Thinking about politics

Really thinking, not playing along with the team.



Individual videos of independents and Republicans explaining why they plan to vote for Obama are here.

Pastrami update

The brisket sat in the pickling brine for three days. (A few hours short of the whole 72, actually, but who's counting?) And this evening I dusted it with toasted, freshly ground black pepper and coriander and moved it into the smoker pit.


Because it's supposed to smoke very slowly (Ruhlman and Polcyn write that usually, pastrami is cold smoked before it's finished in a hot smoke environment), I set a pan of ice in the pit with the meat. You can see that even after the 10 minutes or so it took me to get the photo, the ice has begun to discolor from the smoke.

As I write this, the ice is gone and the meat is getting warmer. Currently it's cooking at about 275 F.

I'll have pastrami before bed time.

Travelling show again and again and...

My magnet painting on the flank of a Toyota Tundra in Greenville, TX. Photo courtesy of Josie.

Two thirds of the economy

Consumer spending represents two thirds of US economic activity. Reuters reports today that the US Commerce Department's estimation of the economy shows we the people tightened our belts considerably in the past quarter:

Consumer spending, which fuels two-thirds of U.S. economic growth, fell at a 3.1 percent rate in the third quarter -- the first cut in quarterly spending since the closing quarter of 1991 and the biggest since the second quarter of 1980. Spending on nondurable goods -- items like food and paper products -- dropped at the sharpest rate since late 1950.

We're eating fewer pork chops and more beans, it seems. As to that new Ford F-150 pickup Bubba wants to buy, well:

Consumers cut spending on durable goods like cars and furniture at a 14.1 percent annual rate in the third quarter, the biggest cut in this category of spending since the beginning of 1987. Car dealers have said that sales have virtually stalled, in part because tight credit makes it hard for even creditworthy buyers to get loans.

A friend of mine owns a car dealership here, and I'm afraid to ask him about his business. A downturn in a business sector of a magnitude not seen in over 20 years can not be ignored. Tightened credit (an artifact of the general financial malaise in the wake of years of unregulated trades in improperly valued financial instruments) is only part of the issue here.

Continuing job losses coupled with declines in the value of stocks, other investments and housing prices have put consumers under severe stress. The GDP report showed that disposable personal income dropped at an 8.7 percent rate in the third quarter -- the steepest since quarterly records on this component were started in 1947...

This is a prima facie case for supporting and expanding the middle class. The US economy is structured upon a foundation of middle class spending. Losing 8.7% of our buying power screws even the rich.

This is why I support Obama's tax plan.

Coupla financial blogs

I've referenced Barry Ritholz's finance blog here a few times, and though a bit more technical than I can easily digest at times, it is a good source of reasoned, non-ideological information about our current meltdown.

Tonight, for the first time, I visited James Surowiecki's blog at the New Yorker online. The guy's good. His print columns are better, of course, but he offers a fresh and sometimes very personal take on developments in the economy. This entry from today poses an interesting move in Social Security, for example:

A couple of weeks ago, economist Brad DeLong suggested (at least semi-seriously, I think) that now might be a good time to “take the Social Security Trust Fund balance out of Treasuries and move it into equities.” As he put it, “Buy low, sell high after all. Just saying…”

This idea was proposed by the Clinton Administration, but didn’t get much traction, in part because Alan Greenspan opposed it for what, in retrospect, looks like largely ideological reasons, namely his disbelief that the government could own U.S. equities without interfering with corporate behavior. This isn’t entirely a red herring, but it’s hardly an insuperable obstacle, either. And given the massive government interventions we’ve seen in the past few months, having the government invest in index funds hardly seems like some intolerable transgression of free-market principles, either. (That’s not even to mention the fact that the sovereign wealth funds of myriad foreign governments have already bought major stakes in American companies, without any obvious disastrous effects.)

Given the market’s current turmoil, it is, of course, unlikely that you’re going to be able to convince members of Congress that now is the time to “gamble” our retirees’ future in the market. But any reasonable expected-value calculation would have to say that it would be sensible to put at least part of the fund into equities. The current yield on a five-year government note is just 2.5 per cent, while the dividend yield alone on the S. & P. 500 is well above three per cent. So even if the stock market goes nowhere for five years and companies keep their dividends flat over that time period (both of which are incredibly unlikely), the trust fund would still come out ahead. And in the more likely scenario, which is that the stock market eventually rebounds from these lows and reverts to its typical performance, the trust fund would come out way ahead. Some may have taken DeLong’s idea as a Swiftian modest proposal, but it’s sounding more sensible every day.

Not that it's ever going to happen. And I suppose in the long run it shouldn't happen. Imagine the effects of a multi-trillion dollar buying spree in a market as volatile as the current one.

Geezer test

Essay portion:


Generation WE: The Movement Begins... from Generation We on Vimeo.



Compare and contrast.(25 points)

Extra credit:



We had our chance. What did we make of it? (10 points)

Pastrami

My family will gather at my house Sunday. I'm making pastrami for them, using the recipe in Brian Polcyn and Michael Ruhlman's book Charcuterie. Currently, I have a beef brisket in a pickling brine in the refrigerator. It's been there for about a day. Two more to go. After three days of brining, it'll get patted dry and rubbed with black pepper and coriander. Then comes the smoke.

Tonight it looks like this:


The brisket started out at five pounds, but the salt and sugar in the brine will draw some moisture (and therefore weight) out during the meat's time in its bath. I imagine I'll end up with about four pounds of pastrami.