Economists' Response to Bailout

I have been pretty quiet about the mortgage/bailout crisis that the American economy has been experiencing in the past week or so. The reason for that is that I cannot really say that I know what exactly should be done and, perhaps more importantly, I am not sure how the Fed and the Treasury should react (nor how they should be allowed to react) to the crisis. To that end, I finally found something that sums up my concerns about the bailout plan. It comes in the form of a letter written to Congress by leading academic economists and goes something like this:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries “systemic risk.” The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private-capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons, we ask Congress not to rush, to hold appropriate hearings, to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.

I think that really sums up most of my concerns about this bailout. It could be said in much more politically evocative terms (as I believe several Congress members have already done), but generally, this is a good summary of all the questions I have regarding the government bailout of the financial industry.

[via NYT Freakonomics]
[full letter and signatories available here]

Tim Wise's "White Privilege": How Palin is Even Running for VP

I just read a really interesting piece on the effects of "white privilege" (on, in particular, the upcoming election). Unfortunately, the site posting the piece is membership only, so I am attaching it below. Enjoy.

THIS IS YOUR NATION ON WHITE PRIVILEGE
By Tim Wise
9/13/08

For those who still can't grasp the concept of white privilege, or who are constantly looking for some easy-to-understand examples of it, perhaps this list will help.

White privilege is when you can get pregnant at seventeen like Bristol Palin and everyone is quick to insist that your life and that of your family is a personal matter, and that no one has a right to judge you or your parents, because "every family has challenges," even as black and Latino families with similar "challenges" are regularly typified as irresponsible, pathological and arbiters of social decay.

White privilege is when you can call yourself a "fuckin' redneck," like Bristol Palin's boyfriend does, and talk about how if anyone messes with you, you'll "kick their fuckin' ass," and talk about how you like to "shoot shit" for fun, and still be viewed as a responsible, all-American boy (and a great son-in-law to be) rather than a thug.

White privilege is when you can attend four different colleges in six years like Sarah Palin did (one of which you basically failed out of, then returned to after making up some coursework at a community college), and no one questions your intelligence or commitment to achievement, whereas a person of color who did this would be viewed as unfit for college, and probably someone who only got in in the first place because of affirmative action.

White privilege is when you can claim that being mayor of a town smaller than most medium-sized colleges, and then Governor of a state with about the same number of people as the lower fifth of the island of Manhattan, makes you ready to potentially be president, and people don't all piss on themselves with laughter, while being a black U.S. Senator, two-term state Senator, and constitutional law scholar, means you're "untested."

White privilege is being able to say that you support the words "under God" in the pledge of allegiance because "if it was good enough for the founding fathers, it's good enough for me," and not be immediately disqualified from holding office--since, after all, the pledge was written in the late 1800s and the "under God" part wasn't added until the 1950s--while believing that reading accused criminals and terrorists their rights (because, ya know, the Constitution, which you used to teach at a prestigious law school requires it), is a dangerous and silly idea only supported by mushy liberals.

White privilege is being able to be a gun enthusiast and not make people immediately scared of you.

White privilege is being able to have a husband who was a member of an extremist political party that wants your state to secede from the Union, and whose motto was "Alaska first," and no one questions your patriotism or that of your family, while if you're black and your spouse merely fails to come to a 9/11 memorial so she can be home with her kids on the first day of school, people immediately think she's being
disrespectful.

White privilege is being able to make fun of community organizers and the work they do--like, among other things, fight for the right of women to vote, or for civil rights, or the 8-hour workday, or an end to child labor--and people think you're being pithy and tough, but if you merely question the experience of a small town mayor and 18-month governor with no foreign policy expertise beyond a class she took in college--you're somehow being mean, or even sexist.

White privilege is being able to convince white women who don't even agree with you on any substantive issue to vote for you and your running mate anyway, because all of a sudden your presence on the ticket has inspired confidence in these same white women, and made them give your party a "second look."

White privilege is being able to fire people who didn't support your political campaigns and not be accused of abusing your power or being a typical politician who engages in favoritism, while being black and merely knowing some folks from the old-line political machines in Chicago means you must be corrupt.

White privilege is being able to attend churches over the years whose pastors say that people who voted for John Kerry or merely criticize George W. Bush are going to hell, and that the U.S. is an explicitly Christian nation and the job of Christians is to bring Christian theological principles into government, and who bring in speakers who
say the conflict in the Middle East is God's punishment on Jews for rejecting Jesus, and everyone can still think you're just a good church-going Christian, but if you're black and friends with a black pastor who has noted (as have Colin Powell and the U.S. Department of Defense) that terrorist attacks are often the result of U.S. foreign
policy and who talks about the history of racism and its effect on black people, you're an extremist who probably hates America.

White privilege is not knowing what the Bush Doctrine is when asked by a reporter, and then people get angry at the reporter for asking you such a "trick question," while being black and merely refusing to give one-word answers to the queries of Bill O'Reilly means you're dodging the question, or trying to seem overly intellectual and nuanced.

White privilege is being able to claim your experience as a POW has anything at all to do with your fitness for president, while being black and experiencing racism is, as Sarah Palin has referred to it a "light" burden.

And finally, white privilege is the only thing that could possibly allow someone to become president when he has voted with George W. Bush 90 percent of the time, even as unemployment is skyrocketing, people are losing their homes, inflation is rising, and the U.S. is increasingly isolated from world opinion, just because white voters aren't sure about that whole "change" thing. Ya know, it's just too vague and ill-defined, unlike, say, four more years of the same, which is very concrete and
certain.

White privilege is, in short, the problem.

After spending a little more time tracking down the original source of this article, it seems that Tim Wise first wrote it for the Red Room. The article is accessible via the link below. Enjoy.

[via Red Room]

Google CEO Eric Schmidt's Eco Forum Talk

Somebody just sent me a link to this YouTube video capturing Eric Schmidt's talk at the Eco Forum about how companies (and even private citizens) can help reduce the environmental degradation going on today. Schmidt does not lay the responsibility for humanity's survival on the earth in the hands of politicians; he places it squarely on the shoulders of private firms and individuals, who, he says, are much more easily able to effect environmental change than any American politician/administration. That changes the whole context of the global warming debate, as it puts the onus of action back on people and companies, rather than letting us wait for our slow-moving governments to do the things we should be doing.
Schmidt continues in the speech by talking about an idea that I think is exactly on the mark: ultimately, it will not be sweeping innovations or governmental mandates that will increase our chances of survival on the earth. Rather, it will be the continuing drive towards efficient production/consumption that will lead to a more sustainable tenure on earth for humanity. We have to learn how to produce and consume the things we need (and want) in ways that allow for the upcoming generations of humanity to be able to produce and consume those things as well. Schmidt explains how he hopes to make Google more efficient, talking about the solar and wind power projects already in place around Google campuses, and provides suggestions for how the US, as a whole, can shift towards reduced resource consumption and improved alternative energy production (here, he sometimes leans on government help).
Overall, it's a really good talk from somebody who is in a position to do something about the global warming problem and actually seems to be doing his bit. It also reassures me, despite the Chrome privacy snafus, etc., that Google still has its head in the right place...

[via YouTube]

The Mote In God's Eye (best alien encounter sci-fi I've read so far)

Let me, first, introduce the book I just read. The Mote in God's Eye is a book co-written by Larry Niven and Jerry Pournelle. It is another one of the books I put on reserve in the local library system that are slowly trickling into my local library on a half-weekly basis. Sadly, I can't read most of them because I have too much other reading to do, but I am really glad I read this one. This book really grabs onto the idea of the alienness of an alien encounter in a way that I don't think I've ever seen before.
Just a quick synopsis before I explain what I mean. Humans seem to be recovering from a civil war that has left many human worlds isolated throughout the galaxy; little by little, the government seems to be finding the worlds and reconsolidating them into the human system. Into this situation arrives an alien probe that has travelled, via normal space (rather than through the jumps that are the equivalent of hyperspace/warp-drive/etc. in this universe), to human territory. Obviously, humans have a desire to figure out what is going on and, in their exploration of the source of the probe, find the Motie civilization.
That is the synopsis. And that is not the coolest part. The coolest part is the civilization humans discover (WARNING: I might spoil the book for you a little in the upcoming paragraphs). The Motie civilization has discovered the jumps in the past but, due to certain circumstances that are explained in the book, have never successfully retrieved a returning jump ship (which is why they send out the normal space probe). Moreover, the Moties live in a feudal, anarcho-capitalist world dominated by a subspecies of Moties that own large regions of the world and do with it as they please. Finally, and this is the coolest bit, Moties are a species that have had their entire history sculpted by one inescapable fact: their inability to control their absurdly high rate of reproduction. This reproductive rate, as explicated by Niven and Pournelle has driven the entire history of Motie Prime and, in fact, the entire Motie system.
I won't say anymore, lest some readers actually want to read this book. I'll just say that reading this book has been one of the most enjoyable bits of sci-fi reading I have done in the past year or so (which is saying quite a bit). If you do read it, I hope you enjoy it as much as I did.

Another Palin Explanation

I think that people are finally getting the idea: a McCain presidency is basically just a Palin presidency in disguise... and a Palin presidency is just the neo-conservative arm of the Republican party running the country for 4 (or 8) more years. Frank Rich (New York Times Op-Ed Columnist) just wrote a blistering piece about what a Palin vice presidency would mean for the United States and how absurd it is that we are actually considering her as a vice presidential candidate at all.
First, he dismantled her RNC nomination speech, pointing out that, not only did she quote her unidentified writer out of context, the unidentified writer was Westbrook Pegler, "a rabid Joe McCarthyite who loathed F.D.R. and Ike and tirelessly advanced the theory that American Jewish immigrants from Eastern Europe (“geese,” he called them) were all likely Communists."
Some other choice quotes follow:

"But race is just one manifestation of the emotion that defined the Palin rollout. That dominant emotion is fear — an abject fear of change. Fear of a demographical revolution that will put whites in the American minority by 2042. Fear of the technological revolution and globalization that have gutted those small towns and factories Palin apotheosized... And, last but hardly least, fear of illegal immigrants who do the low-paying jobs that Americans don’t want to do and of legal immigrants who do the high-paying jobs that poorly educated Americans are not qualified to do. No less revealing than Palin’s convention invocation of Pegler was the pointed omission of any mention of immigration, once the hottest Republican issue, by either her or McCain. Saying the word would have cued an eruption of immigrant-bashing ugliness, Pegler-style, before a national television audience."

"But the ultimate hypocrisy is that these woebegone, frightened opponents of change, sworn enemies of race-based college-admission initiatives, are now demanding their own affirmative action program for white folks applying to the electoral college. They want the bar for admission to the White House to be placed so low that legitimate scrutiny and criticism of Palin’s qualifications, record and family values can all be placed off limits. Byron York of National Review, a rare conservative who acknowledges the double standard, captured it best: “If the Obamas had a 17-year-old daughter who was unmarried and pregnant by a tough-talking black kid, my guess is if they all appeared onstage at a Democratic convention and the delegates were cheering wildly, a number of conservatives might be discussing the issue of dysfunctional black families.”"

In the end, Rich also provides some solid advice for Obama: "If Obama is to convey just what’s at stake, he must slice through the campaign’s lipstick jungle and show Americans the real perils that lie around the bend." Really good op-ed, I think. And one that, again, reminds Americans that a Palin vice presidency (actually, a Palin presidency) is NOT the option we want...

[via NYT]

Palin Exposé

After seeing that McCain went ahead of Obama very soon after the Palin addition, I have decided to actively use this post to help people understand that Palin is not a good running mate for anyone (even a Republican candidate). Of course, this is probably sort of like preaching to the choir (or so I sincerely hope), but I am going to do it anyway, just in case there is somebody who reads this who thought Palin is a worthy candidate for VP.
Starting off in that vein, it seems that the New York Times has made that objective of mine far easier. They ran a pretty long exposé of Palin's mayoral and gubernatorial campaigns and administrations in the Politics section of today's newspaper. It highlights all sorts of fun facts about her "leadership" style: ruthless vindictiveness, over-the-top cronyism, secrecy in place of the campaigned-on openness, and a general disinterest in running a government to serve all the people rather than just her own people. I've linked the article below, enjoy. And please, if you know people who think Palin is a good addition to the McCain ticket, use the article's points to convince them otherwise; just don't tell them it came from the New York Times as that will probably convince them that the "damn liberal media" is just out to get the best VP candidate ever... Ugh.

[via NYT]

McCain leading Obama?!?!

I was reading election information yesterday at some of the more reliable sources of polling information available on the internet: Princeton Election Consortium and InTrade Prediction Markets. I found out that Obama has actually fallen behind McCain in state polls and in InTrade predictions! This after McCain selected Palin as his VP!!! In case this is all because of my transcript of her RNC speech, I would like to clarify that I was being satirical in every instance where I seemed to be praising her. Do NOT vote for McCain and her based on my transcript. If McCain-Palin really win this election, I ... Actually, I have no idea what I'll do as I never really thought I would have to consider that outcome. Thank you very much everyone who apparently thinks that the McCain ticket is somehow better thanks to Palin's new vice presidential nomination...

P2P Copyright Infringement Notice Spam

A really interesting bit of news: spammers have apparently resorted to e-mailing P2P users fake copyright infringement notices, falsely identifying themselves as MediaDefender (part of the RIAA lawsuit apparatus). I don't know if I can put it any better than Ars did, "There's something deeply ironic about the fact that data thieves have targeted content thieves for botnet infiltration." Ironic indeed.

[via Ars Technica]

Google Chrome (and Browsers) Supposedly Make Microsoft Windows (and Operating Systems) Irrelevant

The author of the article linked below makes the claim that operating systems (like Microsoft Windows, GNU/Linux, Mac OS X, etc.) are being made irrelevant thanks to internet browsers (like Microsoft Internet Explorer, Mozilla Firefox, Safari, Opera, etc.)... I am sure many have already thought this but, in order to run Google Chrome, you need Windows (as it doesn't quite run on anything else yet). Therefore, while I'd love to think that computing has reached a point where the internet is the ubiquitous platform that makes everything available to everyone all the time, regardless of everything else, I don't think we've quite reached that singularity yet.

[via NYT]

Key Points from Gov. Palin's Nomination Speech

Key points from Governor Palin's vice-presidential nomination speech in St. Paul, Minnesota last night:

-reporters don't like her and she doesn't care
-Obama talked about religion and guns differently when speaking to versus when speaking of middle America voters
-Obama only worked as a community organizer
-reform is hard but must be done
-she sold governor's jet and chef in Alaska
-she drives to governor's office (instead of taking the jet, presumably)
-she knows how the veto works
-she doesn't like tax on fuel
-she doesn't want federal funding for state projects
-she built a $40B natural gas pipeline to lead America to energy independence
-she knows that foreign powers don't have American interests at heart
-she is in favor of gasoline autarchy
-she wants to drill the North Slope of Alaska to go towards gasoline autarchy, presumable because it will stop our energy dependence on evil foreign powers
-McCain-Palin administration will do everything but drill for oil (lay pipelines, build nuclear plants, clean coal plans, and mover forward on solar, wind, geothermal, and other alternative sources)
-Obama has not written a "major law" or "reform"
-Obama thinks that "America's war" and "victory" are two phrases that just don't mix
-she doesn't like styrofoam Greek columns
-Obama is a hippy-dippy environmentalist
-Obama wants to reduce America's strength in a dangerous world
-Obama is too concerned about terrorists' rights (presumably, that means she just wants all people accused of terror to be put in jails with no due process)
-Obama is raising taxes when America is going into a recession
-how do extra Obama taxes help Americans suffering a recession? (implying that healthcare for uninsured and welfare for poor doesn't apply to those recession-struck Americans)
-Obama uses change to promote career, McCain uses career to promote change
-she doesn't like that Obama has buttons and self-designed presidential seals
-Obama doesn't have the idealism of McCain (presumably because the lack of experience in Washington has left Obama more jaded than McCain, who has been in Congress for around 3 decades)
-McCain isn't a party man (implying that he chose Palin because he has suddenly become hugely religious, strongly anti-choice, and hates the environment) [that last one may actually be true]
-Senator Reid hating John McCain is the best proof that McCain is a good candidate
-Harry Reid isn't as good at stuff as McCain
-Obama wants to make the presidency a journey of personal discovery
-McCain is a war veteran, Obama and Biden are not
-Obama's story of adversity is far less than that of McCain's torture in Hanoi
-McCain has already made his journey
-McCain is compassionate because he was tortured
-McCain is wise because he was tortured
-McCain is confident because he was tortured
-McCain was inexplicably exuberant when returning from interrogations conducted by the North Vietnamese torturers (who presumably didn't read him his rights, a view that Palin shares with McCain's torturers)
-America needs an inexplicably exuberant, tortured Vietnam War veteran as its president for the next 4 years
-Obama only talks, McCain has done things
-since character is "the measure" in this election and change the goal, McCain should be president

[via NYT]

"Mo' Money, Mo' Problems" is right

In introductory economics classes, students are taught that people work the number of hours they do because they choose a point on their work/leisure curve that maximizes their satisfaction with life, in general. This would imply that, since more money comes at the cost of less leisure, money somehow compensates for it by reducing stress and increasing happiness in your life through increased availability of resources (ie, more money). However, according to a recent New York Times article:

Perhaps for the first time since we’ve kept track of such things, higher-income folks work more hours than lower-wage earners do. Since 1980, the number of men in the bottom fifth of the income ladder who work long hours (over 49 hours per week) has dropped by half, according to a study by the economists Peter Kuhn and Fernando Lozano. But among the top fifth of earners, long weeks have increased by 80 percent.
...
One result is that even with the same work hours and household duties, women with higher incomes report feeling more stressed than women with lower incomes, according to a recent study by the economists Daniel Hamermesh and Jungmin Lee. In other words, not only does more money not solve our problems at home, it may even make things worse.

That, from what I can tell, means that richer Americans are so far along on their money-leisure relationship curve that they get reduced satisfaction from each additional hour they spend at work (rather than at leisure)... If they are rational actors, they should immediately readjust their work-leisure choice to improve their overall satisfaction. Maybe they just haven't quite realized that their work is cutting into their overall satisfaction.

[via NYT]

Obama Science Policy

I just read through a questionnaire that Senator Obama finally responded to (Senator McCain still hasn't done so) regarding science/technology/space/environment/education policies in his administration. Being a fairly liberal person, I am pretty happy with what Senator Obama put down; feel free to read it if you want. They also have synopses of other things he has said about the above issues.

[via SEA]