Thursday, February 26, 2009
Rather than express my feelings on this in prose, I thought I would attempt to make it entertaining.
So, here is my advice to Roland Burris (with apologies to Dr. Seuss for the content theft and to Art Buchwald for the idea theft):
Roland W. Burris will you please go now!
The time has come.
The time has come.
The time is now.
I don't care how.
You can go by foot.
You can go by cow.
Roland W. Burris will you please go now!
You can go on skates.
You can go on skis.
You can go in a hat.
I don't care.
You can go
You can go
On a Zike-Bike
If you like.
If you like
You can go
In an old blue shoe.
Just go, go, GO!
Please do, do, do, DO!
Roland W. Burris
I don't care how.
Roland W. Burris
Will you please
You can go on stilts.
You can go by fish.
You can go in a Crunk-Car
If you wish.
If you wish
You may go
By lion's tale.
Or stamp yourself
And go by mail.
Roland W. Burris
Don't you know
The time has come
To go, go, GO!
Get on your way!
Please Roland B.!
You might like going in a Zumble-Zay.
You can go by balloon . . .
You can go by camel
In a bureau drawer.
You can go by bumble-boat
. . . or jet.
I don't care how you go.
Roland W. Burris!
I don't care how.
Roland W. Burris
Will you please
I meant . . .
The time had come
So . . .
We can only hope.
Tuesday, February 24, 2009
O.K., Rick Santelli should not have called people "losers." That was a bad choice.
I also realize that his lively personality is a mix of trading floor bluster and the sort of invective that makes for entertaining television. Bearing that in mind...
While I agree that the "American Dream" has, for some time now, included home ownership, I guess I see it a little differently.
I focus on the "Dream" part of it. It is an aspiration, something toward which people strive. It does not equal the right to own property. Property ownership should, naturally, be absolutely guaranteed by our laws. What they should not do, however, is guarantee property ownership to everyone.
Is there a component of home-ownership that goes beyond rational self-interest? Sure, I suppose there might be, something tied in with sense of home and place. This is surely, though, a higher-level concern when property is involved. At the base, a person's relationship to property is an economic one. People should be able to buy property if they can reasonably afford to do so.
At the core of this must be a frank honesty with oneself about one's limits and expectations. If we are honest about our financial situations and our likely prospects, the ability to own and maintain property should be clear. If we cannot afford it, we should not be blinded by some ideal vision of property ownership. It is this sort of thinking that led people into the difficult situations that we see today. At the heart of every forclosure is someone not willing to be honest with themselves.
While I also agree that the housing issue goes to larger issues of public safety, health and welfare, I cannot agree that these issues are dealt with merely through having a big house. There is plenty of housing stock available, older but serviceable homes and rental units that would be ideal for people starting out their lives or suffering some economic hardship.
This is not what people wanted during the housing boom. Against better judgement, people could borrow more so they did. Not being able to fight this urge, people took on more debt than they could reasonably handle. Thus the Santelli remarks of last week.
Another thing that I cannot forgive is anyone who thought that they were safe because the housing market would keep going up. Give me a break. You don't have to know much about finance or economics to realize that the value of anything is not stable - prices always fluctuate.
To the issue of people being thrown out of their houses and then showing up on the dole later, I say that I would rather pay for their unemployment and welfare benefits (which are temporary) than to pay off an underwater thirty-year mortgage. I have not run the numbers on this, but I suspect they may bear me out.
To the point on the government actually helping people take risks, there are two sides to this issue. In the short term, moves by the government might help to restore confidence and get those capital flows out there again. More generally, though, these moves by the government will hurt risk-taking and speculation.
How? By constantly changing the rules of the game, the government is making it hard for the investing public to say anything definitive about the direction of markets. One look at a one year chart for any market index shows the reactions of the market to this ever-changing landscape.
Oh, and one final thing about Frontline and Paulson. I think it was specious to suggest that the decision to let Lehman Brothers fail had anything to do with a personal vendetta of Paulson against Dick Fuld. Did the two guys hate each other? You bet your ass they do. Enough to do a thing like that? Please.
Thanks again, Josh. I hope that I have spoken to your objections and concerns. I appreciate anything that sparks discussion and keeps people talking. That's the only way we will come to figure these big things out.
Saturday, February 21, 2009
This is exactly what happened to CNBC's Rick Santelli today for his indignant invective against the Obama Administration's mortgage bail-out plan.
The rebuke came from White House Press Secretary Robert Gibbs, who offered to buy Santelli a cup of coffee...decaf. Cute. Really cute.
Well, I think we should all buy Santelli coffee, whiskey, Chianti, Upper 10 (remember that?) or whatever the hell he wants to drink. Why? Because he has continued his streak as probably the most on-the-money (pun intended) financial reporter out there.
He has had it right-on over issue after issue. To wit:
- Santelli takes down the odious Jim Cramer over his market predictions in 2007.
- Santelli speaks the truth about the bank bailouts.
- Santelli calls it on the Fed and interest rates.
- Santelli explains why speculation didn't cause high oil prices last year.
Now, I know that those clips were filled with financial jargon and guys in ties yelling at each other, but I hope you can forgive me for that...it's the world I used to live in.
He was right on those issues in the past, but his insight was more technical and based on his background. This background is what make me like him so much. He cut his teeth trading bond futures at the Chicago Board of Trade. To do that well, one needs an understanding of the wider economy and enough knowledge of the credit markets themselves to trade successfully. In other words, this guy paid his bills because of how well he knew credit markets.
This time, though, he is right because he simply states the idea of moral hazard. This idea basically says that people who are sheltered from a risk behave differently than those who are not. The hazard part comes in when the party doing the sheltering has to choose who to shelter and who to leave aside.
Put very simply, Santelli, myself and I suspect a lot of people don't want to pay for the mistakes of others. People took out mortgages at insane terms that they could never pay back? Too bad...that's their problem. Banks lent too much and leveraged themselves to a ridiculous level? Tough shit, that's the game.
Now, I know what you are thinking: "Will, you always jump in to defend the big capitalist interests against the little guy. Aren't you a little guy? You aren't one of these pirates in neckties on Wall Street, are you? Why the sympathy for them? They got their bailout, now why can't we get ours?"
Well, to that I say that, in this situation, neither big capitalist interests nor the little guy are blameless. In a perfect world, I would say that we bail neither of them out. This is not, however, possible.
Why? Systemic risk. Just how this was defined and implemented (remember all the talk about "too big to fail?) was a bit of a muddle and was charged into without any idea of a coordinated plan or a desired outcome. For a great telling of that tale and it's implications, watch this great episode of Frontline from this past week.
I just thought that Santelli was expressing the frustration of people caught up in this financial crisis and also expressing the idea that was leading to that frustration.
And for that, I say, "Amen and preach on, Brother Santelli!"
Friday, February 13, 2009
What's that? How am I celebrating Valentine's Day?
Silly question. You should know by now that Valentine's Day is not a recognized observance in the City of Tiny Lights.
Is it because it is too commercial? No. Is it because I find the treacle and underlying message of the observance distasteful? That's closer to the truth.
Better yet, get the low-down from St. Valentine himself.
Such an idea is embodied by the BBC's Box Project.
In short, the BBC painted a shipping container with their logo and website. They attached a GPS tracking system. They then sent it in September of 2008 to Southampton where it entered the great, global pool of shipping containers owned by NYK Line. They then have proceeded to track its progress around the world.
It has carried Chivas Regal from Scotland to Shanghai, household goods and make-up from Shanghai to Pennsylvania via Los Angeles and household goods from Newark to Santos, Brazil.
You can get all the details (and follow the box yourself) at the above BBC Box Project link.
There are so many great things about this project. First, it pays tribute to one of the unsung heroes of the modern global economy: containerized shipping. If you consume, well, nearly anything that you didn't grow or make yourself, there is about a 90% chance that that thing spent some time in a shipping container.
Goods in shipping containers get loaded and unloaded quicker which allows for a greater volume which, in turn, allows for lower prices for producers, shippers and consumers. Products get to their destinations quicker because shipping containers are intermodal, meaning that the containers can go from ship to rail or truck without being unpacked. Goods also pass through customs faster and there is little deadheading (empty containers...not at all related to Jerry and the boys). Shipments enter large container terminals and can be on the way to their final destinations within hours.
Think about the implications of all of this. This forty foot long metal box and how it is handled influences all aspects of your life every day and has done so for almost the last forty years.
To put it another way, and relate it to a previous post, it makes the idea of the "Iowa Car Crop" possible.
So, the next time you are driving down the highway (or stopped at a railroad crossing) and rusty metal boxes are whizzing past you, think of how they influence your life and how you live it on a daily basis.
The most profound notions often emerge from the simplest of things. I think this is a great example of just that.
Social Darwinism is often linked with the (perceived) evils of capitalism. This is done thusly: if capitalism is based on competition between competing parties in pursuing incentives, then it is no small step to see that those who are successful are in some way inherently better than those who are not. This means that capitalists believe that the poor are somehow inherently deficient and therefore lesser beings than the rich.
Spencer believed this. Francis Galton, the originator of the idea of eugenics, believed this. Thomas Malthus may have hinted at aspects of this.
But...is this connection appropriate?
While it is certain that Herbert Spencer thought that society was evolving toward greater freedom for individuals, it is less certain that he believed that he thought the poor were inherently inferior. Francis Galton, while he believed that "more fit" people should reproduce more, he certainly didn't advocate genocide on the poor. He merely wanted to reform morals so that the poor would (in his estimation) become more fit. Thomas Malthus, while related to these notions, was more concerned with food supply and land reform. In any event, furthermore, he might have been wrong.
These qualifications, while interesting, do not answer the above question. So, is capitalism inherently flawed and elitist?
The best answer to this (in this situation, anyway) comes from Ludwig von Mises, one of the leading lights of the Austrian school of economics.
Mises argued that social Darwinism fundamentally contradicts the classical liberal ideas that helped give birth to our modern notion of capitalism and competitive markets. He says this is the case because the traits that lend to social cooperation (rather than "natural" aggression) are those that lead to maximize offspring in a given environment.
So, great. Where does this leave us?
It leaves us with the idea that, before using a phrase as loaded as "social Darwinism," it would behoove all of us to understand what it means and that in reducing complex ideas to tag-lines, we often do those ideas a disservice and make them less (rather than more) clear.
So, keep it simple, stupid, but don't make it so simple that it becomes stupid, stupid.
Thursday, February 05, 2009
One concerns short pieces of brilliant writing and how I often fail in my aspiration to emulate them. The other is a collection of items about economic stimulus, "Buy American," the value of partisanship, the uselessness of the GRE, the new miracle drug "Stimulis" and much more.
I am planning longer examinations for the near future. Particularly, the parallels between themes in this and this and this intrigued me.
Barring that, I ask you, dear readers, is there anything you are dying to get my take on? Anything, large or small, that would benefit from the perspective of a grumpy libertarian barstool philosopher?
Or should I have a big plate of shut the hell up with mind your own business sauce served with a side of we don't give a shit?
What say you?
Oh well, it might be too late for me...
Anyway, for any of you who have done any amount of writing, there is one piece of (seemingly)counterintuitive thinking that is absolutely spot-on.
This idea is the notion that it is harder to write a short piece than it is to write a long one.
It is much, much harder to write a short, well-argued piece of writing than it is to do the same in multiple times the space. Think you would have a tough time explaining something in fifty pages? Try doing it effectively in three. Hell, try doing it on one side of an index card.
I am reminded of this whenever the semester begins and my supervising professor and I try and impress this idea on a new group of students.
Let me tell you from experience: they never believe you. They also often never believe how low a grade they got.
So, whenever I run across a well-argued, clear, convincing, provocative, tight and compelling piece of writing, I think it is simply a joy to read.
I figured I would share two of my favorite examples of this with you:
- David Friedman's "The Iowa Car Crop." It explains concepts like comparative advantage and trade theory in a clear, succinct and engaging manner. It is simply stupendous.
- Steve Landsburg's "Why I Am Not An Environmentalist." I have never heard the case against environmentalism stated any better. My personal favorite line: "My county government never tried to send me a New Testament, but they did send me a recycling bin."
Anyone who writes or reads should appreciate the ability to express oneself in an engaging, succinct manner.
I aspire to this. This website shows that, on this score, I win some and I lose some.
Just how many W's and L's I have is really up to you.
I am a little bit afraid of what you think about this, but if you want, tell me anyway.
I can occasionally accept limited amounts of constructive criticism.
- Bryan Caplan comments on the new edition of Henry Hazlitt's classic book Economics in One Lesson. Be sure to read his rebuttal of Brad De Long's "fears" about this book. It was this book that was partially to blame for my interest in economics. It is clear, elegant, well-written and convincingly argued. If you read one book on economics in your entire life, this would not be a bad choice.
- Carmen Reinhart and Ken Rogoff's lessons from past financial crises. I mainly agree with them, especially in the phrase "prolonged slump." Think 1970's, not 1930's.
- Martin Feldstein and Greg Mankiw on economic stimulus. I mostly agree with Feldstein, I agree less with Mankiw. I know Mankiw is a partisan of ideas like this and this, but I am more convinced with these critiques of those positions.
- For a more, ahem, arousing take on stimulus, watch this hilarious video from reason.tv.
- Burton Malkiel, author of a classic book on finance and investing, opposes the idea of "Buy American." So do I. It sounds too much like this to me.
- A great piece at Cato Unbound on political parties, appreciation and the need for partisan organizations. Read responses here and here.
- An English professor's tale of retaking the GRE. Not surprisingly, he did well. Not surprisingly (to me, at least), he found the test lacking.
Sunday, February 01, 2009
Last Saturday, I attended a discussion forum entitled "Obama and the Left," sponsored by a progressive publishing company.
Before you call the Mendota State Mental Hospital and get the commitment papers rolling, allow me to explain.
I attended this event with my good friends and intellectual fellow-travellers Greg, Rick and Jessica. Greg and Rick ran across the flyer, thought it was a "can't miss" sort of event and invited me along. As a grumpy libertarian, I thought it would be a frightfully good wheeze and besides, I hadn't been angried up in a while.
Before going, we steeled ourselves with shots and beers at the corner tavern near Greg and Rick's house. This being done, we descended upon downtown Madison to see what we could see.
The first thing that struck me, before the presentations even started, was the amount of people in attendance. I mean, think about it: they filled a 300+ seat theater to standing room only capacity on a Saturday night for a political discussion forum...only in Madison.
The other thing that struck me immediately was the smug, self-satisfied, humorless air of unbearable earnestness that permeated the attendees. Oh yeah, they laughed on cue at the appropriate forced jokes of the speakers, but it was more a cry of acclimation than a show of the common human emotion of joy. We were even told to be quiet by someone behind us. Honestly, what am I, a fucking five-year-old?
When the program began, it was obvious what we were in for that night. All of the preposterous remarks need not (and should not) be repeated here, but here are some highlights:
- One speaker taking lines from FDR's inaugural address in 1933 as a great new rallying cry for the progressive movement. Specifically, he stressed the portion where FDR recounted the "chasing of the moneychangers from the temple" story from St. Matthew's Gospel. The speaker was obviously monumentally ignorant of the anti-Semitic overtones of FDR's usage of this story...or he was an anti-Semite himself and wanted to clothe his damnable beliefs in the mantle of progressive politics.
- Another speaker reading loaded rhetoric about the United States and the Middle East that was shot through with half-truths, prevarications and outright lies. Her invective (if it could be called that) was made more odious by the fact that she read it out from a sheaf of paper without looking up. Lack of rhetorical force is hardly the term.
- Yet another speaker calling for the impeachment of George W. Bush and Dick Cheney, seeming to forget that they are no longer in elective office...hell, the only thing that GWB is controlling now is a golf cart and a case of Lone Star Beer. This speaker also dragged Naomi Klein's awful book The Shock Doctrine into the discussion. This book, treated as scripture by the left, is filled with distortions, mischaracterizations and flat-out shoddy research into Milton Friedman's life and work. Click here and here for complete discreditings of Klein's shabby piece of lies and character assassination.
- A member of the audience talking about a "warm, safe socialism" where everyone would (apparently) get everything for free and government would care about everyone and everything equally. Where the free stuff is to come from, who is to pay for it and how it is to be distributed were problems that were not addressed, oddly enough. Perhaps the idea of economies of scale has no place in a socialist utopia.
- A veteran of the U.S. Army who, in giving a political speech wearing military insignia, was clearly breaking both Department of Defense and Army codes. Oddly, no one pointed this out to him. Hmmm...
I could go on, but you get the idea.
Greg, Rick, Jessica and myself had to retreat to the corner tavern and drink and eat pizza until things made sense again. Thanks again for everything, booze and food.
In general, the speakers and attendees dragged out the same old tired shibboleths of the left. Our new president, who at the time had been in the job for less than a week, was mentioned to call attention to his failures (in five days?) or to project their far-fetched and unworkable agenda onto the canvas of President Obama.
In a way, I feel sorry for all the people who are seeing Obama as a transformative figure and therefore projecting all of their desires and expectations onto the man. They seem to forget that he is, first and foremost, a politician. This means that nobody gets everything they want. Sorry, that's how it goes.
This event, furthermore, shows that the left's supposed tolerance and open-mindedness is a sham and a lie. They are tolerant of people who believe the same way they do. They cheer if you repeat the right slogans and curse the right (pun somewhat intended) targets. If you don't, then they cannot grasp the concept that someone might respectfully disagree with them, in whole or in part. Greg and Rick, for example, submitted questions (and good ones at that) that were ignored by the moderator. Where's your tolerance now?
They never compromise. They never listen to dissent. They won't admit to other views. They treat their opposition as stupid, backwards and ignorant...in a way, as lesser beings. They never feel the need to have their facts straight or to understand the basis of their arguments. They won't retreat even when they appear to have lost.
In a word, they are extremists. True-believers. Bigots.
My only comfort is in knowing that their brand of extremist nonsense is exactly that, and that I have faith that, given the choice of their ideas or those of others, the great American public would reject them soundly.
Do I reject their right to speak freely. Of course not. This does not mean, however, that I agree with their baseless claims, evangelical devotion to untruths, unrealistic expectations, shocking ingorance or outright intolerance.
I close with a quotation from South Park co-creator Matt Stone that pretty much sums up what I thought of the whole affair and its connotations:
"I hate conservatives, but I really fucking hate liberals."