Maybe the single serious bleak spot on Tuesday’s brilliant electoral map was the success of Prop. 8 in California, amending the state’s constitution to outlaw same-sex marriage. Funded by millions of dollars from the conservative Christians who nearly took over state politics in the early 1990s, by deep Mormon pockets, and with a fear-driven campaign that made McCain/Palin look like smiling purveyors of happy pills, the initiative drew a surprising 52 percent support despite the huge Obama turnout.

Gag.

What this means is that thousands of couples who have married in the last few months now face the prospect of the state revoking that status. Hundreds of thousands more lose the right. A jarring reality, given the sense of new dawn elsewhere in the country.

But a friend and fellow writer, Paul Festa (whose marriage is one of those now truly at risk) writes persuasively in The Daily Beast that opponents of Prop. 8 see some silver lining in the numbers — 52 percent support for this proposition, compared to 61 percent support for a same-sex marriage ban in 2000.

If you really want to know who will decide this issue if it comes up in 2012, ask 14-to-17 year olds, who will be voting in their first presidential election. Those straight supremacists playing with Mormon campaign contributions? Culture war dead-enders. Last night the gay movement lost a battle. The war, launched in the early 1950s by activists Harry Hay, Del Martin and Phyllis Lyon, we’re winning decisively.

Worth a read.

People can debate the semantics of landslides all they want. This is undeniably one of the great moments in American political history, and Obama one of its great figures.

It is encouraging, even inspiring, that an American political system showing such tattered edges over recent cycles can lead to this. A majority of the country has repudiated Bush and the party that spawned him. The tragedy is that we’ll be living under Bush’s shadow for years to come.

Already the conservatives are debating strategies for opposition. That’s natural. I would love to see the spirit of McCain’s gracious concession speech inspire Washington for at least a few months, but more likely is that aside from McCain himself, the minority party will leave the hard choices entirely to the new majority, and let the Democrats take the blame for the sacrifices that will be need to be made.

But that’s later. Today’s for dancing.

The real reason Obama is winning (from Politico):

The Illinois senator admitted in June to carrying a pocket full of charms. He dug his hand into his pants pocket in the middle of an event and revealed what look like a junk drawer of goodies: a “lucky poker chip” given to him by a voter, an American eagle pin from a Native American woman and a small golden statue of the Monkey King.

Just as a reminder, Sun Wukong was commanded by the bodhisattva Guanyin to help a monk bring back Buddhist sutras to China, from the far West. I think this may mean Obama will help bring enlightenment and salvation to the East (coast), and that he will be spared from destruction, the seductions of ego, and flesh-eating demons only by the interventions of a team of transformed trickster-gods. Take that, Republicans!

Obviously he has my vote.

Seen at Bonanza Coffee Heroes, where they make a rich, flavorful brew with geopolitical relevance.

Americans: If you haven’t voted already, send that ballot in now!

(Cross-posted at Hungry in Berlin.)

Drudge linked this interview, so half the world will see it. But it’s so embarrassing to the profession of journalism I can’t let it pass.

A local ABC affiliate in Orlando, FL., got an interview with Biden, and apparently decided they would ask him the “hard” questions, instead of the usual softballs. Which, good thinking. But their conception of hard-hitting journalism is so ludicrously bad, it makes me want to crawl into a corner and pretend I’ve never seen a television before.

Here’s a few sample questions:

Barbara West: You may recognize this famous quote. “From each according to his ability, to each according to his needs.” That’s from Karl Marx. How is Senator Obama not being a Marxist if he intends to “spread the wealth around?”

Biden: Are you joking? Is this a joke?

West: No.

Biden: That’s a real question?

West: That’s a question.

…
West: What do you say to the people who are concerned that Barack Obama will want to turn America into a socialist country much like Sweden?

I don’t necessarily expect a TV anchor to have a good understanding of Marxism, or even socialism (although it would be nice, since we just nationalized a whopping big chunk of our banking industry). But a certain rudimentary familiarity with the progressive income tax system that we’ve all paid in America since 1913 would be nice.

Pathetic.

Incidently, conservative types leery of communitarian wealth-sharing ideas may want to refer to their Bible (thanks, Wikipedia). From the book of Acts, in which Luke describes the early Christian communities:

And all that believed were together, and had all things common; And sold their possessions and goods, and parted them to all men, as every man had need. (Acts 2:44-45)

…

Neither was there any among them that lacked: for as many as were possessors of lands or houses sold them, and brought the prices of the things that were sold, and laid them down at the apostles’ feet: and distribution was made unto every man according as he had need. (Acts 4:34-35)

The Orlando interview is here. Unfortunately, embedding the video seems to break my Wordpress theme, so you’ll have to click through. But the entertainment value is well worth the 4 minutes you’ll spend tearing out your hair.

Ok. I’m the first to admit I didn’t particularly like Doctor Atomic. We saw the opening of John Adams’ latest opera in SF, and my personal feeling was that it was interesting, but it didn’t work. As the story goes, the librettist quit, and Adams and director Peter Sellars instead assembled a libretto from original documents such as diaries, poems, and (painfully) declassified government documents. I’m not a tremendous fan of Adams’ orchestrally dense composition in any case, but the utterly unlyrical rhythms of government prose pretty much killed the drama for me.

Still, I wouldn’t call him a terrorist, musical or otherwise. Yesterday, Adams told the BBC that he’s been “blacklisted” by the US government. Here’s Adams, from the Guardian:

I can’t check in at the airport now without my ID being taken and being grilled. You know, I’m on a homeland security list, probably because of having written The Death of Klinghoffer, so I’m perfectly aware that I, like many artists and many thoughtful people in the country, am being followed.

True? I’m all for paranoia. But if a fairly unrevolutionary composer who makes Nixon and Robert Oppenheimer mythological (anti)heroes is stuck on the US’s terrorist watch list, the administration’s Homeland Security efforts are even more pathetic than anyone imagined.

A brilliant encapsulation of Ireland’s rise to fortune, and subsequent, ongoing collapse, by novelist John Banville (who is a fascinating and lyrical writer, and well worth reading):

IN the ravening years of the Celtic Tiger we had a dinner-party competition to define the figure most representative of the suddenly prosperous Ireland we so bafflingly found ourselves in. Someone came up with “a non-tax-paying businessman’s trophy wife.” This seemed right, and as time went on we added more and more details; at last count we had arrived at “a non-tax-paying businessman’s trophy wife driving her 14-year-old daughter to her drug rehabilitation session in an S.U.V. at 60 miles an hour down a bus lane while speaking on her cellphone, smoking a cigarette and making a rude gesture at a passing cyclist.” Over the past couple of weeks, however, the game has lost its savor. As one dinner guest murmured, “That poor little girl.”

Naturally, the question: Who was/is the States? (or, if you’re here, Germany).

So, the U.S. House has discarded the plan to save the U.S., and really by some extension, the world economy. The markets have collapsed. It was never an ideal plan in the first place. The insane right wanted changes that had nothing to do with economics, and everything to do with Bizzaro World ideology. So they were out. Ordinary citizens saw the price tag and balked, rightfully so — but because very few people know anything about detailed economics, people really don’t understand why having a functional banking system is an important thing even for them. So they were out. Economists mostly said it was the wrong plan to start with, but we needed something to save the economy, and the weekend’s changes were enough to make it palatable. So they were mostly in, holding their nose. Democrats were stuck being responsible, and got a lot of votes for a second- or third-best plan, but it wasn’t enough. They got stabbed in the back by House Republicans, to use a phrase that has some propaganda value over here.

What next? Collapse, anybody? Maybe there’ll be another attempt after the holidays, with a better plan. Or after the election. Maybe Sarah Palin will come up with something brilliant, and all economics students will be discussing the Moose Doctrine for a century to come.

I’m going on vacation to a village without Internet access for a week. Please don’t break the world completely while I’m gone…

I somehow missed this a few days ago. From Forbes:

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

To be fair, they did have to pick a really large number, and part of the problem in this collapse is that there isn’t good information on the total value of distressed or illiquid assets, or even agreement on how to value them in the first place. The Treasury seems set on overvaluing them as a means to recapitalize the banks (because if the government actually paid market value, the banks wouldn’t get enough new capital to keep them afloat). A lot of economists think this is an atrocious idea unless the government gets equity in return.

Here’s the silver lining to global financial collapse. It’s kept me from obsessing about Sarah Palin and McCain’s latest whopper for the last week. Except in the context of financial collapse, for which there’s been plenty of material.

What’s fascinating is watching this in the blogging era. Roughly a billion serious economists are online, and are writing about Paulson’s bailout plan in more or less real time. What’s emerging is partly politically driven (it’s getting very hard to find any economist, left or right, who’s seriously backing McCain), but also perhaps disturbingly divorced from traditional ideological divisions.

The (idiot) right doesn’t like the bailout because it’s not letting markets do their thing. I’m not sure there are many of these folks, outside the mouth-breathing politician class. Markets can fail catastrophically, and while this may seem like a salutory thing to some, if we’re living in a market-based economy, it’s not really a practical object lesson.

But a very large number of economist types seem to be seriously skeptical of the plan as presented, for two main reasons.

First, it gives the government — read, Bush’s executive branch and its successor, as advised by the Fed — virtually unlimited power to spend $700 billion without any kind of genuine oversight. Granted, most people  seem to be pretty happy with the way Paulson and Bernanke have played defense over the past few weeks. But imagine the lobbying that will go on. Remember the way that the Bush administration has staffed important agencies such as Iraq’s Coalition Provisional Authority, FEMA, or the Interior Department’s coke-snorting oil- and gas-royalty division.

The other arguments are tied closer to the economics. The massive sum will be used to buy the mortgage-backed securities that the financial sector has been binging on for years, and which no prudent investor will now touch with anything short of a gas mask and rubber gloves. Worse than Bayerisch Gammelfleisch, this stuff.

The short version of the theory is: Take these currently worthless “assets” off the financial giants’ hands. Instead, give them taxpayer money, filling their coffers with actual assets. This, in theory, makes them financially secure. Investors stop fleeing financial stocks. Banks once again start lending to each other, and to regular people trying to buy houses, start businesses, or conduct business in the ordinary credit-dependent way that makes the world economy tick. Best of all, in the end (as when the government bought distressed savings & loan assets in the 1980s), the “worthless” assets purchased today might actually turn out to have some value once the crisis passes, home prices stabilize, and people turn out to be able to pay their mortgages. Government sells them, the $700 billion or however much we laid out to rescue the financial system gets partly paid back, and everybody goes into the history books happy.

Yes. But.

One big question is how much the government is paying for the all-but-worthless assets. There are various opinions on what they’re worth. The market, for example, is currently pricing sub-prime mortgages as the rough equivalent of belly button lint. However, it’s unlikely that the banks are going to see it that way when they’re selling.

The Naked Capitalism blog quotes a reader who claims to be a congressional staffer thusly (read the full post here, it’s a very good critique of the plan):

Anyway, I wanted to let you know that, behind closed doors, Paulson describes the plan differently. He explicitly says that it will buy assets at above market prices (although he still claims that they are undervalued) because the holders won’t sell at market prices. Anna Eshoo pressed him on how the government can compel the holders to sell, and he basically dodged the question. I think that’s because he didn’t want to admit that the government would just keep offering more and more.

This puts the government in a tricky situation, and may perversely give the banks more power than they deserve. The government, once this is passed, is going to want to clean the mess up as soon as possible. Banks, by contrast, are going to want to get the best price they can for their trash. If they can manage to stay out of bankruptcy long enough, they’re going to be able to stick taxpayers for an unjustifiably high price.

Paul Krugman amplifies on this idea, arguing that the financial sector’s capital deficiency stems from hugely overleveraged (debt-financed) operations, rather than solely from the mortage-backed paper.

Even without panic asset selling, the financial system would be seriously undercapitalized, causing a credit crunch — and this plan does nothing to address that.

Or I should say, the plan does nothing to address the lack of capital unless the Treasury overpays for assets. And if that’s the real plan, Congress has every right to balk.

There’s more, but this post is getting long.

So what’s all this mean? We need a massive plan, and fast. That much is evident. We’re teetering on the edge of chaos far worse than anything we’ve seen since the 1930s. The lesson from the Depression is that the Hoover government did precisely the wrong thing for years, cutting back spending instead of stimulating economic activity, and making a number of other mistakes that virtually no Econ 101 student would today. Bernanke knows this, and is playing the professor-with-power role to the hilt, to make sure that today’s government doesn’t make the same sins of omission.

But it’s worth remembering that this is a democracy, and that Congress should play a role. Safeguards should be in place, and some ability to make Wall Street firms, and individuals, bear the brunt of the cost for their own salvation. Negotiations are underway now, and Democrats are just getting back in the game. This thing probably shouldn’t be approved as is (This pissed-off email, purportedly from a leftie Congress member is great. Quote: “I don’t really want to trigger a world wide depression (that’s not hyperbole, that’s a distinct possibility), but I’m not voting for a blank check for $700 billion for those mother fuckers.”).

Interesting times.