Obama's book

Barack Obama's Philadelphia speech, which I commented on briefly last week, led me to his book, The Audacity of Hope.

I recommend it to anyone interested in politics--either as an observer or an actor--and to anyone seeking inspiration as a leader, for its:

• Engrossing nitty-gritty on how American senators get elected and do their jobs ;
• Nuanced thinking about global and U.S. problems;
• Refreshing honesty and humor (these derive from the author's healthy ironic distance from life--he watches himself, and sees his own vanity and the absurdity of things);
• Inspirational look into the mind of a leader who struggles every day with his exacting conscience.
  

I yearn for your comments.

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El discurso que dio Barack Obama en Filadelfia, que comenté brevemente la semana pasada, me condujo a su libro, The Audacity of Hope.

Lo recomiendo a todo aquel que tenga interés en la política--sea como observador, sea como actor--o que busque inspiración como líder, por:

• Sus fascinantes detalles sobre cómo se elige y trabaja un senador en Estados Unidos;
• Su análisis sutil sobre problemas globales y estadounidenses;
• Su honestidad y humor refrescante (se derivan de una irónica distancia que tiene Barack de la vida --él se observa a sí mismo y reconoce su propia vanidad y lo absurdo de muchas cosas);
  
• Una mirada inspiracional a la mente de un líder que lucha diario con su exigente consciencia.
  

Anhelo sus comentarios.

Obama's Philadelphia speech

This Slate version of Obama's March 18 Philadelphia speech contains the full text.

He has the courage and self-confidence to ask Americans to be nuanced.

Fed: -75 bp; commodity prices will flatten

The Fed decision is out: -75 basis points to 2.25%.

Comments:

1. Dissent is up. Plosser and Fischer both voted for "less aggressive action." In the January 30 FOMC meeting, Fischer alone dissented, preferring "no change" in the monetary policy rate. On January 22, Mishkin was absent, thus didn't vote; those present voted unanimously.
   
2. FOMC members recognize accelerating inflation and upward shifting inflation expectations, but hold to their view that weak demand will pull inflation rates down.
   
3. In particular, they expect commodity prices to stabilize. They appear not to embrace Jeffrey Frankel's favorite explanation for rising commodity prices in times of recession--the current low level of real interest rates--given that their rate decision of today will contribute to it.
   
4. Nor do they seem to agree with former Fed Chair Alan Greenspan, who said in a recent interview about his own low interest rate policy, "You can't do that any more."
   

Greenspan stands by his record: omitted hat tip

In my last post, I omitted a hat tip for the Greenspan video. It goes to Dealbreaker.

Greenspan stands by his record

Frankel theory on high commodity prices

Jeffrey Frankel is Brad Setser's guest blogger for a few days. He's focussing on why commodity prices are up if the global economy has turned down. His answer? Real interest rates:

If strong economic growth is not the explanation for the large increases since 2001 in prices of virtually all mineral and agricultural commodities, then what is? One wouldn’t want to try to reduce commodity markets to a single factor, nor to claim proof of any theory by a single data point. Nevertheless, the developments of the last six months provided added support for a theory I have long favored: real interest rates are an important determinant of real commodity prices.

High interest rates reduce the demand for storable commodities, or increase the supply, through a variety of channels:
- by increasing the incentive for extraction today rather than tomorrow (think of the rates at which oil is pumped, gold mined, forests logged, or livestock herds culled)
- by decreasing firms’ desire to carry inventories (think of oil inventories held in tanks)
- by encouraging speculators to shift out of spot commodity contracts, and into treasury bills.

All three mechanisms work to reduce the market price of commodities, as happened when real interest rates where high in the early 1980s. A decrease in real interest rates has the opposite effect, lowering the cost of carrying inventories, and raising commodity prices, as happened in the 1970s, and again during 2001-2004. It’s the original “carry trade.”

Professor Frankel is cross-posting this material on his own blog too.

Month-old video on campaign still timely

This video of a discussion among four New Yorker writers about the Democratic Party race for the nomination is over a month old, but it's still timely, and it contains both funny moments and eloquent moments.

Panelists are Hendrick Hertzberg, Elizabeth Kolbert, Ryan Lizza, and Jeffrey Toobin. The moderator is The New Yorker editor David Remnick (a hero of mine since I read his 1998 Resurrection on post-Soviet Russia).

The video is long. For readers short of time, here are some highlights:

• Hertzberg: There is very little programmatic or ideological difference between Hillary and Obama. "So, it's really not about the words in this campaign; it's about the music."
• Hertzberg: "There's a soap opera here--there's a Clinton Family drama--that I think the country would just as soon--or at least I would just as soon--not be on the front of the national agenda for the next eight years."
  
• Kolbert, comparing Obama and Hillary: "She's the class grind; he's the cool kid in the class."
  
• Lizza: Hillary's campaign is freer, more open, messier than Obama's. Hillary staffers can speak to Toobin about the campain anonymously without fear of being sniffed out and muzzled later by "leak hunters." The tight discipline in the Obama camp is Bush-like.
• Remnick: It's also Nixon-like.
  
• Toobin: "This election is shaping up as a Democratic landslide."
• Toobin: Whoever wins the Democratic nomination, the Democrats will have tens of millions of dollars more than John McCain. McCain's campaign raised $10 million in all of January; Obama and Hillary raised $10 million each in the first week after Super Tuesday.
  
• Remnick: The press adores McCain, because of all the access that he gives them and his sense of humor.
  
• Toobin: Evangelical Christian Republicans will not work for John McCain. They did work for Bush, and only because of their help did Bush win. Ergo, McCain will probably lose.
  
• Kolbert: "'I'm the guy who can keep you safe.'That's what John McCain is running on." Hence a foreign policy crisis would be a boon to him.
  
• Kolbert and Lizza: Obama's weakness is public doubt as to whether he's ready to be commander-in-chief. So a foreign policy crisis such as a terror attack, with its potential to underscore Obama's foreign policy inexperience, is the Obama camp's worst nightmare.
• Kolbert: If Hillary becomes the nominee, that would be great for McCain ... "because then all the anti-Hillary people who are now trashing McCain can go back to their first love, which is trashing Hillary."
  
• Lizza: "I think that the McCain camp fears Obama more than they fear Hillary. They think that Hillary is the known quantity; they understand how to run against her; they understand her strengths and weaknesses. And I think that they fear that in a race against Obama, the press and the country will get swept up in a sense of history, and that they never really get a fair hearing. That the Obama phenomenon, it doesn't end with the primaries, but that his victory in the primaries will just be the beginning of a sort of launch. And that he could have so much upside potential that, even though the polls show a very close race now, it's never a real race."