opening. Could we be winning this propaganda war?
TWO NEARLY-PRIESTS: We’ve heard so much hyper-ventilation on the matter of gay and straight priests that I found Hanna Rosin’s account of two seminarians extremely insightful. It’s complicated. But what seems to me essential in the current Church is a frank and open discussion of homosexuality – in the priesthood and outside of it. But that discussion is what the older generation now running the hierarchy – dominated by heterosexual bishops who are digusted by homosexuality and closeted gay bishops who are terrified of it – canot entertain. This generation cannot muster even the vocabulary to discuss one of the gravest issues in the Church today. And if they can’t even talk about it, how can they resolve it? I think we just have to wait for this generation to die off. And pray that, by that time, the Church won’t be dead as well.
OKAY, I LIED: I can’t resist citing this piece by Donald Luskin from SmartMoney.com. Alas, it’s only available to subscribers, but someone sent me the full text. It compares this editorial from the New York Times about Coke’s laudable decision to count stock options as expenses in its income statement with the Times’ own practices. The Times huffed editorially:
With President Bush digging in his heels in defense of accounting tricks that hide the true cost of stock options, and Congress equivocating under intense corporate lobbying… [i]t is a bold commitment to reform, and one that, particularly given the meltdown in the stock market in recent days, the White House and Congress should take to heart.
There was no mention that the Times is, allegedly like president Bush, “digging in its heels” to avoid doing what it praises Coke for doing. But the impact on the Times’ bottom line is bigger than that on Coke’s. As Luskin shows,
Based on the pro forma disclosures buried reported deep in the footnotes to their financial statements, we see that reporting options expenses would have reduced reported net [New York Times Company] income by 7.6% on average from 1995 through 2001. By way of comparison, things go better with Coke. The Coca Cola Company’s reported net income would only have been reduced by 6.3% on average over the same period.
Moreover, the Times, in sharp contrast with its Rainesian populism, restricts these options to 900 elite managers out of over 12,000 employees. The Times’ defense is that its editorial and business departments are entirely separate and that hypocrisy is therefore not a valid charge. But doesn’t this smack of unbelievable media arrogance? Does the Times really believe that its writers and editors are so morally and ethically pristine that they are actually immune to any criticism based on the discrepancies between what the Times says and what it does? Actually, I think the Times does think that. And this arrogance is a major reason behind their accumulating lies, distortions and propaganda.
OKAY, I LIED II: John Ellis says he’d short the New York Times. The worst part of it is: The Times-gurus think their “ceaseless and moronic Bush-bashing” is brilliant journalism. And they cite their hand-picked Pulitzer judges as proof! The Mickster sees that front page double-barrelled piece on AOL-Time-Warner on Saturday as more Raines willy-waving. Weirdly, some of the gazillion emails telling me not to give up on the Times-bashing came from within the paper. Hmmmm.
MARY EBERSTADT, CALL YOUR OFFICE: Funny how a movie celebrating a 15-year old’s affairs with older women hasn’t yet evinced a squeak from the usual hysterics. The trouble for the social conservatives at the Weekly Standard and National Review is that the movie doesn’t really relate to their real agenda. If you can’t use pedophilia to resurrect ancient smears about gay people, why worry?
The Dish 