Kevin Drum explains what W. Michael Cox of the Fed means by "portfolio diversification in your income." Try to guess what it means without reading the explanation.
There are serious arguments to be made from the conservative side of economics. I've been fairly well persuaded, for example, that in general free-er trade is good for the economies of all concerned (though I think major changes in the playing field should be phased in evenly over periods on the order of 10-20 years, to give people lots of time to adjust, and we should require a phase-in of some kind of basic labor and environmental standards in our trading partners over a similar period, and provide a lot more services to help those displaced in our own country). I'm also convinced that Supply Side Economics is worth looking at -- when it isn't interpreted as "taxes are always too high" (and that tax cuts for the rich pay for themselves), but instead as the general class of policies aimed at increasing Aggregate Supply, which can mean reducing the burden on investment where possible, but also investing in education and infrastructure, using regulation to eliminate externalities that screw up markets like the one for wild-caught fish (there would be more, and cheaper, fish available if we could prevent overfishing), and so on.
But, in practice, conservative economists have gone off the deep end. They advocate giving people private investment accounts for retirement, healthcare, etc, when in fact it has been well demonstrated that the vast majority of citizens do not know how to administer investment accounts. Tony Snow, spokesman for the White House that advocates the "ownership society", does not even know enough about investing to take the "Free Money!" offer of employee matching funds on a 401(k). People should not have to manage a dozen different accounts, and we should be aiming to protect defined-benefit pensions through Social Security, and re-expand them in the private sector, even if that means accepting lower average returns in exchange for the reduced risk to individuals (not to mention entire age cohorts who happen to be trying to retire right when a crash smacks their private accounts).
A conservative "fiscal hawk" is somebody who thinks giving $300 billion to the wealthiest 0.1% of families (by borrowing on our national credit line, of course) is a better idea than raising the minimum wage.
Now they're saying that it's a wonderful thing to hold down two jobs in order to afford overpriced housing. The economy is doing great! It's growing at 4%-ish, supported by impressive productivity growth. But us peons don't appreciate the brilliance of conservative economics, just because our wages (net of inflation -- and note that a lot of luxury goods are inflating much more slowly than housing, energy, education, etc) are declining and we have to work harder to maintain the same standard of living.
I think a lot of my friends are wondering why I've gotten so politicaly obsessed -- why I'm expending my energy on this stuff when there are lots of other fun things that I enjoy, which I'm giving up for lack of time. The answer is found in stuff like this. There are a lot of people working very hard to make our world a worse place: a place where even our most respected public servants -- didn't many of us, as kids, idolize teachers, firefighters, and policemen? -- are forced to work a second job, because those who benefit the most from the social contract can't be bothered to pay for its maintenance. How can anyone say, with a straight face, that this is a "wonderful" thing? What kind of sick, amoral worldview does such a person hold? I don't know about you, but I'm not going to sit still and let them have their way.
BTW, I'm not sure how many of you live in San Jose, but both of the candidates for SJ Mayor were at the Democratic Reunion picnic I was working at this past Saturday. I talked with Cindy Chavez for a bit -- she's been endorsed by the party, and is idolized by many of the more experienced activists I've been working with, for having been a tireless and effective activist, and having brought a new level of public accessibility and accountability to her work as a city councilwoman. Her opponent, Chuck Reed, is a conservative Democrat who has distanced himself from the party and accepted a lot of backing from Business Roundtable types; he has, rather hypocritically, tried to tie Chavez to the corruption scandal around the current mayor, who catered to some business interests by negotiating contracts without properly briefing the council. (Which of the two candidates seems more likely to be in bed with business? The one who's taken less money from large businesses with a stake in city contracting? Please.)