Politics

It seems as though the tide might finally be turning. If things improve steadily over the next few years and Iraq eventually returns to a normal, functioning, semi-democracy, will you admit that it was worth it? Or will the cost in American lives still have been too high?

The Hudson Institute has a good article on the spending profiles of Americans.

Interestingly enough:

Last year Americans in the lowest income quintile spent an average of $11,247 per person, according to the Bureau of Labor Statistics, compared with $15,843 for middle income quintiles, and $28,272 for the top quintile. The top group is spending only 2.5 times as much as the bottom group, and 1.8 times as much as the middle classes. This is not major inequality.

Tracking spending is vital because it is a better indicator of living standards than income and is a more reliable measure of our confidence in the future. Fortunately,

… a glance at per-person spending over the past 20 years shows that all groups are spending more in real terms. To humbly contradict the soon-to-be Senator Webb, everyone has grown richer over the past 20 years.

The lowest quintile is spending 14% more in 2005 than it was in 1985, the second quintile 16%, the third quintile 11%, the fourth 13%, and the top quintile is spending an additional 16%.

There’s no striking inequality there, especially since people don’t just stay in one quintile. Many have moved up to other quintiles in the 20-year time period as they get older and more experienced and marry other earners.

The Bureau of Labor Statistics data also provide a window on changes in our society. The bottom quintile is spending 120% more on audio and visual equipment and services, compared with the category of TVs and radios from 1985. The top quintile is spending only 31% more. Comcast and Netflix, take note.

A week ago Pope Benedict XVI gave a speech at the University of Regensberg in Germany. He touched briefly on the question of whether there is an underlying intellectual strain in Islam which promotes violence. Talking to people around me, I have been stunned at the intensity of feeling on the topic given that no one I have spoken to has read either the Qur’an or the actual speech.

Robert Louis Wilken gives a good background on the now infamous Byzantine emperor, Manuel II 

Richard John Neuhaus, editor of First Things, writing about the outcry, summarized the speech as follows:

It was a considered reflection on the inseparable linkage of faith and reason in the Christian understanding, an incisive critique of Christian thinkers who press for separating faith and reason in the name of “de-Hellenizing” Christianity, and a stirring call for Christians to celebrate the achievements of modernity and secure those achievements by grounding them in theological and philosophical truth.

Below is the full text of the speech so that you can judge for yourselves whether the reaction was justified:

Your Eminences, Your Magnificences, Your Excellencies, Distinguished Ladies and Gentlemen

It is a moving experience for me to be back again in the university and to be able once again to give a lecture at this podium.

(more…)

I wrote last week about the issues of fees in the investment industry. Now it appears that state governments are so enamored with the venture industry that they are investing on margin. According to VentureWire:

Deutsche Bank AG is emerging as a leading source of capital for private equity funds of funds sponsored by state governments.

In the latest instance, Michigan Gov. Jennifer Granholm announced this week that Deutsche Bank had ponied up $200 million to finance the state’s Venture Michigan Fund, which is a fund of funds earmarked for regional venture capital funds.

The Venture Michigan Fund is the second state-sponsored fund of funds that Deutsche Bank has financed. Deutsche also supplied Utah with $100 million for its Utah Fund of Funds in March. That vehicle invests more broadly in in-state venture capital and buyout funds.

Deutsche is said to be negotiating with other states that are also in the process of setting up funds of funds, a person close to the issue said. Deutsche declined to comment.

The Venture Michigan Fund is managed by Credit Suisse’s Customized Fund Investment Group, while the Utah Fund of Funds is overseen by Ft. Washington Capital Partners.

Rather than serve as a traditional investor, Deutsche acts more like a lender to the funds of funds. Both Michigan and Utah pay interest on the value of the bank’s commitment. In the case of the Venture Michigan Fund, the state pays Deutsche more than 6.5% interest on the $200 million it is supplying. And if the fund of funds’ investments fail to generate enough profits to cover the interest payments, Deutsche receives tax vouchers for the full amount as a backstop.

This is the kind of crass stupidity from politicians that bolsters the argument for limited government.

Have almost finished reading The Guns of August. It’s an account of the first month of World War I and ranks as one of the finest works of historical nonfiction. The book opens with the following paragraph:

So gorgeous was the spectacle on the May morning of 1910 when nine kings rode in the funeral of Edward VII of England that the crowd, waiting in hushed and black-clad awe, could not keep back gasps of admiration. In scarlet and blue and green and purple, three by three the sovereigns rode through the palace gates, with plumed helmets, gold braid, crimson sashes, and jeweled orders flashing in the gun. After them came five heirs apparent, forty more imperial or royal highnesses, seven queens – four dowager and three regnant – and a scattering of special ambassadors from uncrowned countries. Together they represented seventy nations in the greatest assemblage of royalty and rank ever gathered in one place and, of its kind, the last. The muffled tongue of Big Ben tolled nine by the clock as the cortege left the palace, but on history’s clock it was sunset, and the sun of the old world was setting in a dying blaze of splendor never to be seen again.

It’s astonishing to read of the parallels between 1914 and today. The course of history is influenced by frail human intellect as much as ever.