Tuesday, January 12, 2010

The Political Lynching of Harry Reid

When Barack Obama was neck-in-neck with Hillary Clinton racing for the Democratic nomination for president, one of his earliest supporters, Senator Harry Reid of Nevada said in a private conversation that Obama could win the presidency. One of his reasons was that Obama was “light skinned” and "with no Negro dialect unless he wanted to have one."

Political thunder rolled and lightning flashed as posses of liberals and conservatives threw their nooses around Reid's neck. Reid issued a quick and humble apology to the President. Democrats pardoned him. Republicans charged bigotry and double standard. Reid continued to grovel in public regret. Seldom have we been treated to such bipartisan demagoguery. Reid did nothing wrong. He was within his rights and he was right.

Pause to ask just where in his remarks he sinned.

Reid had the facts right: Obama, whose mother was white and father black, is light skinned. Second, he does not speak with any accent identified with black Americans. Can Obama use African American accents? Sure he can, and like all of us, he sometimes changes his vocabulary or pronunciation to fit in with friends or ‘the crowd’.

That leaves us to ask if Reid’s offense was implying that these qualities of Obama made him more acceptable than someone dark colored like Dr. Thomas Sowell the economist, Condaleeza Rice, or Smokin’ Joe Frazier the boxer. That suggestion could offend by suggesting t

hat Obama would receive votes because of accent and skin color, not by earning those votes. But don’t American blacks themselves talk about the advantage some have by being lighter skinned? Perhaps Reid offended black Americans who are darker and speak with pronunciation common if you listen to the Jeffersons or Sticky Fingaz or Magic Johnson or Al Sharpton.

Many claim the worst offense was the use of the word “Negro.” But it’s a word used by many black Americ

ans. It’s the customary word to describe the accent that Obama doesn’t have. Anybody he

ar of the United Negro College Fund? The only poor choice in

the phrase was dialect instead of accent, and that’s an ignorance of linguistics, not bigotry.

Or perhaps Reid offended the American public in general—implying that skin color and accent play a role in the public’s judgment of a candidate. They do, of course. Are we not allowed to say so? Aren’t we constantly told that racism is still alive in America?

Does anyone doubt that a significant number of votes are influenced by how a candidate talks and by skin color? Even Vice President Joe Biden opined that Barack Obama would win votes because he was “the first mainstream African-American who is articulate and bright and clean and a nice-looking guy."

But Reid didn’t apologize to all voters, or black Americans. He apologized to President Obama. Yet certainly the President, who had no record of big accomplishments in or out of politics, won a lot of votes by being articulate, easy to understand, and by not fitting the unfortunate stereotypes of black Americans. He also won a lot of votes because as Joe Biden suggested, many Americans (and most blacks) wanted a black president and he fit their comfort zone in most ways.

What we should lament most loudly is that when Harry Reid speaks a clear truth he has been pilloried by everyone, and that Republicans, acting like politically correct liberals, make Reid’s truth a bigger shame than his lies.

And even more important, when speaking the truth in a private conversation becomes a matter for public shaming and persecution, America is in deep doo doo. The Democrat pardon reinforces their role as self-appointed censors. If Republicans want to shame Reid, they should first support him for speaking the truth, then point out how he has turned the exercise of a fundamental right into the occasion for a groveling apology.

(Photo credit, noose copyright by Matthew Lee High: www.flickr.com/photos/ )matthigh/2772052540/

Saturday, January 2, 2010

When A Lot Of Knowledge Is A Dangerous Thing

Periodically we need to field test durable but competing visions of how the world works.

New Years Eve I saw the very learned and witty novelist Gore Vidal express the conventional wisdom that we need intelligent people as political leaders. By intelligent he meant “intellectual” as in people from Harvard and Yale, people who can quote from the classics and great books. He welcomed Obama as the only president in modern times who qualified as truly intelligent, although he cited no evidence. Vidal is a very learned and graceful writer whose books are worth reading, but who speaks in public as if his credentials absolve him from field testing the truth of his judgments on others. Suffice that they are sharp and witty.

His greatest intellectual rival had a different vision of intellect and government. He famously said, ““I’d rather be governed by the first 200 names in the Boston phone book than by the faculty of Harvard.” The author of that declaration was William Buckley—novelist, host of the TV debate Firing Line, and editor of National Review.
For our field test, however, let us avoid the controversial evaluation of presidents and members of Congress and look at the case of a mathematician turned investor and political activist.

Readers may have heard of the recent move by Senator Diane Feinstein of California to prevent the siting of a solar electric project on federal lands in the Mojave Desert. Her move provoked a fight with alternative energy champ and fellow liberal Democrat Robert Kennedy, JR. who said, “This is arguably the best solar land in the world, and Senator Feinstein shouldn’t be allowed to take this land off the table without a proper and scientific environmental review.”

This interesting dispute led me to look behind the scenes at the real estate and environmental dimensions of the land use dispute, and there I found our mathematician-investor-activist and a test of the Vidal-Buckley dispute. David Gelbaum studied math under a professor who devised a system that beat the Las Vegas blackjack dealers. Gelbaum went on to develop a mathematical model for predicting stock values. Managing his fund Quercus Trust he became a billionaire. Like other billionaires he became a political activist, pouring his money into the Sierra Club’s political efforts, Democratic campaigns, and the National Democratic Party, and over $30,000 directly to the Obama campaign.

He also joined these people in their often proclaimed belief that alternative energy and green technology are good for the economy and good for investors. He co-founded Wildlands Conservancy then bankrolled its purchase of Mojave lands for a natural preserve. The Conservancy made a sweetheart deal with Catellus Development to buy the land Catellus could not develop and set up Catellus for a tax deduction for presumably selling the land at less than market value.

Often such deals involve real below-market pricing by sellers, but very often conservation group and landowner collaborate to get an appraisal fraudulently far above the actual purchase price, and the seller deducts the “gift” from taxes as well as divests itself of unwanted or unusable land. Why should Catellus fight about desert rats and tortoises when it could exchange the land for a tax deduction?

Whether or not the Mojave-Catellus-Wildlands deal involved land price manipulation, Gelbaum has often been accused of stock manipulation and has barely escaped indictment. Consider him innocent until proven otherwise. Nevertheless, having made billions for himself and his causes, he lost billions for people who invested in the companies his Quercus Trust bought into with the announced intention of “helping” them out of difficulty.

That outraged legions of small and often idealistic investors. Then last year Gelbaum’s investments in “green companies” ended up gutting the budgets of his favorite causes—the Sierra Club to which he had secretly given $47 million and the ACLU to which he had contributed secretly a fourth of its budget, some $94 million. In December he tried to assure members and other donors that his withdrawal in no way signified disapproval of the organizations.

Why had he cut off the funds? “My investments in alternative, clean energy companies have placed me in a highly illiquid position as a result of the general credit crisis in the American and world financial systems."

No one can fault Mr. Gelbaum for having put his money where his mouth and his heart are, but the results are instructive. By abandoning his wildly successful logic and economic math, he has achieved the following:

A. Put two very large non-profits in the position of having too many eggs in one basket (a novice business mistake), then devastated the budgets of those charities by bad investing

B. Made a highly public case that green tech is not a good investment and job creator. That undermines a major policy claim of the Obama administration he supports.

C. By helping put millions of acres of California land off limits to solar energy, he may have destroyed the state’s ability to achieve its legislated goal of generating 33% of its energy from renewable sources by 2020.

This highly intelligent math genius and successful investor ended up making a cascade of stupid investment decisions and inflicting grave damage on his own favored causes. He began to making mistakes when his political goals started to command his intelligence, twist his logic, and veto his mathematics.

A committee of the first 200 names in the Boston phone book would not have made such a mistake. (Reminds me that the faculty of Harvard passively approved the policy our President’s chief economic adviser, Larry Summers, while president of Harvard. He set up its budget for a $1.8 billion loss, partly by investing in the complex debt instruments the Obama administration has blamed for much of the nation’s economic crisis.)

Moral of the story: alternative energy is the wave of the future just as oil and coal once saved the world from deforestation for fuel and for pastures to feed that engine of transportation and work—the horse. Our new transition, like our old transition, is inevitable, but relying on our intellectuals in government to choose how and when and through what companies or government dictates we should invest may be intellectual, but it is not intelligent.

So what is the equivalent of the first 200 names in the Boston phone book? The millions of average men and women who collectively are called “the market.”