Democrats Bringing On Modern Great Depression

How many times have I said we are making the same mistakes of the Great Depression, the same policy mistakes - protectionism, raising taxes on nearly every type of business activity, regulating massive swaths of the economy??? How many times. Well now the similarities are getting just downright eerie as well as scary. It is as if the Democrats are reading the history of the Great Depression and doing every single thing that deepened the Great Depression again, on purpose. Today's Democrats have resurrected FDR's undistributed profits tax that was one of the primary causes of the second dip post 1936 that made what was then a short recession into the Great Depression. The second was the FDR's National Recovery Act, which today comes in the form of ObamaCare, Financial Reform, and Cap and Trade. If we get our new, modern version of the undistributed profits tax and financial reform, I say Great Depression II (2007-2014) is a done deal. A done deal. Don't say you weren't warned.

Nobel Economist Confirms Everything I've Been Saying

Can I just say that nearly everything that Henninger tells us that Nobel laureate Robert Lucas says, readers of NBfPB have heard me say before...

Henninger: "What discomfits [Lucas] is the similarities in the policy choices that accompanied both delayed recoveries. By 1934, the Depression's banking crisis had been resolved, "yet full recovery was still seven years away," he said in the Milliman lecture. GDP stayed more than 10% below trend. "Why?" The answer, he says, was growth-suppressing policies, such as the Smoot-Hawley tariff, cartelization, unionization and, "most important but hardest to measure, FDR's demonization of business."

Baseball: "How many times have I said we are making the same mistakes of the Great Depression, the same policy mistakes - protectionism, raising taxes on nearly every type of business activity, regulating massive swaths of the economy??? How many times. Well now the similarities are getting just downright eerie as well as scary. It is as if the Democrats are reading the history of the Great Depression and doing every single thing that deepened the Great Depression again, on purpose."

Henninger: "[Lucas] credits the current Federal Reserve with avoiding the mistakes of the Depression, properly acting this time as the lender of last resort. With the financial side essentially in order and the recovery stalled, Prof. Lucas sees public-policy analogies to the 1930s: "The likelihood of much higher taxes, focused on 'the rich'; medical legislation that promises a large increase in the role of government; financial legislation that assigns vast, poorly defined responsibilities to the Fed and others."

Baseball: "Government can crater the system again through its vendetta of regulation. ObamaCare is today's NRA. We have small trade wars smoldering, threatening to burst wide open. Taxes are on their way up to highly distortive levels. And now we are on a campaign to destroy our best capital markets institutions."

and...

"We have, fortunately thanks to Ben Bernanke, passed the first test - we have not contracted the money supply bringing on defaltion."

ObamaCare is Today's Smoot-Hawley

Actually, more like the National Recovery Act of 1933. This act probably did more to reverse a nascent recovery and deepen a routine recession into the Great Depression in the 1930s, but Smoot-Hawley has more brand recognition as a true policy disaster. Remember, our scorecard is currently 1 for 4. ObamaCare represents higher taxes and massive regulation of the economy, and I am afraid that our one success in avoiding the mistakes of the 1930s - monetary expansion - will be swamped by this failure to learn from the past. If ObamaCare passes, not only are we double-dipping, the Great Recession deepens, perhaps into Great Depression Dos.

A few more eerie parallels: 1) Roosevelt's cadre of academics went on a trip to Moscow and came back with a glowing admiration of Stalin's putatively efficient economic model. Today, our intelligentsia is again enamored with authoritarian models of efficiency (again, putative efficiency). 2) Given the dubious constitutionality of some major provisions in the emerging Obamacare bill, we may have to wait upon a defining Supreme Court case to set us free from the economic shackles that this legislation will put on us - just like Schechter Poultry v United States, aka the Kosher Chicken case. 3) In anticipation that many of his New Deal initiatives would run into judicial scrutiny, FDR aimed to pack the Supreme Court. On cue, similar calls can be heard today.

History never repeats? Horsepucky.

UPDATE: Jim "Mad Money" Cramer thinks we double dip too.

No Fooling...Economic Barbarity Is At the Gates

The Wall Street Journal's Op-Ed page today is chock-a-block with analysis of various government revenue grabs, many of which have been addressed before here at NBfPB. First the WSJ talks about the global bank tax money grab, and they rightly point out, as I did recently, that we just might be saved from this disaster by the Canadians, who didn't let their banking system become infected with crappy mortgages, didn't require national finances to bailout the system, and ought not to be punished for it. This is a very big deal, which is why I use the terms "saved" and "disaster". It does not matter by what means you do it or under what pretense you do it, removing capital from the banking system on a large scale results in economic activity grinding to a halt. We did this during the 1930s under multiple guises - the check tax comes to mind - and exacerbated what would become the Great Depression. This is no apocalyptic hooey, we are headed in that direction if we do things that give us the multiplier effect of the fractional reserve banking system in reverse. That is what sucking capital out of the banking system does, it gives us a reverse multiplier effect, for every dollar of capital that disappears, several dollars of loans supporting business activity has to disappear.

The next money grab on the horizon is the tax assault on dividends. This one is doubly dumb because, not only will it hurt the economy, but it won't achieve its revenue goals. Again the WSJ rightly points out that revenues from dividend tax increases almost always fall short of projections. Well short, and here is an example of why. Oh, and let's not forget what Nobelist Robert Mundell said about increased taxes on cap gains and dividends...nosedive city, baby. But you don't have to know your Great Depression economic history to know about the stupidity of this maneuver, we have ample lessons from recent history to guide us - lower divvy taxes and you get a flood, raise them and you get a drought. So in fact, this is a trifecta of stupidity.

I have warned that policy mistakes will send us double dipping. I think we are about an inch away from being there. We have a bottom of the ninth at bat to save us in the form of the November elections, but short of completely hamstringing this administration and this Congressional leadership, much greater economic pain is pretty much baked in the cake.

A Rant In Contravention to All the Idiotic Market Rhetoric

The dumbest and most annoying (and most consistently wrong) bearish mantra emanating from quotable analysts that the financial press loves to parade before us is "the consumer is tapped out." How many months and years have we been hearing that the consumer is tapped out? In what will hopefully be a refreshing change, in that we won't have to hear this gibberish any more, the bears are formulating a new rationale for our impending economic doom. Scratch all that about the consumers, actually it's the banks that are tapped out! So because a few large banks got drunk on securitization and underwriting fees and have to write-down assets that won't trade because nobody knows how to value them, the economy is going to be starved of capital? Hmm. Ok, I get that maybe Citigroup might reign it in a little, but why would the First National Bank of East Jesus stop lending money? Or why would a bank stop lending to buy container ships or truck engines or cement mixers just because lending money to poor people to buy overpriced homes proved to be a bad idea? There is no reason to believe that all banks will cease to engage in banking and that all investment projects will be viewed the same as housing. There is just no sense to this.

Oh, and how much of a frankfurter is Wells Fargo CEO John Stumpf for using such sensationalist rhetoric with his reference to the Great Depression? Last I checked, there wasn't 25% unemployment, the money supply wasn't shrinking at a rapid pace, and we weren't sticking it to our global trading partners (not yet at least). This economy looks nothing like the economy of the 1930s and while he might defend himself that he limited his comparison only to housing, he should be smart enough to know how the phrase "Great Depression" carries broadly ominous symbolism, especially when wielded by the irresponsible half-wit media, and should not be blithely bandied about. I guess bankers sometimes need to break out of that measured, sober stereotype once in a while and do something kah-ray-zee!

Our "Great Depression II" Scorecard

Lovely...

Brief: Another U.S.-China Trade Spat
Stratfor Today »-->February 25, 2010
Applying STRATFOR analysis to breaking news
China’s Ministry of Commerce accused the United States of “abusing its own trade relief measures” on Feb. 25, in response to a U.S. Department of Commerce’s decision on Feb. 24 to impose preliminary countervailing duties ranging from 11-13 percent on carbon and alloy pipes. The U.S. Commerce Department claims the duties will counteract the low prices of the pipes due to government subsidies that the Chinese producers receive. It is also considering adding stiffer anti-dumping duties. China and the United States have seen a rise in trade disputes since spring 2009 in the rocky global economic environment, many of which have been referred to the World Trade Organization (WTO). Among numerous complaints, China has launched investigations into imports of U.S. car parts, has made a preliminary ruling against U.S. chemical fibers and has imposed anti-dumping duties of 43 to 105 percent on U.S. chicken products; while the United States has imposed tariffs of 35 percent on Chinese-made tires, duties of 10-16 percent on Chinese steel piping, tariffs and additional duties on Chinese wire-decking, and anti-dumping duties on Chinese ribbons. These conditions will persist, as China continues to use artificially low credit, subsidies and rebates to help its exporters, and the United States strives to protect its ailing manufacturing sector from Chinese competition. But both sides have so far given warning shots and sought to avoid escalation into a full trade war.

Remember, by wide consensus among economists and historians, the Great Depression was deepened and prolonged by four principal policy mistakes:

• Contraction of the money supply
• Protectionism
• Massive Regulation
• Higher Taxes

We are currently going 1 for 4 on not repeating these mistakes...actually, I'm going to be generous and call it 1.5 for 4 because cap-and-trade and healthcare look mighty wounded, if not dead, maybe 1.25 as Dodd's financial regualtion reform looks to be moving again. Let's hope that is enough, but I'd sleep better if we were solidly batting above .500 on this.

Dems Dusting Off Last, Un-Dusted Off Bad Idea from FDR's Great Depression Playbook?

I have chronicled how the Obamacrats have been dusting off every bad economic idea from the days of FDR in their ridiculous and misguided attempts to manage the economy.  I have also noted that the one truly bad idea of the Great Depression that they haven't aggressively tried to resurrect is the "undistributed profits" tax.

Of course, you knew it was only a matter of time...

More Protectionism Hurt Odds of Avoiding 1930s Redux

I said that the administration's awful protectionist decision on Chinese tires would encourage more companies to come forward and ask for protectionist measures. We've seen it with paper companies and now some steel products producers. They have asked and our government is obliging. Protectionism was one of the four critical policy mistakes that turned a routine recession in the 1930s into the Great Depression, which went on to spark already simmering grievances into a global war that killed 50 million people. While we have not resorted to protectionism on a significant scale this administration has been dabbling in small scale protectionism almost from day one with the Mexican trucking ban. Even if we don't resort to big-time protectionism, at some point the continuing small scale efforts add up to a significant protectionist stance for which we'll face the consequences; and, we will have thusly failed one test in our modern effort to keep a routine recession from becoming another Great Depression.

We have, fortunately thanks to Ben Bernanke, passed the first test - we have not contracted the money supply bringing on defaltion. If we we stop dead in our tracks on protectionist measures and tack backward toward freer trade we will stand 2 for 2 and have good odds of not repeating the GD. Taxes and massive regulation of the economy remain as the final two tests. Taxes are going up, that is certain, so we could be 2 for 3 going into the fight over massively regulating the economy represented by healthcare reform and cap-and-trade. If we fail that test and have close to 40% of the economy subject to nearly unlimited government interference, we will stand at 2 for 4 and, no surprise, I give us a 50-50 chance of avoiding another 1930s. But I am profoundly pessimistic that the administration's protectionist urge will subside, so we stand at 1 for 3 in my book. Healthcare "reform" and cap-and-trade are the last test. If we pass both measures as currently contemplated it will represent an unprecedented takeover of nearly the entire economy akin to Roosevelt's NRA, and we'll have gone 1 for 4. Not good enough, I'm afraid, and we'll see something quite similar to the 1930s.

Although, some think 1930s America is not the right comparison, not that this is all that much better.

"We Have To Tax Something Somewhere"

There is much talk these days about the Great Depression. Amity Shlaes's book The Forgotten Man couldn't be timelier although there are places where it is not being enthusiastcally embraced, or even read (hint: in the Office of the President Elect).

I'm not going to wade into this massive subject, but I do want to highlight a little known aspect of Depression Era policy that doesn't get enough attention (and thus opprobrium) - the check tax. Read here for some background (and to discover that the title of this post was a quote from a then member of the Great Sausage Factory). The details of the debate are worth your time but here is the quick summary: Congress and the Hoover administration levied a tax on checks, so people pulled their cash out of banks in order to transact. Why pay your $2 milk bill via check if you get hit with a tax to do so? Same went for paying employees. Turns out that paying employees via check was a relatively new concept too, and Congress was warned that a check tax might encourage "going back to the old way" of handing out cash on payday. Well, the logic represented by the quote in the title of this post carried the day and we got a check tax. Guess what happened? People took cash out of the banking system. Muliplier effect? We got it in reverse.

Supply Siders: Right and, Hopefully, Much Richer

The market bottomed one year ago yesterday on March 9, 2009. It's been up 68% since in one of the greatest recoveries in history. This man called it. And this man has been calling it, and, of course, Sir Mustard Seed Himself made the call. If you've followed them, you know that they were right all along, but more importantly, they were early. They called it when no one could see it. Unbelievably great job by them and I hope they are very rich because of it (better revenge than being right). Further, I think the difference between making the right call and the wrong call - the wrong call was "Great Depression II, other shoe to drop, armageddon, etc - was how you saw the financial crisis and the economy. If you saw it as a panic or a "velocity of money" problem, you were probably more inclined to make a "V-shaped recovery call". If you saw it through the lens of classic business cycle theory, you were probably looking for a "U-shaped" recovery. Then there were the armageddonists, the "L-shaped" recovery people, the people who didn't like the "Porkulus" because it wasn't big enough - the Roubinis, Krugmans, Roaches and Stiglitzes of the world. Granted the situation was complicated by a change in political power in Washington that represented a massive change in idealogical trajectory (as we have been finding out; some of our fellow countrymen were duped as to how much of an philosophical leap we were taking in the other direction - these people are commonly referred to as "rubes" around here.) and still is, but in retrospect we can identify real winners and losers. The supply-siders came out big winners, and the Keynesians and the "imbalances" crowd - Rubinomics folks - came out losers. If you were of the former camp, you had a better chance of calling it right and making some nice money. If you were of the latter camp, you likely spent the year predicting more doom and gloom and you missed the recovery. That is not to say that idealogy, or your philosophical approach to the economy, was solely determinative of outcome, it helped to know your financial history - 2008 was more akin to 1907 than to 1929, and if you were perceptive enough to make that key comparison, you had the analytical foundation to call a recovery and put down some markers, which hopefully were big financial bets on that recovery.

Recipe for Disaster: We're Mixing the Ingredients in a Bowl

I have said that we are making all the same mistakes that Hoover and FDR made in the early 20th century that turned a routine recession into the Great Depression (all the mistakes save one, and we have Ben Bernanke, but not a single soul in elective office, to thank for that). Today, the top bank analyst on the street says that the SEC's bombing of Goldman Sachs could engender another financial crisis. Bove is merely saying what I've been saying, we are making the same mistakes again. Government can crater the system again through its vendetta of regulation. ObamaCare is today's NRA. We have small trade wars smoldering, threatening to burst wide open. Taxes are on their way up to highly distortive levels. And now we are on a campaign to destroy our best capital markets institutions. We are mixing the batter, but we have not yet baked the cake. If we avoid a double dip it'll be by a small miracle, a positive Black Swan, like when my three-year daughter decides to "help" and dumps a load of salt into the cake batter and we are forced to pitch it all and start over.

Shock Doctrine Indeed

Wannabe economist and anti-globalization zealot Naomi Klein has written a successful book claiming that free market capitalism is incredibly unpopular and only gets advanced by being rammed down people's throats in a crisis. The theory is pretty laughable, but every cockamamie theory needs to rebutted seriously as a matter of intellectual integrity. Here is the best one I've found (watch the video), although there is this too. Of course, any serious student of history knows that it is economic shocks that bring about increased central control of the economy. Nobody disputes that the Great Depression accelerated the world's gravitation toward socialism in general, and that Germany's inter-war economic dislocations gave rise to National Socialism. These are but history's most prominent examples. True to form, openly socialist Senator Bernie Sanders plays the same role that collectivists and utopians throughout history have played, seeing in a crisis the opportunity to seize economic power from individuals and garner it for the state.

My Weekend of Economic Research

Since the media is pushing this recession theme hard (I see that some Brit rag is dubbing 2008 the year of the Great Depression), I thought I'd go out this weekend and do a little gum-shoe research on the economy. Granted this is hardly comprehensive or representative, but this sort of real-world activity is how you reality check what you are reading in the papers. So here goes:

Saturday AM: Trip to the mall. Not packed but solid foot traffic. Apple store - mobbed. Pottery Barn and Crate & Barrel - dead. P.F. Chang's - close to full but no waits for table. Best Buy - moderate traffic, surprising lines at check out. Local Home Appliance retailer - dead.

Saturday Lunch: California Pizza Kitchen - packed, but no big waits for table unlike 6 months ago.

Saturday Evening - drinks at local Irish pub - restaurant 2/3 full, bar crowded.

Conclusion: Housing and related sectors stink. Rest of economy doing fine. Surprise surprise. Recommendation: use the media bias/harping to load up on stocks.

Repeating the Mistakes of the Great Depression

This is simply terrible economic policy. If Summers, Romer, Goolsbee and other various Obama braintrusters aren't strongly advising the President against this, they are professionally negligent. If they are and Obama isn't listening, he is negligent.

UPDATE: In the name of fairness I must note that George W. Bush, just as stupidly, imposed tariffs on imported steel. The only thing that makes the two tariff impositions different, and the Obama version slightly more damaging, is the timing. A trade war right now, the given the global economic environment, would be much more damaging than in 2004.

Hanke Agrees With Me

Check this out, where a prominent economist agrees with me that 2007/08 was a panic more akin to 1907 than to the Great Depression. Again, you heard it here first!

Who Needs Recovery When We Can Have the Impression of Recovery?

Amity Schlaes new book about FDR and the Great Depression is getting alot of play in the economics blogosphere. Greg Mankiw helpfully points to John Updike's defense of FDR and subtly calls it "telling," which is a hyper-gentlemanly scholar's way of saying it's nuts. Updike's defense is based on the banal, popular view of business as heartless. I doubt the label was even deserved in the 1920s, as it isn't today, but let's grant him that. Rather than have a robust business environment where these heartless corporations could employ people, Updike sees virtue in the "impression of recovery". This reminds me of the oral history I learned from the likes of my dad and my uncles who lived through the New Deal. As a naive student I wondered at the brilliance of the New Deal until they burst my bubble telling me about what it was really like to work on WPA projects, where men were essentially paid to dig holes in the woods or move things around with no productive purpose in mind. However, the ultimate flaw in Updike's argument is the strange notion that a transaction involving government is a human, meaningful one whereas a transaction with a corporation is a heartless, empty one. Of course in reality, corporations are not monoliths but collections of people who, mostly, act like people when dealing with other people; and, government can be as monstrous, impersonal and heartless as any corporation. Maybe the 1920s were different, but today, I'd rather deal with almost any company that currently provides me goods and services over virtually any government entity, as I suspect most of us would. If we got half of the solicitousness and attention from the governemnt that we get from, say, our auto insurer, Updike could have a seat at the table, but as is he ought to be laughed out of the room.

UPDATE: Scott Johnson is not impressed either.

Again, Very Little Sympathy for the Younglings

Record numbers of recent college grads are living at home with mom and dad.

The Class of 2008, born during the historic bull market that closed the past century, reached a dubious distinction last year: More than a million of the college graduates have gone back home.

The number of 26-year-olds living with parents has jumped almost 46 percent since 2007, according to Census Bureau data compiled by the University of Minnesota Population Center. Last year, the number of 18- to 30-year-olds living with their parents grew to 20.7 million, a 3.9 percent gain from 2010.

The figures underscore the difficulty that millions of young people have had in finding jobs and starting careers in the U.S. following the longest recession since the Great Depression. About a quarter of American adults between the ages of 18 and 30 now live with parents, while intergenerational households have reached the highest level in more than 50 years.

The whipper-snappers can't say they weren't warned.  You get the government you deserve and this is what you get for letting your college professors fill your heads with gibberish.

Life In the Age of Obama: Fewer Homes With Plumbing

Reversing a five decade trend...

Amid the worst recession since the Great Depression, pilfering cut the number of U.S. homes with complete plumbing by about 10.4 percent from 2008 to 2011, according to U.S. Census data compiled by Bloomberg. That reversed a five-decade trend. The decay of housing adds another obstacle to recovery in Rust Belt cities already beset by crime and poverty.

As is usual these days, Detroit seems to be the leader in this retrogression of life in America.  Article here.

Pitchfork Brigade Needs to Stand Down

Here in the great Northeast we are all abuzz (in fear actually) of the pitchfork brigade that has formed in our nation's capital to levy punitive taxes on all of us in the financial services industry over the misdeeds of a few and the misunderstanding of the very small and inconsequential retention bonuses paid to the few folks worth their salt left over at AIG keeping the lights on.  Citibank and JPMorgan sent around late day emails assuring people that they would work with policymakers to avert this ill considered law - and that is about as nice as I can describe it.  Krauthammer has it right, but let me say this...this law is a disaster in every way.  It is not justified by any stretch.  Punishing the tens of thousands of people who work hard and with integrity in our financial system to make amends for the stupidity of a few who are already expelled from the system, is a gross injustice and it would have devastating consequences.  First, the New York City economy would implode.  NYC is just squeaking by on the little financial services activity that is still going on.   This law would send NYC over the edge into the abyss.   Then it would ripple throughout the economy as the NY money center banks and capital markets firms lose people and suffer disruption and uncertainty.  This is to say nothing of what it would do to communities like Charlotte, and San Francisco, Minneapolis and Boston (remember, Wells Fargo, State Street, US Bank were all forced to take TARP funds).  I can't even begin to articulate how dumb a reaction this is, and it has me quite fearful, not for myself, but for our economy and for our country.  Tonight my friend assured me that it would never pass.  "Oh yeah", I said?  Who is the voice of reason in the halls of power ?  Where precisely is the brake going to be applied?  We speculated that some grey haired Democratic power broker like a Felix Rohatyn would place a call to the White House and make sure that it didn't pass or Chuck Schumer, at least, would see the devastation that his constituency faced and mount a counter campaign.  Is this our best hope - some miracle intervention?  We are on very dangerous ground, we are tottering on the edge of recession looking into the abyss at Depression and our leaders seemed determined to bungle us over the edge.  

Here is my suggestion...we need an outright slaughter of the incumbents in 2010.  Although I have a partisan preference, I am not calling for a change in the partisan makeup of our legislature; I would be happy if the partisan makeup stayed the same but that every current member of Congress was sent packing.  We literally need 535 completely different people as our elected representatives.  Of course that seems a pipe dream but that is what needs to happen, short of revolution.

US Banking, a Hinge of History

Aside from his political views, I never cease to be amazed at Warren Buffett's genius. It was no coincidence that over the weekend, before substantive details of the Treasury's bank "stress tests" are revealed, Buffett was waxing euphoric over Wells Fargo at the Berkshire Hathaway annual meeting. The Oracle went so far as to say that if there was one stock he would put his entire net worth into, it would be Wells. Wow. That is a public relations triple howitzer. Not surprisingly, it was good for a 20+% gain for WFC on Monday, muting the news that the government is going to ask Wells to raise capital. The good news for Wells is that, at worst, they raise a couple billion, of which Berkshire would take a big chunk. But frankly, as I've said before, if were them, I'd sue the feds. The TARP money was essentially forced upon them, the conditions were changed ex post facto, they are facing resistance in giving it back, they've been forced to cut their dividends, and now the government is demanding they dilute shareholders based on an unlikely Depression era economic scenario and arbitrary capital rules that run counter to decades of bank regulation practice. I repeat...I'd sue. All of this should be a bridge too far, especially for a company like Wells that did the government a favor by sweeping up the mess at Wachovia, which could have been a disaster for the FDIC.

Of course this is not the only tactic to employ. A strong bank could play along with the government and seek to benefit as the heavy hand of the government wrecks some of the competition. This appears to be the game plan that Jamie Dimon is following. Yesterday, he said that JPM stands ready to acquire banks that the feds think aren't up to snuff. While this is a tad cynical and not ultimately good for the dynamism of American capitalism, I am not too upset as a JPM shareholder. Obama has eight years at the most and his influence could easily wane much faster, so it is not implausible that JPM scoops up otherwise decent bank assets - long term assets - at distressed levels, which will accrue to JPM shareholders' benefit long after Obama is gone and US banking returns to normal. We could well look back on this era and say that JPM, posing as an altruistic corporate citizen, looted its competitors with the imprimatur of the federal government. (Concerning TARP, Dimon has spoke numerous times recently of "what is good for the country", despite being one of the most shareholder-focused CEOs in America.) Again, fine for JPM shareholders, but this is crony capitalism or some other such variant of directed capitalism, it is not dynamic, Schumpeterian American capitalism.

History hangs on individual actions, it is not foreordained. The direction of the US economy and American capitalism could be tied up in the actions of one or a handful of banking institutions in the next couple of months. Who goes along, who resists, who questions authority, who makes an alternative case, who stands on principle, who plays the angles? These are the questions of great import. These are the hinges on which history turns. It is both scary and exhilerating.