Category: Philosophy

Did Lack Of Regulation Cause This Mess?

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Mish’s Global Economic Trend Analysis: Did Lack Of Regulation Cause This Mess?

Yes.

This has been another episode of stupid answers to stupid questions.

But Mike “Mish” Shedlock seems to think that it’s the FDIC which has caused all thi, because no one would have put a dime into countrywide in 2004 if not for the FDIC insurance, which created a moral hazard allowing people to place their money at risk, despite the fact that in 2004, Countrywide was golden with soaring stock.

Additionally, most of the money that Countrywide to bury itself was not the sub $100k investments of ordinary account holders. It was many times that from Wall Street investors, who had no guarantee at all, even for the first $100K.

This is mindless Randroid Objectivist claptrap, and it is actually the purveyors of this mindless Randroid Objectivist claptrap, most notably Alan Greenspan, who has never passed up an opportunity to deregulate a market, or to bail out a major capitalist bigwig, who created this mess.

Mr. Shedlock is therefore wanker of the day.

Samantha Power Resigns

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My concolences, and this does not bode well for the Obama campaign.

For the past few weeks, Hillary Clinton and the her campaign have been bitch slapping Barack Obama and his campaign, and this is just another step.

For the past 25+ years, the Republicans have used what Josh Marshall calls, the Bitch Slap Theory of Politics, and Hillary and her folks know it, and get it, and are using it on Obama.

The theory is as follows:

One way — perhaps the best way — to demonstrate someone’s lack of toughness or strength is to attack them and show they are either unwilling or unable to defend themselves — thus the rough slang I used above. And that I think is a big part of what is happening here. Someone who can’t or won’t defend themselves certainly isn’t someone you can depend upon to defend you.

–snipped Kerry comment–

Hitting someone and not having them hit back hurts the morale of that person’s supporters, buoys the confidence of your own backers (particularly if many tend toward an authoritarian mindset) and tends to make the person who’s receiving the hits into an object of contempt (even if also possibly also one of sympathy) in the eyes of the uncommitted.

This is certainly what Bush’s father did to Michael Dukakis and, sadly, it is what Bush himself did, to a great degree, to Al Gore.

And what Bush did to Kerry, and what Clinton is doing to Obama.

If he can’t answer this against Clinton, Obama cannot win the general.

Very, Very, Wise

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Lance Mannion gets to the core of Republican governance practice“

If the Goverment is a car setting out to give every one a ride to work, then for 40 years the Republicans have been puncturing the tires, pouring sand in the gas tank, stealing the distributer cap, and, whenever they can get their hands on the wheel, driving it straight into the nearest ditch and then, pointing to the wreckage as the tow truck backs up to it, saying, See, this proves that people were meant to walk.

And they do this so that they don’t have to chip in on gas.

Signs of the Apocalypse: Jim Cramer Trashes “Laissez Fair”

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Yes, this is the Cramer of “Mad Money”, and yes, he is generally to the right of Atilla the Hun, he supported Alan Keyes in 2008, and at a speech at Bucknell University, he condemned laissez fair politics:

“Do not be fooled by the sirens of laissez faire,” he told a packed audience at Bucknell University’s Weis Center for the Performing Arts in the continuing national speakers series, “The Bucknell Forum: The Citizen & Politics in America.”

“Ever since the (President) Reagan era, our nation has been regressing and repealing years and years worth of safety net and equal economic justice in the name of discrediting and dismantling the federal government’s missions to help solve our nation’s collective domestic woes,” he said. “We call it deregulation … a covert attempt to eliminate the federal government’s domestic responsibilities.”

When Jim Cramer is forced to come to his senses, you know something is whack.

Some Interesting Insights on How Obama Gets It Wrong

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Read all 4 articles. Even if you are a big Obama supporter, they ware well worth reading.

First, as always is Paul Krugman, who teaches an important lesson, don’t pick a useless fight with someone who buys ink by the truckload. He looks at Bill Clinton’s election of 1992, and he finds the message of Barack Obama to be a classic example of people who neither know, or understand, their history.

He makes the point, an accurate one, that Clinton ran as an agent of change and an outsider from Washington, and notes that the partisanship of that era was the result of, an “all out assault from conservatives determined to use any means at hand to discredit a Democratic president”.

He makes the point that the deliberate vagueness of Clinton in his 1992 campaign was a mistake, which, “left the business of producing an actual plan until after the election”.

His warning is that, “Otherwise, even if a Democrat wins the general election, it will be 1992 all over again.”

He’s right.

Then, on Open Left, we have a number of very good critiques of Obama and his (mis)understanding of history.

First up, Paul Rosenberg explaining why the history is wrong.

In the wake of the disasterous Bush presidency there are two possible responses. One is that, just like the last time conservatives controlled the country–1920-1932–they are destroying the country. The second is that both sides are to blame. They’re both fighting, instead of solving the problems we face. Obama represents the second response, and he is, quite simply, utterly, totally and dangerously wrong. Whatever his intentions may be, action based on this worldview cannot fundamentally reverse the damage that movement conservatism has done to our country. Because of the fierceness of movement conservative opposition, his worldview demands that we change things only modestly in the grand scheme of things.

Then we have Rosenberg (again, it’s a 2-fer) explaining why it’s wrong through rhetorical analysis. He takes a typical Obama quote, “….The believer condemns the non-believer as immoral, and the non-believer chides the believer as intolerant”, and explains a very simple point: what if someone is actually intolerant? What if one side is simply wrong, and the other is right?

Some are lying. And some are telling the truth.

And when Obama condemns both equally, as equally destructive?

That’s a lie, too. However rhetorically neat it may be.

He’s arguing, effectively to my mind, that in embracing the idea that the problem is not the problem, but that the dispute is the problem, he is enabling those who would be the least moral and least tolerant and least honest amongst us.

Chris Bowers looks at Obama too, and it’s not pretty:

Second, Obama puts forth one of his central arguments that change has not happened because we are bitterly divided:

[about 5:10 in] We are looking to fundamentally change the status quo in Washington. It’s a status quo that extends beyond any particular party. And right now, that status quo is fighting back with everything it’s got, with the same old tactics that divide and district us from solving the problems that people face, whether those problems are health care that folks cannot afford or mortgage they can not pay.(…)

[about 6:40 in] We are up against decades of bitter partisanship that cause politicians to demonize their opponents instead of coming together to make college affordable or energy cleaner.

The lack of affordable health care, the ongoing mortgage crisis, the lack of renewable energy, and the cost of college were caused by bitter partisanship? That just doesn’t make any sense to me. The failure to pass progressive solutions on all of those areas of policy might be due to partisanship, but it is due to Republicans in the Senate and the White House staunchly opposing solutions to all of these problems. Unless one believes that Republicans oppose solutions on these issues simply out of spite and resentment from the vicious attacks we Democrats have sent their way, I have a difficult time seeing how partisanship that goes beyond one party is responsible for the lack of positive legislation on these issues.

Noonan Says That Bush has Destroyed the GOP

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Of course, she opens up with a slam against Bill Clinton, though she forgot to pimp her friendly dolphins.

That being said, there is one paragraph about Bush that I find amusing:

This is absurd. George W. Bush destroyed the Republican Party, by which I mean he sundered it, broke its constituent pieces apart and set them against each other. He did this on spending, the size of government, war, the ability to prosecute war, immigration and other issues.

Bush had inflicted damage on the GOP, but this has not been a failure of George W. Bush, but an artifact of his success.

He has been remarkably successful in producing results in the Republican agenda:

  • Never ending war.
  • Fear of those who appear different from us.
  • The privatization of essential government services.
  • A widespread belief that the government cannot work.

The problem, is that the Republican agenda has consequences:

  • It has destroyed the US Army.
  • It has destroyed the US Marines.
  • It has destroyed our respect worldwide.
  • It has destroyed our economy.
  • etc.

George W. Bush did not destroy the Republican Party, no has he wounded our nation for years to come, movement conservatism has.

Getting IP Right, and Trying to Avoid the “Oh, Canada” Cliche

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Harold Feld asks, “Someone tell me why Canadians seem to be so much smarter than we are, at least on the public policy fronts that I cover?”

The public policy fronts that he covers involve things like IP and network neutrality, and he is, in this case referring to the the Candian Radio-Television Commission‘s (CRTC) announcement that it is imposing new national ownership limits and cross ownership limits on its broadcast media, and the political backlash that has delayed a Canadian version of the DMCA.

The answer is actually far more depressing than the my friend Harold Feld, esq. would like to think: The Canadians believe in public policy, and the United States does not.

This is why someone like Michael Powell could make a statement that basically said that corporate profit was a public good, and not get tarred and feathered.

In Canada, his phone calls would not be returned.

Markets Don’t Work as Predictive Instruments

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Paul Krugman has an rather interesting insight into the New Hampshire primary results, specifically he gives us this picture of the Intrade price for “Clinton wins the Democratic nomination” bidding:

These investors in this market, you know the one that is supposed to predict the future, got it completely wrong. In fact, as time went on more and more of them got it wring (the bar graphs are at the bottom). Dr. Krugman notes, “There’s no hint that the market saw either Iowa or New Hampshire coming, or knew anything beyond the bloviations of the talking heads.”

That is the little picture, but there is a bigger picture, and that is that markets are not some sort of magically predictive tool. They are simply a sort of group guessing game.

One of the arguments for the increasing use of arbitrage is that by creating derivatives, like futures market, help the economy, because of their ability to predict future market swings.

The answer is that they don’t. What more, as can be seen on an almost weekly basis, these instruments contribute to price swings, and make commodities more active, by adding another layer of profit taking on the way to market, though, to be fair, they employ no-account Harvard MBAs.

There are cases where futures markets are essential. Without the ability to buy rubber for delivery at a later date, for example, bidding on OEM tires for a car manufacturer would be risky and more expensive, but now we have entities like stock futures, which are unnecessary, make the market more volatile, and encourage speculation at the expense of investing.

Quote of the Day: David Brooks

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Overheard in New Hampshire: David Brooks on Bill Kristol

After last night’s debate, New York Times columnist David Brooks was chatting with a group of people. One of them said: “I hear you hired that conservative Bill Kristol.” David Brooks responded: “More like a pseudoconservative.”

I’m not sure where this comes from, but my guess is that Brooks thinks that Bill Kristol is the beneficiary of conservative affirmative action (nepotism).

Deep Thoughts

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Every so often, I have a thought that is worthy of Jack Handy, and I’m sharing this with you:

I was at my chiropractor, and I noticed the various theraputic furniture that they have in the office.

With springs, hinges, dampers and suspension, powered lifts, straps and buckles, I thought You know, a pervert could have a lot of fun with this stuff.

And then I realized, Throw in some killer eggnog with whipped cream, and you could have a really kick ass office party.

Unregulated Competition Hurts Innovation and Consumers

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This analysis comes from that bastion of Communist thought, the Financial Times. John Gapper compares Europe, where GSM was mandated by government, and the US, where anyone who rented the spectrum could use whatever standard they wanted, giving us providers with GSM and CDMA.

He quotes a 5 year old article from Wired:

Once the marketplace was allowed to work, it quickly converged to CDMA, which proved to be superior. CDMA is ascendant in America. More important, it’s the foundation for the next generation of cell phone technology – 3G – since it turned out to be the only technology capable of making the leap to fast and capacious wireless data transmission. Had the US government mandated a standard, by contrast, it would undoubtedly have picked TDMA or GSM, since those were the dominant technologies at the time. And then we wouldn’t have CDMA leading the way to 3G today.

Certainly, it is good to read such a deeply held faith in the marketplace leading to its own advancement.

Of course, it would help if it were not 180° wrong. As Mr. Gapper states:

I am afraid that history has not been kind to this argument. Europe has stayed ahead of the US in mobile telephony, and in 3G services. Having one technology standard has spurred competition among network operators and handset manufacturers while competition in the US has been stymied by a proliferation of technologies.

In truth, he is only partly right. US mobile technology deployment, and for that matter US broadband suck because this is what the unfettered free market leads to.

The Europeans mandated a single standard, and have prevented carriers from locking in customers. From a purely profit perspective, there is more money in making your customers captive than there is in providing them a superior and innovative product.

That’s why local phone carriers and cable companies spent their money on lobbying, and creating limited products that require you to purchase all or nothing. To quote Willie Sutton, it’s where the money is.

They are monopolists by necessity….There is only so much in the way of wire or cable you can place in a city, so the last mile is necessarily a monopoly or duopoly, and they spend their money on protecting this, not on benefiting the consumer.

Word Up….Politics Good

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Dave Roberts of the Gristmill gets it right. At a meeting on environmental policy, he made the point that Republicans really don’t have detailed or credible global warming ideas, and someone scolded him for, “making it a political issue.”

His response is spot on:

It’s something I hear a lot, and I remain utterly baffled by it. The assumption seems to be that politics is bad and that the ideal state would be unity. That’s just … creepy. This is an enormously significant policy challenge facing a democracy, where different citizens and groups have different assessments of the problem and different proposals for solving it, arising from different interests. In other words, it is political. Politics is the means by which people resolve their disputes. The only practical way of achieving unity is by suppressing dissent.

Virtual Suicide Bombing

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Clive Thompson plays Halo 3 online. Because he has a life, and does not spend 10-20 hours a day on line, his skills, and his power are limited.

However, he has found a way to even the scales:

.…

Whenever I find myself under attack by a wildly superior player, I stop trying to duck and avoid their fire. Instead, I turn around and run straight at them. I know that by doing so, I’m only making it easier for them to shoot me — and thus I’m marching straight into the jaws of death. Indeed, I can usually see my health meter rapidly shrinking to zero.

But at the last second, before I die, I’ll whip out a sticky plasma grenade — and throw it at them. Because I’ve run up so close, I almost always hit my opponent successfully. I’ll die — but he’ll die too, a few seconds later when the grenade goes off. (When you pull off the trick, the game pops up a little dialog box noting that you killed someone “from beyond the grave.”)

It was after pulling this maneuver a couple of dozen times that it suddenly hit me: I had, quite unconsciously, adopted the tactics of a suicide bomber — or a kamikaze pilot.

….

What is interesting here is that the dynamic is pretty much identical to those of an insurgency. While the stakes are clearly less, no one is actually dying, the power dynamics are the same, and so are the resulting tactics.

Hey, I Know, If I’m Offensive Enough, then I’ll Get Attacked by the Right Wing Blogs, and My Readership Will Skyrocket!!!

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On a more serious note it is true that religion defies logic. In fact the definition of religious faith is that it defies logic.

Religion is about knowing the unknowable, and as such, whether you take the tales literally, or as metaphor, the stories, narrative, and cosmology of any religion are supposed to be intellectually absurd. Religion is supposed to transcend the intellect on some level

This is why, for example, Talmudic discussions of exactly what substance the 10 commandments were supposed to be made of* hold little interest for me, except to the degree that they can be shown to be allegories that show us how to live our lives.

But for those of you who simply want to be offended, there is this (Praise be to Tshirthell.com):

.

*Sapphire. What’s more the first set, the ones Moses smashed, were supposed to be carved entirely by God, while the second set are supposed to have been cut into tablets by Moses, and then God carved the words on them. It’s supposed to indicate that God was displeased at that whole Golden Calf thing.

Mens and Womens Poems

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Not my poem, it was posted by a friend I’ve never seen in person on a message board (by invite only) called Stellar Parthenon. Neat place. We’ve had a thread on thread about the collapse of the US Economy Since December, 2003.

WOMAN’S POEM
Before I lay me down to sleep

I pray for a man, who’s not a creep,
One who’s handsome, smart and strong.
One who loves to listen long,
One who thinks before he speaks,
One who’ll call, not wait for weeks.
I pray he’s gainfully employed,
When I spend his cash, won’t be annoyed.
Pulls out my chair and opens my door,
Massages my back and begs to do more.
Oh! Send me a man who’ll make love to my mind,
Knows what to answer to “how big is my behind?

I pray that this man will love me to no end,
And always be my very best friend.

MAN’S POEM
I pray for a deaf-mute nymphomaniac with huge boobs
who owns a liquor store and a golf course. This
doesn’t rhyme and I don’t give a sh$#.

Deep Thought

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In the midst of a post about real estate crashing and foreclosures, Rich Toscano mentions his, “Partner in dim sum consumption crime and occasional Econo-Almanac guest contributor Ramsey Su.”

My first thought was OH MY GOD!!!!! What restaurant, I have to know. Real estate is ephemeral, but the love of a Jew for Chinese food, that’s forever.

The weird thing is, Toscano is in San Diego, and I’ve never been there, and I have no urge to go there…well maybe…if there is some really good Chinese food.