April 2008

Stocks soared yesterday on the very bold assumption that the credit crunch is over, but don't think the dimwits who were doing the buying have cornered the market on stupidity, no sirree. It would appear that they have good company over at The Wall Street Journal, which haughtily took our beloved Hillary Clinton to task the other day for suggesting that the U.S. was flirting with Japan-style deflation. The editors purported to give her a history lesson, alleging that Japan's central bank waited too long to ease, and that when it finally did ease, the rate cuts were too small. Of course, nothing like that could ever happen here: 'There's little sign the U.S. is facing a similar danger today, given that the Federal Reserve has been dropping rates quickly as the economy has slowed,' the editorial noted. 'If anything, the problem is the opposite, with the Fed risking future inflation by putting rates into negative real territory and devaluing the dollar.' Would that the Fed were so successful at creating inflation, since that has been its obsessive goal all along, a desperate attempt to keep the housing sector from capsizing. Despite the effort, eight million home 'owners' reportedly are underwater now, and some of the biggest builders in the country are struggling to avoid bankruptcy. Just ask them how worried they are about a resurgent inflation. Praying for it would be more like it. And the banks are praying right along with them, since it appears they may have loaned out quite a bit more mortgage money than the underlying homes are worth. Keynesian Quackery Now, we have no problem with the Journal attacking Hillary's $10 billion 'Rebuild America Plan' or whatever other Keynesian quackery she and her fellow politicians would inflict on taxpayers. But for the newspaper to

April Fool's Day has been anticlimactic ever since Orson Welles broadcast The War of the Worlds on American radio nearly 70 years ago. He pulled this legendary stunt on October 30, 1938 ' the day before Halloween ' but it set a standard for hoodwinking the public that no April Fool's prank has ever topped. Here's Wikipedia's account: 'The first half of the 60-minute show was presented as a series of news bulletins, which suggested to many listeners that an actual Martian invasion was in progress. Some fled their homes; others merely were terrified. The news-bulletin format was decried as cruelly deceptive by some newspapers and public figures, leading to an outcry against the perpetrators of the broadcast.'  The best thing to come of it was that it brought Welles instant fame. He'd have become hugely famous anyway, towering genius that he was, but the faked Martian attack made him a celebrity virtually overnight. Welles was 22 at the time, just three years away from co-writing, directing, producing and starring in Citizen Kane, arguably the greatest film ever made. He was a modern-day genius of the first rank, and his prodigious achievements in both film and theater serve to remind us that there is a vast gap between true genius and mere talent. The hallmark of genius is that it succeeds at nearly all that it attempts, and in a way that ordinary minds could not easily have imagined. Even when genius fails, it inspires. Welles had nearly a hundred projects in the works that he did not complete. Many of his scripts and partially shot films are in storage under the supervision of his last companion, Oja Kodar. Perhaps a hundred or even a thousand years from now Welles' luminous work will be on display in some virtual museum,