Chaos in Teheran

Pretty amazing footage from the BBC, here.

What is going to happen? While part of me wishes for chaos and collapse, this will likely not solve anything. The Obama Administration's job of dealing with Iran just got immensely more difficult.

I guess no matter how a people pat themselves on the back for their successful demonstration of democratic institutions, the specter of fraud and vote manipulation will always rear its head. Consider Florida 2000.

More footage from the AP:

Another view, reported in the NY Times News Blog holds that Moussavi's lead or strength in the polls was all an exercise in Western wishful thinking, that his support was principally among a narrow educated elite who tended to be much more approachable by Western media. Makes some considerable sense to me. This is another case in which we really need more "humint" when it comes to the Middle East, or anywhere else that American culture does not hold sway.

Or another explanation: "The regime use democratic tools (elections) as a means to show off its legitimacy. It does not believe at all to democracy. It says democracy is a Western and not Islamic value and in fact it fight all western values."

I find this all very hard to watch. I am a sentimental old democrat, I guess.

PIMCO's Common Sense

I never thought that PIMCO would vote for an inflationary Fed policy and monetizing long-term Treasury Debt. But Paul McCulley, in his "Global Central Bank Focus," has just done so, in a very perceptive and balanced speech to the Money Marketeers Club. McCulley points out the policy paradox we find ourselves in, with a need to greatly expand the nation's balance sheet through borrowing while the private economy is deleveraging with a vengeance. This has the Republicans and traditional conservatives predictably frothing at the mouth. The policy prescription also calls for vastly expanded temporary federal spending to fill the demand gap, again causing the GOP leadership to pull out what's left of their hair. As McCulley puts it, the Fed has placed itself at the service of fiscal policy, normally the province of the Congress.

He also deftly points out the difficulty of the Euro Zone, where the ECB has the power to conduct a unified monetary policy, but no unified political authority exists to exercise fiscal policy. As he puts it,

To be sure, the ECB (European Central Bank) has difficulty with the concept of QE [quantitative easing], in part because Euroland represents monetary union without political union and, thus, fiscal policy union. Put differently, if the ECB wants to be accommodative of more Keynesian fiscal policy stimulus, de facto monetizing it, what fiscal authority does the ECB call to cut the deal?

I thought this was great stuff. I have been a recent convert to reading Bill Gross, but I think I will start following Paul McCulley as well. We're all Keynesians now!

Anne Boleyn

One of my very favorite "ballads," in a rendition by Stanley Holloway: "With Her Head Tucked Underneath Her Arm."

Here are the words:

In the Tower of London, large as life,
The ghost of Ann Boleyn walks, they declare.
Poor Ann Boleyn was once King Henry's wife -
Until he made the Headsman bob her hair!
Ah yes! he did her wrong long years ago,
And she comes up at night to tell him so.

With her head tucked underneath her arm
She walks the Bloody Tower!
With her head tucked underneath her arm
At the Midnight hour -

She comes to haunt King Henry, she means giving him 'what for',
Gad Zooks, she's going to tell him off for having spilt her gore.
And just in case the Headsman wants to give her an encore
She has her head tucked underneath her arm!

With her head tucked underneath her arm
She walks the Bloody Tower!
With her head tucked underneath her arm
At the Midnight hour.

Along the draughty corridors for miles and miles she goes,
She often catches cold, poor thing, it's cold there when it blows,
And it's awfully awkward for the Queen to have to blow her nose
With her head tucked underneath her arm!

Sometimes gay King Henry gives a spread
For all his pals and gals - a ghostly crew.
The headsman carves the joint and cuts the bread,
Then in comes Ann Boleyn to 'queer' the 'do';
She holds her head up with a wild war whoop,
And Henry cries 'Don't drop it in the soup!'

With her head tucked underneath her arm
She walks the Bloody Tower!
With her head tucked underneath her arm
At the Midnight hour.

The sentries think that it's a football that she carries in,
And when they've had a few they shout 'Is Ars'nal going to win?'
They think it's Alec James, instead of poor old Ann Boleyn
With her head tucked underneath her arm!

With her head tucked underneath her arm
She walks the Bloody Tower!
With her head tucked underneath her arm
At the Midnight hour.

One night she caught King Henry, he was in the Canteen Bar.
Said he 'Are you Jane Seymour, Ann Boleyn or Cath'rine Parr?
For how the sweet san fairy ann do I know who you are
With your head tucked underneath your arm!'

Moderates Unite (cont'd)

I was searching madly earlier for support for the view with which I agree that are no backups for the propeller-heads, particularly the Props-in-Chief, Tim Geithner and Larry Summers. Well, Deborah Solomon in the WSJ has it nailed. While lack of staff is a problem throughout the Administration, it is especially tough on Treasury, which is bearing the brunt of the bailouts.

And Solomon's piece lays the blame on the difficulty vetting prospective candidates in light of the post-Daschle standards.

Moderates Unite

Again, I find that this morning David Brooks speaks to my sense of unease with the new administration's early moves. About all I can say for our President is that he is within the first 45 days. As I emailed to my friend Prince Charles of Birmingham yesterday, What choice do we have?

I am struck by Brooks' observation that, "The only thing more scary than Obama's experiment is the thought that it might fail and the political power will swing over to a Republican Party that is currently unfit to wield it." So we are kind of stuck, and the quandary Brooks and I (and no doubt many others) find themselves is that we have no home.

As I said to Birmingham Charlie yesterday, I am a lifelong Republican, but of the Rockefeller variety. Somewhere along the way, my party got hijacked by a bunch of ideological "whack-jobs" with whom I find I share no values whatsoever. I long for a return to a Hamiltonian view of government, with a Constitutional mission to "promote the general welfare," in such a way that all the people benefit.

I do agree that the need to save the economy should not necessarily sweep aside the addressing of important goals, such as health care and education reform. But fiscal discipline has always been part of the Hamiltonian credo.

My faith in our new President has not entirely dissipated. But I would like to see some backup to the propeller-heads that Obama has assembled. Geithner needs an Assistant Secretary for Tax Policy, for Debt Management, for Economic Policy, and I am sure other key posts. Neel Kashkari, a Paulson holdover, is still running TARP. How long does it take to sort out the Plum Book? Probably too many casualties to the no-lobbyist, no "tax cheats" Puritanism of the new guys. As the Washington Post reported many in Washington (and in Bedminster) feel that the problems of the markets and the economy are too complex to be left to Larry Summers and Tim Geithner.

So what's my course? I am tempted to fall back on the mantra of Julian of Norwich -- "All will be well; all will be well; and all manner of thinge will be well." But she was a Anchorite and lived in a box! What did she know about credit default swaps and CMOs?

The Fox and the Hedgehog

David Brooks' column this morning  put me in mind of Isaiah Berlin's famous essay, "The Hedgehog and the Fox." The title was based on a fragment from the Greek poet Archilochus about the nature of knowledge: The fox knows many things, but the hedgehog knows one big thing. There is naturally lots of disagreement abut the meaning of these words. Typically, the scholars might postulate that the fox for all his cunning is defeated by the hedgehog's one defense. Berlin goes on to suggest a quite different interpretation: Essentially, this describes the differences among human beings. On one side are those who think in terms of a single organizing principle giving meaning to all that they think and experience. On the other are those who pursue many ends and ideas, very possibly unrelated and contradictory, moving through their lives operating on many levels, without any compulsion to fit their experiences or thoughts into any overarching framework. The first group constitute the "hedgehogs," the second the "foxes." Berlin proceeds to relate this to the domain of aesthetics, classifying Dante as a hedgehog, Shakespeare as a fox, Pushkin a fox and Dostoevsky as the quintessential hedgehog. I don't need to follow the meat of his essay, which goes on to explore the appropriate place of Tolstoy.

My question of the moment is: Where am I in this great dichotomy. And the corollary (because I have such deep faith that Barack Obama is the right man at the right time to lead at this turning point in American, and perhaps Human history) is where is President Obama. I note from today's survey results that I am not alone in my confidence in the President. But where are we being led? If I have developed any philosophy over the years, it is pragmatism: If it works, use it, it has meaning; and if it ain't broke, don't fix it. Obama and his "propeller heads" may not have the answer, may not even know the question, but we have to wait until it plays out for at least a few bars. Too many are prepared to condemn policies and approaches out of ideological prejudgments. My tentative conclusion is that the President is the Fox-in-chief at this stage, and I believe that is the right place to be.

As for me, I too am a fox, but a pretty pitiful one. As I said last night, I believe the old saw: If you can keep your head when all about you men are losing theirs, then you probably don't understand the situation. 

The Second Coming

Reading Paul Krugman's column this morning, I was struck by the almost whispered reference to Yeats. I suddenly thought that perhaps we were at that terrifying point in the Yeatsian cycle of existence, where we will see the advent of the "rough beast." To many, the "rough beast" has already arrived – in the form of economic privation, paralyzing uncertainty and despair. In any event, it's worth recalling that prophetic ode today.

THE SECOND COMING

    Turning and turning in the widening gyre 
    The falcon cannot hear the falconer; 
    Things fall apart; the centre cannot hold; 
    Mere anarchy is loosed upon the world, 
    The blood-dimmed tide is loosed, and everywhere 
    The ceremony of innocence is drowned; 
    The best lack all conviction, while the worst 
    Are full of passionate intensity.

    Surely some revelation is at hand; 
    Surely the Second Coming is at hand. 
    The Second Coming! Hardly are those words out 
    When a vast image out of Spiritus Mundi 
    Troubles my sight: a waste of desert sand; 
    A shape with lion body and the head of a man, 
    A gaze blank and pitiless as the sun, 
    Is moving its slow thighs, while all about it 
    Wind shadows of the indignant desert birds. 
    The darkness drops again but now I know 
    That twenty centuries of stony sleep 
    Were vexed to nightmare by a rocking cradle, 
    And what rough beast, its hour come round at last, 
    Slouches towards Bethlehem to be born?