Gore has a simple answer for America's woes, as he explains in his article titled A Generational Challenge to Repower America, available at www.realclearpolitics.com:

[...] Yet when we look at all three of these seemingly intractable challenges at the same time, we can see the common thread running through them, deeply ironic in its simplicity: our dangerous over-reliance on carbon-based fuels is at the core of all three of these challenges - the economic, environmental and national security crises. We're borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that's got to change. But if we grab hold of that common thread and pull it hard, all of these complex problems begin to unravel and we will find that we're holding the answer to all of them right in our hand.

The answer is to end our reliance on carbon-based fuels [...]

Enthymeme:

We're borrowing money from China to buy oil from the Persian Gulf to burn it in ways
that destroy the planet

THEREFORE:

our dangerous over-reliance on carbon-based fuels is at the core of all three of these challenges---the economic, environmental and national security crises

Locus: cause and effect, in this case an "ironically" simple cause that passes into complex effects, and in Gore's estimation, seemingly unrelated effects.

The assumption or suppressed premise that underwrites this enthymeme passes right into its own storyline, and the storyline is this:

Consumption---consuming things, the circulation of goods and services in the form of borrowing, buying, and the exchange of money and commodities---the consumer society, that is, capital formation in its industrial and post-industrial forms, or market democracy in its current form, is anarchic, anomic, unplanned and unmanaged, a system opposed to its own proper function, an anti-system, as disordered as it is disorderly, a threat to our planetary life support system as well as to our immediate security. In other words, the system---our system---must be dismantled in order to save it.

The assumption is that the anonymous, apolitical, and amoral character of trade undermines social and political life. Think of the Krupp weapons manufacturers selling weapons to both sides of conflicts. When Barack Obama said that he favoured increases in capital gains taxes even though the data show that higher capital gains taxes produces less revenue on grounds of "fairness," he expressed his commitment to the same assumption. It is an assumption that those who believe in free minds and free markets do not share.

The estimable James Pethokoukis detects the same assumption(s) on different grounds in a capital commerce blog burst titled Dissecting Al Gore's $5 Trillion Energy Plan

[...] The latter analogy is especially apt since the Gore Plan would effectively transform our free-market economy into a command-and-control war economy full of rationing and scarcity. Of course, there are many folks like Gore who view global warming as the moral equivalent of war. But Gore would extend the concept into the economic equivalent of war. Again, all this makes sense if you think we are doomed otherwise [...]

The emphasis is ours, all ours. Gore is not defending the environment so much as attacking the market system.

Gore is right. His argument is deeply ironic in its simplicity. Only not in the sense that Gore thinks is.

N.

Context: Pethokoukis defends McCain's innovation award proposal for better car batteries against Sen. Obama's criticism. Here is McCain on Energy Security And National Security availabe at realclearpolitics.com:

[...] I further propose we inspire the ingenuity and resolve of the American people by offering a $300 million prize for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars. This is one dollar for every man, woman and child in the U.S. -- a small price to pay for helping to break the back of our oil dependency -- and should deliver a power source at 30 percent of the current costs [...]

Our comment: Cash awards for top performance are like lotteries: they tend to favour the house. In the case of a lottery only the winnner shares in the proceeds; most of the receipts go to the house. In the case of an innovation prize the researchers assume all the costs of research and development; only the winner realizes a one-time benefit. Sen. McCain himself emphasizes the cost effectiveness of his proposal when he writes "This is one dollar for every man, woman and child in the U.S.---a small price to pay for helping to break the back of our oil dependency---and should deliver a power source at 30 percent of the current costs."

Here is Sen. Obama's retort from Pethokoukis's blog entry:

[...] When John F. Kennedy decided that we were going to put a man on the moon, he didn't put a bounty out for some rocket scientist to win—he put the full resources of the United States government behind the project and called on the ingenuity and innovation of the American people—--not just in the private sector but also in the public sector [...]

In this case the taxpayers assume all the costs, and all the risks, and, like NASA, the program never goes away.

The ingenuity of the public sector? If only the Senator would give us an example of public sector ingenuity.

Back to Pethokoukis:

[...] Private companies are using them internally to generate new approaches and ideas. It is a way for government to actively try to solve a big problem without creating a massive bureaucracy or favoring companies with good lobbying efforts. Instead, Obama is having a '70s flashback by offering a windfall profits tax to help fund a command-and-control research effort by government.

Obama's knee-jerk opposition to the McCain plan really reflects what an old-fashioned agenda he's been proposing. I can't find anything in it that either goes against decades of Democratic orthodoxy (fix Social Security? Raise taxes!) or reflects any of the novel policy ideas put out by liberal think tanks, much less conservative ones.

It's like a warmed-over version of Bill Clinton's "putting people first" agenda (Obama even resurrects Clinton's high-speed rail idea) infused with a healthy dose of Carternomics. (Since he's been hiring economists lately, Obama might want to give Hillary's top guy, Gene Sperling, a call.) Obama must believe those polls that show him up by double digits over McCain because that's how he's running his campaign right now, like a guy with a big lead trying to run out the clock and not make any mistakes [...]

Also see:

McCain, Gingrich, US$300 Million Prizes for Car Batteries, and the _Hieroor Tyrannicus_

N.

1) He is a great campaigner and communicator who could both shore up support in the South among social conservatives (Huckabee is a former Baptist minister) and appeal to working-class voters in the critical "Big 10" states of Pennsylvania, Michigan, Wisconsin, and Ohio.

2) As any pollster knows, voters search for candidates who "care about people like me," and Huckabee would probably score a lot higher on that quality than millionaire investor Mitt Romney. Plus, given all the turmoil on Wall Street, 2008 would seem to be a bad year to pick a former investment banker for veep.

3) Economic conservatives and supply-siders may balk, but the threat of four years of Obamanomics and higher investment, income, and corporate taxes might be enough to keep them on board.

Leaks are dangerous things, of course. Is this a McCain trial balloon to test Huckabee's acceptability? An anti-Huckabee leak to rouse opposition? An anti-McCain leak to make moderates and independents nervous about voting for a ticket with such strong ties to the social conservative wing? A guy trying to impress USNWR with his insider knowledge?

Regardless, the most interesting thing to me about the leak is, "Where's Tim?" As in Governor Tim Pawlenty, the man many think is McCain's true favorite choice? Nowhere in the article, that's for sure. Where's his bid for a shot at the ticket? Only McCain knows for sure.

We have seen a few tentative mentions of nationalization as an option, but no discussion of what that might mean for America.  Perhaps it will be, as the Democratic Party proposes for health care, an easy no-cost solution.  But instead nationalizing two large sectors of the American economy will have large and unexpected effects on America.  It will be the largest expansion of government power since the New Deal. 

The exact form nationalization takes matters little. 

• It can de jure or de facto.  Governmental control has long since moved from legislation to agency dictats.  Our representatives in Congress now function more as Tribunes than a legislature.
• It might be an explicit government take-over, or through existing business structures.  The building might say First National Bank, but so tightly controlled so as to be functionally a government agency.

What will America look like -- guessing -- after a severe recession and nationalization of these two sectors?

Despite hysterical forecasts, it will not be an apocalypse.  America's people and infrastructure will still remain, and life continues.  America will more closely resemble France and German.

• Economic growth will slow.
• Our government and economy will be more rigid.
• Economic and political power will concentrate.
• Social mobility will be more difficult, as challenging established power structures (profit, non-profit, political, economic) will be more difficult.

Our elites will likely see these things as progress.  What we think of these changes will not matter, unless we take responsibility for our country.   We have the tools to do so, if we have the will to use them.

Recent news reports and commentary about the slow nationalization of our financial system

"U.S. Mulls Next Steps in Crisis", Wall Street Journal (18 March 2008) (subscription only) -- Excerpt:

The U.S. will face the same issues that Asian nations faced in the crisis of 1997-98. Is it better to nationalize financial firms outright, or inject bonds that provide the funding to carry on, so long as the recipients agree to repay the bonds with future profits?

"Bank Bailout Is a Path to Nationalization", James Pethokoukis, US News and World Report (21 March 2008)

"10 reasons your taxes are going up", Paul B. Farrell, Marketwatch (24 March 2008) - Excerpt:

The Fed's dealing with America like a third-world banana republic, effectively nationalizing our financial industry!

"Denial, Hope, and Panic", John H. Makin, American Enterprise Institute, (27 March 2008). Excerpt:

Addressing the fundamental problem -- the persistent and accelerating fall in house prices -- will require legislative action that will, to some extent, nationalize the mortgage market.  This approach is understandably abhorrent to many and carries with it substantial risks of involving the federal government in mortgage markets to a greater extent than is already the case.

If steps to contain the damage being caused by a free fall in house prices result in a return to the idea that house prices go only up and that they are underwritten by the federal government, we will see another housing and credit bubble even larger than the one that has already been threatening the global economic system.

We are probably at a point, however, where we need to choose between two approaches to putting a floor on house prices.  Either have the Fed print so much money that a return to inflation eventually stabilizes house prices and then pushes them back up -- the radical monetize approach -- or, alternatively, employ the nationalize approach, whereby a federally funded agency steps in to buy mortgages at less than their current face value to help stabilize the credit markets.  The Fed's commitment to ensure price stability makes the nationalize approach the only realistic option, however unattractive it may be.

"Policymakers confront awkward home truths", Financial Times  (31 March 2008)

The uncomfortable question of how to nationalise part of the US housing market is drawing closer. The Fed's balance sheet is huge and can be expanded to swap for unwanted mortgage securities. This may still not be enough to unwind financial market tensions and it looks increasingly likely the government will have to join the rescue, perhaps by creating a new agency that can accept defaulting mortgages and replace them with more accommodating terms for homeowners.

"Fed eyes Nordic-style nationalisation of US banks", Telegraph (31 March 2008)

The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis. ...

These are steps toward a new era for America.  Quiet and small steps, so as to not disturb the Candidates or the stately kabuki of the election process.

Please share your comments by posting below (brief and relevant, please), or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).

For more information about this subject

1. A brief note on the US Dollar. Is this like August 1914?  (8 November 2007) — How the current situation is as unstable financially as was Europe geopolitically in early 1914.
2. The post-WWII geopolitical regime is dying. Chapter One   (21 November 2007) — Why the current geopolitical order is unstable, describing the policy choices that brought us here.
3. We have been warned. Death of the post-WWII geopolitical regime, Chapter II  (28 November 2007) — A long list of the warnings we have ignored, from individual experts and major financial institutions (links included).
4. Death of the post-WWII geopolitical regime, III - death by debt  (8 January 2008) – Origins of the long economic expansion from 1982 to 2006; why the down cycle will be so severe.
5. Geopolitical implications of the current economic downturn  (24 January 2008) – How will this recession end?  With re-balancing of the global economy, so that the US goods and services are again competitive.  No more trade deficit, and we can pay out debts.
6. A happy ending to the current economic recession (12 February 2008) – The political actions which might end this downturn, and their long-term implications.
7. What will America look like after this recession?  (18 March 208)  — More forecasts.  The recession might change so many things, from the distribution of wealth within the US to the ranking of global powers.
8. The most important story in this week’s newspapers   (22 May 2008) — How solvent is the US government? They report the facts to us every year.

To see the all posts on this subject, go to the archive for The End of the Post-WWII Geopolitical Regime.

That would kind of kill McCain's whole rationale for running, don'tcha think?

Well, that is pretty much what did happen, except in reverse. Voters who were most concerned about the economy went strongly—41 to 21 percent—for McCain over Romney, the multimillionaire venture capitalist. The Wall Street legend. The guy with the M.B.A. The guy who turned around the Salt Lake City Olympics. The guy who says, "I know how the economy works." Even worse, Romney lost to a fellow who has admitted in the past that economic policy is not his strong suit and that he might need more of an expert as his veep if nominated.

See, the problem with Romney isn't necessarily that voters don't like his ideas—such as cutting corporate taxes or eliminating investment taxes for middle-class voters. It's that voters don't think he understands their problems. Until that hurdle is overcome, ideas don't matter.

You have to do politics before you can do policy [...]

We concur. The struggle for NH has entered its archival phase. As we wrote before of Iowa, this is when the political community and various media dispute, interpret, or redact he outcomes of the contest.

Team Romney has failed at every task it set for itself. It failed to consolidate the social-conservative base as evidenced by the exit polling from IA and NH. It crucially failed to return clear decisions for Romney in IA and NH. Further, Romney massively-titanically overspent and received precious little in return. How much? Upwards of US$20 million of his own money on top of the US$80 million that he raised, but no one really knows. Tellingly, Team Romney isn't saying.

Romney now leads in delegates, but by one estimate Romney has spent almost US$1 million dollars per delegate---so the question then becomes, given this preposterously low ROI, just how sustainable is the Romney tribe's campaign?

This is also when a new discursive front opens up against Romney's flank as

(a) pressure for Romney to withdraw begins to develop

-and-

(b) doubt, dissensus, and discord breakout within Romney's own ranks.

To address (a) Romney has radically scaled back his operations, particularly his massive and massively ineffective media buys. To address (b) Romney has issued internal memos and issued promises to major financial backers.

"BOSTON (AP) — Republican presidential candidate Mitt Romney has decided to pull his advertising from South Carolina, where he was hoping to take on Mike Huckabee and John McCain, and from Florida, where Rudy Giuliani has been spending time and money," write Jim Kuhnenn and Glen Johnson in an AP release titled Romney Pulls Ads in SC, Fla.

"We feel the best strategy is to focus our paid messaging in Michigan," Romney spokesman Kevin Madden said Wednesday.

The decision comes on the heels of back-to-back second-place finishes in Iowa and New Hampshire for the former Massachusetts governor. Romney, a multimillionaire who had used some of his own cash, had invested heavily in both states, counting on the two to give him the momentum toward the nomination.

Earlier on Wednesday, Romney had assured his top financial backers that he will win the upcoming Michigan primary, as he and his staff worked to soothe supporters unsettled by his losses in the Iowa caucuses and New Hampshire primary.

"It's just getting started," the presidential contender told hundreds of supporters gathered at a convention center for a followup to the "National Call Day" that raised an unprecedented $6.5 million a year ago

He promised to carry on to Michigan, which votes Jan. 15, as well as Nevada and South Carolina, which vote Jan. 19.

The public spectacle, a rarity for the normally tightly controlled Romney political operation, included appeals for calm from a top financial backer, eBay CEO Meg Whitman, and a top political supporter, former Sen. Jim Talent of Missouri [...]

To assuage his paid staff and hirelings in field, Romney's strategist Alex Gage issued one of his infamous "internal memos."

Gage's argument: Despite Romney's losses and setbacks, "the Republican race remains wide open." Talking points include:

• Gov. Romney’s message of change generated momentum in New Hampshire.
• Gov. Romney is the best candidate in the Republican field to match up against the Democrats in the fall.
• No other candidate is competitive in as many states as Gov. Romney.
• Gov. Romney has a clear path to victory moving forward.

That the Republican race remains "wide open" is true on its face. The other points in support of a continued Romney candidacy are false or simply meaningless until Romney solves his ROI problem, especially as the campaign transitions to a far more long-term, slow-accumulation-of-delegates strategy. Did e.g. Romney's message of change generate momentum? No. Or: even if the answer is yes, the outcome of the contest indicates that it was not enough momentum. And how much did Romney spend per day in NH to promulgate his non-momentum message?

Sargent: “[Grrrr-Romney] was spending $100,000 a week through October, and he’s now upped the ante to $200,000 a week [in NH]”

Does e.g. Romney have a clear path to victory? Maybe. Perhaps. But at his current spending levels it he would have to blow his entire fortune to pursue it.

What Romney needs, and does not have, is a message that connects with people on the ground---a narrative, a story, something, anything. A successful message could resolve or at least ease his ROI problem. As Pethokoukis argues, what Romney needs is an Oprah moment.

Only Romney needs more than a moment. And Romney's own moment may have already passed.

yours &c.
dr. g.d.