Economics

In common with the first presidential debate, I left tonight's televised spectacle in disgust after about 20 minutes. The Vice-Presidential debate entertained me somewhat more. There were two reasons for this.

1) Sarah Palin's bizarre personal style. I divine two possible explanation for her performance. Either she really does talk like that and she saw no reason to gussy up her elocution, or she spent some time with a DVD of Fargo cribbing from Frances McDormand's Oscar-winning riff on a woman from a small town in the Northern Districts of America. Either way she chose to exude that aura. "You betcha"? Winking at the camera? What a trainwreck, what a ridiculous person. Just going from her appearance at that debate (which she chose, and carefully!) can you imagine her pinch-hitting for McCain, across the table from Sarkozy or, God Forbid, Vladimir Putin (the bogeyman himself!)?

Of course the argument goes that she is actually a canny operator and that her attitude was carefully massaged, which I'm willing to believe. But the reverse is that she represented what the GOP thinks we want. That implied insult ought to be enough to send American voters running away from them at the polls, but who I am kidding. It horrified and entertained me, at any rate. I like to imagine that McCain's vice-presidential selection was controlled by John Waters--"Who will be the most tawdry and grotesque while still being at least a simulation of politics?"

2) Rum. Katy and I drank for the debate, which put a glow on it and made it enjoyable.

Tonight, though, I was bored and agitated by the rules of the debate, most prominently that the candidates were not allowed to engage one another. Just before I quit watching, McCain took an opportunity to lie about Barack Obama's tax plan, and then Brokaw refused to allow Barry to address the falsehood. It would have been against the rules, sure, but if that's the case then the rules sucked.

I also had a problem with both candidate's answer to the question about whether the economy was still going to be messed up even after the bail-out (no wait, we're calling it a rescue now). Both of them dodged. This is stupid. The economy is not going to be okay, even if the present crisis is averted, because the problem is systemic rather than temporary. We've had two major bubbles in the past ten years (remember the Dot-Coms?) because of how our economy is structured. It is designed to favor explosive growth and so it seeks to create opportunity for it even when none exists. Entirely speculative value is the result, as in the late 1990s; companies that did nothing to produce wealth were assigned illusory dollar values. More recently, the housing market increased trillions of dollars in value in spite of the fact that it had scarcely changed physically. Why did this value rise? Demand rose! Why was demand rising? Because the value was rising! Get in, cash in, take a loan to buy a house.

In hindsight it was clearly a bubble, but even the financial giants were taken in by it, sustaining and extending the bubble to make their buck, and now we're paying the price of exuberance. And of course it is going to hurt. Several trillion dollars in illusory value disappeared from the economy a year ago August, there is going to be an economic contraction in consequence. The lesson should be that we need to set up provisions to prevent such bubbles from ever occurring again, to design the economy for stability and steady growth rather than explosive expansion and dizzying contraction. But neither candidate indicated that he had especially learned this lesson.