Month: November 2009

John Hempton:

However if the crisis was a liquidity crisis and not a solvency crisis then, come the time to exit quantitative easing, the Fed will have a sufficient balance sheet to do its part.

I do not believe the US banking system was insolvent in March. I never did believe it. And I thus believe the Fed has an exit strategy.

Daron Acemoglu:

Consider the two cities of Nogales on the Mexico-U.S. border. On the Arizona side, residents enjoy relatively high incomes, good infrastructure, and reliable public services.

“None of those things are a given across the border. There, the roads are bad, the infant-mortality rate high, electricity and phone service expensive and spotty.

The key difference is that those on the north side of the border enjoy law and order and dependable government services — they can go about their daily activities and jobs without fear for their life or safety or property rights.

On the other side, the inhabitants have institutions that perpetuate crime, graft, and insecurity.”

Nogales, Sonora and Nogales, Arizona share similar cultures, geography, and climate. The lower income and quality of life on the Mexico side reflects the ineffective rules there.

It’s just business, Sarah, nothing personal.

Media bias is a very real phenomenon, but it isn’t a political bias.

When people hear the phrase they imagine the media having a political agenda and pushing an ideologically slanted product at unsuspecting viewers. That does not happen. Even at FOX. Media bias is commercial bias. The biggest influence on the product you read and see is the desire to make money – and that’s why ‘product’ is the appropriate term.

You’re not believing me about Fox News, are you? OK. So why does Fox News offer the most conservative product, stocked with plenty of “family values” talk and appeals to social/religious conservatives, while the Fox networks offer the raunchiest programming?

Reid Stowe:

As I take a deep breath in, I visualize the seven colors of the rainbow spectrum, one color in each chakra, red at the bottom to violet at the top. I am sitting in my bed leaning against the wall with my legs locked in the lotus posture like a pretzel. I start the Om deeply and slowly. I visualize myself sitting on top of the motor and as I begin the Om, first I visualize all the rainbow colors flashing up my spinal cord in a DNA helix pattern and with my inner voice I say thank you. Then I see the red in its corresponding chakra and I say thank you. I visualize each color as strongly as I can and say thank you to each one. After I reach violet I swing the colors clockwise through the battery banks on each side of the motor and say thank you. The electricity and the colors go into the motor and the motor starts with a roar and I say thank you with meaning and grateful that it is running. The electricity with my attention rises up to the electric winch above my head and the winch spins and I say thank you. Then my attention goes over to the satellite tracking unit and I go with its signal up to its satellite in space and bounce back down and say thank you.

John Cassidy: Economics, when you strip away the guff and the mathematical sophistry, is largely about incentives. At any time, these can get distorted in a particular market. Usually, though, the memory of past crashes, together with financial regulations and restrictive social conventions, preserve a modicum of stability.

But during Alan Greenspan’s era in charge of the US Federal Reserve, lax monetary policy, deregulation and financial innovation shocked the economy out of its stable configuration, placing it on a “bubble path”.

Once the credit bubble got started, the men who ran the biggest financial institutions in America were determined to surf it, regardless of the risks involved. Because from where they sat, and given the financial incentives they faced, pursuing any other strategy would have been irrational. And when a Wall Street CEO levers up their firm’s equity capital 30 or 40 to one in search of extra profits, their actions can bring down the entire economy.

Kevin Carson:

The Green Revolution Saved Lives?

The very claim that [The Green Revolution] “saved a billion lives” starts from a false assumption: that the main cause of Third World starvation was economic, rather than political.

It assumes that starvation resulted mainly from insufficient production, from a lack of land, or from the inadequacy of farming techniques.

In fact, the main cause of Third World starvation was what Franz Oppenheimer called “political appropriation of the land”: great landlords and landed oligarchs holding fertile land out of cultivation altogether, or tractoring off peasant smallholders so the land could be used to grow cash crops for export.

The real source of starvation is the hundreds of millions of people living in shantytowns who might otherwise be supporting themselves on their own land, but who now can’t afford the “more efficient” crops produced on their former land at any price, because they don’t have any money.

Arnold Kling:

The beauty of holding sales on “Black Friday” is that stores know that many price-insensitive shoppers will stay away in order to “avoid the crowds.” So you can get revenue from price-sensitive shoppers without sacrificing profits from price-insensitive shoppers.

Steven Mithen: So what is the point of music?

It is perhaps astonishing that we live surrounded by music, we invest so much time, effort, and resource in listening to and, for some, performing music, and yet we can’t really say what it is.

That is just one of the many mysteries of music. Another is why we have such a compulsion to engage with music: why do we find so much music so beautiful to listen to, why does it stir our emotions, why do we have choirs, bands, and orchestras whose reason for existence is nothing more than to make music? Why do we sing in the proverbial bath? And this is not just us in the 21st century Western world, but throughout the world and existing throughout time: engaging with music is a human universal. There are no known societies, and as far as historians and archaeologists can tell, there never have been any societies that did not have cultural practices that we would categorize as music. Very few individuals will express a complete un-interest in music; even fewer will express a formal dislike.

This is very strange.

It is about how we came to be human in the broadest meaning of the term, and a key part of being human is being musical.

James Hansen:

Politicians would be happy if scientists just tell them there is a climate problem and then go away and shut up. Let them decide what they want to do.

But I decided that I did not want my grandchildren, some day in the future, to look back and say, “Opa understood what was happening, but he did not make it clear.”

What is clear is that we cannot burn all the fossil fuels. There is a limit on how much carbon we can put into the atmosphere.

“I have learned from experience that the greater part of our happiness or misery depends upon our dispositions, and not upon our circumstances.” – Martha Washington [cannot verify]

Liu Bolin paints himself.

Slideshow Here.

No touch up or trick photography. Hint: front tire.

EconomicPopulist:

Nearly every state and local tax system takes a much greater share of income from middle- and low-income families than from the wealthy or from business.

When all state and local income, sales, excise and property taxes are added up, most state and local tax systems only screw the poor.

So-called ‘low-tax’ states are high-tax states for the poor, and most do not offer a fair deal to middle-income families either.

Budgets are failing. Only the wealthy pay low taxes.

They said,

“Brake wear contributes up to 20% of total traffic emissions, but the health effects of brake particles remain largely unstudied.”

Particles of iron, copper and carbon in brake wear can harm lung cells in vitro.

“Just as for exhaust particles, efforts to diminish brake particle emissions will lead to an improved ambient air quality and so could provide better protection of human health”.

Psychological therapy could be 32 times more cost effective at making you happy than simply obtaining more money.

Chris Boyce of the University of Warwick and Alex Wood of the University of Manchester compared large data sets where 1000s of people had reported on their well-being. They then looked at how well-being changed due to therapy compared to getting sudden increases in income, such as through lottery wins or pay rises.

They found that a 4 month course of psychological therapy had a large effect on well-being. They then showed that the increase in well-being from an $1300 course of therapy was so large that it would take a pay rise of over $40,000 to achieve an equivalent increase in well-being.

Economics has been completely at sea. We lack understanding the reality that economics is supposed to illuminate.

We have known about the endogenous instability of fractional reserve banking for some 200 years.

Dead we do not want:

So we don’t advocate – I wouldn’t advocate medical treatment for grief, even though it is a very disruptive state, I think that it’s interesting in that in the case of grief, there’s not only an internal natural healing response, which I very much think there is, but there’s also a social healing response. So, of course, when we know that someone has lost someone, we naturally – certainly if they’re someone close to us, we’re going to be there for them for quite awhile after the death occurs. But even if they’re not that close, we’ll often go to the funeral. We’ll go and visit them a few times early in their homes, bring them food, take care of them in various ways, certainly not expect them to be taking care of us, even though we might be a guest in their house. All this is very natural. I mean, we don’t really hardly need to be taught. I mean, people do it in all kinds of cultures and it’s just something we do. And that is, I think, the best way for the healing process of grief to be helped along, not by medical treatment.

Alive we will not heal.

“The SWAT team is coming in. They are hammering the hinges off as I type.”

Jon Taplin:

For me the most distressing aspect of American politics over the last 30 years is the realization that the Washington Establishment really does rule the country no matter which party holds the White House or Congressional majorities.

Progressives suffered through 12 years of Republican presidents after Reagan’s election only to realize that the election of Bill Clinton changed nothing. The military budget didn’t shrink, deregulation of business oversight continued apace, alternative energy strategies sat on the shelf. Now we have to suffer through watching Larry Summers and Tim Geithner lead Obama down the primrose path to disaster while the financial elites take home record bonuses.

As some of our correspondents have suggested that the split we may be seeing is not between liberals and conservatives, but between insiders and outsiders–the establishment vs the people.

The Onion:

LOS ANGELES—As the White House considers sweeping strategic shifts in the war in Afghanistan, heroin addicts across the nation called on President Obama Monday to stick with the current U.S. policy, which has flooded the world market with low-price narcotics. “There’s no need to change nothing, Joe Biden,” said addict Reginald ‘Bones’ Dillow, who, when conscious, is an outspoken proponent of the U.S. military strategy that has resulted in a nearly 40-fold increase in Afghan opium production since the end of Taliban rule in 2001. “Everything is so cheap—it’s all totally fine like it is, right? Over there, I mean. Why would you want to…do the…[garbled].” Obama is reportedly looking into economic incentives that would both persuade poor Afghans to cease opium cultivation and benefit chemically dependent Americans, the most promising of which involves constructing facilities in the war-torn country for the manufacture of methadone.

America going broke?

It’s not merely that we’re exploited like a feedlot of demographic cattle, but also our inability to demand much from each other, not unlike fat Britain during the edge of its Empire, where our habits are congratulatory and self-preserving rather than challenging and insistent.

I trust America’s great longing to offer important works. I look for grand change coming through today’s bewilderment and noise. Our new day is not yet. I can barely tolerate the whining or the bravado or how the wicked shift blame and shinny up to whatever is winning at the moment. We might oscillate like crazy for awhile.

For me, change will show itself when, just one example, a firm such as GE is trumpeting truly exciting and life-enhancing and prosperous engineering rather than saving itself by green-toggling our stimulus funds.

Lobbyists are employees, not the leaders that hired them, and we haven’t yet taken these guys to the woodshed for making some of the biggest blunders of all time.

A Womb of One’s Own

Hurricane Katrina: It was not an act of God

Martin Melaver:

Years ago, when we started down the road of our first green mixed-use development (one of only two or three LEED HUD projects in the nation), we felt pretty good about ourselves and spoke in the language of “giving back to the community.” Such hubris. What I realize now is that the community has given back to us in ways almost impossible to enumerate.

We convened and then became enveloped by a vast array of community stakeholders who have taught us, among other things, that our very viability as a business is inextricably linked to the community we’ve helped make more vibrant.

Oh, and by the way, the only real estate stuff really getting funded out there in any substantive way are projects that hit the Venn-diagram intersection of green, job creation, energy efficiency, and affordable housing. It’s a lesson not lost on the very largest companies around, as GE seeks to retool itself by tapping in to federal stimulus funds.

In the early days of the American republic, a company needed a charter to conduct its business. It was a charter limited both in scope and duration. A business could only continue on to the extent that its practices lent itself to the enhancement of the general polis. My company’s recent experiences in the green affordable housing arena is testament to the rightness of such a charter. It forces us to earn our stripes every day.

Perhaps… we real estate enterprises simply need to mothball our operations for a good long time. Alternatively, rather than wait around for the next wave of high-rollers to come knocking on our doors, we might consider rolling up our sleeves, addressing needs our social order is clamoring for, and make ourselves relevant for a change.

Bush to start a free market think tank.

Anthony Gregory:

So the guy who began the auto bailouts, whose federal “Ownership Society” was key in creating the biggest speculative bubble in memory, who had bragged in 2004 for having “passed the strongest corporate reforms since Franklin Roosevelt”, who trashed the Bill of Rights, inflated the welfare state and expanded government faster and in more directions than any president since Vietnam, if not since World War II — this guy is now promoting free markets and criticizing big government?

Trauma patients without insurance are almost twice as likely to die in the emergency room. [link]