In the February 2008 issue of Harper's Magazine, Eric Janszen writes about the economy:

The dot-com crash of the early 2000s should have been followed by decades of soul-searching; instead, even before the old bubble had fully deflated, a new mania began to take hold on the foundation of our long-standing American faith that the wide expansion of home ownership can produce social harmony and national economic well-being. Spurred by the actions of the Federal Reserve, financed by exotic credit derivatives and debt securitization, an already massive real estate sales-and-marketing program expanded to include the desperate issuance of mortgages to the poor and feckless, compounding their troubles and ours.

That the Internet and housing hyperinflations transpired within a period of ten years, each creating trillions of dollars in fake wealth, is, I believe, only the beginning. There will and must be many more such booms, for without them the economy of the United States can no longer function. The bubble cycle has replaced the business cycle.

Pick up the February issue today at your local newsstand, or read about it at Janszen's web site.

Here's Larry Kudlow:

The key thing to remember is that businesses drive the economy. Businesses create jobs and incomes for consumers to spend. Today’s John Edwards/Mike Huckabee anti-business populism sounds more like William Jennings Bryan than Adam Smith. It’s absolutely crazy. They attack Wall Street and investors, which is another way of attacking capital. Without capital investment, there will be no new business, no new jobs, and no middle class.

... America is an optimistic country, and for the life of me I don’t know why the Republican presidential candidates can’t understand this.

I am no fan of the populists' spiel. But I recall this essay, from last year:

The belief that corporate power is the unique source of our problems is not the only idol we are subject to. There is an idol even in the language we use to account for our problems. Our primary dependence on the scientific language of “environment,” “ecology,” “diversity,” “habitat,” and “ecosystem” is a way of acknowledging the superiority of the very kind of rationality that serves not only the Sierra Club but corporate capitalism as well.

... Perhaps the most powerful way in which we conspire against ourselves is the simple fact that we have jobs. We are willingly part of a world designed for the convenience of what Shakespeare called "the visible God": money. When I say we have jobs, I mean that we find in them our home, our sense of being grounded in the world, grounded in a vast social and economic order. It is a spectacularly complex, even breathtaking, order, and it has two enormous and related problems. First, it seems to be largely responsible for the destruction of the natural world. Second, it has the strong tendency to reduce the human beings inhabiting it to two functions, working and consuming. It tends to hollow us out.

Amid all the fervor for Going Green this election year, what ever happened to Reduce?

Really, the best thing that we can do for the planet is to use less of it.

So, whose platform is that? The chatter about "energy independence" is code for farm subsidies. It's about domestic growth, perhaps to the detriment of foreign profit, but it's not as though OPEC would pump significantly less oil -- they just wouldn't earn quite so much for it. The developing world will pick up all the slack. Recall, from earlier this week:

China’s catching up alone would roughly double world consumption rates.

'Goldilocks needs tax reform ... not root-canal economic populism'

The answer ... is no.

So what's the "stag" part of stagflation look like as we begin 2008?

The economy seems to be decelerating rapidly:

* According to the latest data, released Dec. 27 but dating to the end of October, home prices are falling at a record rate. The S&P/Case-Shiller index of home prices in 10 major metropolitan areas dropped 6.7% from October 2006. That's a record year-to-year decline, beating the old record of 6.3%, set in April 1991.

* That decline is feeding into a whopping increase in credit card delinquencies. The dollar amount of credit card debt at least 30 days late jumped 26%, to $17.3 billion, in October 2007 from the same month of 2006, according to an Associated Press study of 325 million individual accounts held by the 17 largest credit card trusts.

* Retail sales in the just-concluded Christmas shopping season appeared weaker than projected, with growth in same-store sales running below estimates of 2.5%, according to the International Council of Shopping Centers. All this is starting to hit the real economy where it counts: in the unemployment numbers. Initial claims for unemployment, a good gauge for what's going on in the job market, rose to 350,000 in the week that ended Dec. 22. That left the four-week moving average for initial claims at 343,000. That's getting worryingly close to the 360,000 level in the four-week moving average that has accompanied recessions in 1990 (362,000) and 2001 (373,000).

But as bad as this news is, it doesn't add up to the "stag" in "stagflation."

Is '70s-style stagflation returning?

You might ask, "Who understands the GWOT?"

John McCain -- who, solely because of the grievous blow to Romney, seems to have been almost as big a winner last night as Huckabee or Obama -- flew to Manchester, NH yesterday for an early evening “town meeting.” He was accompanied by his own personal Chuck Norris, Joseph I. Lieberman.

The setting was the nearby town of Derry, which looks like a Lionel Train layout ...

The most interesting exchange came at the very end, and it was about Iraq. The money quote -- the bit that could come back to haunt McCain -- went like this:

Q: President Bush has talked about our staying in Iraq for fifty years.

McCain: Make it a hundred.

That’s the sound bite. That’s the headline. Now let’s look at the context, which I think is worth considering in full.

Click through; it's short and worth reading ... here's the wrap-up:

You have to hand it to McCain. It's impossible to imagine any of the other Republicans engaging in this kind of extended conversation with a citizen. There was more real debate in this exchange than in any of the so-called real debates.

But what the context shows, I think, is that yanking that sound bite out of context isn’t really all that unfair. McCain wants to stay in Iraq until no more Americans are getting killed, no matter how long it takes and how many Americans get killed achieving that goal -- that is, the goal of not getting any more Americans killed. And once that goal is achieved, we'll stay.

Do you think McCain has a "pro-war" sentiment?

A Hundred Years' War?

Do you dream of interplanetary space travel?

In the summer of 1944, the population of London was accustomed to the loud rumbling of a buzz bomb flying overhead, the abrupt silence when the engine stopped and the bomb began its descent to earth, the anxious seconds of waiting for the explosion. Buzz bombs, otherwise known as V-1s, were simple pilotless airplanes, launched from sites along the French and Dutch coasts. As the summer ended and our armies drove the Germans out of France, the buzz bombs stopped coming. They were replaced by a much less disturbing instrument of murder, the V-2 rockets launched from more distant sites in western Holland. The V-2 was not nerve-wracking like the buzz bomb. When a V-2 came down, we heard the explosion first and the supersonic scream of the descending rocket afterward. As soon as we heard the explosion, we knew that it had missed us. The buzz bombs and the V-2 rockets killed a few thousand people in London, but they hardly disrupted our civilian activities and had no effect at all on the war that was then raging in France and in Poland. The rockets had even less effect than the buzz bombs.

In the latest issue of the New York Review of Books, Freeman Dyson reviews a new book, Von Braun: Dreamer of Space, Engineer of War. (Unfortunately the full text is behind the paywall.) His review is worth reading.

Dyson writes:

This book raises three important issues, one historical and two moral. The historical question is whether von Braun's great achievement, providing the means for twelve men to walk on the moon, made sense. ... The two moral issues are whether von Braun was justified in selling his soul to Himmler, and whether the United States was justified in giving sanctuary and honorable employment to von Braun and other members of the [V-2] team. ...

He also talks about his own feelings of responsibility for the firebombing of Dresden. You may recall, from 2006:

According to one who was present, Churchill suddenly blurted out: "Are we animals? Are we taking this too far?"

Publishers Weekly reviewed the book:

Neufeld, chair of the Space History Division at the Smithsonian's National Air and Space Museum, offers what is likely to be the definitive biography of Wernher von Braun (1912–1977), the man behind both Nazi Germany's V-1 and V-2 rockets and America's postwar rocket program. Spearheading America's first satellite launch in 1958, which brought the U.S. up to par with the Soviet Union in space, von Braun was celebrated on the covers of Time and Life. Neufeld has a deep understanding of the technical and human challenges von Braun faced in leading the U.S. space program and lucidly explains his role in navigating the personal and public politics, management challenges and engineering problems that had to be solved before landing men on the moon. Neufield doesn't discount von Braun's past as an SS member and Nazi scientist (which was downplayed by NASA), but concludes nonjudgmentally that von Braun's lifelong obsession with becoming the Columbus of space, not Nazi sympathies, led him to his Faustian bargain to accept resources to build rockets regardless of their source or purpose. A wide range of readers (not only science and space buffs) will find this illuminating and rewarding.

The book was also reviewed for the Washington Post last September.

Wernher von Braun: Rocket Man, by Freeman Dyson

Mike Huckabee, the folksy former governor of Arkansas and Baptist preacher, won the Iowa Republican caucus with a strong late surge that buried his principal rival, Mitt Romney, the former governor of Massachusetts.

On the Democratic side, with 86% of precincts reporting, Senator Barack Obama had 37 percent of delegates allocated under the Democratic Party’s system, while former senator John Edwards and Hillary Rodham Clinton each had 30 percent.

It's Obama and Huckabee in Iowa

America is "selling the farm" to live "high on the hog"?

Forget the hog: that dream's gone, and the farm may not be far behind.

"Never underestimate the power of the superpsycho, hyper-spending American consumer. Where there is no cash, he will sell his soul. Or just charge it."

If you want to rise above this low opinion, here are 10 New Year's resolutions to prepare you to win in the coming 2008-2010 bear-recession:

1. Go contrarian.
2. Do it yourself.

"Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense."

3. Millionaires build wealth by working, not investing
4. Do what you love (or your boss will decide for you)
5. Plan to retire early: Much earlier than you expect
6. Downsize your lifestyle: Start by saving 15% of income
7. Buy no-load index funds: No brokers, no active managers
8. Invest long-term: Market-timing is high-risk gambling
9. Rebalance: Focus on picking allocations first, not funds
10. Live with gratitude: Life is a gift (so is your nest egg!)

Trust no one. Play it conservative, because 2008-2010 will repeat of the harsh lessons of the 2000-2002 bear-recession.

Ten resolutions to survive the bear market

About 1.41 billion movie tickets were sold this year, about the same number as last year. However, in 2002, 1.61 billion tickets were sold.

So, ticket sales are down 12% over the last 5 years.

The big macro story is that once upon a time, most Americans routinely went to the movies. Today, only a minority do. And that minority continues to shrink.

From here on out, Hollywood can -- and will -- continue to raise ticket prices to offset shrinking audiences. But that will presumably just cause the audiences to shrink faster.

Numbers numbers numbers, film industry edition

I recently met a young writer who, having decided he didn't know as much about movies as he wanted to, put together a film course for himself via his Netflix queue, a way to work through the likes of Godard and Chaplin, Fellini and Hawks, Hitchcock and Renoir. We talked about Netflix queues not just as lists of titles but as dream outlines of the people we'd like to be -- you, or I, might be a person who watched "Masculine Feminine" three times before returning it; who had every intention of getting through "Hiroshima Mon Amour" but ultimately sent it off in the pouch, unwatched; who is glad to have seen "The Passion of Joan of Arc" but also relieved at the prospect of never having to watch it again. Through movies, we collect bits of ourselves, and sometimes we reject parts of ourselves, too.

Movies that Mattered | Salon

The problem is that the art-house audience that supported the French New Wave filmmakers to whom “Reprise” owes an obvious debt can no longer be counted on to fill theater seats. Or maybe it’s overwhelmed. For a variety of reasons, including the glut of releases, movies are now whisked on and off theater screens so fast that it’s hard for the audience to discover them, much less build a popular film-going culture. In 1984 Jim Jarmusch’s “Stranger Than Paradise” hung around in theaters long enough for people to learn how to spell his name. These days too many cool movies are just passing through on the way to your Netflix queue.

Americans consume a lot of garbage, but that may be because they don’t have real choices: 16 of the top box-office earners last weekend — some good, almost all from big studios — monopolized 33,353 of the country’s 38,415 screens. The remaining 78 releases duked it out on the leftover screens.

I doubt that most moviegoers would prefer the relentlessly honest “4 Months, 3 Weeks and 2 Days,” which involves a young woman seeking an illegal abortion, over “Juno,” an ingratiating comedy about a teenager who carries her pregnancy to term. But I wish they had the choice.

A List, to Start the Conversation