Beat The Path

Paterno and Pedestals

2012-01-23T17:19:00.000-08:00

One irony of the firing of Joe Paterno was that, in the end, it served to protect his legacy. It allowed him to be held to account for the scandal he did not do enough to stop, enabling the story-line "He made a grave mistake, for which he accepted, with grace, his [ultimate] punishment, but look at all the good he did..." Another irony is, in contrast, how self-serving, hypocritical and without grace the Penn State trustees who fired him appear.

Also not in a good light, are those who, at the beginning of the scandal, seemed to take perverse joy in the take-down of JoePa. And while there is an obvious accomplishment gap, Paterno and Tebow shared this sort of critic. The ones who finds Virtue and Character threatening rather than inspiring. To whom the need for "everybody does it" self-affirmation overwhelms any desire for self-improvement.

Intellectual vs Intelligent II

2012-01-03T19:26:00.000-08:00

The Time's Room For Debate, bravely considers research by conservative think tanks that argue that taking into account "standardized tests of cognitive skill" teachers are paid "roughly 50 percent above private sector levels."

Opposing this view are Jeffrey Keefe, an associate professor at Rutgers, who argues that "comparing teachers to other workers with similar education, experience and weekly work hours... teachers are underpaid by about 19 percent" and that "a cognitive ability model that does not account for education level is meaningless, because individuals are employed in jobs that depend on the skills acquired through education" and David Z. Hambrick, an associate professor at Michigan State University, who acknowledges research that demonstrates that "measures of general intelligence are... the single best predictor of job performance across a wide range of occupations," but none-the-less asserts that "as a society" we decide to pay more critical professions more -- for example, he notes, heart surgeons are more important than electricians -- and contrasts the compensation of entry-level teachers (it comes to about $20 / hour, he calculates) and bartenders (who apparently can make double that) to argue we don't pay teachers enough.

Again, it is hard to take these academics with any seriousness. The suggestion that a master's degree in education imparts skills similar to a master's degree in physics, engineering or even business is precious. The research acknowledged by the Hambrick more or less contradicts Keefe's argument. Hambrick's argument itself is beyond foolish. Wages, of course, are determined by supply and demand (and, too often, political influence), not, as he bizarrely asserts, relative importance. And it is hard to imagine that he honestly discounts the lack (wealth) of fringe benefits, career opportunity and job stability built into a bartender's (teacher's) hourly rate.

It should be noted that Conservatives need not embrace the argument that teachers are overpaid. If not true -- if members of one of the most powerful unions in America are compensated similarly to, or even less than, equivalent non-organized private sector workers -- it would be the strongest argument against unionization imaginable.

Mis-Understanding Debt

2012-01-02T22:09:00.000-08:00

In a column ironically titled "Nobody Understands Debt", Krugman argues that national debt is not "like a family that took out too large a mortgage, and will have a hard time making the monthly payments" for at least two reasons: "Governments don't [have to pay back their debt] -- all they need to do is ensure that debt grows more slowly than their tax base," and "an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves"

The first reason is, inescapably, the logic of a Ponzi scheme.

There is some truth to the second reason. National debt held domestically is less dangerous for the obvious reason that paying it down does not directly shrink the national economy, but also, and more importantly, because citizen-debt holders are "stickier" than other investors: If Greeks were willing and able to purchase Greek sovereign debt, it would not be in crisis now.

In any case, he clarifies this as not even being true: "Foreigners now hold... a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners." In other words, paying down the debt will shrink the national economy (unless these 89 cents worth of U.S. claims are simultaneously called in), and U.S. debt is not in (or roll-over-able into) stickier hands.

Complementing the column's hollow argument, is Krugman's habitual bombastic dismissal of opposing views. Those he disagrees with are "disconnected... from the suffering of ordinary Americans", "have no idea what they're talking about", are "repeatedly, utterly wrong" and, in case the nuance here was too subtle for the gentle reader, are guilty of "wrongheaded, ill-informed obsession." This sort of political rhetoric is, obviously, designed to minimize analysis or reflection and very effective -- taken seriously, it can tie one's sense of self-worth to particular political conviction: by aping Krugman, one demonstrates being informed and right-minded.

While there is, of course, no shortage of equivalent rhetoric on the right, Ann Coulter, for example, doesn't carry anything like the academic or intellectual pretension of Krugman.

Tebow Time

2011-12-06T05:09:00.001-08:00

Tim Tebow presents an interesting rorschach test. To his detractors, he lacks the basic skills his job demands and why can't he curb the Jesus. To his defenders, his faith is a virtue, his character compensates for lack of skill, and, besides, the only true demand of the job is winning.

Those who question whether a team can win a super bowl with Tebow at QB willfully ignore the statistics. Consider the following total yardage season stats, the first three by recent super bowl winning QBs, the fourth Tebow's year to date:

 
 Year Ply/Gm Yds/Gm Yds/Ply TO/Game
 2000 33.6 180.3 5.4 1.6
 2007 36.6 199.3 5.4 1.7
 2008 34.3 194.9 5.7 1.4
 2011 34.4 187.7 5.5 0.4

Those who insist that Denver's rational way forward is drafting a "franchise" QB also disregard history. There are only 6 current super-bowl winning quarterbacks, and two of them, E. Manning and Roethlisberger did so with mediocre season stats displayed above. Of the remaining 4, only 2 -- P. Manning and Rodgers -- won for the team which drafted him as its the QB of the future. Brees was acquired as an unwanted-elsewhere free agent and Brady was drafted well past "of the future" territory. Similarly, looking historically at QBs taken in the first round, about a quarter developed into stars and more then half, more or less, bust. In other words, drafting a franchise QB is easier said than done.

Finally, to those those who would credit Von Miller, rather than Tebow, for Denver's surge, that Denver started winning only when Tebow started starting is dumb luck. More attentive observers would note, whatever else, the affect a QB tougher than Chuck Norris has on his team-mates play.

Just Saying

2011-12-05T20:54:00.001-08:00

Moral high ground? nah...

The Politics of Steve Jobs

2011-11-25T10:11:00.001-08:00

Judging from Steve Job's final advice to Obama -- "that the administration needed to be more business-friendly", that "regulations and unnecessary costs" make it difficult to build factories in the United States and, crucially, that "until the teachers' unions were broken, there was almost no hope for education reform" -- his personal opinions were far more at home on the WSJ op-ed page, than that of the NY Times.

On the other hand, Apple customers are understood to be predominately Democratic. This is, in part, due to -- as Jobs critiqued -- Microsoft and Google being "pure technology" companies that "never had the humanities and the liberal arts in the DNA". While techies may love their gadgets infinitely customize-able, non-geeks can be confused, or even scared, by over-configure-ability, and, so, prefer technology that works simply. In other words, Apple's appeal lay, largely, in enabling -- for a premium -- the tech-phobic to pose as tech-savvy. One frequent implicit claim of this blog, is that there is an direct analogy in this to the appeal of Democratic politics.

On a darker note, there is more then a touch of nihilism, in the sense of beauty mixed with cruelty, surrounding Jobs, his products and, perhaps, his customers.

Sexual McCarthyism

2011-11-07T20:24:00.000-08:00

After a number of anonymous, and unspecific, allegations of sexual harassment, were leveled against Herman Cain, one Sharon Bialek has come forward with a specific allegation. Her claim contains a corroborated un-serious allegation and an un-corroborated serious one.

The un-serious claim is that Cain made an "unwanted physical advance." As she relays it, he telegraphed his intent clearly and well in advance -- "upgrading her room at the Capital Hilton to a grandiose suite" and rather than, as initially suggested, meeting for coffee, taking her out to dinner and drinks -- and she chose to not clarify her intent. As soon as she did, in her own telling, he stopped and took her back to her hotel.

More serious is the implication that he would have given her a job had she slept with him. While she provided no corroboration, if true, it is unlikely an isolated incident. It will inevitably come out if there are other women to whom Cain made similar offers. Perhaps Politico will now dig up every woman hired during Cain's tenure at the NRA, and ask if they slept with him.

Cain's talk of "lynching", and comparison with Justice Thomas, is not entirely off-base. Was Cain not conservative, the responsible media would be reminding us -- justly -- of the legacy of racism with which this sort of sexual McCarthyism resonates.

Cultural Capital

2011-11-03T21:24:00.000-07:00

David Brooks, I suppose, fancies himself conservative for writing things like:

it is easier to talk about the inequality of stock options than it is to talk about inequalities of family structure, child rearing patterns and educational attainment. But the fact is... it’s not nearly as big a problem as the tens of millions of Americans who have dropped out of high school or college. It’s not nearly as big a problem as the 40 percent of children who are born out of wedlock. It’s not nearly as big a problem as the nation’s stagnant human capital, its stagnant social mobility and the disorganized social fabric for the bottom 50 percent... If your goal is to expand opportunity, then you have a much bigger and different agenda.

He is certainly correct up to a point: cultural capital matters -- big government policies that disregard that are doomed to fail. He, and others, however, imagine that there are other, smarter, big government policies which can, taking cultural capital into account, succeed.

Structurally, these arguments take some factor which is correlated to cultural capital (e.g.: home ownership, college education), latch on to any tenuous rationale arguing the relationship is causal (People take better care of things they own! College graduates have wider social networks!), push expensive government programs with inevitable unintended consequences that, equally inevitably, fail because wishful thinking cannot turn correlation into causation.

Von Hayek taught that the natural, evolutionary, processes of free societies tend to increase cultural capital. More traditional conservative teaching would accentuate the role played by community. In either case: A government which governs least expands opportunity best.

Economic Interests

2011-09-20T18:35:00.000-07:00

In the Times Room for Debate, Ilyana Kuziemko and Michael Norton, proffessors at Princeton and Harvard respectively, argue that the "recurring tendency of lower-income Americans to vote against their own economic interests" -- defined as "redistributive policies" -- has three explanations. First, "Erroneous beliefs about the current degree of wealth inequality" -- Americans believe the richest 20% amongst us own only 59% of total wealth rather than, as the currently estimated, as much as 85% . Second, "Americans show a robust pattern of overestimating the probability that they will one day be rich." Finally, "individuals near the bottom of the income distribution may be wary of redistribution because it could help those just below them leapfrog above them." This is illustrated by data which shows that Americans making the closest to minimum wage are "the least likely to support increasing the current minimum wage."

It is hard to take this with any seriousness. The notion that the difference between 59% and 85% has any meaningful impact on political-economic opinions is dumb. The suggestions that the poor prefer to be exploited in that hope that they will one day get to exploit and that they would cut off their hands to spite the very poor, are both stupid and nasty.

The simple truth is that most people -- excluding, perhaps, Ivy League professors -- prefer the dignity of earning their keep. Lower-skilled jobs are, far more than others, absolutely dependent on the strength of the economy. In other words, lower income Americans correctly understand their economic interests lie more in pro-growth, rather than redistributive, policies.

Republicans are often condemned as being anti-intellectual. In their defense, it is worth remembering the distinction -- opposition really -- illustrated here, between intellectual and intelligent.

Reading the Torah

2011-09-10T19:37:00.000-07:00

Writing in Haaretz, Rabbi Shai Held divides the world "between those who acknowledge that they read selectively, and those who do not - or who, given their assumptions, simply cannot." He believes the Torah can be just as well read advocating "universal humanism" as "radically particularistic chauvinism." Given that we "have to decide" the manner in which we read, the most "urgent religious question" is: "How do we build religious lives in which our care for others is intensified rather than attenuated?"

Rabbi Held's philosophy undermines his intention. Religion which acknowledges it reads selectively subverts itself. The statement "The Torah can justly be understood advocating chauvinistic nationalism, but I prefer to read it humanistically," simply does not carry the power of "Those who read the Torah as advocating chauvinistic nationalism pervert it's teaching." As Rabbi Held does acknowledge that "no religious thinker could embrace" a view which puts "human beings rather than God at the center of the universe," it is hard to see how he understands otherwise his view that the fundamental teaching of the Torah -- Revelation -- is whatever a human being decides it is.

Better is the traditional teaching, amplified by Strauss, that we have to choose between Reason and Revelation.

Why Stimulus Cannot Work

2011-09-07T20:42:00.000-07:00

A Journal Op-Ed presents research from George Mason economists Garett Jones and Daniel Rothschild, that shows stimulus didn't work, in part, because it was implemented poorly and wastefully. The truth is readily apparent upon any reflection that even an efficiently executed stimulus program could never have worked.

As explained by the President, stimulus is meant to "break the vicious cycle where lost jobs lead to people spending less money, which leads to even more layoffs.". Stimulus is meant to work by creating a virtuous cycle where stimulus payments lead to people spending more money, which leads to more hiring, which leads to even more spending. This will only work to the degree that businesses confuse stimulus-driven spending with actual economic signals and hire. The more aware businesses are of what the government is doing, the more they will inevitably hold off hiring until they perceive it to actually be working. The more managers hold of hiring, of course, the less effective the stimulus.

Further, stimulus is more effective the more the economy is being impacted by the vicious cycle, when people are spending less because they fear working less, and will spend more when they expect to work more. Stimulus will necessarily be less effective if people are saving more for other reasons independent of job prospects. In this particular, people are saving more and spending less because they are fearful for their retirements. American's largest investment tends to be their homes which are not, now, worth what they were. In addition, policies debasing the currency debase also people's savings. Finally, people are recognizing that government may not be able to fulfill its social security and pension commitments.

In other words, sensible entitlement reform and bringing the deficit under control to restore confidence in the government's ability to keep its commitments, strengthening the currency and allowing the housing markets to work themselves out stand to work where keynsian stimulus will simply not.

An Ivy's Worth

2011-08-30T20:15:00.000-07:00

A column in the Journal recently argued that Americans "hate" [macro-]economics because it over turns common sense (for example that paying people to not work leads to less working) and -- unlike, for example, physics which can be equally counter-intuitive -- does not, generally, work.

The counter-claim that macro-economic conclusions are strongly data-driven, is easy to call into question.

For example, the President's nominated Chief Economist is, in part, known for research showing there is no economic benefit to elite undergraduate education. This conclusion is only superficially data-driven. It turns out -- unsurprisingly -- that, controlling for objective academic measures, elite college grads do economically better. In other words, Penn alumni with 1400 SAT scores tend to make more money then Penn St. alumni with the same scores.

To get around this, Krueger suggests there are un-observed material variables -- such as "motivation and creativity." In an initial paper, he modeled these factors by schools a student was accepted to. He found that students accepted to, for example, Penn with equivalent SAT scores were likely to make equivalent money even if they chose to attend Penn St. In a later paper, he found "quality of schools applied to" a more precise proxy.

This is, of course, crazy-talk. Common sense dictates the following: A Wharton finance major is likely to make a lot more then a Penn St finance major; Concentrating on women's and religious studies is not a recipe for economic success whether from Penn or Penn St; A C student has better prospects from Penn than Penn St.; Some students are better served by Penn St. and, knowing who they are, more likely than others to turn down Penn; Quality of school applied to says more about social resources and expectations than intrinsic motivation or creativity (which are, in any case, likely the stronger factors).

Which is all to say: Students ought think twice before dumbly following what Dr. Krueger (B.S. Cornell '83, Ph.D. Harvard '87) says. And Conservatives are absolutely right to be skeptical of the "data-driven" conclusions of macro-economic models.

Galuth

2011-08-07T20:42:00.000-07:00

"Galuth" is, perhaps, the most powerful and contemporary Jewish conception. We are taught that it was not only the Jews who were exiled with the destruction of their Temple -- G-d, Himself, was as well. Where some see a world in which "God is dead," the Jewish tradition teaches that He is merely in exile. And not because we, today, do not believe in Him faithfully enough. Rather, because, we have not been good enough to each other.

Heads I Win, Tails You Lose

2011-08-01T05:10:00.000-07:00

In the high stakes poker game, they were playing, Boehner folded.

As described by the President, the new deal is staged:

The first part of this agreement will cut about $1 trillion in spending over the next 10 years...  the second part... establishes a bipartisan committee of Congress to report back by November with a proposal to further reduce the deficit...  To hold us all accountable for making these reforms, tough cuts that both parties would find objectionable would automatically go into effect if we don’t act.

The threatened tough cuts would be to defense and medicare providers.

The President made absolutely clear in his statement that the substance of the negotiations -- tax raises vs spending cuts -- weren't going to change. In effect, what this deal does is switch the "hostage" from the debt limit to defense and seniors. Which is to say from a hostage many in the GOP -- who believe smaller government leads to economic growth -- would be happy to sacrifice. The committee it sets up will give equal weight to House Democrats and Republicans despite the 2010 elections that gave republicans an almost 2-1 edge.

Finally, and above all, there is absolutely nothing in this deal that would motivate Democrats to compromise. Should the committee come back empty handed, they would gleefully look forward to arguing to voters that crazy Republicans skewered Defense and Seniors to protect "the rich".

In other words, politically, Republicans would be well advised to trash this deal -- argue that Obama's insistence on playing politics with Defense spending renders him an unfit Commander-In-Chief -- and roll the dice on default.

Obama's Rhetoric

2011-07-25T23:02:00.000-07:00

While it would be a mistake to take the President's political rhetoric more seriously than it ought be, two observations from his address last night.

The President appears fond of his professor moments. He likes saying things like "I won’t bore you with the details of every plan or proposal, but basically, the debate has centered around..." and "something known as the debt ceiling -- a term that most people outside of Washington have probably never heard of before." He even felt the need to explain that should we default, "we would not have enough money to pay all of our bills" One imagines that liberals find such rhetoric smugly self-affirming whereas conservatives bristle.

He also repeated his now oft-used line about asking "hedge fund managers to stop paying taxes at a lower rate than their secretaries." This argument is somewhat ambiguous.

The term "Hedge Fund Managers" can refer to the companies that manage hedge funds. A big portion of their revenue is proportional to the returns they generate and allowed to be taxed as capital gains (~15%), rather than ordinary income (~35%). While there are good arguments for taxing this revenue at the higher rate, doing so will certainly reduce employee compensation, including for secretaries. In other words, raising taxes on fund management firms will indirectly, but surely, raise taxes on those firm's secretaries.

"Hedge Fund Manager" may also refer to the fund's principles, many of whom earn staggering figures by investing their own money. This return is absolutely investment income and taxed appropriately. An attempt to better discriminate, to have different classes of investors pay wildly divergent tax rates would very much appear confiscatory.

Debt Politics

2011-07-25T22:30:00.000-07:00

The President, in his speech tonight, reached out to the sort of independent who likes "balance" and "compromise". In his, Boehner spoke to the sort of independents who, back in the day, supported Perot. In that the latter are more likely voters, Boehner played the stronger card.

The founding fathers dealt Boehner perhaps the strongest card in preventing the Senate from initiating a revenue bill (i.e.: A bill the Republican house would not support). The proposed Senate bill very much works to the G.O.P.'s political favor. Accepting it, in the last minute will take some air out of the claim they are un-compromising extremists, they will honestly take home to their base the best deal they could get, and it will put real teeth into the 2012 election.

Boehner's proposed two-step process is likely less politically advantageous. It will give the Democrats, before the election, another opportunity to frame Republicans as stooges of the very-wealthy and, most dangerously, it will give the President another chance to finally appear a strong and effective leader.

NFL Settlement

2011-07-25T16:01:00.000-07:00

From: ...
To: 
Sent: Monday, July 25, 2011 12:04 PM
Subject: Have No Fear....

Degenerate Football Fans-

The league, the NFLPA and myself have reached a 
settlement, and there will be the Confidence/Rank Em pool 
for the 2011/2012 season.  A more detailed email will be 
forthcoming, but it will be comparable in format to past 
years (weekly winners, cumulative winners, etc.)

As spots often go quickly, please let me know if you are 
interested.  Also, if you know others that may be 
interested, please let me know.

Thanks, and I hope you are all enjoying your summer.
________________________________________
From: [ME]
Sent: Monday, July 25, 2011 12:43 PM
To: ...
Subject: Re: Have No Fear....

I'm interested.  But I believe we should cap the potential
winnings of new entrants for the first five years they are
in the pool at 30% of the stated prizes, and divide any 
excess amongst those of us who have been in the pool the 
longest (and thus have contributed the most to the pool 
pots over the years).   Just to be fair.  And we should 
set some of that money taken from the new entrants aside 
for people who used to be, but are no longer, in the pool.
To compensate them for their sacrifices and contributions 
to the success  of the pool.

The Debt Limit

2011-07-13T22:37:00.000-07:00

A WSJ op-ed argues that "The tea party/talk-radio expectations for what Republicans can accomplish over the debt-limit showdown have always been unrealistic... Republicans might have played this game better, but the truth is that Mr. Obama has more cards to play." According to the op-ed:

The polls that now find that voters oppose a debt-limit increase will turn on a dime when Americans start learning that they won't get Social Security checks. Republicans will then run like they're fleeing the Pamplona bulls, and chaotic retreats are the ugliest kind. By then they might end up having to vote for a debt-limit increase and a tax increase.

The Journal is correct only in that if the Republicans do not have the courage of their convictions, bluffing will end badly.

In a separate column, Rove argues that the Government has sufficient revenue for debt payments, Social Security benefits, Medicaid and Medicare, active duty military pay, Department of Defense vendors and IRS refunds. In other words, that the political consequences of not raising the limit are bearable. As not raising the debt limit will set a hard cap on Federal spending and give the President, in effect, a line item veto to enforce, why would fiscal conservatives support raising it? The President will be politically constrained in his spending choices -- imagine the blow-back if he continued to pay six figure salaries to political appointees while cutting social security.

While Republicans have no political -- or principled -- interest in a debt limit deal, they would be wise to offer proposals that framed "Spending as a percent of GDP" as the issue. Failing that, they may have difficulty countering the President's intended claim that he "offered" the largest deficit cuts.

Social Science Bubbles

2011-07-11T16:24:00.000-07:00

In his latest column, David Brooks acknowledges that 50 years worth of gigantic policies driven by flawed social science has produced disappointing results. He is, however -- like those perpetually convinced that the latest financial bubble is not a bubble at all -- absolutely convinced that the latest social science, this time, can produce effective policies.

At the center of his argument is research by Eldar Shafir of Princeton and Sendhil Mullainathan of Harvard that finds "scarcity produces its own cognitive traits." For example, if you are poor, you are more likely to know the starting taxi fare or make complicated trade-offs involving milk and orange juice. This imposes enormous cognitive demands, crowding out other cognitive function. He doesn't explain what policies follow from this insight, but the most obvious would be those freeing poor people from these difficult choices. He does re-iterate his belief that "we need to design policies around" the knowledge that "we each have multiple selves" that "emerge or don’t emerge" in specific contexts.

It is worth noting that generations of folk lore would contradict any policy conclusions of scarcity research: Those we celebrate as having lifted themselves from poverty, do so, largely, because, not in spite, of their acute -- even obsessive -- attention to the kind of questions Brooks is convinced are obstacles.

Above all, as previously argued, pre-scientific teachers well understood our complex and divided natures. For that reason, they encouraged beliefs -- in particular: virtue and personal responsibility -- that supported our better angels. There is no evidence that social "science" ever has, or will, improve on what it displaced.

Golden Shield

2011-06-14T17:21:00.000-07:00

We usually read stories regarding, for example, the Great Firewall of China, with the confidence that our contentious, open society is immune from that sort of control. It is, therefore, un-nerving -- in a Matrix-y way -- when we bump up against an apparently American analogue.

Bill Simmons, explaining Lebron's latest meltdown, writes:

Remember when Wade tore into LeBron with three-plus minutes remaining in Game 3? When he yelled at him for eight solid seconds? When there was genuine anger in his eyes? When he did it right on the court, right in front of the other players, right in front of 20,000 fans and 10 million TV viewers?

The answer is, strangely, "no". 20,000 fans may have seen it, but it was not televised and not to be found on Youtube.

While there are certainly many people who would enjoy that video, its absence doesn't threaten our civilization. But it does raise the question of what else are we missing...

Circumcision

2011-06-13T15:48:00.000-07:00

San Franciscans have stirred controversy by putting an anti-circumcision ordinance on the ballot. Adorably named "intactivists" argue that infant boys have a right to keep their foreskins intact.

The debate is not quite much ado about nothing. Circumcision is not, simply, an old tradition or the sign of our covenant. It has a clear symbolic meaning: We are created imperfect. As such, it stands clearly against that contemporary theology that teaches "God makes no mistakes."

The opposition to tradition, in this instance, is also an opposition to science. For example, Russell Crowe's tweets argue "Who are you to correct nature?" and "'human' science has caused too much damage" (they also argue: "Why don't you sew up your @$$?").

In the end, the contemporary assertion is tied to the understanding that we are the best -- or primary -- judge of ourselves. We can easily experience ourselves as "on the right track" -- if you do not then "just love yourself and you're set" -- but we are often not experienced by others in that way. The (hard) scientific and religious traditions command us to confront the world outside our heads.

Israel and The Arab Spring

2011-05-24T18:09:00.000-07:00

Drudge headlines: Obama, Cameron compare themselves to Reagan, Thatcher for over-seeing the Arab Spring.

USA Today reports that Israelis are wary of the Arab Spring for good reason:

Tarek Khouly, a coordinator for the April 6th youth movement in Cairo... says "We're not at a situation now where we can confront Israel... Once Egypt is strong... Israel will choose to go away."

Netanyahu, in his adress to Congress, warned that the democratic "hopes could be snuffed out, as they were in Tehran in 1979... [and] Lebanon’s democratic Cedar Revolution.". Ben Stein argues they were a fraud to start with.

The simple truth is this: The Arab world has a once-in-a-generation opportunity to re-ground their societies in liberty and democracy. Whether -- or to what degree -- they succeed, or whether they condemn themselves to another generation of tyranny, will be a strong function of whether they -- paraphrasing Golda Meir -- love their own more than they hate the other. It is most straightforwardly so in Syria, where Assad would long ago been overthrown if Alawites didn't reasonably fear massacre, but it is equally true in Egypt where both the Army and Muslim Brotherhood will happily manipulate passions to thwart liberty and democracy.

Obama's Audacious AIPAC Speech

2011-05-23T06:42:00.000-07:00

The President, in his address to AIPAC, argued that "the march to isolate Israel internationally — and the impulse of the Palestinians to abandon negotiations" has gained "momentum in the absence of a credible peace process". Heading this off demanded he state explicitly the "1967 border" formula. In truth, the current absence of negotiations is largely due to an administration policy which, of all the complex and difficult issues, decided to focus on kitchen renovations in Efrat, strengthening the Palestinian "impulse" to abandon negotiations. More to the point, there are fundamental issues raised if the "march to isolate Israel internationally" is strengthened, not weakened, by Palestinians abandoning negotiations, and hard to see how the presidents policy speaks to those issues.

He then clarified that "'1967 lines with mutually agreed swaps' means... a border that is different than the one that existed on June 4, 1967." He implied that those who criticized him where of bad faith, or limited English comprehension. In this he misses (willfully?), the point. There is a clear difference -- in framing negotiations -- between stating that the final borders will look something like the 1967 borders adjusted for demographic realities and security needs -- what "everyone knows" and he clarified himself as having meant -- and that the 1967 borders represent the basis for negotiation -- what it easily sounded like he said.

More to the point, this maneuvering is taking place under the shadow of the Palestinian determination to seek statehood at the UN in September. A determination which, itself, the President inspired. It would certainly further "the march to isolate Israel internationally" should it entail recognition of the 1967 borders without reference to demographics or security. Supporters of Israel are right to fear that the President's speech will be easily, predictably, used to further that cause.

Obama's Middle East Speech

2011-05-20T14:24:00.000-07:00

In his latest speech, the President layed out his view of the middle east negotiations.

Upon any reflection, his layout is as coherent as the sound of one hand clapping. Or rather, he manages to be on two sides of the fence at once. On one hand, he grants Israel military presence in the Jordan River valley ("Israel must be able defend itself - by itself - against any threat"), one the other hand he precludes it ("The borders of Israel and Palestine should be based the 1967 lines with mutually agreed swaps"). On one hand, he closes off any right of return of Palestinians to Israel ("Israel as a Jewish state and the homeland for the Jewish people"), on the other hand he leaves it open ("two wrenching and emotional issues remain: the future of Jerusalem, and the fate of Palestinian refugees"). Ultimately, he asserts, the only thing "America and the international community can do is state [this all] frankly."

Netanyahu's response appears childishly imperious. A savvier diplomatic response would be to accentuate the hand that defended Israel's position, and ignore the other hand. On the other hand, Netanyahu's response reflects the seriousness of the stakes -- millions of lives in balance -- where-as Obama's empty speech reflects less world-concerned foreign policy, and more re-election concerned, domestic political posturing.

The Female Rabbinate

2011-01-04T19:32:00.001-08:00

This blog has previously taken the position that opposition to an egalitarian Orthodox Rabbinate is foolish. Rationally, it certainly seems the case: It is hard to see the direct, Halachic, arguments against as being, today, compelling.

I was enthusiastic, then, when my congregation welcomed a “congregational intern”, who while not titular-ly on the rabbinic staff serves, for-all-intents-and-purposes, a rabbinic function.

Unfortunately – and, given her relatively mainstream background and the synagogue's prominence, surprisingly – in each the three speeches I have heard her present, she made a distinct point of delivering apiquorsic lessons, that – for good reason – one would never hear from the male Rabbinic staff.

One wonders, when she was selected, was there no more orthodox option available?

In the end, perhaps it is only realistic to expect that prospective Rabbanits will naturally/largely seek to fundamentally subvert, or overcome, and not uphold or conserve. Perhaps opponents of an egalitarian Orthodox Rabbinate are, almost despite themselves, correct in their view of the stakes. Above all, perhaps wise promoters of an egalitarian Rabbinate ought more closely follow Branch Rickey .

Crazy Talk

2010-11-17T21:26:00.000-08:00

Drudge links:

The little guy appears to be losing out on the General Motors initial public offering. Trading shops like E*Trade, TD Ameritrade and Charles Schwab aren't getting access to the GM public offering, expected to occur next week. Despite 35 underwriters and at least 365 million shares, there isn't enough to distribute to online brokers that cater to small, retail investors.

As the powers that be are certainly aware of the political sensitivity surrounding the GM IPO, this exclusion seems tone-deaf. That said, a bigger political risk may lie in the pricing of the IPO: an under-priced IPO profits politically connected financial institutions -- having excluded retail investors -- at the expense of taxpayers. If the IPO turns out to have been overpriced, such that those in on the IPO lose money initially, excluding small investors will turn out to have been politically fortunate.

As to why politically connected financial institutions might collectively overprice the GM IPO...

Less conspiratorially, its reasonable to observe (conflictingly) that retail investors represent a more uncontrollable/unpredictable element in the mix, and that excluding people from the initial offering may serve to build-in immediate demand for the stock in the markets.

The Land Which I Will Show You

2010-10-17T18:12:00.000-07:00

And G-d said to Avram: Take yourself (Lech Lecha) from your nation, your community and your father’s house towards the land which I will show you. And I will make you a great nation, bless you and exalt your name; it will be for a blessing. And those who bless you shall themselves be blessed, those who curse you shall themselves be cursed and, through you, all the nations of the world shall be blessed.

These three verses-- the first in which G-d addresses a Jew -- may well, on that account, be the most critical in the Bible. In them, G-d presents to Avram, and, one presumes, his descendents, the mission and purpose that G-d has in store.

The precise nature of G-d’s command may be hard to grasp. One complication is the odd, double, phrase Lech Lecha. Rashi understands it as “Go, for yourself, for your benefit”, as if G-d was not appealing to the better angels of Avram’s nature. Another, easy, observation is that the command is ordered backwards. One must first leave his parent’s home before leaving his community, and his community before leaving his nation. This can be understood, then, as a psychological, rather then geographical, command. If so, however, it could lead to its being understood as more generally applicable. In any case, as Rashi notes, Avram had already left his homeland, taken by his father, and was en-route to Canaan, which, lo and behold, turns out to be just the land G-d had in mind. While Avram would hardly be the last to hear G-d sanctify an undertaking anyways underway, one would like to imagine that there was more at play here.

It is tempting – one cannot but question whether the land we call Israel is indeed what is here promised – but probably ultimately foolish to read the “I will show you” as forever in the future. Rashi, more modestly, explains that the term was used to make the Promised Land more desirable. This explanation is far from innocent. Something fundamentally undesirable may become desirable when mystery and tension are added, but something fundamentally desirable needs, wants, no such artifice.

Parenthetically, the command of the Posuk is the conceit of the Scientist: A scientist must separate himself from the biases of one’s own and follow the truth where-ever it leads. That Avram is portrayed in the Midrash as a natural philosopher is then not irrelevant. Nor is it irrelevant that the where-ever-it-leads winds up being the original destination and the separation from one’s own in this Posuk, becomes the creation of a new nation – a new subjectivity – in the next.

The blessings of the second verse – fecundity, wealth and fame – are not, Rashi points out, blessings in their own right, rather they are compensations for the rigors of travel. One can go farther then Rashi and note that the three blessings roughly map to the three goings-out in the first Posuk.

Be that as it may, it leaves the third verse as, ultimately, the explanation of the purpose of Avram’s mission. The verse appears not entirely self-consistant – if nations are cursing Avram and, thus, themselves, cursed, then all the nations of the world are not blessed. Perhaps the first two clauses can be understood as a historical process through which the final one will come about.

Strauss writes the following: “The emergence of nations made it possible that Noah’s Ark floating alone on the waters covering the whole earth be replaced by a whole, numerous, nation living in the midst of the nations covering the whole earth.” The limit of that comparison is precisely the difference between Noah – the Tzadik im Peltz – and Avram.

Politics And Culture

2010-09-02T17:07:00.000-07:00

In David Brooks' latest column, he observes the pointed disagreement between the German and American Governments in how to approach the economic crisis. American leaders argued... governments should borrow billions to stimulate growth. German leaders argued... what was needed was not more debt, but measures to balance budgets and restore confidence. He notes that the early returns seem to favor the Germans. Recycling Von Hayek, he believes this is because

The economy can’t be played like a piano — press a fiscal key here and the right job creation notes come out over there. Instead, economic management is more like parenting. If you instill good values and create a secure climate then, through some mysterious process you will never understand, things will probably end well. The crucial issue is getting the fundamentals right. The Germans are doing better because during the past decade, they took care of their fundamentals and the Americans didn’t.

He believes the underlying reason the Germans have done better is because they "inherited a certain consensus-based economic model", while Americans have inherited an economic model that "fosters disruptive innovation (of the sort useful in Silicon Valley)" but has "a penchant for over-consumption and short term thinking." Recycling Moynihan, he believes it all reduces to:

Nations rise and fall on the intertwined strength of their cultures and governing institutions...  German governing institutions have functioned reasonably well...  The U.S. has a phenomenally creative culture, but right now it’s an institutional weakling... [where] political division frustrates long-range thinking.

To blame irresponsible government on "political division", is simply to re-frame the question: Assuming this is, in fact, so (and I am not convinced): Why is American politics more divisive than German politics?

What seems evident to me -- and perhaps implicit in Brooks' argument -- is that the divisiveness in American politics is a reflection of the divided-ness in American society. We lack the ethnic ties that bind other societies, and -- as illustrated by the WTC Mosque debate -- we lack any unifying conception of American Ideals/Values.

One the other hand, it is not clear that the cause of institutional irresponsibility is political divisiveness. For example, in Von Hayek's teaching, the values the "parenting model" calls for instilling, are the context-specific product of an evolutionary trial and error process. In other words, much clearer with-in a consensus-based context than a disruptively innovative one.

The ultimate argument contra-Brooks is Japan, consensus-based and not particularly politically divisive, in whose economic footsteps, America is now following. In contrasting Japan and Germany, what sticks out is the resistance the Japanese have towards accepting responsibility for WWII war crimes against the willingness of Germans to do so. It should not be surprising that being a society which generally accepts responsibility is related to having a government that acts responsibly. What is reflexively somewhat more surprising is what this indicates of American society.

Political Meta-Cognition

2010-08-24T21:27:00.000-07:00

Polls that indicate many Americans believe Obama to be a Muslim have the media agitated and self-critiquing, in a way that similar polls indicating larger numbers of Americans believed W Bush complicit in 9/11 never did.

Lapsed conservative, David Brooks, a-historically, sees contemporary culture as the problem:

...[contemporary] culture places less emphasis on the need to struggle against one’s own mental feebleness. Today’s culture is better in most ways, but in this way it is worse. The ensuing mental flabbiness is most evident in politics. Many conservatives declare that Barack Obama is a Muslim because it feels so good to say so... Issues like tax cuts and the size of government, which should be shaped by circumstances (often it’s good to cut taxes; sometimes it’s necessary to raise them), are now treated as inflexible tests of tribal purity. To use a fancy word, there’s a metacognition deficit... Of the problems that afflict the country, this is the underlying one.

Strauss taught that there is a natural friction between philosophy (or "metacognition") and -- in particular, but not exclusively, democratic -- politics, ultimately symbolized by the political death of Socrates, the first philosopher. He was skeptical of liberalism on precisely this point: its faith in -- actually, its bet on -- the real possibility, or even the inevitability, of a rational, "enlightened", (democratic) politics. To his critics, this is evidence of his anti-democratic project.

On the other hand, there is no shortage of evidence -- these sorts of polls included -- of the correctness of Strauss' critique. Confronted like this, liberal commitment to democracy wavers:

Churchill said: 'The best argument against Democracy is a five minute conversation with the average voter.' That was England back in the 1940's. Tragically -in the USA of 2010 - that conversation would only need to be 30 seconds.....

Read carefully, Strauss provides an approach towards upholding democracy as it apparently is, and not as one may wish it would be.

Do You

2010-08-22T10:43:00.000-07:00

The season premiere of the Jersey Shore made mild (forgive me) waves, when America's Sweetheart Snooki, took on the President:

"I don’t go tanning anymore because Obama put a 10 percent tax on tanning. [Sen. John] McCain would never put a 10 percent tax on tanning. Because he’s pale and would probably want to be tan... Obama doesn’t have that problem. Obviously

Obama made even milder waves, previously, when evidence surfaced contradicting his claim he did not know who Snooki was.

A more interesting bit of zeitgeist may be found in the cast's (in particular Paul Delvecchio's), use of the phrase "Do You." Urban Dictionary, defines the phrase as "following your heart" and "acting in a way that satisfies you, not caring at all about what others think." This also appears to be the sense intended by Media Mogal Russell Simmons in his book of that title.

As employed by America's (or at least MIA's) MVPs, "Do you" instead conveys "stay out of my business," which, according to pollster Scott Rasmussen is the primary message ordinary voters are now trying to send to Washington.

Net Neutrality

2010-08-18T18:14:00.000-07:00

The political debate around Net Neutrality provides a illustration of the difficulty of little-l liberal politics.

As generally framed, one side argues government ought to ban internet providers from differentiating service based on "kind of traffic or level of traffic", while the other side argues government interference will do more harm then good.

Proponents, rightfully, fear a landscape in which a few companies control information and stifle innovation. Critics, rightfully, fear regulatory capture as just as sure a path to that landscape and mock the concept of content-agnosticism:

A woman gets a pacemaker that "will wirelessly contact the hospital if she suffers from cardiac arrhythmia. Are you telling me that it would be illegal to prioritize that traffic over a video of a squirrel on water skis?"

On one side there are likely companies that dream of parlaying control of the (metaphorical) rails into control of the cargo. On the other, some Net Neutrality advocates recognize that their cause is being co-opted by groups whose agenda entails "nationalization of everything from the communications and broadcast infrastructure to the failing newspaper business."

Within a rational politics, we would be able to adopt reasonable rules: Providers would have to treat similar content from different vendors agnostic-ally, but could prioritize certain sorts of traffic (eg: emergency medical), and sensibly manage levels of traffic. Almost no-one in this debate believe that outcome at all likely.

He Taketh Away, Giveth

2010-08-17T18:08:00.000-07:00

The Times describes the administrations thinking on mortgage finance

The Obama administration has been barraged with ideas for reworking the government’s role in housing finance... Mr. Geithner said continued government support was important... The absence of such support... would deepen future recessions because unsubsidized private companies would curtail lending...

The Journal reports that mortgage markets are being knocked.

The market for mortgage-backed securities has... taken a hit in recent days on growing talk of a "mega-refi" program... lots of refis would be bad for mortgage-backed securities investors.

It goes without saying that a government truly concerned that private companies not curtail lending, would not be pursuing policies that punished private lenders.

To me, this is emblematic of this administration's general economic approach: With one hand, use private sector inaction to justify expensive government intervention/expansion, while, with the other, punish/freeze private sector actors.

Rational Basis

2010-08-10T16:42:00.000-07:00

Unsurprisingly, the district court judge found no rational basis behind denying gay marriages state sanction.

Douthat, acknowledges the weakness of the general conservative apologia in attempting his own, which, when stripped of pretension, amounts to little.

Von Hayek would suggest an indirect defense. He taught it was wholly rational to respect our cultural inheritance -- which he viewed as the product of a complicated evolutionary process -- as such. In his frame, to argue that a, for example, commonly-held traditional moral view is without rational basis, one has to assert deep understanding of the complicated interconnections binding us together as a society, and therefore the consequences that flow from upholding or rejecting that view. No person can rationally make that assertion.

That said, Judge Walker was not simply disregarding tradition. After all, our founding fathers envisioned a politics in which reason displaced passion.

Torat Chaim

2010-07-06T22:40:00.000-07:00

Five Towns Jewish Times columnist and pulpit Rabbi Aryeh Ginzberg, caused local controversy, when, in a column aptly self-described as "painful", he asserted that a synagogue's invitation to Sara Hurwitz as a scholar in residence was cause for crying on Tisha b'Av.

Responding to similarly foolish comments by YU Rosh Yeshiva Hershel Schachter, Rabbi Shai Held made the following argument:

One can... be grateful to him for drawing an absolute line in the sand. The world of Jews committed to serving God through a life of Torah and mitzvot is divided between those who believe that gender roles are eternally fixed and immutable, and those who believe that new faces of Torah and halacha are revealed in every generation—as they must, if Torah is to remain a Torat Chaim, a Torah of life, dynamic and alive in every generation... I wish to make one very fundamental point: the time is long past for Jews to assume that the forces of reaction are somehow “more authentic” or “more religious” than the forces of dynamism, responsiveness, and creativity.

This dichotomy ignores the historical reality -- the mantra of "Hadash Assur Min haTorah" notwithstanding -- of a radically evolving American Orthodox Jewish community and the social reality of the Modern Orthodox Jewish community, which, while resistant to Rabbi Held's views on Halachic innovation, is inching slowly but decisively towards an egalitarian Rabbinate.

More fundamentally, the re-interpretation of Torat Chaim, to me, mirrors the manner in which Rabbi Held undercuts himself. Traditionally, "Torat Chaim" refers to Torah as the relationship between the Jewish People and their Living G-d. Something meaningful is lost in this de-sanctification/re-imagining along lines we more familiarly describe our constitution. It is only in the shadow of, in opposition to, "Hadash Assur Min haTorah" -- itself an (a-halachic and) a-historical re-interpretation -- that this new conception achieves richness and power.

[To be sure, the traditional meaning of Torat Chaim is difficult to uphold in our secular, scientistic, world. But de-sanctifying Judaism as a response to modernity is a cheap trick played by mediocre Rabbis. Rabbi Held can do better.]

In the end, the authoritative traditional teaching on Halachic innovation stands opposed -- and is, to my mind, superior -- to both these dueling modern concepts ("Torat Chaim" and "Hadash Assur Min haTorah"):

Rab Judah said in the name of Rab, When Moses ascended on high he found [G-d]... affixing coronets to the letters. Said Moses, ‘Lord of the Universe, Who stays Thy hand?’ He answered, ‘There will arise a man, at the end of many generations, Akiba b. Joseph... who will expound upon each tittle heaps... of laws’. ‘Lord of the Universe’, said Moses; ‘permit me to see him’. He replied, ‘Turn thee round’. Moses went and sat down behind eight rows. Not being able to follow their arguments he was ill at ease, but when they came to a certain subject and the disciples said to the master ‘Whence do you know it?’ and the latter replied ‘It is a law given unto Moses at Sinai’ he was comforted.

In reading this text, one can be certain that what discomforted, and then comforted, our Law-Giver, was not personal embarrassment, and then pride.

Myths

2010-07-06T05:59:00.000-07:00

This blog is not in the habit of agreeing, even mildly, with Krugman, however, he opens a recent column with an insight similar to one of the underlying themes here:

When I was young and naïve, I believed that important people took positions based on careful consideration of the options. Now I know better. Much of what Serious People believe rests on prejudices, not analysis. And these prejudices are subject to fads and fashions.

The column illustrates this by arguing that the fear of "bond vigilantes" attacking the US sovereign debt that is currently driving policymakers is the fundamentally irrational product of prejudice, not analysis.

A different analysis -- one that better understood that the quantitative risk of an event is the probability of occurrence times the cost, and one one which still remembered the previous unthinkable-ness of the "bond vigilante" attack on Wall Street -- might view Krugman as providing a self-referential representation of a Serious Person whose beliefs rest on prejudices (or [in this case] material interests), not analysis.

Of deeper interest is the consequence of the -- agreed upon -- insight. Krugman advises his readers to be on guard for the "foundation of fantasy" in-, and therefore not be fooled by-, opposing arguments. This is likely be a rhetorical ploy: Krugman surely recognizes that if Princeton professors can rise above the natural prejudice that otherwise ensnares Serious People, his readership largely cannot. He is, then, intentionally strengthening their own prejudices by discouraging them from taking seriously -- analyzing -- opposing political arguments.

Properly analyzed, Krugman's column provides illustration that the true distinction is not between people/arguments guided by rational analysis vs those grounded in prejudice, rather between those which recognize the intrinsic limit/locality of rationality vs those which do-, or can-, not: There is, in the end, always a "foundation of fantasy" to be found beneath most any rational analysis; the question is what one does with it.

Fair Reading

2010-06-15T01:10:00.000-07:00

Linda Greenhouse positively gushes over the commencement address David Souter delivered at Harvard.

As she describes it, his argument is as follows: Judges ought go beyond any "fair-reading model" and "make choices among the competing values embedded in the Constitution." The American people want "to have things both ways" and so the "court has to decide which of our approved desires has the better claim." Those who limit themselves to fairly reading the law "'egregiously' miss the point" driven by longing "for a world without ambiguity, and for the stability of something unchanging in human institutions." He, on the other has come to "embrace the 'indeterminate world'" and to understand that "meaning comes from the capacity to see what is not in some simple, objective sense there on the printed page." As evidence/illustration he cited the Pentagon papers, which required the court to weigh national security against the First Amendment, and Brown v. Board, in which the "meaning of facts" and therefore decision, but not the facts themselves, changed from the earlier Plessy case.

An op-ed in the Journal, critiques Souter's argument by noting that Plessy went every bit as much as Brown beyond a fair reading. This critique misses its target because Souter's argument -- shockingly, but inarguably -- hinges on Plessy being correctly decided (one can only guess his view of Dred Scott).

Souter is certainly right to this degree: Justices cannot hide underneath a text to escape responsibility for their decisions; Ultimately, they have the power.

On the other hand, his application of the banal liberal conceit that Conservatives are afraid to boldly go is the opposite of profound. Prudence dictates that an unelected Court in a Democratic system -- even one that recognizes, with Souter, the ultimate difficulty of fairly reading -- operate roughly within the parameters of public expectation (which it can, in turn, help to set). The American people plainly want their Court fairly-reading, not approving/deciding-amongst our desires -- we put obscure lawyers skilled at reading legal texts, not revered philosophers or trusted teachers, on the court.

Put slightly differently, the difference between Souter and Scalia is that not, as Greenhouse would have it, a sort of existential bad faith on Scalia's part. Rather, Scalia is more conscious, or conscientious, than Souter of the context in which Judges operate. While to Souter, the common notions of what Judges ought do are something to be overcome, to Scalia, they form the basis of Judicial authority in a Democratic society.

Uncomfortable Zionism

2010-06-14T09:59:00.000-07:00

Peter Brienart caused a bit of a stir with his article The Failure of the American Jewish Establishment. Stated clearly, his argument is, on its face, horrifyingly bizarre:

His main thesis is that American Jewish leaders, who advocate support for Israeli government policies as the product of a democratic process are wrong morally and pragmatically. They are wrong morally, because, he says, Democracy in Israel is slipping away -- he approvingly quotes Israelis proclaiming "Israel has not been democratic for some time now" and comparing their government to "Franco’s Spain." They are wrong pragmatically, because supporting this illiberal system is, he believes, alienating a generation of American Jews. Instead, he suggests American Jewish Leaders ought be promoting authentically liberal democracy in Israel, what Avraham Burg calls an "uncomfortable Zionism."

To respond to this with rational argument or fact would largely miss the point, although it is of some interest that while, to some, the rise of Likud has meant Israel is now a more representative, truly competitive multi-party democracy, to others, Israel was more truly democratic under narrower rule. Brienart makes his position clear in lamenting the political influence of the "Russian immigrant community" and the party representing "Jews of North African and Middle Eastern descent."

Which is not to say he should be dismissed: Underneath lies a clear threat -- the asymmetrical relationship between Israel and the diaspora. Israel needs Liberal Diaspora Jews far more (or at least more directly), than Liberal Diaspora Jews need Israel; Israel's existence is jeopardized by the loss of a generation of diaspora Jews. Brienart's implication is accurate: Might, in this instance, makes right and so the onus is on Israel, and its supporters, to pander to these enfant terribles.

Brienart also gets one (somewhat tangential) point right when he argues that Zionism needs more positive ("based on the precepts of liberty, justice and peace taught by the Hebrew prophets") and less negative (e.g.: victimhood-driven) content. On this, he takes the opposite side of Michael Chabon. Brienart's unstated critique of Orthodox parochialism is particularly on-target: They, above all, should understand that The Hope of Two Thousand Years can not be a state like any other.

Truth and Consequences

2010-06-03T21:15:00.000-07:00

Supporters of Israel are speaking a clear truth when they argue that "the mob that assaulted Israeli special forces on the deck of the Turkish ship Mavi Marmara on Monday was not motivated by peace." Best one can tell, by and large, the flotilla was populated by people who empathize with Palestinians and de-humanize Israelis: As far as Israelis are concerned, this was no Love Boat.

Critics of Israel (e.g.) speak with less truth -- the general line of argument being that the the Gaza blockade is a failed Israeli policy designed to overthrow Hamas and immorally collectively punish the Gaza population.

The collective punishment argument is revealing. Few would argue that, for example, the global boycott of apartheid South Africa was an immoral policy designed to collectively punish a civilian population. In fact, many of those horrified by collective punishment targeted at Gaza, would eagerly impose it on Tel Aviv. Obviously a blockade is more onerous then a boycott, but the difference is in degree, not principle. Ultimately, those who oppose the blockade on the collective punishment basis take less seriously then do Israelis, Hamas' stated genocidal intent.

The "failed Israeli policy argument" is willfully ignorant. Critics point to the problems it has not solved while ignoring its achievements. If Hamas is in no danger of being overthrown in Gaza, neither does it -- as it did in 2006 -- pose a meaningful challenge to Fatah's over-all leadership. If it is not un-armed, it is at least, not armed like Hezbollah. It also is likely not simple co-incidence that where Fatah once strove to out-Hamas Hamas, they are now, apparently, moving in a more peaceful direction.

Further, and for that reason, it was hardly Israel's policy alone: Hamas/Gaza was locked down -- with broad international support -- as much, if not more, for Fatah's benefit than Israel's.

The most likely outcome now appears to be a revised policy that preserves Israel's key interest -- weapons inspection -- but frees Hamas to, again, compete more vigorously with Fatah.

This may prove a blessing in disguise. Ultimately, Fatah may understand that it cannot win by out-Hamasing Hamas, that its only real path to continued relevance is a negotiated peace, that the longer it takes to reach that peace, the more powerful Hamas will become, and therefore the more difficult it will be. For the first time in memory, we may now have a Palestinian leadership which sees its self-interest tied to a quickly negotiated peace. Similarly, the President may finally be finished giving the parties reasons to not negotiate.

Despite themselves, and beyond their bigoted understanding, the blockade runners may have actually given peace a chance.

All Politics is Local

2010-06-01T23:11:00.000-07:00

Turkish Prime Minister Recep Tayyip Erdoğan, never a friend of Israel's, has been the most vigorous voice condemning the Israeli raid on the Turkish Flotilla. His strong position neatly matches his domestic political calculus. Only three years ago, one million Turks protested against his government:

As many as one million people rallied... accusing the government of planning an Islamist state... denouncing... Erdogan... as a threat to a secular order separating state and religion...
Only 10 years ago the army, with public support, hounded out of office a democratically elected Islamist government... The army General Staff raised the stakes on Friday... with a threat to intervene in the election. The Istanbul protesters said they backed the army, long viewed here as the ultimate guardian of the secular republic.

In the context of the historically close ties between the Israeli and Turkish militaries, Israel is, for Erdogan, likely a convenient proxy through which to attack/undermine his domestic secular/military political enemies. Along the same lines, Israel's attempt to link the flotilla organizers to Islamic extremists, while galling to the American-left-of-center, is, in part, directed towards Turkish secularists.

The Israeli response will most likely prove Pyrrhic. It will be all the harder for them, now, to maintain the blockade. On the other hand, few Israelis believe Hamas ought not be blockaded and watching the videos, few Israelis see humanitarianism at work. The greater the international condemnation/isolation, the more likely Israelis will be to rally round the flag.

Obama faces, perhaps, the toughest political dilemma. A big part of his base -- one which till now has had strong influence on his Israel policy -- would like to see Israel further under the bus. Especially after signing the NPT resolution singling out Israel, but not Iran, any hint of that here risks further decay in his support amongst Jewish-Americans.

On the other hand, Obama now has an opportunity to validate his diplomatic approach. The administration, in an attempt to please all its constituents, is advocating an "Israeli investigation" with "international participation." If Obama can get Israel and the international community to productively co-operate, he will have earned his Nobel prize.

Orlok, Shylock and Blankfein

2010-05-26T20:27:00.000-07:00

Michael Kinsley asked the question out loud: Is Criticism Of Goldman Really Anti-Semitism?

Then there is this oft-quoted passage ... in Rolling Stone: "The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." This sentence, many have charged, goes beyond stereotypes about Jews and money, touches other classic anti-Semitic themes about Jews as foreign or inhuman elements poisoning humanity and society...

Taibbi claims to have been utterly blindsided by accusations that his article was anti-Semitic... His critics find this impossible to believe. Could such a sophisticated writer... not know about the stereotypes and ancient lies that this passage echoes... It may be possible to call Goldman Sachs a bloodsucker without being an anti-Semite. But is it possible to call Goldman Sachs a bloodsucker and then be surprised when you're called an anti-Semite?

Kinsley's analysis, seems to me, simply correct. There are plenty of reasons to criticize Goldman having nothing to do with antisemitism. There are also plenty of memes historically entwined with antisemitism whether or not applied to Goldman.

The current cover of New York Magazine, asks the same question, perhaps less innocently. It doctors an image of Goldman CEO Lloyd Blankfein in a manner that seems to me plainly inspired-by/drawing-on Shylock and Count Orlok -- the most classical of all classical anti-semitic imagery.

Take a look and decide for yourself:

(from left to right: Al Pacino as Shylock, Max Shreck as Count Orlok, the first two images morphed using MorphThing, the New York Magazine stylized Blankfein, Blankfein un-doctored)

Culturalism

2010-05-24T05:26:00.000-07:00

The standard, if intellectually lazy, political conservative position on the Civil Rights Act is, as Ross Douthat describes:

No ideology survives the collision with real-world politics perfectly intact. General principles have to bend to accommodate the complexities of history, and justice is sometimes better served by compromise than by zealous intellectual consistency. This was all that Rand Paul needed to admit...

A more full throated, conservative/libertarian defense is possible: To believe in Freedom is to believe that discrimination, by itself, without government support, cannot stand. If you and I have competing firms and you are unwilling to employ or serve a particular minority, that gives me sustainable competitive advantages -- wider access to talent and markets. In a truly free market, given those advantages, over time, my firm will crush yours. That, in practice, it does not always seem to play out this way, points to market warping Government intervention (today in the form of a failing monopolistic education bureaucracy and regulation-as-barriers-to-entry) sustaining discriminatory inequality, not to the limits of Freedom.

This argument, to me, seems politically viable as it re-frames the question from "Do you support discrimination or not?" (we all here agree not), to "Do you believe in Freedom?" It is naturally resisted by progressives to whom freedom is not found in, rather from, free and fair markets, and by politicians, for whom the sacrifice of principle is second-nature, but should be naturally embraced by, for example, conservative columnists.

That it is not, I think, reflects an increasingly unhealthy infatuation with an overly fixed view of culture. In their heart, I suspect, they believe that racial discrimination will persist even in free and fair markets, because, they believe, disadvantaged minorities posses and perpetuate an inferior culture.

The concept of "culture" is most properly politically employed to trace the limits of anyone's ability to meaningfully understand the deeply complicated webs that structure a society, and by extension, point to the dangers of hubristic government policy. But to believe in Freedom is to see in American history ample evidence of how malleable and ever-changing "culture" can be and how people, left to their own devices, lift themselves up.

The Glass Closet

2010-05-10T22:52:00.000-07:00

Gawker weighs the evidence and concludes that Elana Kagan is lesbian. If true, it certainly is disheartening that in 2010, Ms. Kagan feels the need to cover it up in order to advance professionally.

Previously, attentively reading the President's statements on the matter, I argued that his call for empathetic judges was, in particular, a call for "someone who will discover a constitutional right to Gay Marriage". He also succeeded in meeting his goal of a choice being someone who could create majorities, if not in general, at least in this particular.

If Roe (among others) is any guide, the coming Supreme Court discovery of a constitutional right to Gay Marriage (as opposed to letting the political process play out) rather than settling the issue, will serve, above all, to harden hearts, intensify the political combat and push farther into the future the day when a nominee's sexual orientation is understood to be a non-issue.

On Immigration

2010-05-09T18:42:00.000-07:00

The immigration debate is a frustrating illustration that American politics is now played in the red zone. Between the forty yard lines we (should) all agree that America is both a nation of immigrants and a nation governed by law.

In one red zone, any attempt to enforce any immigration law is protested as racist, even, nazi-esque. (It [should] go without saying that such rhetoric is wildly overblown: there is a meaningful distinction between the consequence of being caught w/o papers in Arizona 2010 and in Germany 1942).

In the other end, there is a shocking lack of racial sensitivity. To compare and contrast: Opponents have accused the Tea Party of racism. As far-fetched as the smear is, Tea Party activists are conscientiously working to counter it. There is precious little mirror effort -- to articulate a clear differentiation between anti-illegal-immigrant and anti-Latino -- from anti-illegal immigration activists.

This is likely, in part, due to there being a distinct racial edge to anti-illegal-immigration advocacy. One illustration is Ross Douthat's otherwise unintelligible argument that immigration policy ought counter the natural forces of geography. Another illustration is the near radio-silence maintained regarding the meaningful Asian component to illegal immigration.

The reason that illegal immigration from Asia, drives less opposition than that from Mexico is less simple racism as much as Asian immigrants do not raise the specter of Reconquista -- a fear that, perhaps, could be more sensitively treated by some Mexican-Americans, but that will inevitably be inflamed by the assertion that Americans are wrong to regulate entry into their country.

To the degree that opposition to unfettered Mexican immigration is driven by a desire to maintain a certain vision of this country, conservatives would do well to remember that illegal Mexican immigrants are often cultural conservatives -- hard working, G-d fearing, and, by definition believers in limited government. If anti-immigration conservatives, ultimately, want to live in the US, not Mexico, they would do well to remember that the same is true, by definition, of immigrants.

Parents and Paternalism

2010-05-04T18:03:00.000-07:00

According to the Times report, charter schools have not worked quite as designed:

Some advocates concede that the intellectual premise behind school choice — that in a free market for education, parents will remove students from bad schools in favor of good ones — has not proved true.

For example:

Even though the school did worse on the Ohio math and English exams than the average Cleveland public school, families did not flee Arts and Social Sciences Academy. On the contrary, enrollment has doubled in each of the past two years. It is a phenomenon often seen in academically failing charter schools when parents perceive them as having better discipline than district schools.

To some, this argues that "you need government accreditation to drive quality."

As switching schools is taxing on children, caring parents cannot be expected to do so for marginal improvement (eg: from one bad school to a slightly less bad school). On the other hand, it would be surprising if there really was data indicating that, presented the option between failing and succeeding schools, parents would not choose the latter for their children.

The case for Government paternalism, in the article, insinuates just that. While it finds these "almost all poor minority" parents generally unwilling to return children in floundering charter schools to public schools, they increasingly flee, the article implies, better public schools for charter schools. Parents like this cannot be trusted to make educational decisions for their children without oversight.

In truth, the evidence presented by the article is very questionable. For example, if the average Cleveland public school does better on exams than Arts and Social Sciences Academy, there are certainly still plenty of well below average public schools to drive A&S Academy's increasing enrollment.

More fundamentally, the evidence that parents are making improper decisions rests entirely on standardized tests. But, as educators are quick to remind us when applied to public schools -- standardized tests are flawed, if better than nothing, measures. In this case, there is a reasonable alternative measure: The judgement of parents, who have a deep abiding concern, and 360 view of the product, certainly embeds significant information standardized tests cannot capture.

Accusations of racism are too cheaply thrown around by all sides, but one cannot help but wonder if the views+choices of demographically different parents would be so casually disregarded.

Educating Educators

2010-05-03T17:48:00.000-07:00

The Times reports "Despite Push, Success at Charter Schools Is Mixed".

...one of the most comprehensive studies, by researchers from Stanford University, found that fewer than one-fifth of charter schools nationally offered a better education than comparable local schools, almost half offered an equivalent education and more than a third, 37 percent, were “significantly worse.” Although “charter schools have become a rallying cry for education reformers,” the report, by the Center for Research on Education Outcomes, warned, “this study reveals in unmistakable terms that, in the aggregate, charter students are not faring as well” as students in traditional schools.

The Stanford conclusions, to me, betray a deep lack of understanding on two related fronts:

For one, quality of education is not sensibly understood -- as the Stanford researchers appear to -- as simply linear. The space, I would think, is more clearly a sort of s-curve: Children are either empowered and propelled by their education, or they are held back -- failed -- by it. We have a crisis because too many American children are in the latter category, the proper measure of success is, ultimately, whether or not charter schools are failing fewer students than traditional public schools.

Secondly, all but the most radical free market fundamentalist acknowledges that Government directed bureaucracies are generally better than free markets at meeting clear, static targets. Free markets naturally create volatility and waste along with innovation and adaptability. If there were easy or obvious answers to our educational crisis, there would be less momentum for free market solutions.

The true value of charter schools is as laboratories in which a variety of educational approaches can be tried, evaluated and the best ones propagated. For example: charter schools have finally (at least for the moment) mainstreamed the notion that educators fail children when they make excuses:

...Perry White, a former social worker who founded the Citizens’ Academy charter school... and has overseen its climb from an F on its state report card in 2003 to an A last year. “It took us a while to understand we needed a no-excuses culture,” he said, one of “really sweating the small stuff.”

Synthetics

2010-05-02T10:20:00.000-07:00

One emerging consensus is that congress ban "synthetic" derivatives. As Senator Levin explains it:

As far as I'm concerned, we ought to eliminate the damn synthetics. To me, they don't serve any real purpose at all. They're just betting on something where they don't have a stake, they're not hedging legitimate risk. With other things, there's a limit. There's a finite amount of corn and wheat and mortgages. But these synthetics have no finite limit. So you literally have a gambling hall and the bets are unlimited. I'd get rid of them, and there will be an effort to get rid of them, and I will vote for it

While appealing, this argument is not true in full. Synthetic derivatives served some real purpose as real firms created demand for them. Even if they only served to encourage speculators, in doing so, they may well have served to decrease costs of hedgers of "legitimate risk". On the other hand, its easy to imagine that at some degree of abstraction, the synthetic derivatives do more harm than good and it, therefore, makes sense to have rules which, at least loosely, tie derivative trading to productive economic activity.

It must be said in all this that the idea that if the government doesn't understand the economic value of some activity, that value does not exist, is characteristic of command-, not free-, economies. In more free economies, private economic activity is not proscribed on the basis of perceived social value, rather it is regulated to the degree it threatens others. Trading in synthetic derivatives was only made threatening by the risk it posed to too big to fail/too big to manage firms. If Congress is, in fact, doing away with too big to fail, our traditional economic conceptions would argue for leaving synthetics alone.

Common Sense Reform

2010-04-29T19:08:00.001-07:00

In contrast to the President's faith-based Financial Services Reform package, sensible Financial Services reform would be ground in steps that would have clearly been helpful if in place over the past few years. Such reform would likely contain the following five elements:

Too Big to Fail is Too Big: No single company ought be allowed to control more than a few percentage points of GDP. No single company ought be allowed to control more than a fraction of a percentage of any government insurance program. (Including the PBGC, which may well be the next bubble a burstin'). I continue to believe that the FDIC no longer serves any earthly good, but that is a more radical sell. At the least, there should be strict transparency requirements around all government insured institutions and those they who do business with them, and clearly defined limitations around aggregating, and leveraging, taxpayer risk.
Regulating the Regulators:If we must create a new Government agency, it ought to monitor, evaluate and report on the costs, benefits, risks and consequences of existing regulatory policies.
Derivative Ducktyping: Labelling any particular activity as a "derivative" ought not change its tax or regulatory profile. Selling CDS is selling insurance, buying TRS is buying on margin, etc.
Protecting Vulnerable Investors: In deference to Senator Snowe's concern, market participants ought be allowed to self-identify as vulnerable. Self-identified vulnerable investors would be required to hire Brokers to represent their interests in transactions with Dealers.
Educated Consumers: A licensing process, analogous to a driver's license, should be required of anyone who would like to participate in financial markets, whether by buying stocks or taking mortgages, etc.

These five elements -- preserving fairness, transparency and competition -- embrace the traditional spirit of regulation in our economy. The five elements proposed by the President, reflect a very different spirit.

Leap Of Faith

2010-04-29T05:48:00.000-07:00

The President, at Cooper Union, declared five elements crucial to financial services reform:

* Instituting a system to ensure that "American taxpayers are protected in the event that a large firm begins to fail." * Imposing the so-called Volcker Rule... limits on the freewheeling trading and risks taken by banks. * Setting new transparency rules for derivatives "and other complicated financial instruments." * Assuring "strong consumer financial protections." * Instituting "pay reforms" to give investors and pension holders "a stronger role in determining who manages the companies in which they’ve placed their savings."

The logic behind the proposed mechanisms are, to a certain way of thinking, very straightforward: To protect American taxpayers from the failure of these Leviathan firms, regulators need to be empowered, in the first instance, to reduce the likelihood of failure and, in the second, to manage an orderly unwinding. Reducing the likelyhood of failure argues for the Volcker rule, pay reform, as well as greater transparency rules, so that regulators have an easier time understanding market interdependency. Finally, and certainly, ordinary customers have to be protected from predatory practices.

Ultimately, this logic demands large leaps of faith: It is simply irrational to believe that large Leviathan firms, representing double digit percentages of GDP, can be orderly unwound without requiring heavy taxpayer subsidy. The belief that, left to broad politician-regulator discretion, they can be fairly unwound, defies recent experience.

The bill itself calls into question the belief that a new, more complicated, patchwork of super-empowered regulators will reduce risk. The Volcker rule, premised as it is on the nonsensical notion that holding a loan is entirely different and less risky then buying a bond, and the politically popular, but economically misguided, "Pay Reform", are embedded evidence that this reform, will serve not to limit, rather -- in the now tried and true form of creating distorting market inefficiencies / regulatory arbitrage opportunities -- create risk.

Finally, if Madoff passed SEC scrutiny, and repo 105 passed muster with Fed employees placed at Lehman, how can Mom and Pop investors rationally expect to be reasonably protected by yet-another-agency?

Of Fiduciaries

2010-04-27T22:18:00.000-07:00

One recurring line of questioning in yesterday's Goldman testimony, involved the notion that that market makers ought have a fiduciary obligation towards their customers. Olympia Snowe has taken a rather stark position:

10. Fiduciary Duty: Swaps dealers should have a special duty of care to pension funds, endowments, retirement funds, and state and local governments to protect vulnerable market participants from being taken advantage of by dealers.

Putting aside logistical questions about how such a duty could be coherently structured -- can dealers really be required to only buy what they want to sell and only sell what they want to buy? -- Ms Snowe's characterization of pension funds, endowments, retirement funds, and state and local government investors as being "vulnerable market participants" is jarring.

If she is correct, then Pension Fund managers who advertise themselves to their own clients as being -- and are paid to be -- savvy and sophisticated, not vulnerable and out-of-their-depth, investors appear guilty of fraud / misrepresentation.

Of Wall Street, Casinos and Derivatives

2010-04-25T07:57:00.000-07:00

One common way of explaining "what went wrong", involves differentiating the Wall Street Casino, personified by excessive derivative trading, from the "productive economy".

This explanation fundamentally misunderstands the nature of free markets. Properly understood, free markets are Casinos. Every economic choice one makes -- of school, profession, employer, etc... -- is a bet. Above all, entrepreneurial activity -- the engine of a free market economy -- is bet-driven.

Imagine, for example, believing that parents in a particular city will increasingly demand environmentally friendly toys and therefore thinking about opening an environmentally friendly toy store. To do so would bundle a number of bets, first of all on the evolving demand for environmentally friendly toys, but also on demand for toys in general, on the real-estate, demographics and economy of a particular geographic area, on your ability to recruit, retain and motivate a staff, and so forth.

Underneath all the obfuscating mumbo-jumbo, derivatives are tools that allow free market actors to hedge their bets, which, by itself, facilitates economic activity.

To the environmentally friendly toys store example: If you believed strongly that demand for environmentally friendly toys will increase relative to toys in general, but are afraid that the market for toys in general may be about to collapse, you would choose not to open the toy store. On the other hand, if you were able to purchase a derivative that allowed your store to make money even if the market for toys in general collapsed, so long as the market for environmentally friendly toys collapsed less, you might choose to open that store.

Derivatives, like any security, are rendered dangerous when employees of institutions both too big to fail and too big to manage bet the house with them.

While no one, in our political arena, would claim to be opposed to free markets, one can see in various proposals, a frightening ignorance on the part of many, from both parties, who would "regulate" them.

How Dat

2010-02-08T15:52:00.001-08:00

Saint coach Sean Payton wanted to win badly enough to take a pay cut to facilitate the hiring of Greg Williams.

Williams preaches aggressiveness, but not mindlessly so. He teaches players not to simply roll the dice, but to take advantage of being prepared -- "believe in what you see". On his game sealing interception -- the Saints' second in two games -- Tracy Porter said: "All week, we watched it on film... They went to it a lot. And when that route came, it was just like I was watching it on film."

This approach rubbed off on Payton. His signature call, the aptly named Ambush, was pure preparation-driven aggression.

Earlier in the season I contrasted one approach -- attributed to Belicheck's supporters -- of making coaching descisions according to a logic deaf to effect on players, with one that is first of all concerned with player and team development.

The former camp would have supported Jim Caldwell's choice to throw the last two games of the season. But that descision sent a clear message to his team that they were good enough to be champions without giving their best through every minute of every game. In some way it was also the message Bill Polian sent the team when he replaced a Hall of Fame coach with an unproven one.

There is justice, then, in the Saints victory. The tragedy is that Peyton Manning, who unlike the organization he plays for, takes nothing for granted, was not able to impose his values on his team.

J-Street @ PENN

2010-02-02T06:33:00.000-08:00

---------------------------------------- Sent: Monday, February 01, 2010 9:46 PM Subject: FW: Hillel and JStreet Dear Rabbis Alpert and Brochin, While I have a great deal of respect and affinity for yourselves and PENN Hillel generally, I have to stand on my own principles and will not be donating to PENN Hillel this calendar year. The principles at stake, for me, are two-fold. The first is, as, Gabe describes, J- Street does not, to my mind, conform to the criteria Hillel itself has laid out. I am not aware of any position that J-Street has staked out to differentiate itself as being more supportive than Fatah of Israel. The second is more fundamental. Your stated “concern is keeping college students around the Jewish table, engaged in the Jewish conversation.” I have to stand for the principle that Jewish-ness is not completely devoid of content. If there is to be any minimal boundary to “Jewish conversation” then Hillel is not the place for J-Street. Finally, it would be very disheartening to me were it true that the only way to not Jewishly alienate these many students is to give platform to these “morally deficient” views. These students are surely no more one dimensional than is our heritage. Would it really not be possible, or effective, to communicate respectful, sympathetic, but firm disagreement with these sort of views, while finding other, authentically and richly Jewish avenues to engage and embrace these students? Respectfully, Marc

If there is a comment to make here, it is regarding the tragedy of today's leaders, having experienced, in the 60s, the communal costs of being too insecure to allow meaningful diversity of opinion, leading, instead, towards a community too insecure to minimally stand up for its values. What is it that makes the common-sense middle ground so difficult to uphold?

State of the Union

2010-01-28T18:03:00.000-08:00

Whatever else the president is an enrapturing speaker. The irritating smug demeanor he stepped to the podium with mesmerizing-ly melted away as he got into the speech.

His over-arching theme -- I, like you, am decent and resilient; identify your struggles with mine -- was brilliant.

There were two incongruous moments that undermined his intended message.

The first -- shades of "guns and religion" -- he mentioned global warming, and, with his party, took the opportunity to laugh at the expense of the nearly half of independents who are skeptical of the science (Republicans laughed as well, but with different reason). One doesn't appeal to independent voters by deriding their beliefs.

The second was both more subtle and more damning. Discussing healthcare reform:

... And I know that with all the lobbying and horse-trading, the process left most Americans wondering, "What's in it for me?"

This sentence placed in stark contrast the fundamental decency of the American people -- who were revolted by the depth of the horse trading, not their lack of participation -- and the fundamental corruption of the man they elected President.

Budget Deficit Commission

2010-01-21T16:46:00.000-08:00

The President now, wisely, seeks to pivot towards fiscal responsibility. His strategy is proposing a bipartisan budget deficit commission.

Republicans are rightly skeptical of being used as political cover for tax raises to pay for the Democratic spending binge (relatedly: Rove contrasts the profit the taxpayer made on W bailouts vs the steep losses being incurred by O).

Their politically deaf response, however, creates headlines portraying Obama as deficit-concerned and Republicans as partisan obstructionists. Their stance -- requiring a mandated up/down Congressional vote -- is undermined by the reality that such a mandate could pass was there unified Republican support. If such a mandate does pass, Republicans will be faced with the no-win situation of voting for meaningful increase in taxes (presumably including a VAT) or deficits.

Congressional Republicans have two savvier strategies:

They can demand true bi-partisanship. The Obama proposal is stacked 10D - 8R. An effective response would ridicule Obama for proposing to appoint 25% of the panel's Republicans himself (!)

Even better, they could insist that a minority recommendation issued by the commission also be guaranteed an up/down vote should the majority's be voted down. This would, at least, allow Republicans to clearly present their position that we should cut spending more and raise taxes less.

Boston Tea Party

2010-01-19T21:54:00.001-08:00

Watching her concession speech, there is certainly some truth to the Democratic spin that Coakley was a horrible candidate. Watching Brown's acceptance speech, he is certainly a talented politician.

On the other hand, Democrats are certainly fooling themselves when they proclaim that results, not process matter to the American people. To blame Coakley for over-confidently taking Christmas off when up by 20 points, is to blissfully ignore what else hit the news then.

While it does seem, from the exit polls, that health care was important to voters, it did not seem central to Brown's messaging. More central was the appeal to Reagan Republicans: "our tax dollars should pay for weapons to stop them and not lawyers to defend them". Brown was even supportive of waterboarding. His competitiveness amongst union members is a big part of the story.

That said, in the end, those who disregard the nationalization of the race, argue Coakley lost because the campaign was slow to respond to Brown's increasing competitiveness. Politico reports, that the DSCC Chairman "learned that the race was tightening... when independent pollsters returned results showing the race much tighter than Democratic polls had been portraying." In other words, the Democrat lost largely because Democratic pollsters saw their job as framing perceptions instead of providing timely and reliable information to their team.

The notion of professional politicians being fooled by their own spin, is off-putting if entirely consistent with the self-destructive path the Congressional majorities have chosen for themselves.

The Consequence of Mary Poppins

2010-01-18T07:15:00.000-08:00

I was dragged, last night, to the Broadway production of Mary Poppins. While I can't complain too much -- it was all, or rather mostly, good, nostalgic, fun -- its financial/economic teachings are insipid.

The financial/economic teaching, of the classic movie appear mostly harmless. Bankers extolling the virtues of disciplined long term investing, and responsibly building credit, are mocked, but not central to the plot -- Mr Banks loses his job because he puts it before his family, and regains it when he shifts priorities.

The musical attempts to be sharper in its financial commentary. The central plot element illustrates that smart investing stems from focus on the human aspect and not the strength of the idea, or plan. The character of "the Holy Terror" is introduced (or rather resurrected from the books) to cast rigor and discipline as a traditional Disney villain.

The musical is consistent with the under-informed liberal narrative of the current financial crisis caused, to this view, by a self-involved financial world, wrapped in paper profits and complex derivatives, that lost touch with the real, "human" world around it.

The reality, of course, is that the most direct cause -- government policies promoting the illusion of home ownership by encouraging loose lending -- was a focus on the narrow human aspect at the expense of the rigor of the plan.

More fundamentally, I have previously posted my view:

In the end, the strength of an economy boils down to the aggregate willingness and ability of people to do things valued by other people. And underneath all the awful decisions made by all sorts of economic actors, lies a culture that increasingly devalues the painstaking work that goes with ordinary productivity.

This devaluation is something the writers of musical -- and to a somewhat lesser degree the movie -- strangely sought to encourage.

The good news is that there does appear to be some growing recognition, that parents hurt their children when they withhold discipline.

Opposite Marriage on Trial

2010-01-12T19:39:00.000-08:00

In his opening statement, Ted Olson promised to prove:

The importance of marriage.
The "grievous harm" worked by denying the right to marry.
There is "no good reason" to deny homosexuals this right.

The first two items are red herrings. Whatever the tangible benefits of marriage, they certainly come far more from the commitment of the couple than the tax implications. The notion -- suggested by Olson -- that a couple cannot fully "share their dreams" with each other without state sanction is silly (and mildly ironic given his backers).

The true injury caused by Prop 8 is symbolic. As well described by Olson:

All it does is label gay and lesbian persons as different, inferior, unequal, and disfavored.  And it brands their relationships as not the same, and less-approved than those enjoyed by opposite sex couples.  It stigmatizes gays and lesbians, classifies them as outcasts, and causes needless pain, isolation and humiliation.

On the other hand, state sanctioning of gay marriage causes similar symbolic injury (stigmatization) to adherents of traditional religion. Decision via judicial rather than political process aggravates the injury as one's voice is, at least, more fully heard in a political process.

Reading Olson's statement more carefully, the injury he describes is inflicted less by the denial of state sanction as much as by the societal mores that support the status quo. The majority of Americans, as expressed by their votes, consider homosexual "relationships inferior and less-deserving of respect and dignity," a view that, if Roe v Wade is any guide, judicial interference will only harden. In the end, then, what plaintiffs seek is not to remedy their injury as much as the compensatory satisfaction of asserting their political power over the majority that dis-respect them.

In a prior post, I expressed agreement in principle with the third item. Or rather, that there appears no rational reason to oppose sanctioning gay marriage. Opposition is rooted in accepted tradition.

What is on trial, then, appears to be whether or not, in the eyes of the law, traditional values constitute a "good reason".

The Ladies and the Tiger

2010-01-03T21:08:00.000-08:00

Tiger "mistress", Jaimee Grubbs is not without a conscience. In a conversation with extra TV, she "couldn't describe how remorseful" she was to have hurt Elin the children. None-the-less, she does not feel all that bad as, she says, "If it wasn't me, it was going to be other girls."

Traditional teachers advanced standards of behavior -- classical virtue, religious righteousness -- to be adhered to for their own sake. Von Hayek observes that this traditionally morality is everywhere being replaced by "social conscience" -- being guided by awareness of the effect of our actions on others.

Von Hayek critiques this new thinking on its own terms. He argues that traditional moral rules are, themselves, social phenomenon -- evolving societal understandings, required as people cannot possibly fully understand the complex consequences flowing from their own actions. To Von Hayek, true social conscience demands respect for traditional rules.

Pragmatically -- as illustrated by the Prisoner's Dilemma -- any consequence-driven social morality seems unlikely to be ultimately upheld. In the end, whatever we do, other people will pollute, deal arms, sell predatory mortgages, mislead on their mortgage applications, separate fools and their money, sleep with married billionaires, etc, so why should we abstain? The Obama Administration has, in fact, played to this lesser angel, in the stimulus debate, suggesting critics opt out.

Tiger, of course, has no similar excuse for his choices. He has, thankfully, not yet attempted to justify them. That said, it is hard for us to simply condemn him, knowing that few men could withstand the temptations he faced. By some measure, his sin, so to speak, was not being a saint. Or, perhaps, his true mistake, given his place in life, was aspiring to-, thinking he could-, be a father and a husband.

Avatar

2009-12-20T15:54:00.000-08:00

Avatar is being billed must-see as the most expensive movie ever made.

As the actual production costs are not, for the genre, unusually excessive, it appears -- if the billing it to be believed -- that it is the marketing budget that broke records.

One wonders why with a film promising a revolutionarily magical viewing experience and fawningly reviewed by the best critics requires record-setting marketing.

Not all the buzz has been positive. Following South Park, many have derided the film as "Dances With Smurfs". The Independant sees the film as an "allegory of US adventurism in the Middle East". One conservative blogger crudely, labels the film "Liberal Porn of Doe-eyed nature lovers killing Marines," another simply questions "drawing the audience to cheer the brutal deaths of Americans."

Avatar's opening weekend -- hurt by an east coast snow storm -- appears to roughly track that of the awfully reviewed 2012, with relatively mediocre domestic revenue supplemented by strong performance overseas (where, presumably, fewer people have qualms cheering the brutal deaths of Americans).

The performance of Sherlock Holmes, which opens this friday, may provide a rough baseline to calculate how much 20th Century Fox and James Cameron cost themselves by injecting divisive politics into their blockbuster movie.

Fourth and Two

2009-12-19T17:30:00.000-08:00

Bill Belichek widely admired (or, depending on one’s perspective, reviled) as a cold-hearted football coaching genius, was widely attacked for, against conventional wisdom, choosing to go for a fourth and two from his own 29 and losing the game. Two New York Times blogs (here and here) defend the decision, calculating that he made the statistically correct decision for the team, if not for his career. Bill Simmons undermines that statistical argument by noting that the assumed odds of making a fourth and two are meaningfully different than converting a two point conversion.

Given the ultimate fuzziness of the statistical argument, whether one condemns or defends Belichek’s choice would seem to reduce, more or less, to whether one prefers to defer to, or align with, the genius coach or the accepted practice.

It is worth understanding that beneath the presented alternatives lie divergent sets of values. The accepted practice, in the end, argues that the Patriots should not have beaten themselves. If Indy was able to drive seventy yards in two minutes for the touchdown, they deserved the win. To this way of thinking, the job of a coach is not as much to directly give his team the best chance of winning, as it is to put the best team on the field. Belichek supporters disregard the testimony of former players – since, to some degree, supported by the Patriots subsequent performance -- that Belichek’s choice came at the expense of the product-on-the-field.

In the end, Belicheck likely did not have finely tuned statistical analysis on hand. The call more likely came from his gut. As he described it, he saw a chance to win and took it.

2012

2009-12-15T23:00:00.000-08:00

The political foolishness of the common Conservative tendency to tar anyone to one's left with a common brush is more and more apparent.

While we do seem to have on the right a more defined topology of competing views -- witness the more idealogical difference between, for example, McCain and Huckabee, compared to that between Obama and Hillary -- there does appear to be at least one increasingly sharp division on the left.

The root of this division is the natural tendency of power to seek more power, which in politics results in the governing party seeking to expand the power of government. The greatest example of this is how the party of Ronald Reagan became the party of W Bush.

For all the efforts made, big government conservatism was always ill fitting and mostly shucked once Republicans lost power.

On the left, however, there is a strong core -- perhaps up to 15% of the electorate -- of, for lack of a better label, Socialists, who ideologically support an ever-expanding government. In the other corner of the left are -- again, for lack of a better label -- Liberals who believe that Government ought be part of the solution to national problems, but who also share, to some degree, with conservatives, belief in the traditional classically liberal American values.

With Obama's election, the "Socialists" are in now power and the "Liberals" appear to be slowly getting squeamish.

The earliest manifestation of this was, perhaps, Joe Lieberman's excommunication. Lieberman, who volunteered for Bobby Kennedy and freedom summer, remains very much a traditional Liberal. In his principled opposition to the current push for socialized medicine he expressed a very Liberal creed: "Sometimes the private sector does things that are wrong, and when they do, you regulate—sometimes you litigate, But never in the history of America ... have we tried to keep one industry honest by having government go into that business to compete with the industry."

Another illustration is Jon Stewart's antipathy towards the groupthink that increasingly appears to be part of global warming science -- intellectual integrity and independence is a core value of the Liberal, but not Socialist, left.

In an editorial today, the Times stated unambiguously its common-sense position that a bank that is too big too fail ought not be allowed to exist. The Socialists in power prefer, instead, to expand the power of government further by entrenching and controlling the largest firms.

In the 2012 elections, Republicans will have the option of nominating a staunch conservative who in the best of circumstances could win less than 55% of the vote. Democrats, then, would likely continue to respond with (stealth) Socialist candidates and our politics would continue to be played in the red zone.

I pray -- though am not optimistic -- that Republicans will find the wisdom to choose a principled moderate who can remind Liberals of our shared values. Such a candidate could hope to win upwards 60% of the vote, with meaningful coattails, presenting Democrats with the choice of marginalizing their Socialists or facing political irrelevance.

Shared Intentionality

2009-12-01T19:30:00.000-08:00

From the Science Times: We May Be Born With an Urge to Help

The article opens by claiming biologists are overturning dour traditional -- that of philosophers, theologians, and parents -- notions of human nature. They have found that human children are naturally more helpful, co-operative and social than chimpanzees.

The article centers on a book by a Dr Tomasello who teaches that children develop "shared intentionality", described as the propensity to abide by, and enforce, social norms, which he believes parents ought reinforce. To Dr Tomasello -- a co-director of an institute for evolutionary anthropology -- shared intentionality evolved very early on -- it is handy when hunting -- and is a foundation of human culture.

The article then quotes one Dr. de Waal, a primatologist, who teaches that humans are naturally empathetic -- only psychopaths are not -- and therefore the humaneness of societies is, thankfully, ground in biology, not "the whims of politics, culture or religion."

The article notes (in an apparent non sequitur) that "experiments have shown that people will reject unfair distributions of money even it means they receive nothing" and, more relevantly, is fair enough to acknowledge that social norms may, in part, be enforced negatively and that warfare is also an expression of this human capacity for co-operation. It concludes with one final lesson from Dr. Tomasello that "we are both selfish and altruistic at the same time."

This final lesson is, of course, very consistent with the traditional teachings that the article claimed biologists were overturning.

Above all, the article is wonderfully self-referencing. Enforced social norms apply as much to thought as to behavior. Without them, those who easily imagine the roots of human nature as adapted to prehistoric lifestyles would have less difficulty understating how our traditional political, cultural and religious structures might be adapted to human nature (and, in turn, human nature to them). More-over, if there is, here, a new way of thinking upending previously established norms, it is brought about by people raised to rebel against any naturally developed shared intentionality.

Monoculture

2009-11-08T08:15:00.000-08:00

One recurring trope on this blog is Von Hayek's teaching that government ought to garden more and sculpt less.

I was watching The Botany of Desire on PBS, based on the book by Michael Pollan. The film argues against monoculture. According to the film, people want, for example, their french fries, to always taste in a similar manner, what Pollan labels "monoculture-on-the-plate". The film faults free markets for too efficiently meeting this desire via "monoculture-on-the-farm". In a state of nature, crops evolve immunities to pests. In monoculture agriculture, where biological diversity, and so natural adaptation, is suppressed, pesticide is required in increasing quantity. This is expensive, creating demand for genetically engineered crops. As pests, unrestricted by monoculture, continue to adapt, a little genetic engineering creates the need for ever more genetic engineering. All to replace, but not really improve, a function that nature more respected well serves.

It is worth noting that diners tend to choose diversity-on-the-plate. The closer the food people eat is to the farm, the greater the economic pressure for diversity-on-the-farm. The economic pressure toward monoculture stems, in part, from consumer preference for the bounty of technology and, in part, from monoculture in the markets.

The analogue between all this and economic/financial-services regulation is self-evident, if likely missed by folks like Pollan given that, within our politics, evolution and free markets are placed in opposing corners. Von Hayek teaches that Darwin actually liberally applied ideas from Smith. Conceptually and historically, Von Hayek would seem right. The competing political alignment points to the limit of his otherwise brilliant work.

Political Architecture

2009-11-05T20:15:00.000-08:00

As a software developer, I am in the habit of thinking about the manner in which the architecture of a process controls its results.

In the case of congressional decision making, the "primitives" (in the software, not anthropological sense) are Congressfolk whose above-all-else motivation is re-election.

There are two rough dynamics which control re-election. Many Congressfolk -- Representatives from highly gerrymandered districts and Senators from reliably red or blue States -- have relatively safe seats. These Congressfolk face greater risk of being primaried out -- for being too moderate for their base -- than losing in the general election for being too partisan or idealogical. Other Congressfolk, facing more competitive electorates, can ill afford being seen as too partisan or idealogical.

Congressional seniority rules guarrantee that party leadership will be largely composed of the less moderate safe seats Congressfolk.

Best of the Web points out that Pelosi's healthcare push, surprising in light of the election, is good for her personal re-election prospects.

At this point the argument that the interest of Blue Dog Democrats lies in opposing the Obama agenda, is wrong headed. Voters angry with Obama or Pelosi are not going to vote for Democrats, whatever their voting records. If Republicans really wanted to kibbosh the Obama agenda they would offer Blue Dogs a place under their big tent. They, of course, have other motivations.

The limiting constraint on the radicalism of the safe seated Congressfolk is that their power depends on the size of their caucus which depends on their ability to recruit and re-elect moderate candidates. It is likely too late for the moderate candidates recruited by Democrats the past two cycles and this will all serve to discourage future recruitment.

It was once said that American politics operated between the forty-yard lines. Since the passage of McCain/Finegold, American politics operates more stably in the red zone.

Incendiary

2009-11-01T11:47:00.000-08:00

A Huffington Post post complains about over-cautious media coverage of the California gang-rape and speculates that coverage would be far more aggressive was it "a 15 year old middle class girl was gang raped by black and Latino men outside a suburban homecoming dance."

The incident is, itself, frightening. The attack went on for more than two hours, with dozens of witnesses, some of whom encouraged the attackers, none of whom notified authorities. The victim was a church-going honors student.

Through their pastor, the her family has requested:

Please do not respond to this tragic event by promoting hatred or by causing more pain. We have had enough violence already in this place. If you need to express your outrage, please channel your anger into positive action.

An LA Times column notes:

...Richmond High students want outsiders to stop calling them animals and savages. "We feel like they're blaming the school," an angry senior complained at a school board meeting I attended Wednesday night. "It wasn't nobody's fault," she said. "People shouldn't be pointing fingers." And school officials are making sure to emphasize the tragedies that didn't happen. The homecoming dance "was a success in terms of safety because nothing happened at the event," a campus police officer announced. "We have a safe environment at Richmond High." ... The troublemakers at Richmond are emulating what they see in popular culture. "A lot of them, they don't think they're going to be successful," said junior Olachi Obioma. "They've already been judged, so they go with that. They drink, they smoke, they pop pills. It's the 'bad boy' culture. That's how they see themselves." ... Or they didn't intervene because they didn't know the girl and didn't feel compelled to help a stranger. On a big, racially mixed campus like Richmond, you stick with your own and mind your business.

Reading between the lines of the reporting, there is some reason to believe that the victim was white. If so, exceedingly cautious reporting is very much called for.

However responsible the reporting, as the facts emerge, the concerns of the Richmond High students will be well founded. If the past is a guide, well meaning people will, then, accuse any who do not believe "this could have happened anywhere" of prejudice. That narrative will not sell: Parents will not easily be convinced that it is bigotry to believe their own community's sons better raised.

If the more damaging, ethnic, narrative takes hold, it would be more tragic for being untrue.

I have previously posted about the social cost of the view that teaches people -- like Olachi Obioma -- to blame an unjust society for their own lack of achievement. In the end, we -- and not some alien culture -- are the ones who taught these kids that their behavior is not their responsibility.

SuperFreakonomics

2009-10-29T19:29:00.000-07:00

The authors of SuperFreakonomics, Steven Levitt and Stephen Dubner, make what is, at face, a straightforward economic claim: Faced with a serious problem (global warming) and given the option of two sorts of solutions, one (geoengineering) which costs an order of magnitude less then the other (carbon emission reduction), why spend more?

Some argue that there are not really two sorts of solutions, that geoengineering is unlikely to practically work. With admitted ignorance of the technology, I think -- at this point -- its fair to observe that changing the behavior of billions of people, and against many of their narrow, short-term, interests is not entirely practical itself.

The scientist most relied on by L&D, Ken Caldeira, doesn't share their conclusion, in part, for a different reason: he apparently believes carbon emission is "essentially immoral" just like "mugging little old ladies". L&D view this moralistic, as opposed to analytical, approach to be, in some form, religious.

While L&D do take perverse joy in challenging traditional moral assumptions -- eg: pimps up -- their analysis is not simply amoral. Their claim is ultimately Machiavellian: better, more moral, outcomes, can be realized through cold-hearted, amoral, analysis than by adherence to pious orthodoxies.

The traditional, religious, understanding, shunned by all sides in this debate, is that people generally act moral less out of analytical, or empathetic, judgments of right and wrong, than out of force of habit guided by the weight of culture and tradition. Where this weight is removed, people have a frightening tendency to, for example, murder little old ladies and mug defenseless children.

It is hard, then, to imagine that the behavior of billions of people will be peacefully changed to meaningfully reduce their carbon footprint without harnessing the weight of culture and tradition to attach a notion of something like sin to carbon emission.

Behind the Numbers

2009-10-27T21:10:00.000-07:00

Of all the numbers trending in the GOP's favor perhaps the most signifigant this: In April 2008, 75% of Independents believed there was solid evidence for Global Warming. Today only 53% do.

One of the important emerging political trends is increasing Democratic competitiveness in the Mountain West: Three 2004 Mountain Red States turned Blue for Obama, and a fourth was friggin close. In April 2008, the region polled 75%-21% believing in global warming. Today the region -- at 44% - 42% -- is the most skeptical in the nation.

Another, similar trend involved college graduates. In 2004, their vote was split, in 2008 they went 53% - 45% for Obama. In April 2008, 75% of Independent college graduates believed in Global Warming, today only 56% do.

In both cases, a strong contributor to increasing Democratic support was the perception that the Republican Party, personified by W & Sarah Palin, stood, blinded by, or hostage to, ideology and theology, increasingly anti-science and even anti-thought. The Democrats with increasing success portrayed themselves as the thinking person's alternative. The success of this perception was reflected in the public trust for Global Warming science vouched strongly for by Democrats and questioned, with equal fervor, by Republicans.

Republicans have done precious little in the past year and a half to counter the perception that they couldn't think less. In these numbers lies rapidly falling public faith in the reasonableness of Democrats.

Kwame Anthony Appiah

2009-10-21T05:22:00.001-07:00

In his most recent column, David Brooks quotes Princeton professor Kwame Anthony Appiah (leaving some ambiguity as to whether he shares the opinion) as distinguishing between the "philosopher's" view of possessing character and virtue and the "psychologist's" view of being a "community of competing selves" which "are continually popping in and out of existence... have different desires, and they fight for control - bargaining with, deceiving, and plotting against one another." This latter view is propped up by "a century's worth of experiments" which show people often behave differently in different contexts.

Arguing against a straw man is one tell tale sign of a weak claim. Classical thinkers, of course, even without the benefit of psychological "experiments", understood well our divided and competing natures (after all, they were people too!). They taught stories of heroes with character and virtue, not to raise awareness of our true, or fixed, nature but to encourage our better angels. Their central insight was that behavior is largely habitual and habits can, largely, be developed.

Stripped, then, of its scientific pretense, this "psychologist" critique is merely functional. It offers -- actually, sells -- greater self-satisfaction. The traditional teaching promotes better behavior.

From a societal perspective, the classical view is obviously more beneficial. Which is, in the end, to be expected of a teaching that has passed the test of time.

Babies with Candy

2009-10-19T22:25:00.000-07:00

In his latest NYTimes column, Nobel Laureate, Paul Krugman is in (recycled) whining mode. Highlights:

...Goldman Sachs is making record profits...   banks that are actually in the business of lending, as opposed to trading, are still in trouble... 

while the wheeler-dealer side of the financial industry, a k a trading operations, is highly profitable again, the part of banking that really matters — lending, which fuels investment and job creation — is not...

In the first phase of the crisis, Main Street was punished for Wall Street’s misdeeds; now broad economic distress, especially persistent high unemployment, is leading to big losses on mortgage loans and credit cards.

And here’s the thing: The continuing weakness of many banks is helping to perpetuate that economic distress. Banks remain reluctant to lend, and tight credit, especially for small businesses, stands in the way of the strong recovery we need...

we desperately need to pass effective financial reform. For if we don't, bankers will soon be taking even bigger risks than they did in the run-up to this crisis...  When bankers gamble with other people's money, it's heads they win, tails the rest of us lose.

The truth of the matter is more complicated than Krugman would like you to think. This deep into the credit crisis, even Nobel winning, NYTimes column writing, Princeton professors ought to understand the manner in which bank lending is tied to fixed income security markets (where the bulk of Goldman's reported profits came from).

Main Street, was not, as Krugman pretends, an innocent victim of Wall Street's misdeeds. Main Street, hand in hand with Wall Street, borrowed far more money than it was able to pay back, leading up to the crash.

To spur any recovery, of course, businesses require funding. Krugman's apparent view that this best comes from a return to not-entirely-responsible lending seems perverse. More obviously sensible would be tax cuts and reduced regulatory burdens.

Finally, the notion that financial reform will decrease risk taking is something other than evidence-based. Consider a recent Journal column detailing the Government's hand in almost 2/3s of all bad mortgages.

Krugman is right, of course, to be concerned about the agency costs embedded in our financial system. But legislators and regulators, as much as bankers, play games with other people's money. Was Krugman more honestly concerned he would be more in favor (de-)regulatory policies that gave people more control over their own money.

A Radical Proposal

2009-10-17T17:24:00.000-07:00

As noted here previously, one of the true causes of systemic risk in our financial system is the FDIC. A bank account is, simply, an unsecured loan to the bank. Because accounts are "insured" by the FDIC, account holders are not as concerned about banks engaging in risky behavior as unsecured lenders would otherwise be. In theory, the FDIC should be so concerned and could set appropriate terms. In practice, of course, well, here we are.

On the other hand, without FDIC insurance we face an increase risk of bank runs, which can cause liquidity crises, and so threaten the economy. Even without FDIC insurance people seeking return on their savings would still put their money in banks, it would simply be less "sticky" and therefore more systemic-ly risky.

Finally, our Government is a massive borrower, largely from foreign sources. At this point, realistically, we carry debt that can only be rolled, not -- ever -- be payed back.

Given all this, the sensible thing -- to me -- would seem to be the Government acting, itself, as a retail bank. Instead of holding accounts that are, in effect, loans to Chase, subsidized by the government, individuals should be able to open accounts that are, in effect, loans to the Government. Private banks could play a customer-facing/administrative role as a DMV-style customer interface would kill the project. Better, I think, to finance as much of our debt in this manner as possible, than borrowing more from abroad. Once this system is set up, FDIC insurance could be wound down in a reasonable manner (eg: lowering the amount covered by a certain percentage annually).

The main public-interest negative I can see in this is that it in its structure acknowledges the permanence of our national debt. But that is simply facing reality.

Facing a different sort of reality: Too many vested interests make too much money off of FDIC insured accounts for this sort of reform to ever have a chance.

Of Predators

2009-10-14T17:35:00.000-07:00

Thomas Frank writing in the Journal argues that Republicans misunderstand, and therefore misuse, when they -- borrowing James K. Galbraith's construct -- identify the Government as a Predator. To Frank and Galbraith the Government is only a Predator when it serves evil corporate, as opposed to public, interests.

Last week, I criticized Sheila Bair for her transparent attempt to preserve the solvency of her agency by stealing from secured creditors. In fairness to her, she merely wanted to get in on the scam the administration has already facilitated for the UAW and JP Morgan.

Sensible people, including the President, understand that one of the core problems with the our health-care system is its employer centric-ness. While Democrats have mostly ignored the sensible conservative proposal to extend to individuals the tax advantages that privilege corporate provided coverage, Sen Ron Wyden (D, Oregon) did propose a reasonable, if convoluted, bi-partisan ammendment, that in some circumstances would have given some employees more control of their coverage. Big Business and Big Labor joined hands, were blessed by the President, and the offending proposal was (shamefully) killed.

These sorts of policy choices are the rule, not the exception. As noted previously, Republicans are, for the time being, without power in Washington and, so, if Government is now acting the Predator, it is doing so without their corrupting influence.

The classical, which is to say conservative, teaching on the subject is "power tends to corrupt and absolute power corrupts absolutely." In this view, it is Frank and Galbraith who are hopelessly unable to appreciate the predator gene in the DNA of our leviathan state.

Sustainable Growth Rate

2009-10-13T19:41:00.000-07:00

Conservative critics who reject the notion of that you can reduce deficits by spending trillions miss, in part, the boat. As discussed previously, the driving force behind Health Care Reform is the curve by which Medicare promises to bankrupt the country. The logic is sound, if solipstic. Medicare contains a straight-foward, if uncreative, cost containment mechanism: legislative fiat. Unsurprisingly, overly aggressive limits cause doctors to leave the program. To maintain doctor participation, Congress has had to repeatedly override mandated caps. The proposed reform addresses this with equal uncreative straight-fowardness: If there is no market paying higher prices, doctors will be forced to accept the capped price.

The basic laws of supply and demand teach that this is not a long-term solution. Pushing down price in this manner will, inevitably, push down supply. Not only that, but the goal is, of course, to dramatically increase demand.

The apparent plan for this is a bit more creative. The idea is to privilege primary care physicians at the expense of more skilled, more expensive specialists. Considering that the current crop of primary care physicians functionally failed out of Med School, there will then be little reason not to lower standards. If Med School is made easier, more like, for example, Nursing School, you can expect to have enough primary care physicians, at lower cost, to handle the expanded demand.

There will, of course, sooner than later, be a dramatic shortage of specialists (with one notable exception). For that, the President and Congressional Democrats do have a straight forward, if somewhat copycat, plan: IBGYBG.

The Nobel Prize

2009-10-11T23:02:00.000-07:00

Yoni Brenner comments in the Times about the silliness of the award.

It seems to me that the politics would argue for Obama turning the award down. Let him say "I very much appreciate that you appreciate what I am trying to do, but I haven't done it yet and there are many deserving alternatives. Why don't we circle back in three years and see how I am doing?" Even his political opponents would have to credit him. By accepting the award he strengthens the narrative that sees him as seeing himself as the Obamessiah.

More distasteful than what Obama has not done and the deserving candidates passed over is Obama's track record. James Woolsey, CIA director under President Clinton, writes in the Journal, of the ugly premise underlying Obama's central Israel initiative: the ban on expanding kitchens in Gush Etsyon. Lanny Davis, former special counsel to President Clinton, recently observed in the Journal Obama's apparent intent to not "recognize free and fair elections in Honduras... at the same time it is about to recognize the president of Afghanistan, who was elected in what is now seen as a fraudulent electoral process." Add to that calibrated response to the violence in iran and his rebuff of the Dalai Lama and it seems that we have a president quite willing to trade freedom for stability.

The President, and his policy makers, argue that they are just being realistic; that their policies offer better outcomes. Which may prove out. But it does accentuate the perversity of extending this award to a man doggedly justifying means with ends, before the results are in.

Afghanistan

2009-10-08T21:58:00.000-07:00

A few easy Afghan observations: Biden's proposed strategy for Afganistan sounds an awful lot like Rumsfeld's for Iraq. The Military, being protective of its institutional reputation, and more importantly, the lives of its soldiers, is less likely now, than it was then, to go more or less quietly along with a strategy it feels is dangerously wrong-headed. The administration, in claiming that military leaders who publicly express independent opinions are circumventing the chain of command, is, rather blatantly, attempting to circumvent its own chain of command by keeping key information -- professional military opinions -- from the public it, nominally, serves.

Listening to Candidate Obama, one sure got the impression that there was no meaningful difference between the Taliban and Al-Quaida. While Biden may well be correct that there still is, to the degree that Al-Quaida is primarily operating out of Pakistan, how helpful can focusing on Al-Quaida can be, without either Pakistani co-operation or disregard for Pakistani sovereignty? As the Taliban have been reported to be an extension of Pakistan's internal security service, the administration's sudden, and surprising, willingness to include the Taliban in the future of Afghanistan appears a carrot offered in the hopes of that co-operation.

Given the relative strategic priority, one imagines that the debate over Afghanistan policy is part of the larger effort regarding neighboring Iran. Iran, presumably, would strongly prefer the Biden plan. The administration might view this public airing as a useful support to its diplomacy (playing Good Cop to McChrystal's Bad Cop).

What ever the case, the Administration has, best one can tell, tried very hard to maintain a sophisticated, multi-faceted, diplomatic engagement with Iran. Since Reagan, Conservatives question the general effectiveness of that sort of approach. Obama, now, has a golden opportunity to prove them wrong.

Serving the FDIC's Interest

2009-10-07T16:22:00.000-07:00

In a recent speech, FDIC chair, Sheila Bair laid our her vision for financial services regulatory reform.

She starts from the common-sense premise that "we need an end to the too big to fail doctrine". She proposes a "mechanism for the orderly resolution of these institutions similar to that used for FDIC-insured banks." She argues for extending this mechanism beyond the large bank holding companies to smaller bank holding companies, hedge funds and insurance companies. She expressed support for the international initiative towards the development of wind down plans providing they "be developed in cooperation with the resolution authority". Finally, she also proposes considering "limiting the claims of secured creditors to encourage them to monitor the riskiness of the financial firm." She believes that short term secured borrowing "may encourage greater fragility in the financial markets" and that taking money from secured creditors and giving it to general creditors would serve "to stem any systemic risks."

The most striking feature of her analysis is that, to her, the "too big to fail doctrine" is false. That with a structured resolution process no firm is too big to fail. As noted previously, an FDIC-style resolution process works well when disposing a relatively tiny amount of assets into a large market. It can not be reasonably expected to work as well disposing a more meaningful proportion of assets in market.

That large and/or interconnected companies should maintain "living wills" is an almost inescapable take-away from the Lehman bankruptcy. Mandating that any such company (including non-financials) maintain active shareholder and creditor approved pre-packaged bankrupcy plans appears a no-brainer. Bair, rightfully, notes that such plans can improve systematic resilience by highlighting risks and dependencies. More questionable is her insistence on regulatory agency participation in, or rather -- let's not kid ourselves -- control of, developing these plans. Without regulator intervention, this sort of rule would create structural pressure against firms too big or complex to fail. The bigger and more complex a firm is, the more difficult it will be for shareholders and creditors, by themselves, to reach agreement.

Demanding that smaller firms that could be otherwise be reasonably wound down through existing mechanisms maintain "living wills", as Bair appears to support, is the sort of regulation-as-barrier-to-entry that larger firms love.

At first glance, her argument to mandate haircuts for secured creditors is unequivocally idiotic. If shareholders, regulators and unsecured creditors cannot together adequately monitor the riskiness of a firm, how could secured creditors? How does taking money from secured creditors and giving it to unsecured creditors stem any systemic risk?

Most risible is the suggestion that secured lending "encourages more risky behavior." Bair surely knows this is false: Systemic risk is primarily caused by unsecured rather than secured lending; A firm's secured borrowing cannot get out of hand, as a firm has finite assets to borrow against. If one only lends securely, one is not put at risk by a borrower defaulting. In truth, unsecured borrowing is also, generally, a check on excessively risky behavior as lenders demand higher rates from firms perceived as more risky. The financial system did not work this way because the government subsidized unsecured lending: In the first instance via the implicit "too-big-to-fail" guarantee, but also via the FDIC itself -- a bank account is nothing more then a unsecured loan to the bank.

Her true motivation appears clearer when one considers that the FDIC is running out of money. It would sure benefit from being able to seize 20% from secured creditors of banks it takes over. Similarly, to argue for an FDIC-like resolution process to be expansively applied is, between the lines, to argue for a dramatic expansion of FDIC authority. It should be no surprise that Bair argues as forcefully for regulation in her agency's interest as she opposed regulation against her agencies interest. It is unfortunate that the regulator cannot be relied on to, instead, defend the public interest.

The Pursuit Of Ignorance

2009-10-06T17:37:00.000-07:00

One of the not-enough-discussed culprits at the heart of our economic melt-down is a portfolio theory which promises that, through the miracle of diversification, smart investors need not trouble themselves with the messy details of any potential investment. This has quantitative problems that any competent investor would have tried to address. For example: correlations in bull markets can not be expected, with any certainty, to hold in bear markets, but given that our political and economic watchmen feel obliged to restrain bear markets, there is limited data available to derive more meaningful correlations. There is, however, no getting around the fundamental qualitative issue: So long as somebody is minding the store, diversification-investors can piggyback. The more investors adopt this approach, the fewer investors there are minding the store and the more executive decisions are made to benefit management or short term, vulture, investors.

This is, I think, an instance of a general pattern. Central Bankers, and their would-bes, looking mostly at coarse grained economic indicators feel comfortable directing whole economies. Regulators and Legislators -- not to speak of Journalists! -- are heroically unrestrained by an often for-dummies (if that) understanding of the industries they oversee. Our President has apparently adopted that theory of foreign relations which argues we need not bother understanding the internal political dynamic of other nations. In the middle of it all is a culture of management, in which everyone's highest professional aspiration is to take credit -- and be paid -- for other people's work.

In the end, the strength of an economy boils down to the aggregate willingness and ability of people to do things valued by other people. And underneath all the awful decisions made by all sorts of economic actors, lies a culture that increasingly devalues the painstaking work that goes with ordinary productivity.

Saving Regulation From Itself

2009-09-29T15:34:00.000-07:00

The Times' Dealbook reports:

Paul A. Volcker, a top White House economic adviser... [and] former Federal Reserve chairman, told Congress that by designating some companies as critical to the broader financial system, the administration’s plans would create an expectation that those companies enjoy government backing in tough times... He urged lawmakers to make clear that nonbank companies would not be saved with federal money... he took "as a given" that banks would be bailed out in times of crisis.

Volcker makes reasonably explicit what I claimed in my previous post, that the intent of the administration is to insulate "critical" firms from market discipline. Smaller firms, attempting to operate without governmental guarantees will be at an obvious disadvantage competing against firms blessed as "critical". Costly and complicated regulation being considered in the name of weeding out systemic risk will create significant barriers to entry serving to further defend "critical" firms from the threat of meaningful competition.

Theoretically, as the President outlined, this may entail such firms being subject to increased regulatory scrutiny to ensure they do not take undue risk. In practice, even this will not likely come to pass. It is unclear that such regulation would be, in any way, more onerous then that which smaller firms will be subject to in the name of filling gaps in the regulatory fabric. It is unclear that the politically influenced regulators will serve to dampen, rather than spur excessive risk taking. Finally, it is unclear with what degree of seriousness we can take anything the President said considering the as-a-given dismissive-ness, his senior economic adviser treated the declaration of intent, in the same speech, to "put an end to the idea that some firms are 'too big to fail'."

In that politically astute speech, the President captured the common sense lesson reasonable people took away from the credit melt down: Too big to fail is too big. Washington's regulatory class, apparently, learned the opposite lesson: Not too big to fail is not big enough.

This is a clarifying moment, as Republicans have no real ability to influence the outcome. If, as appears likely, the administration, under the banner of tighter regulation, uses the power of government to distort markets in the service of large Wall Street banks, Democrats will not be able to blame corrupted Republicans. Rather, it will demonstrate, as clearly as can be, corruption in the heart of the idea of regulation.

If the goal of the regulatory class is to protect capitalism from itself, who, or by what means, will they (and we!) be protected from themselves?

Wall Street Compensation

2009-09-25T06:32:00.000-07:00

Eric Dash blogging in the NY Times explains What’s Really Wrong With Wall Street Pay.

The easy observation that Wall Street compensation policies are unsustainably flawed does not at all support the current push for regulatorily controlled compensation.

Free markets, of course, feature a wonderfully elegant regulatory mechanism for dealing with firms unable to set interest-aligned and sustainable compensation policies: They go out of business. It is only in a regulatory-jungle system like ours, where the government dutifully insulates powerful firms from market discipline, that issues like this arise.

Time was when progressives could maintain the conceit that the idea of regulation was to protect the market from itself. As it stands, it is a barely disguised euphemism for command.

Obama's America

2009-09-20T22:30:00.001-07:00

There appears to be such a mountain of forensic evidence linking janitor Raymond Clark, III to the murder of medical student Annie Le, that authorities do not feel the need to lock down his motivation.

From the reporting it appears that achievement/class resentment was likely involved. The executive director of the American Association for Laboratory Animal Science has been quoted to the effect of: The gap in education levels shouldn't necessarily lead to tension if there is a culture of respect. The latent blaming-the-victim implication horrifies.

Von Hayek notes that envy, according to Mill the most evil of all passions, is sanctified in our society by the formula "social justice". What the successful once dismissed as envy on the part of the less successful is, in the view of the less successful -- or as we are obligated to see them: "less fortunate" -- righteous indignation in the face of gross injustice.

Even if we sympathize with the aspiration towards equality of opportunity and admire the charitable impulse, we must recognize that the equation of unfairness with injustice sits, precariously, on a slippery slope.

Overseen on a morning cross-town bus: suited father and pre-school daughter, perhaps 4 years old. Father and daughter are reviewing addition and subtraction on his fingers.

It is hardly fair that products of less invested parents will have to, one day, compete against that little girl. Just as it is hardly fair that people less naturally gifted have to, every day, compete against people more naturally gifted. Or that people with weak work ethic have to compete against those who seem to enjoy hard work.

A society in which parental investment, natural ability and hard work are more generally rewarded is one that will generally progress farther. A rising tide, in turn, lifts all ships. But try explaining that to Raymond Clark, III.

Racketeering

2009-09-15T14:39:00.000-07:00

Drudge posted a report that public trust of media has fallen to record lows. It is unsurprising that an industry that sells -- above all -- trust suffers economically as it loses trust. On the other hand, perhaps trust is merely more diffuse. Media does increasingly market "Trust Us, Don't Trust Them."

One source of any loss of trust is that, as people receive information from multiple sources, slanted editing is readily apparent and, therefore, costly.

An example from yesterday's news: Reading the Times one is led to believe that the proposed BofA SEC settlement was thrown out of court over concerns about irresponsible management and overly lax regulation. Obama, according to the Times, is, of course, rushing to save the day by pushing for "tougher" regulation. Along the way the health care debate is mentioned and the gentle reader is informed of Obama appointee Mary Schapiro's heroic efforts to revive the SEC's "reputation as an effective watchdog of Wall Street."

The actual facts -- buried, mostly, in the bottom of the article -- are these: BofA was coerced by the Governments, as part of effort to stem the financial crisis, to purchase Merrill. The S.E.C. then turned around and sued BofA management claiming -- apparently with justice -- that it failed to adequately inform shareholders of pending Merrill bonuses. The parties agreed that BofA should pay $33M. The judge, above all noting the gross injustice of making the alleged victim -- BofA shareholders -- pay the penalty ripped the racketeers, both of whom profit from the arrangement (The S.E.C. by getting to claim that it is exposing wrongdoing). A dozen lines up from the bottom, the article notes that screwing shareholders in this manner (perhaps, amongst others) is a long-standing S.E.C. practice.

The readily apparent takeaway: The Judge’s issue was with an until-now-unchecked, out-of-control, regulator abusing the people it was charged with protecting; the precise opposite of the "overly-lax regulator" trip the Times tried to sell.

More accurate reporting of the decision is available from this WSJ op-ed.

Babies With Candy (or Baby Sitting on Capitol Hill)

2009-09-06T13:00:00.000-07:00

The heart of Krugman's Times Magazine article is a cute"parable" about the Capitol Hill Baby Sitting Co-Op, first recounted in a 1977 article:

This co-op... was an association of about 150 young couples who agreed to help one another by baby-sitting... To ensure that every couple did its fair share of baby-sitting, the co-op introduced a form of scrip: coupons... entitling the bearer to one half-hour of sitting time. Initially, members received 20 coupons on joining and were required to return the same amount on departing the group. Unfortunately, it turned out that the co-op’s members, on average, wanted to hold a reserve of more than 20 coupons, perhaps, in case they should want to go out several times in a row. As a result, relatively few people wanted to spend their scrip and go out, while many wanted to baby-sit so they could add to their hoard. But since baby-sitting opportunities arise only when someone goes out for the night, this meant that baby-sitting jobs were hard to find, which made members of the co-op even more reluctant to go out, making baby-sitting jobs even scarcer. . . . [in] this particular example... a recession is a problem of inadequate demand — there isn’t enough demand for baby-sitting to provide jobs for everyone who wants one... Freshwater economists... believe that all worthwhile economic analysis starts from the premise that people are rational and markets work, a premise violated by the story of the baby-sitting co-op. As they see it, a general lack of sufficient demand isn’t possible, because prices always move to match supply with demand.

To Krugman's perverse view, we are always in a recession as there is never enough demand for -- to take an example -- Princeton Economics Proffessors or New York Times Columnists to provide jobs for everyone who wants one. More sensibly viewed: The problem was that people went out less then they otherwise might have.

Reading the actual 1977 article, it is evident that Krugman, for his purposes, misrepresents crucial detail:

The price of the scrip was constitutionally pegged to one half-hour of sitting time.

According to the authors the shortage of scrip did not stem from irrational fears of co-op members. Rather there was an ill thought out co-op management regime which removed about 5% of scrip from circulation annually.

The co-op first attempted a rule mandating that members go out more. When this failed, they adjusted the rules such that new members received 30 scrip but only had to pay 20 on exit. According to the authors this worked for a while but eventually resulted in the reverse problem where more people wanted to go out than babysit.

The "Freshwater" premise, that free markets work because prices move to match supply with demand could hardly be violated by dysfunction in a "market" in which prices were constitutionally fixed.

The key to this whole thing is the silliness of the scheme. The scrip served no earthly good. There is no advantage to a couple babysitting for scrip to spend on babysitting over babysitting for dollars to spend on babysitting. The value the co-op created by establishing a babysitting exchange was impaired by the demand any transaction be in the heavily regulated scrip rather than dollars.

This was, in other words, a market designed to fail by regulators who didn't believe in markets. The primary lesson of this parable is the opposite of what Krugman would have his readers believe.

There is, to my mind, a more interesting take away from the observation that given the silliness of the scheme, there was an anti-market selection bias amongst people choosing to participate. More enterprising people may well have created a black market for scrip in which prices varied with changing supply and demand, saving the co-op from itself.

If this can be applied more broadly, it would argue that a foolishly regulated market economy (and, frankly, which isn't?) depends on a market-oriented culture to function well. In such an economy, market dysfunction can be caused by cultural change.

Babies with Candy

2009-09-05T19:34:00.000-07:00

If Paul Krugman is, indeed, a brilliant and rigorous thinker, he hides it awfully well. In a Times Magazine article he divides the world into two sort of economists. Freshwater economists believe markets are always perfect and workers choose not to work during recessions. Saltwater economists believe that markets are deeply flawed and require strong government participation to function well. He demonstrates the superior wisdom of the Saltwaters by the existence of bubbles, the fact that workers do not choose to be unemployment during a recession and the greater prestige of their affiliations (Harvard, MIT, Princeton).

Somebody in Krugman's prestigious university should explain him what a logical fallacy is.

It is very easy to argue that markets can mis-price things, or that recessions produce more than creative destruction; It is much more difficult to demonstrate that governments will generally, or even often, price things better or that fiscal policy will generally, or even often, does more good than harm. There is very little basis -- particularly in the context of the current financial crisis -- to believe that government can generally be expected to act more rationally then investors or consumers. On the contrary...

Krugman's beef, above all is with the theory of rational markets:

As I see it, the economics profession went astray because economists... fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets...

Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of markets — especially financial markets...

To Krugman, this argues for increased governmental babysitting of the economy.

It is hard to see, as Krugman does, in the failure of our heavily regulated financial markets, proof that ungoverned free markets fail. Or that what our financial markets require is more, not less, heavy handed government meddling.

In the end, it ought be stated, Krugman's line of argument is inherently anti-democratic. In a democratic government, limitations of individual economic decision making will be reflected in governmental decision making. There is no reason to believe that government -- riddled with agency cost, sitting on top of the food chain -- is not itself an institution at particularly high risk of running amok.

The belief that government can somehow stand above the fray, making rational and beneficial decisions, even as irrationality infects the hoi polloi, requires belief in a government that is something other then of and by the governed.

Government Re-Insurance

2009-09-01T17:55:00.000-07:00

The FDIC appears close to insolvency. This comes on the heels of the insolvency of Fannie Mae + Freddie Mac, and with that of the PBGC, Medicare, Social Security and, many suspect, the FHA, looming on the horizon. There are, of course, no shortages of private sector bankruptcies in the current disrupted economy, but there are good structural reasons to question whether a democratic government can be expected to well manage an insurance program.

The fundamental problem is the asymmetric interest and information involved in such a program. Groups paying premiums have will lobby as hard as they can to reduce their payments far below any risk adjusted fair value. Tax payers, less likely to be aware of the down-the-line costs-to-them politically reduced premiums are likely to bring, will not exert meaningful countervailing pressure. Political decision makers will grease the squeaky wheel.

The general hybrid regime we have of nominally private sector insurance, heavily regulated and implicitly backstopped by the government works reasonably well. Structurally, it creates an interest group able to check political power of premium payers and markets within which risk can be, more or less, priced.

On the other hand, the complexity of the hybrid econo-system reduces cost transparency and accountability. For example, if medical insurance companies were regulatory required to take on previously uninsured sick people at the same price they take on healthy people, insurers would raise rates on everyone. Customers would have general difficulty attributing cause, especially as there would be politicians and affiliated media arguing that the rate increases were due to private "waste" or "greed". A hybrid insurance system, whether or not it effectively produces a public good, is also vulnerable politically to the charge of "socialized risk, private profit." Given a byzantine regulatory framework precludes a reasonably competitive market, its easy to imagine insurers take more than market profit.

In short, the current hybrid system has the advantage of a market for price discovery, but suffers from having too many chefs in the kitchen.

The difficulty with a purely private approach for key forms of insurance is removing the implicit government backstop. If, for example, a life insurer of any reasonable size failed, the politics would tend towards a bailout for beneficiaries. Its hard to imagine how a insurance market could well function without any insurers of reasonable size.

The least bad approach might be "publically provided, privately priced". To take a "Public Option" as an example, such a system could work roughly along the following lines: The Insuring Agency sets its policies as far as what it pays for what and what premiums it charges. The Agency issues "re-insurance" securities with a moderate duration, perhaps three years. In the event the Agency ran out of premium money, holders would pay in the notional value of their securities before a government bailout. In exchange they are paid a fixed monthly rate.

It would not be to difficult to construct a reasonable feedback mechanism. For example requiring the agency sell a certain amount of new "re-insurance" securities in an annual all-or-nothing auction within a set price band. An auction failure -- indicating a lack of market confidence in the Agency's solvency over the three year window -- would trigger mandated steps -- reducing benefits, raising premiums, federal cash infusion -- to restore fiscal health established by a successful auction.

There is, of course, devil in these details. As a general principal, it is hard to imagine our Government creating a market that serves a purpose other than funneling taxpayer dollars to Government/Sachs. More concretely, it is easy to imagine that the Government will motivate the heavily regulated large players to dampen any negative market signals.

Teddy's Health Care

2009-08-27T19:12:00.000-07:00

My gut reaction to Teddy's passing was unsympathetic. He was a man who, in both his personal and political life, was a bulwark against individual responsibility and accountability. For all his power and influence, his actual achievements were limited. To call someone a Lion of the Senate, is to damn with faint praise.

On the other hand, writing in the Journal, Noonan captures what was great and compelling and fundementally American about Kennedy, even for those repulsed by his political idealogy. Un-, or rather, very softly-, spoken in her column is an implicit compare and contrast extremely unfavorable to our current President.

Another, Journal op-ed reminds us that it wasn't long ago that pro-business conservatives were on the Government Health Care bandwagon, and, so, how badly the Administration has played what once was a winning hand.

The attempt to rebrand Universal Health Insurance as TeddyCare is of conflicting value. On one hand, it may make legislation more palatable to seniors. On the other hand, it risks serious backlash. As the Times delicately reported:

...He chose what he called “prudently aggressive” treatments. “He always admired people who took risks, like Teddy and Kara did,” Mr. Dodd said, referring to two of Mr. Kennedy’s children, who both beat cancer with bold treatments... Mr. Kennedy deputized Dr. Horowitz, who lives in the San Francisco Bay Area, to research all treatment options before deciding on an intensive regimen of surgery, chemotherapy and radiation — hardly a clear-cut choice with an almost inevitably lethal disease and a patient of Mr. Kennedy’s age. Some physicians assembled at Massachusetts General Hospital considered his tumor inoperable — and measured his likely survival time between six weeks and a few months.

Voters can be expected to resent that Teddy, for his own care, ignored the evidence-driven medical care, we are being told he made the cause of his life to impose on others.

Smart Diplomacy

2009-08-25T22:47:00.001-07:00

Amongst the campaign promises the President has had difficult living up to was his commitment to smart diplomacy.

If this Drudge post is accurate, he appears about to, in his own way, deliver.

The gist of the four way deal is the US takes a much harsher line on Iran, in particular the promise of meaningful sanctions, Israel agrees to a very limited -- basically in name only -- settlement freeze, Arab states agree to very limited moves towards normalization, Palestinians agree to resume stalled negotiations.

According to the article, both Israel and the Arab States are primarily motivated by a desire to see the current administration grow a pair vis a vis Iran, it is less clear why the Palestinians agreed to play along. The promised shift in Obama's Iran policy is, in fact, the only real commitment in this whole deal. There is no indication of a genuine diplomatic breakthrough between Israel and the Palestinians that might lead to an actual agreement.

In the end, a skeptic might wonder if all this window dressing is entirely for the benefit of allowing our Government to save face as it drops a failing approach. More practically, perhaps the President felt he required the mirage of peace process progress to sell a more aggressive policy towards Iran to his core supporters.

Netanyahu is, perhaps, the biggest political winner. Israelis -- even those who generally oppose settlement construction -- being less aware of American domestic political calculations, will see this deal as being very well bargained by their Prime Minister.

Texas

2009-08-22T22:50:00.000-07:00

It is obviously very early, but of prospective GOP 2012 Presidential candidates, Rick Perry has the best story. He is a rock solid conservative, who said no to stimulus money, governs the best state economy and is more telegenic than Bobby Jindal.

His path to the presidency, however, goes through fellow Republican Kay Bailey Hutchison, who is challenging him in the primary for the 2010 gubernatorial election.

This primary well serves republican interests. Perry seems likely to emerge victorious, more battle tested and so more prepared for the 2012 elections. If he proves unable, better to find that out in 2010 then 2012.

A Wonderful Suggestion

2009-08-21T05:18:00.001-07:00

A Times op-ed reports that Rhode Island plans a new law requiring health insurance policies be written such that the average person can understand them.

This sounds like a wonderful idea whose utility is not limited to health insurance policies. If only financial derivative contracts had been required to be written that way! Or, more importantly, the Health Care Bill.

Income Inequality

2009-08-20T20:50:00.000-07:00

A NY Times article quotes a Harvard economist who makes an almost entirely reasonable argument:

"I think incredibly high incomes can have a pernicious effect on the polity and the economy,"... Much of the growth of high-end incomes stemmed from market forces, like technological innovation... But a significant amount also stemmed from the wealthy’s newfound ability to win favorable government contracts, low tax rates and weak financial regulation, he added.

It is certainly true that income disparity creates serious issues in our society. In particular -- as he notes -- the wealthy have a greater ability to bend government policy towards their economic interests. His latter two examples of such bending, however, are foolish.

The charts included in the article demonstrate that increases in the highest incomes do not lead to tax cuts. (Perhaps one of his students can explain him how to run a regression... )

Secondly, he repeats the oft-heard, but couldn't-be-farther-from-the-truth, cant that Wall Street excess was enabled by "weak" financial regulation. In the context of his argument it is more thoughtless than usual. If the wealthy are able to bend government policy to their interest, why would they modestly settle for weak regulation, when they could get regulation that more affirmatively served their interest? (Do they really call it Government Sachs for nothing?) And as he understands that the wealthy strongly influence government policy, how can he take for granted that strong regulation would, in any way, work against their interest?

On a related topic, one Ronald Dworkin (no, not that one) argues in the journal that the upper middle class today is more responsive to marginal disincentives to work then it was in the past, as work is less considered itself a virtue and professionals are increasingly swayed by quality of life concerns.

His argument strengthened another argument that has been bubbling in the back of my head: Progressive taxation increases income disparity. To construct a crude model -- a company with $100 revenue and two employees, one highly silled ("A") making $66 and one not ("B") making $34. If both are taxed at 33%, A takes home $44. If taxes are changed such that A pays 50%, her take home would initially be reduced to $33. A's natural response would be to ask for a $22 raise to restore her take home value. Any raise for her comes out of B's pocket. If A recieves half her request, she is now making $77 and B $23. The increased tax progressiveness producing an increase in income disparity.

This is a rough model by any stretch, but its core contention is strengthened by the argument that A will meaningfully reduce her hours in response to a meaningful reduction in her after-tax wage. In theory, the company could hire an additional person to share A's role. In practice, it will often be more cost effective to pay A more.

IoC

2009-08-16T09:00:00.000-07:00

As I am moving from Java to DotNet, i am re-evaluating IoC containers.

I've been naively using Spring for a while, and unfortunately, missed out on Guice, which, best I can tell is the IoC of my dreams (now lost to me forever, or at least as long as I am on DotNet).

That said, I am growing skeptical of the concept of an IoC container. To take an example from the Guice site. Is this:

public class BillingModule extends AbstractModule {
  @Override 
  protected void configure() {
    bind(TransactionLog.class).to(DatabaseTransactionLog.class);
    bind(CreditCardProcessor.class).to(PaypalCreditCardProcessor.class);
    bind(BillingService.class).to(RealBillingService.class);
  }
}

Really so much more awesome than:

  public static void main(String[] args) {
    CreditCardProcessor processor = new PaypalCreditCardProcessor();
    TransactionLog transactionLog = new DatabaseTransactionLog();
    BillingService billingService
        = new RealBillingService(creditCardProcessor, transactionLog);
    ...
  }

?

The primary differences -- best I can tell -- are:

Without an IoC container, every class ideally announces every dependency via its constructor. This can result in a lot of constructors requiring, e.g.: Loggers, which is, arguably, displeasing aesthetically. This also may not work smoothly with tools that want a no-arg constructor.
If your object graph changes, w/o the IoC container, you'd have to change constructors forcing changes to your wiring code before you could compile. With an IoC container, things can, but are not guaranteed, to adapt more magically. You may not be notified that your code is now broken until it fails in run-time.

It is not clear to me that these trade-offs arguing for using an IoC container.

SSIS != ETL

2009-08-14T16:09:00.000-07:00

I've started to use Microsoft Sql Server Integration Services @ work. On first impression, like many ms products: its purty.

The second impression is less favorable. An ETL tool has two by-definition requirements: The E-L, pulling data from some source(s) and pushing it to some target(s), and the T, meaningful transformations of the data.

SSIS does a service-able job at the E-L. Which is, by itself, no win. DTS, once upon a time also did, and SSIS leverages already existing Microsoft Technologies to do most of the work.

As far as the T goes, SSIS is, at best adequate. Relatively basic and common tasks are difficult even, if, more or less do-able.

The over-arching issue for SSIS is there is little reason to use it. As there are plenty of tools out there providing data transfer between heterogeneous sources, an ETL tool has to provide a reason to embed transformation logic in its platform instead of natively in database procedures, which, for me, SSIS, so far, fails to do:

A firm seeking database vendor independence wouldn't choose SQL Server Integration Services.
An ETL developer requiring drag and drop GUIs (and so, unable to code procedures) likely lacks the ability to handle reasonable complicated transformation logic.
SSIS does not, yet, provide useful few-click implementations of common ETL tasks. For example, while it has a SCD transformation, I've found it does not always behave as one, or at least I, would like. Or, more egregiously: the nightmare that is the pivot transformation.
Finally, the most frustrating to me is that, at the very least, I expect an ETL tool to give me robust logging and auditing reasonably free. If I write a stored procedure, I have to manually intermingle code capturing and loggic basic metadata (e.g.: How many rows were retrieved from a source, how many were inserted into the various destinations) with my transformation logic. An ETL tool can capture and log that behind the scenes. What makes SSIS' failure in this regard completely fustrating is that MicroSoft understands, exactly the sort of logging a real world project would desire and how clunky and intrusive it is to implement in SSIS.

I have not played yet with huge data sets, it is possible that SSIS offers some advantages over t-sql for those. The general defense of SSIS seems to go: It is a relatively new platform and all its limitations will be addressed as it matures.

As it exists, I suspect the best way to make it useful is to build some template packages, an internal (xml) package definition configuration file and dotnet code which programmatically builds packages, which entails an awfully high start up cost. In my current implementation I am limiting my use of SSIS, mostly, to its E-L ability, and, for the moment, as a stored procedure runner.

In the end, of course, it is unfair to hold to basically free SSIS to the bar set by far more expensive alternative tools.

Systemic Risk

2009-08-12T20:06:00.000-07:00

The WSJ reports that dems seek to regulate VCs out of fear that Hedge Funds might otherwise avoid the yoke of regulation by labelling themselves VCs. Hedge Funds, of course, must be regulated in the name of "Systemic Risk". As a stress tested matter of fact, they actually pose little such.

The most common notion of systemic risk is: the risks imposed by interdependencies in a system/market, where the failure of a single entity can bring down the entire system/market.

This is simply not true of most Hedge Funds. There have been many notable blow-ups with only one -- LTCM -- raising the spectre of systemic risk. And, as described in a previous post, in any reasonable frame, the systemic risk posed by the LTCM collapse had far more to do with reckless (despite being regulated) banks then the fund. In the current crisis, while Hedge Funds are hemorrhaging capital, only those owned by banks have received Government support.

As a software developer, I tend to see systemic risk, in the sense above, as one type of, for lack of a better term: "structural risk". By which I mean: bad architecture; A system designed, or structured, in such a way that it will more often than not produce bad outcomes.

To take an example from my undergrad EE, imagine a chain of Christmas lights designed such that if any one bulb died, all bulbs follow. Such a chain would not long last. Re-architecting the chain to decouple a bulb's life from its neighbor's would be a far more sensible strategy then adding intrusive and expansive monitoring and micro-control on top of the flawed design. Which, if you are following the analogy, is what financial regulators -- eschewing the simpler "too big to fail is too big" -- seem to have in mind.

Large public banks fundementally pose "Structural Risk" in that their behavior is dominated by agency costs. Public shareholders are almost guarranteed to be absent and incapable owners. Banks are not subject to meaningful market discipline (which would be a structural check on agency risk) both because (a) their biggest clients are large institutional investors (eg: pension funds) who themselves personify agency risk and FDIC insured account holders who, as such, are more concerned with cheap promotions then sound operation, and (b) being too big to fail they operate in the market with implicit Government guarrantees. Given this environment, large public banks can be expected to, more often then not, behave irresponsibly. This is not true of most Hedge Funds which tend to be managed by expert owners, with, historically, wealthy individual or family office clients and, of course, no Government backstop.

Which is all to say that, while it is reasonable to tightly regulate exceptionally large funds, funds owned by banks and funds who manage a meaningful amount of institutional money, there is little reason to regulate most funds. The push for unnecessarily expansive regulation is especially unseemly given the far weaker push for meaningfully re-designing regulation controlling those companies most directly responsible for the current mess -- Fannie Mae, Freddie Mac, the credit rating agencies, the large banks, etc -- all of whose behavior was strongly influenced by existing regulation.

A cynic might note that more regulated companies make better donors and are more responsive to the desires of government officials. Perhaps the ultimate structural risk is having racketeers at the top of the food chain.

She's Back

2009-08-09T05:16:00.000-07:00

Sarah Palin is back in the news declaring that ObamaCare is evil:

"The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama's 'death panel' so his bureaucrats can decide, based on a subjective judgment of their 'level of productivity in society,' whether they are worthy of health care," the former Republican vice presidential candidate wrote.

The AP reports this as a lie

The nonpartisan group FactCheck.org, a project of the Annenberg Public Policy Center at the University of Pennsylvania says the claim is false... Obama addressed the controversy during a July 28 AARP-sponsored town hall. "Nobody is going to be forcing you to make a set of decisions on end-of-life care based on some bureaucratic law in Washington," he said.

Fact Check actually goes farther in asserting the claim that this legislation "may place seniors in situations where they feel pressured to sign end of life directives they would not otherwise sign [which] may start us down a treacherous path toward government-encouraged euthanasia" is false:

We can’t argue with Boehner’s claim that counseling “may” cause more seniors to refuse treatment... but we see no evidence that it will. There’s certainly no requirement in the bill that seniors decline life support or extraordinary measures of medical treatment. Furthermore, seniors have had control over the end-of-life issues the Republicans are concerned about for a long time... As for the argument claiming that this is the first step on a slippery slope leading to government-encouraged euthanasia, that’s a stretch. The right to draw up an advance directive is federally guaranteed, but doctor-assisted suicide is legal in only three states. It would take a lot more than Medicare-funded counseling for voluntary euthanasia to become a standard government recommendation. The original author of this part of the legislation responded... saying that "nothing could be further from the truth."

FactCheck's "non-partisan" reasoning is exceptionally weak. The facts that there is no requirement that seniors decline care and that seniors have ultimate control over their care speak in no way to the question of whether seniors may be pressured by counselors to make decisions they would not otherwise make. Even the intent of the original author, we all well know, is subsumed by the plain meaning of the authored words. Their evidence that this would not be a step on a slippery slope has even less to do with price of tea in china. In other words, Fact Check has a different basis for its conclusions than the available evidence.

In the long term, Boehner and Palin's claims are almost certainly true and Obama's FactCheck claim false. The key fiscal motivation for health care reform is spiraling medicare costs. End of life care is a major cost contributer: ~30% in the last year and 15% in the last 60 days. Bending the curve, then, requires meaningfully reigning in end-of-life care. Under the current rules, where seniors have, more or less, control over their care, this demands convincing them to refuse expensive treatment they would have otherwise opted for. Should persuasion fail to produce the required savings, some form of rationing can reasonably be expected.

I suspect that the most just means of rationing care -- end of life or other -- and the one -- I fear -- least likely to be adopted by the current administration, is to ensure that price signals are exposed to patients. If subsidized patients were required to pay a meaningful (as determined by individual financial situation) portion of the cost of their treatments, individuals could make personal choices in the context of their own values while, in aggregate, producing a result that best reflected the values of society.

Opposite Marriage

2009-08-08T19:32:00.000-07:00

I've always thought it impossible to rationally oppose state certification of gay marriages. If two people are determined to pay extra taxes, well why not?

Conservatives are on stronger ground when they make it a question of process rather than outcome. There are good reasons to prefer state certification of gay marriage as the legislated product of a democratic process rather than imposed by judicial fiat (even if I suspect that that is what judges today looking only to law and precedent and ignoring political implication would do).

In a WSJ op-ed Princeton University Law Professor Robert George, takes his stab at arguing against same marriage, and, at first blush, succeeds in not looking the fool:

... [The state's interest in regulating marriage is] to make it more likely that, wherever possible, children are reared in the context of the bond between the parents whose sexual union gave them life. If marriage is redefined, its connection to organic bodily union—and thus to procreation—will be undermined. It will increasingly be understood as an emotional union for the sake of adult satisfaction that is served by mutually agreeable sexual play. But there is no reason that primarily emotional unions like friendships should be... legally regulated at all.

The most apparent weaknesses in his argument: We take for granted -- but it might not be the case -- that children are best reared in that context. Also the notion that Government regulation ought be limited to where it has a strong reason is not, unfortunately, shared by all Americans.

And, most fundementally, it would seem an awfully narrow view that limits the social value of opposite marriage to creating a context for rearing children.

Freedom Highway

2009-08-03T19:55:00.000-07:00

I've been watching the wonderful The Clearwater Concert in celebration of Pete Seeger's 90th birthday party on PBS.

Springsteen anchored the show:

And then came Bruce. As the last artist of the night, Springsteen had the lengthiest remarks, with a speech that was an appreciation of Pete's place in history... Bruce spoke of ... Seeger as "the stealth dagger through the heart of our country's illusions about itself." ... and he described preparing for their duet on "This Land is Your Land" at the Inauguration, when Pete said: "I know I want to sing all the verses—all the ones that Woody wrote, even the two that usually get left out." Bruce summed up: "He sings all the verses, all the time—especially the ones we'd like to leave out of our history as a people."

What is good for the goose is, as always, not for the gander: While Michael Franti and Patterson Hood did cover Dear Mr President, no one was impolite enough to mention Songs for John Doe

Clunky Math

2009-07-31T15:42:00.000-07:00

According to a CBS 2 article posted by Drudge:

With almost 23,000 deals already processed and tens of thousands more in the pipeline, it's possible the $1 billion allocated for the program might have already run out.

The back of my napkin looks like this: Assuming 30,000 deals at $5,0000 a pop and you have spent $1.5 million in a week. Assume that rate constant and you have 6 and a half weeks or so until you exhaust the $1 Billion allocated. I would suspect, in reality, the rate would decay and the program could safely stretch for two months. Unless, of course, administrative costs dramatically exceed the 25% I factored in on top of the $3.5-$4.5K received by consumers, or the money allocated is going elsewhere.

Or, and this may be most likely, the administration is pursuing a cabbage-patch strategy to generate positive -- for both program and government -- publicity.

The other back of my napkin looks like this: There were 1M vehicles sold in June. Sales for July are expected to be up 10% meaning an extra 100K. Less than 3% of total auto-buyers in July took advantage of the program. (Even though the program was not available till the end of July, it was passed end of June, so rational buyers interested in the program would have delayed their purchases until it began.) My initial gut was that this number was low until my wife pointed out that $3500 is not a ton for a used car in reasonable shape.

What this, to me, means is that a good chunk of Cash For Clunkers participants would likely have a bought a new car this year in any event. If 2/3s of the participants would not have otherwise purchased a car then 70% of the projected July over June increase is due to other factors, 10% represent sales cannibalized from future months and the remaining 20% is what we have to show for a 1.5M - 1B dollars of government spending.

Your Momma Outside

2009-07-26T09:30:00.000-07:00

Reading the police report, the Gates arrest appears far more about class than race. Gates, himself, made this clear by invoking his status -- "You don’t know who you’re messing with" -- and authority -- "get the chief". Its fair to say that a person of any race who laced into a police officer the way Gates apparently did, would have been similarly arrested, but that only someone of Gates' status would have had the charges quickly dissmissed.

Reading Stanley Fish's column which testifies to Gate's personal history of being subject to racism, overt and subtle, helps to understand how Gates might have been predisposed to mispercieve racism in this instance, and, as such, how he is, in some way, a genuine victim here, and not simply a clown, or worse, a class bully on a power-trip.

That said, Mr Gates is not just any longstanding victim of racism. He is, or at least is advertised as, one of America's foremost authorities on race. As such, he, more than others, ought have been able to differentiate genuine racism and the soft everyday injustices -- a man who committed no crime being arrested in his home for arguing with a Police Officer -- that Americans of all races have learnt to live with.

There are, in other words, things that a black man is subject to in America because he is black, there are things he is subject to because he is a man, and there are thing he is subject to because he is in America. It is disappointing that our national experts on race appear unable to understand these distinctions and that "having a police officer visit your home when you have been seen breaking in" and "being arrested for verbally assaulting a Police Officer" are clearly in the latter category.

European Sophistication

2009-07-25T21:13:00.001-07:00

One note from my trip to Europe. I found it interesting that behavior that here is taken as evidence of European sophistication are, there, simple nessecity.

For example, bottled water. In America, where running water is mostly drinkable, drinking European bottled water is a sign of sophistication. In Europe, where the running water is generally not drinkable, it is a practical necessity.

Similarly, transport via small cars and bicycles. Here, where streets have been built for cars, they are a symbol of energy-, or environmental-, consciousness. In Europe, the streets, often built hundreds of years ago for narrower transport, ill fit cars, driving small cars or bicycles is a practical necessity.

Snippet

2009-07-25T20:59:00.000-07:00

The following snippet from the Sotomayor confirmation hearings deserves mention.

GRAHAM: When it comes to civilian criminal law, do you know of any concept in civilian law that would allow someone be held in criminal law indefinitely without trial? SOTOMAYOR: When you're talking about civilian criminal law, you're talking about... GRAHAM: Domestic criminal law. SOTOMAYOR: Domestic criminal prosecutions. GRAHAM: Right. SOTOMAYOR: After conviction, defendants are often sentenced... GRAHAM: I'm talking about you're held in jail without a trial.

There are many easy excuses to make for Sotomayor's apparent ignorance of the legal fact that "conviction" comes after a "trial". Confirmation hearings are long and exhausting, she was obviously only trying (as she did the entire hearing) to obfuscate, and so forth. That said, one would be hard-pressed to review the transcripts of previous Supreme Court nominees and find something similarly embarrassing.

Fustrations

2009-07-21T19:36:00.000-07:00

Not that there was much at stake, but the Democrats apparently won the Sotomayor confirmation hearings.

The GOP effort felt lacking sufficient discipline or strategy. To my slanted ears, the sharpest questions came from Senator Hatch in the guise of "questions from constituents". The questions fashioned by the Senators and their crack staffs underwhelmed.

The nominee did present an inviting target. She was awkwardly over-rehearsed. Many of her answers brought to mind the Bing commercial as she offered repeated scripted responses to keywords whether or not they fit the question. In my petty heart I wish that a GOP Senator had called her on her cartoonish slow-talking. I think the politics would have supported making an issue of her -- I am pretty sure -- unprecendented, for a Supreme Court nominee, number of answers hid behind "I don't know" and "I can't recall" and "That wasn't my area of expertise". What does well qualified mean in the face of that sort of demonstrated (or was it put-on?) ignorance?

In as much as Sotomayor chose to play the role of Judicial conservative, Republicans may have been well advised to prod her less, and use her to poke Democrats more. Sen Kyl prompting Sotomayor's dismissal of the President's judicial philosophy was a coup. I wish they had pulled off a like moment more explicitly exposing the Democrats Sunstein-derived identification of Judicial Review as Judicial Activism.

The one exchange that really let me down, was following Sen Coburn asking the sensible question "How did we get to the point where something that's spelled out in our Constitution and guaranteed to us ['is not settled law and settled fixed'], but something that isn't spelled out specifically in our Constitution is?", Sotomayor answered:

One of the frustrations with judges and their decisions by citizens is that... what we do is different than the conversation that the public has about what it wants the law to do. We don't, judges, make law. What we do is, we get a particular set of facts presented to us. We look at what those facts are... and then look at the Constitution, and see what it says, and attempt to take its words and its -- the principles and the precedents that have described those principles, and apply them to the facts before you.

Coburn, dropping the ball, responded, simply, "Thank you." A smarter, or at least more you-tube-worthy, response would have forcefully articulated that the Constitution belongs to the American people, not a narrow class of elite judges and that a gap between how the American people understand their Constitution and how judges interpret it, reflects not -- as Sotomayor would have it -- ignorance on the part of the people, but arrogance on the part of judges.

Or, failing that, he could have at least pushed her to back away a little from her assertion that precedent innocently describes constitutional "principles" towards acknowledging the plain reality that the way we got to this point was that some Judges simply made law which is now sanctified as precedent. And judges who rule based on such precedent are, if not making law themselves, blessing the principle of Judicially fabricated law.

In related news, the President subtly re-iterated his desire to hide behind the Supreme Court's skirt on gay marriage.

Swine Flu

2009-07-17T06:18:00.000-07:00

It is easily explainable -- if you live in a large city you are more likely to be exposed to both human-transmitted disease and Democrats -- but mildly amusing that the CDC's swine flu map closely resembles the Red-Blue maps.

The published to-date US fatality rate is 0.57% with high state-by-state variance (stdev of 0.52%). On the high end New York has a 2% mortality rate, Wisconsin with far more cases has a 0.07% rate. This divergence could reflect factors like differing virus strains, demographics and, perhaps, the method for counting cases (perhaps people in New York are less likely to get diagnosed than people in Wisconsin).

According to published reports, British Health planners are expecting a much lower mortality rate, expecting it to range from 0.1% to 0.36%. They expect between 19,000 and 65,000 deaths assuming 30% of the population of 61 million fall ill.

One strong argument in favor of a nationalized medical regime is the potential for more organized data collection and more data-driven medical decision making. Unfortunately, in Britain, at least, that potential is unfulfilled:

The CMO needs to remedy data deficiences over swine flu What is the death rate from HINI flu likely to be? ...it is vital to know as accurately as we can how many are likely to die of it. But it’s no good asking the Chief Medical Officer, Sir Liam Donaldson. Radio 4’s Today programme tried doing that this morning, and was fobbed off with a series of claims about how difficult it was to make such a forecast, and how wide was the area of uncertainty... Sir Liam would have been better employed remedying the deficiencies in the UK data that are the basis of the uncertainty. Why, for example, did the capable Imperial College team have to rely on data from the US Centers for Disease Control, rather than the UK’s Health Protection Agency? ... The only way to get a grip on what is happening with H1N1 is to use statistical science properly, not to mock its uncertainties in radio interviews. If statistical science does not underpin the Government’s estimate of 100,000 H1N1 cases per day by the end of August 2009, what does? ... If statistical science does not underlie the UK’s planned locations for 500 Tamiflu collection points, what does? ... (Conflict of interest: Sheila Bird serves on UK’s Scientific Pandemic Influenza Advisory Committee, which has not met since swine flu reached the UK.)