A recent foxnews.com poll:

It’s kind of scary. Foxnews has infected its audience with an astoundingly myopic view of the world. These viewers are utterly incapable of having any sort of reasonably informed intellectual discussion about anything. Everything is simply Obama’s fault. Everything he says is a lie. He’s just a dirty socialist hell bent on destroying the country. He’s trying to hoodwink us all.

It’s amazing. The President is agreeing to some $4 trillion in budget cuts, and yet foxnews.com viewers STILL think he’s fear mongering in order to get his way. If that’s the case, then what is “his way”? Getting the long term budget in control by making some cuts and raising some taxes?? Is that so unreasonable? Is it such a crime to close private-jet-tax-loopholes and let the Bush-era upper-echelon tax breaks expire? Must he instill the fear of economic calamity before republicans will give an inch? And if so, then what does that say about republicans? Are they so obnoxiously stubborn that they’ll refuse everything the President offers so they can stick to their ridiculous pledge not to raise taxes on the uber wealthy? Have they no willingness to compromise?

About the debt ceiling… no one really knows what exactly will happen if it’s not raised. No one can predict the market with 100% certainty. However, I’m fairly certain that the likelihood nothing bad will happen at all — that this is all just a political scare tactic by our devilish president — is much much lower than 88%. In fact, I’m fairly certain that the impact would indeed be calamitous, with the worst case scenario being absolutely catastrophic.

When you’re facing such a grave worst case scenario, it’s best not to tempt your fate – lest you follow down the path of ruined fools.

I think the more appropriate answer for foxnews viewers is (a) Not sure, I don’t know enough about how the economy works. Because clearly, they don’t.


The economic recovery turns 2: Feel better yet?

As pointed out in the above article, the economic recovery is going nowhere good. The working class continues to suffer, while most of the economic gains over the last 2 years have gone to the wealthy. Workers’ wages and benefits now make up only 57.5% of the economy, down significantly from the 70-year norm of 64%. Meanwhile, the wealthy are mostly back on track, as most asset classes have gained back all of their losses (and then some) from the financial crisis of 2008. Stocks are up 90% from the March 2009 lows, gold is up 100%, oil and other commodities are way up. Unfortunately housing — the last asset refuge of a withering middle class — is still down and continues to fall with no rebound in sight.

The problem, at a 30,000 foot level, is the lack of economic velocity. Velocity is the rate at which money is exchanged, from buyers to sellers. When velocity is high, the economy is good — lots of people employed (sellers), lots of consumer confidence (buyers). When velocity slows, so does the economy in general. Consumers aren’t buying, so sellers can’t sell anything. If we all bought and sold each others’ farming goods, then the slowdown wouldn’t hurt that bad — we could all just consume our own farmed goods, no need to sell to another. However, our modern economy doesn’t work that way. I think only about 1-2% of the population are farmers. The rest of us do some other job, and we rely on our income in order to have money that we can exchange for necessary goods, like food, clothing, and shelter. When consumption (velocity exchange) slows down, it’s a symptom of lack of money, which is a symptom of lack of income, which is a symptom of a struggling job market. And the stats support the thesis: unemployment is very high at 9.1%, and workers wages are down a troubling 7% from their stable historic norm.

This is why a healthy job market is absolutely critical to the health of a nation’s economy, and more importantly to the well being of its people. People without jobs lack the means to acquire money, and money is necessary in order to receive a share of the nation’s food supply. Way back in human history when mass food production began — when one farmer could not only support himself but also hundreds of his fellow men — governments were created in order to manage how food was distributed throughout the society. Other members of society, now free from cultivating food themselves, could branch off into other endeavors, like science, engineering, architecture, arts, etc. Efficiency improved, society thrived, technology advanced rapidly, and the rest of it is the history of human achievement…

(btw, advanced food production, thanks in part to the abundance of large domesticated animals, was one of the fundamental reasons why Europeans came to dominate the globe, rather than Africans, Asians, or Native Americans. Read Guns, Germs, and Steel to find out why (that book ought to be required reading for every high schooler, imo…).

Nowadays, in order to partake in the nation’s food production, you must have money, which means you must have income, which means you must have a job (unless you have disposable assets to sell, which most people don’t). When people are out of work, the economy (and the nation for that matter) is failing to do what it needs to do in order to support its people and distribute the goods.

Of course, if you’re rich, and you have lots of assets at your disposal, then the struggles of the lower classes may not bother you all that much. In fact, you’ve probably suffered a great deal of ideological capture, where you believe that you deserve your wealth, that it’s yours and yours alone, and as such the govt has no right to take it from you via taxation. It’s an easy argument to make logically; however it usually leaves out the part where your claim on those assets depends in large part on the govt recognizing that they are, in fact, your assets. Unless you have your own army to defend your home and your wealth, then you depend on the govt to do that for you. When you add that salient fact into the mix, the “what’s mine is mine” argument gets a bit weaker. Perhaps, in fact, the govt does have the right to tax you. And not only that, but perhaps they have a right to tax you more than they do others, in proportion to your wealth, given that you have so much more of it that needs to be protected.

So, in my humble opinion, the extreme conservative republican viewpoint that taxes on the rich are unfairly high, is deficient of a full and complete understanding of reality. And I won’t even bother to address their argument that raising taxes on the wealthy will stunt economic growth, as that argument is so devoid of economic understanding that it resembles the sputtering nonsense of a 1 year old. Perhaps if we were to raise taxes from the current rate of 36% to 70%, then yes, that might have an effect (tho not necessarily a bad one). But rolling back the Bush tax cuts, which would raise the highest income tax bracket from 36% to 39%, will do nothing to harm the economy. It will, however, go a long way in getting the govt’s budget in order, which will do loads to improve our outlook.

Basically, the way I see it, after thinking long and hard about it, breaking it down to fundamentals, shifting back and forth from Austrian philosophy to Keynesian, trying to grasp a comprehensive understanding of how it all works, this is what I believe we need to do to fix the economy:

1. Massive govt stimulus. We must get economic velocity moving again. The private sector is failing to do this. Corporations are awash in cash, their profits are up, however they’re not willing to take the risk of adding capacity in the face of a depressed economy. Only the govt is capable of taking on that risk (since the govt is the biggest not-for-profit org in the country). The FED can’t do it — they’re currently helpless, with interest rates at the zero bound. It’s serving little good to continue pushing money to private lenders, when there’s a severe dearth of worthy borrowers for that money (since the middle class is already under back-breaking debt that they can’t pay off due to significantly diminished income). The answer to this problem is govt stimulus. We need a massive govt works program, that will employ people and raise income. And we might as well do it now, while interest on US debt is at historic lows, and while the country’s infrastructure sorely needs it (just take a drive thru NJ traffic, at any hour on any day of the week, and you will soon be convinced of the desperate need to improve its public transportation options, which are essentially non-existent).

2. Raise govt income by raising taxes on the wealthy. If the govt is going to borrow 2 or 3 trillion dollars for a massive works program, then we must reassure the bondholder community that the govt won’t default on that debt. If bondholders were to lose confidence in US credit, that would be a financial disaster for America and the world (one that we’re unwisely playing chicken with by dicking around with the debt limit). Interest rates on govt debt would soar, making it virtually impossible for the US to continue borrowing. That would be followed by drastic Greece-like austerity measures, which would in turn be followed by Greece-like protests. If it gets really bad, we might see a tumultuous and possibly violent revolution of the lower and middle classes against the rich (not unlike the revolutions of serfs and peasants against the ruling lords throughout history).

3. Regulate the hell out of the financial industry. This is a must, if we are to avoid delivering ourselves right back to financial catastrophe. There’s something like $600 trillion in unregulated swaps currently outstanding in the market. The GDP of the entire world is only $70 trillion. This is a problem that has gotten way out of control. It’s like a big nuclear bomb, hanging by a thread over all of us, getting bigger and bigger and heavier and heavier, threatening to break loose and detonate the entire global economy. This monstrosity came into being thru the unfettered financial wizadry of investment banks run amok. We need to harness these careless financiers. They are setting us up for global economic meltdown, and they don’t seem to realize it, or care. Either way, they must be stopped. They will not regulate themselves. And we can’t leave it up to the free market to do it either, because ultimately that would mean leaving it up to bankruptcy to sort out the mess — and by then, the bomb would have already exploded.

It seems at times that our economy is inescapably doomed. However, in reality, these 3 solutions would be quite easy to implement. We just need the political will to do it. Well, actually, it doesn’t even require much political will, per se. It just requires obstinate, misinformed republicans to get out of the way and let the rest of us tend to the work that needs to be done.

From Paul Krugman: Degrees and Dollars.

The fact is that since 1990 or so the U.S. job market has been characterized not by a general rise in the demand for skill, but by “hollowing out”: both high-wage and low-wage employment have grown rapidly, but medium-wage jobs — the kinds of jobs we count on to support a strong middle class — have lagged behind.

The notion that putting more kids through college can restore the middle-class society we used to have is wishful thinking. It’s no longer true that having a college degree guarantees that you’ll get a good job, and it’s becoming less true with each passing decade.

We have a growingly disastrous dynamic in this country, where rapidly rising tuition costs are being met with a steadily declining pool of jobs for those degrees. We’re saddling kids with tens-to-hundreds of thousands of dollars of debt before they even enter the workforce, and then offering them fewer and fewer opportunities to earn enough income to pay it off.

I suppose this is one of the consequences of allowing vast amounts of the country’s wealth to collect at the extreme upper echelons of the pay scale. The only way to keep the economy moving is to lend that wealth back to the lower classes (a la housing boom) – since the lower classes can’t earn a wage to keep it moving themselves.

This dynamic is not sustainable. Eventually we’ll reach that tipping point (again), where debt load weighs so heavily on income that demand crashes and the economy enters a tailspin.

While I’m a libertarian at heart, I can’t deny that any economic system that funnels so much wealth to so few is doomed for disaster and, ultimately, revolution. This can’t be a good thing. So much societal wealth is wasted in the process. Perhaps we need to re-think our ideas about property and freedom, at least in an economic sense.

p.s. By the way, just to be clear, the problem is not that productivity advances (via technology) are putting people out of work (any more than it was a “problem” that early agrarian food production put hunters and gatherers out of work). Productivity improvement is always welcome — it represents increased wealth. A wealthy society is one that achieves a high standard of living while toiling less to maintain that standard.

The problem has more to do with fungible wealth (i.e. money) gravitating toward the few, while heavy debt is spreading over the many. Not only is this unsustainable, but it’s hindering our ability to fully utilize and improve upon the wealth we already have (i.e. insufficient aggregate demand).

Death and decorum

February 18, 2011

A city of Poughkeepsie Police Officer was shot and killed today.

Within an hour of the incident, I knew the officer’s name.

Not because the police department released his name at a press conference, or anything official like that. The police department had not yet even announced that the officer died. Nor was I directly notified by anyone in the department.

Rather, I was informed of his name, and his death, by my Facebook news feed. Someone had posted a status, “R.I.P”, followed by the officer’s name.

I didn’t know the officer at all, so learning his name, or that he died, didn’t affect me all that much – besides naturally feeling a pang of sadness for him and his family.

But then I thought to myself, what if I had known him? And what if the way I was informed of his death was thru a cool, curt “R.I.P” status on my FB feed? From a vaguely remembered FB “friend” with whom I rarely interact and barely know? What if the officer was my brother, or my father, or my son? What if I were his wife, or his mother? What if police had yet to notify me, or any other next-of-kin, of his death? How would I feel, if I read the name of a loved one, perhaps my most cherished love in the world, in a FB status line that declared him dead?

There’s a reason police don’t immediately release the names of the deceased. The delay gives the police enough time to notify the immediate family, and enough time for the family to share the tragic news with extended family and friends – in their own way and on their own terms. Most people consider this just basic human decency.

But it appears that in today’s world, basic human decency has been hastily shoved aside, by certain people’s insatiable obsession to be first to report the news, across instantaneous circuits like twitter and FB. I don’t doubt that these people are still human – that they still recognize, at some level, that murder is a sensitive tragedy, and that they are sympathetic to the victim and family. But this sympathy apparently doesn’t translate into decorum. It apparently doesn’t stop them from disposing of sensitivity in order to demonstrate just how much “in the know” they are.

I wonder if it ever crosses their minds, even for a second, that maybe it isn’t their place to report the victim’s name to the whole world? That maybe as a society we’ve developed more appropriate and respectable channels to relate such delicate news — and that these channels don’t include faceless pseudo-anonymous blurts on twitter?

Perhaps these people just don’t have the empathetic capacity to understand. So let me try to put it in perspective for them: Suppose you suddenly and unexpectedly found out today that the person you loved more than anyone on earth, the person you cherished and depended on, had been gunned down in the street. His life, brutally ended. Your life, painfully and ruthlessly changed forever. Upon hearing the news — so abrupt and shocking and unimaginably devastating — would your first reaction be to post it on twitter, for everyone in the world to digest in 140 chars or less?

I would presume, no. But maybe I’m presuming too much.

Dear First Responder,

We thank you for your heroism on September 11th. We thank you for running toward the burning buildings and smoldering rubble while everyone else was running away. We thank you for your bravery, your sacrifice, your patriotism, your selfless devotion to your duty to help your fellow man in desperate need. You stand for the best of America, the best of humanity, and we all owe you a debt of gratitude.

But it appears that, from a political point of view, we don’t owe you govt-funded health care. This is unfortunate for you, because now you are dying. We told you it was safe to work in “the pile”, but of course it wasn’t. And now you are suffering from numerous diseases, all directly related to the toxic exposure you suffered while working at ground zero.

I hope you understand. We can’t fund your health care for several reasons, one of which, as Republican Representative Lamar Smith puts it, “This legislation as written creates a huge $8.4 billion slush fund paid by taxpayers that is open to abuse, fraud and waste.” How can we in good faith pass legislation that one day might be abused?

Nevermind that the current tax code is so complex at the top end that it’s abused every day by savvy moneymen who find unintended loopholes to swipe millions if not billions of dollars of tax revenue. And nevermind that the financial deregulation the Republican party strongly supports would undoubtedly allow financiers to deftly abuse and manipulate markets, steering massive amounts of wealth their way in bubbly speculative schemes using opaque unregulated “financially innovative” instruments, before walking away with the loot and leaving the rest of society to deal with the crash. (Oh, and if for some reason they’re unable to get away before the roof caves in, then I hope you don’t mind if we fund their bailout, to the tune of $850 billion dollars or so. Yes, this is a bit more than the $8.4 billion slush fund we refuse to give 9/11 first responders for health care, but, you see, well, it’s finance. It’s very complicated. We MUST bail them out. You, on the other hand…).

The legislation also creates a bad precedent. If we pay for your health care, what’s to stop the next group of first responders, who bravely perform their duty after (God forbid) the next terrible devastating attack, from seeking the same kind of govt-paid health services? By helping you, we open the door to helping all of our brave and patriotic service men and women. And that just can’t happen.

As I said before, we really do appreciate your service. In fact, we will continue to exploit the patriotic services of men and women like yourself when it suits us, for example, when we pass legislation that subverts the rights of privacy and due process that are protected by our Bill of Rights (don’t worry, we called it the PATRIOT Act, evoking images of true patriots like yourself, to throw off all the Republicans who would normally be 100% against such legislation).

But as for making your life longer, or your inevitable death less painful, I’m sorry, but the govt just can’t afford it. We’ve got tax cuts for super-rich wall-street wizards to pay for (you may remember them — they were running past you the other way on 9/11).

Yours sincerely and respectfully,
Senate Republicans.

In the days after September 11th, 2001, President Bush declared to us, and to Muslim people around the world, that America was NOT at war against Islam.

But he didn’t clearly and definitively state the converse: that the Islamic world was not at war against America.

It wasn’t a calculated omission, but it was an unfortunate one nonetheless. Since then, some people have insisted on repeatedly stating that Muslims attacked us on 9/11. These people don’t see anything wrong with that characterization. It’s factually correct, after all.

But a characterization such as that has a significant impact on our perspective. The way we talk about things affects the way we think about those things. We create a mental frame of the subject, thru which all information passes and is unavoidably filtered, interpreted, altered, and construed.

By stating that Muslims attacked us, we’re effectively framing the attacks as a holy war, perpetrated by ruthless Islamic extremists. These extremists can’t be reasoned with, for their purpose and justification is ethereal: they’re doing Allah’s bidding, slaying infidels, as is prescribed by the Koran. They hate us because we are not like them. They hate us because of our freedoms.

This is a convenient framing for us, because it absolves us of any culpability we might have in bringing this fight upon ourselves. The framing escapes any need for us to examine the spread of Western imperialism over Islamic lands: the battles we’ve waged there, the governments we’ve installed, the thousands of Muslims we’ve killed.

For none of these things is the reason the terrorists attacked us. They attacked us simply because we are non-Islamic, freedom-loving people.

And we will fight to defend that freedom. “Give me liberty, or give me death!” By framing it as a war against Islam (er, I mean, an Islamic-extremist war against us — remember, we are the passive party here, being attacked and thus forced to defend ourselves), we’ve effectively defined the battlefield to include any Islamic country in the world* (with the asterisk qualifying that they either support or give safe haven to Islamic terrorists). So let’s pick one we particularly don’t like: Iraq! Does Iraq harbor terrorists? Surely it must — look at all the Muslims there. Not enough of a justification? OK, how about a cooked-up WMD claim? That’ll do it.

And so, with spurious evidence of al-Qaeda training camps and WMDs, the Western crusaders, at the charge of their outspokenly Christian leader George W. Bush, invaded and swiftly conquered the Islamic holy lands located in modern-day Iraq, slaying tens of thousands of Muslims along the way. The Islamic leader Saddam Hussein was seized, given a perfunctory trial, then executed. After their conquest, the Christian crusaders subjugated the surviving Muslims with a phony, Western-friendly govt — one that permitted the crusaders to steal the oil riches buried beneath the holy land.

I assume most American Christians would take offense to my holy-war-like characterization of “Operation Iraqi Freedom”. And perhaps rightly so. It’s certainly an unfair framing.

Just as unfair as framing 9/11 as a religious attack by Muslims against American freedom.

But the terrorist leaders themselves have called the attacks Jihad against America! Jihad means holy war!“, the Americans say. Again, this is factually correct.

But throughout history, people have hijacked religions to justify the vicious slaying and conquering of other peoples.

When the Spanish conquistador Francisco Pizarro met with the Inca leader Atahualpa at Cajamarca on November 16, 1532, Pizarro instructed his Friar to hand the Bible to the Inca, and compel him to accept Catholicism as his faith and Charles V as his emperor. Atahualpa, confused by the book and the strange unrecognizable symbols inside (the Incas hadn’t developed writing at the time), tossed the book to the ground. The Friar screamed that the heretic Incas have insulted the Christian God and have refused to acknowledge His supremacy. At this, Pizarro ordered his men to attack. Even though the Spanish were greatly outnumbered (by some accounts, 80,000 Incas to about 150 Spaniards), they easily routed the Incas with their superior military technology (guns, cavalry, steel armor and swords, none of which the Incas possessed). Tens of thousands of Incas were killed that day, and the Inca leader Atahualpa was seized by Pizarro and held for ransom. After the ransom was paid (enough gold to fill a 22′ x 17′ x 8′ room), Pizarro executed Atahualpa anyway. The Spanish conquered the land and subjugated the remaining Incas, most of whom died within a year’s time due to the lack of immunity against European germs.

Clearly, Pizarro’s conquest of the Incas had nothing to do with religion. Nevertheless, religion was the primary proximate justification Pizarro used to motivate his troops, to steel their resolve, and to absolve them of the moral guilt and responsibility of slaying massive numbers of Incas. When his troops wrote letters home describing the battle and their incredible victory, they spent the first and last paragraphs of those letters profusely praising God for protecting them in battle, and repeatedly noting that their inexplicably victory — despite being vastly outnumbered — was proof that God exists and supports their war efforts over non-Catholic savage societies.

So just because Bin Laden says it’s Jihad, doesn’t make it so. Just as Pizarro did with Catholicism, terrorist groups like al-Qaeda have hijacked the Islamic religion to justify the indiscriminate killing of Westerners. They use religion, and the promise of an afterlife full of 72 virgins, to manipulate and motivate young Muslims to sacrifice themselves in suicidal missions against the West.

The Western world has committed numerous atrocities against Islamic peoples — atrocities for which we neither take responsibility, nor even acknowledge. The worst of them being, in my opinion, the subtle yet highly corrosive framing of Islam itself as the enemy.

Back in 2001, the Federal Reserve began slashing interest rates as the economy slumped into a recession. The objective was clear: counteract the deflationary pressures of the imploding Nasdaq, pump money into the markets, increase velocity, reverse disinflation, get the economy moving again, bring us back to GDP growth and full employment.

The strategy was successful. By 2004, core inflation was on the rise. The FED manged to push the interest rate below the inflation rate, so real rates were actually negative. This induced copious amounts of lending (as Bloomberg notes, US consumers took on $2.9 trillion in new home-loan debt from 2004-2006, the biggest increase of any three-year period on record). Velocity rose. GDP grew. We achieved full employment. The economy was back on track.

But we also created massive bubbles in housing, stocks, and commodities — all of which burst when the FED attempted to throttle the economy by raising interest rates. As the FED withdrew money, the ponzi-scheme bubbles were starved of the necessary new ammo (i.e. fresh money) to keep them going. As such, the bubbles collapsed spectacularly, sending the economy to the brink of worldwide financial destruction.

Fast-forward to autumn 2008. The economy was crashing. Deflation was a real risk. The FED went back to the monetarist playbook: drop interest rates, pump money into the markets, fight disinflation, induce lending, etc. And when the FED hit the interest-rate zero bound, it pumped even more money into the economy with “quantitative easing” — printing money to buy treasury debt directly.

Two years later, the real economy is still slumping. Deflation is still a risk. So last week, the FED announced a second round of easing, dubbed “QE2”:

In its latest move to jump start the sluggish recovery, the Federal Reserve announced it will pump billions into the economy.

The central bank will buy $600 billion in long-term Treasuries over the next eight months, the Fed said Wednesday. The Fed also announced it will reinvest an additional $250 billion to $300 billion in Treasuries with the proceeds of its earlier investments.

QE2 is a further attempt by the FED to raise core inflation back to a meaningful target, which Paul Krugman explains, is somewhere near 4%.

Meanwhile, stocks are rising. Commodities are rising. Bonds have nearly reached their own “zero-bounds”.

It seems the FED’s hope is that all the additional money it drops from helicopters will fall across the economy evenly, thereby generating an even amount of inflation everywhere — most importantly in core inflation. But in reality, the money is directed by selfishly rational economic actors, who have not much care for the economy’s overall health. They only care about profit, and as such they will direct the money where the likelihood of profit exists. The real economy, currently suffering from overcapacity, isn’t offering much in the way of profitable investment. So the actors search elsewhere, poking and prodding, looking for the next “sure thing”. Eventually enough of these actors poke and prod in the same direction, and suddenly profitable investments re-emerge. Over the last year-and-a-half, we’ve seen feverish poking at stocks and commodities. Since the March 2009 lows, the S&P 500 has risen 85%, while commodity indexes are up 50%. The “sure bets” are back in sight. Money managers are making money again. The financial industry is happy.

And yet the real economy limps along, getting nowhere. Even the money that actually reaches the hands of the middle class, eventually gets absorbed by the financial industry, as the middle class services all the mortgage and credit-card and student-loan and car-loan debt it piled up over the last decade. As we continue to trend toward core deflation, the FED will no doubt feel justified printing ever-more money. It’s simply following the basic rules of monetary theory: deflation = high demand for money => print more money.

I am not too sure, but it seems to me that we have at least a 50/50 chance (probably greater) of repeating the destructive, ever-worsening bubble-bust pattern that has plagued the worldwide economy for the last 3 decades. John Hussman has recently stressed the dangers of excessive quantitative easing here, here, and here. Paul Krugman thinks we shouldn’t worry about bubbly inflation too much — deflation is still the real threat. And Bernanke says, “I don’t know what you guys are talking about, I’m not even TRYING to create inflation.”

Bernanke reminds me of a pilot, desperate to maintain airspeed in order to sustain lift. His rule is straightforward: we must go fast, lest we fall from the sky. But as he blindly follows the rule, he ignores the fact that the plane is violently pitching up and down, lurching left and right, as it encounters severe turbulence that’s only made worse the faster it goes. On the one hand, Bernanke’s right: if we slow down, we might fall out of the sky. But on the other hand, if the turbulence gets too extreme, the plane might break apart in mid-air. We’ve already suffered some serious damage. The passengers are getting pretty banged up. The fuselage is dangerously unstable. The airframe is critically strained. The next shock might be perilously intolerable… But Bernanke thrusts ahead. He’s not going to let this plane drop from the sky. He read about the great de-lifting of the 1930’s. He’s not about to let that happen again. Not on his watch.

But what if crashing to the ground isn’t the worst thing that could happen? What if mid-air disintegration is a far worse fate?

Bernanke’s steadfast abidance of the rule reminds me of the icy wisdom that the diabolical Anton Chigurh shares with his rival — the more conventional-means bounty hunter Carson Wells — just before Chigurh blows him away:

If the rule you followed, brought you to this, of what use was the rule?