Month: August 2007

In Which I Disagree With Brad Delong

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Brad Delong quotes Lawrence Summers, who asks “Why Haven’t the Conforming Mortgage Cap Amounts Been Raised?”, and Mr. Delong further says, “These are wise questions. I don’t understand why the conforming mortgage dollar caps have not already been raised substantially.”

Let’s be clear here. They are probably both smarter than I am. They definitely both have far more training in economics.

That being said, I think that, in a world where economic policy is run by sane competent men*, that any sort of recovery should answer some questions first:

  • Who is the target of the bailout. I would argue that distressed homeowners are the target, in which case it’s necessary to derive a targeted solution which maximizes the homeowners relief, and minimizes the amoung to which we indemnify the investors, loan companies, etc. Capitalism must allow for failure to be capitalism.
  • What regulatory changes must be made in order to prevent this from recurring, seeing as how any bailout increases the belief in further bailouts, and hence destructive risk taking. I think that much of this problem has its roots in the deregulation from the late 1970s through to the present day, so I recommend re-adoption of New Deal era regulations.

In terms of what I would suggest for initial steps:

  • An aggressive push to allow borrowers to negate loans due to violations of the truth in lending act, which allows buyers to rescind the loans and void the mortgages. (they still owe the money, but it becomes an unsecured loan, and the debtors have far more rights in terms or restructuring in bankruptcy).
  • A law invalidating all pre-payment penalties.
  • Reregulation of the lending industries to prevent further abuses.

*Yes, I know, that’s not the case right as long as Bush is in office.

D’Oh!!!!! Remember Homer Simpson is a Cartoon!

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And here we have a future Darwin award winner. The 14 year old who had overheating problems with his XBox*, and decided to cool it in a bowl of water.

He did survive, but was taken to the hospital with burns.

I might suggest that this kid not be given another video game console, and that perhaps he be sent outside to play.

*This is not a unique problem. The XBox has a reputation for thermal problems.

Scat Stealth Drone

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The Russians have unveiled a new stealthy combat UAV at the Moscow air show.

As I’ve said a number of times, the building blocks of stealth are publicly available, the equations were originally published in a Soviet scientific journal and are publicly available, so this is no surprise.


This appears to be mockups of various wind tunnel studies, and it also appears that the first prototype will be manned with a v tail.



Iraq War Brings Drop in Black Enlistees – New York Times

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There is an interesting article in the NY Times regarding precipitous drop in Black enlistment in the military.

The sharpest decline in black recruitment has been experienced by the Army, which has the most troops deployed in Iraq; black recruits dropped to 13 percent of the Army’s total in 2006 from 23 percent in 2001. In the Marines, with the second-largest force in Iraq, the share of black recruits decreased to 8 percent from 12 percent in the same period. There were also declines in the Navy and the Air Force, though not as great as those in the two other services.

To provide some perspective, note that Blacks are about 13% of the US population.

As a traditionally economically disadvantaged community, it should be noted that Blacks are traditionally more likely to enlist, as doing so is perceived as a way out of poverty and America’s profoundly dysfunctional ghettos.

“I’m not really into going overseas with guns and fighting other people’s wars,” said Mr. Finch, 18, headed to college this fall to study accounting.

While the fact that we are mired in a senseless quagmire in Iraq, this quote highlights another aspect of the drop, that many Blacks feel divorced from the US Government, and in particular George W. Bush, with whom the Iraq war is closely associated.

Additionally, it should be noted that one of the reasons that Black ghetto youth joined the military was to get away from gang activity in their neighborhoods, and because of the lowered recruiting standards, gang members, and gang culture, have increasingly entered the military.

Our military is being destroyed, and in a much more profound and long lasting way, by our fools errand in Mesopotamia.

George Orwell is Spinning in His Grave….Again

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Because the public access policy of the NHTSA certainly appears to be implementing what Orwell warned against.

Under the new access policy, no one is allowed to speak for attribution to the press under almost any circumstances. They have to get advance permission for the most routine things. This means that the press office cannot tell a member of the press who the director of the HTTSA is:

If you want to know something as simple as who heads the National Highway Traffic Safety Administration, don’t bother to ask the safety agency’s communications office. Without special permission, officials there are no longer allowed to provide information to reporters except on a background basis, which means it cannot be attributed to a spokesman.

Without such attribution, there are few circumstances under which most reporters will report such information. This makes for interesting dealings with the office charged with providing information about the nation’s top automotive safety agency.

So, I will end the suspense about the boss’s identity. The administrator is Nicole R. Nason, who took over on May 31, 2006, after she was appointed to the post by President Bush.

And it is she who put the big hush on one of the government’s most important safety agencies.

…

H/t to the Carpetbagger Report

The First Serious Republican to Call for a Pullout Wins Iowa

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Strategic Vision Polled voters on a number of issues, including Iraq, and the results are interestting, particularly question 4.

4. Do you favor a withdrawal of all United States military from Iraq within the next six months? (Republicans Only)
Yes 51%
No 39%
Undecided 10%

Given those numbers, and given the number of candidates who are running, the highest in the polls gets barely 30%, the first credible* Republican candidate to call for a pullout wins Iraw.

*Credible means not a racist libertarian nutjob like Ron Paul.

This is bad…This VERY VERY Bad.

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The Federal Reserve is allowing CitiGroup and Bank of America to make massive transfers to their brokerage sides.

Jesus H. Christ on Toast!!! Doesn’t anyone remember what happened during the depression???? It’s why, until the mid 1990s, banks were forbidden to own brokerage houses.

This unusual move by the Fed shows that the largest Wall Street firms are continuing to have problems funding operations during the current market difficulties, according to banking industry skeptics. The Fed’s move appears to support the view that even the biggest brokerages have been caught off guard by the credit crunch and don’t have financing to deal with the resulting dislocation in the markets. The opposing, less negative view is that the Fed has taken this step merely to increase the speed with which the funds recently borrowed at the Fed’s discount window can flow through to the bond markets, where the mortgage mess has caused a drying up of liquidity.

These rules are not for good times, they are for times like now. They are there to prevent the financial system from going down the drain as good money follows bad.

Helicopter Ben has made a very bad move.

Deep Thought

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

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

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

Abusive Patent Practices

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Well, it looks like everyone’s favorite patent troll, Rambus is about to get spanked by the EU.

The European Commission has confirmed formal “patent ambush” charges against US memory chip designer Rambus.

…..

It said that “Rambus engaged in intentional deceptive conduct in the context of the standard-setting process, for example by not disclosing the existence of the patents which it later claimed were relevant to the adopted standard.”

…..

The FTC found that Rambus had through subterfuge, illegally gained a monopoly in four key memory technologies.

The gist of all this is that Rambus had an idea, a patentable idea, about how to improve memory performance.

It wasn’t a bad idea, but it wasn’t better than any of the other ideas out there either.

However, when the JEDEC was drawing up standards for the next generation of memory, Rambus, which participated in this board, deliberately, and deceptively kept the information that they had this IP, and that people who signed off on this standard would have to pay them royalties in order to use it.

Had Rambus revealed the status of their IP during the development of this standard, as required by law, the standard would have been drawn up in a way so as not to require their technology.

Personally, I think that people should go RICO on their butts, definately to the extent of putting them out of business, and hopefully to the extent of bankrupting principals in this scheme and sending them to jail.

In Which the Neocons Reveal what they REALLY Want

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A number of blogs have come across an article by noted Neocon Philip Atkinson on a prominent Neocon web site which called for nuclear genocide in Iraq, and a military coup to make GW Bush president for life.

I can think of no way of illustrating how un-American, angry, and plain bat$%#@ crazy these guys are than by printing his article in full:

Exclusive: Conquering the Drawbacks of Democracy
Philip Atkinson

Author: Philip Atkinson
Source: The Family Security Foundation, Inc.
Date: August 3, 2007

While democratic government is better than dictatorships and theocracies, it has its pitfalls. FSM Contributing Editor Philip Atkinson describes some of the difficulties facing President Bush today.


Conquering the Drawbacks of Democracy
By Philip Atkinson

President George W. Bush is the 43rd President of the United States. He was sworn in for a second term on January 20, 2005 after being chosen by the majority of citizens in America to be president.

Yet in 2007 he is generally despised, with many citizens of Western civilization expressing contempt for his person and his policies, sentiments which now abound on the Internet. This rage at President Bush is an inevitable result of the system of government demanded by the people, which is Democracy.

The inadequacy of Democracy, rule by the majority, is undeniable, for it demands adopting ideas because they are popular, rather than because they are wise. This means that any man chosen to act as an agent of the people is placed in an invidious position: if he commits folly because it is popular, then he will be held responsible for the inevitable result. If he refuses to commit folly, then he will be detested by most citizens because he is frustrating their demands.

When faced with the possible threat that the Iraqis might be amassing terrible weapons that could be used to slay millions of citizens of Western Civilization, President Bush took the only action prudence demanded and the electorate allowed: he conquered Iraq with an army.

This dangerous and expensive act did destroy the Iraqi regime, but left an American army without any clear purpose in a hostile country and subject to attack. If the Army merely returns to its home, then the threat it ended would simply return.

The wisest course would have been for President Bush to use his nuclear weapons to slaughter Iraqis until they complied with his demands, or until they were all dead. Then there would be little risk or expense and no American army would be left exposed. But if he did this, his cowardly electorate would have instantly ended his term of office, if not his freedom or his life.

The simple truth that modern weapons now mean a nation must practice genocide or commit suicide. Israel provides the perfect example. If the Israelis do not raze Iran, the Iranians will fulfill their boast and wipe Israel off the face of the earth. Yet Israel is not popular, and so is denied permission to defend itself. In the same vein, President Bush cannot do what is necessary for the survival of Americans. He cannot use the nation’s powerful weapons. All he can do is try and discover a result that will be popular with Americans.

As there appears to be no sensible result of the invasion of Iraq that will be popular with his countrymen other than retreat, President Bush is reviled; he has become another victim of Democracy.

By elevating popular fancy over truth, Democracy is clearly an enemy of not just truth, but duty and justice, which makes it the worst form of government. President Bush must overcome not just the situation in Iraq, but democratic government.

However, President Bush has a valuable historical example that he could choose to follow.

When the ancient Roman general Julius Caesar was struggling to conquer ancient Gaul, he not only had to defeat the Gauls, but he also had to defeat his political enemies in Rome who would destroy him the moment his tenure as consul (president) ended.

Caesar pacified Gaul by mass slaughter; he then used his successful army to crush all political opposition at home and establish himself as permanent ruler of ancient Rome. This brilliant action not only ended the personal threat to Caesar, but ended the civil chaos that was threatening anarchy in ancient Rome, thus marking the start of the ancient Roman Empire that gave peace and prosperity to the known world.

If President Bush copied Julius Caesar by ordering his army to empty Iraq of Arabs and repopulate the country with Americans, he would achieve immediate results: popularity with his military; enrichment of America by converting an Arabian Iraq into an American Iraq (therefore turning it from a liability to an asset); and boost American prestiege while terrifying American enemies.

He could then follow Caesar’s example and use his newfound popularity with the military to wield military power to become the first permanent president of America, and end the civil chaos caused by the continually squabbling Congress and the out-of-control Supreme Court.

President Bush can fail in his duty to himself, his country, and his God, by becoming ex-president Bush or he can become President-for-Life Bush: the conqueror of Iraq, who brings sense to the Congress and sanity to the Supreme Court. Then who would be able to stop Bush from emulating Augustus Caesar and becoming ruler of the world? For only an America united under one ruler has the power to save humanity from the threat of a new Dark Age wrought by terrorists armed with nuclear weapons.

OH MY GOD! We Must Stop Bush and His Evil Minions™ NOW!!!!

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Marty Kaplan of the Huffington Post is right. This is all about the Bush and His Evil Minions™ attempting to revisit, and relitigate, the 1970s.

There’s no longer any doubt about the master narrative of the Bush Administration. Their purpose is to re-litigate the 1970s. Nixon’s downfall, let alone all that followed, clearly has stuck in Cheney’s craw. All his New American Centurions were so scarred by the fall of Saigon and the Church Committee reforms that even Morning in the Gipper’s America didn’t do enough to restore the imperial executive and the American imperium. So now we watch as FISA and FOIA are dismantled, checks and balances are declared Congressional overreaching, and the bully pulpit is being used like Stalin’s commissars used scissors and a paste-pot to purge and doctor the historical record.

So what’s next? No doubt some reactionaries are drooling to undo Nixon’s putting the coffin-nail in the gold standard. Perhaps others want to retake the Panama Canal which, after all, we stole fair and square. The Supreme Court’s already doing a decent job rolling back civil rights and civil liberties from the 60s; surely overturning Buckley v Valleo’s campaign contribution limits is next in line.

I’m putting my money on an attempt by GOP culture warriors to expunge disco from the national memory. Don’t you have a feeling that this crowd is still in a world o’ hurt from humiliations they suffered beneath a twirling mirrored ball yea many generations ago?

He’s wrong, and they must be stopped. They will be trying to bring disco back.

The horror….the horror….

The Biggest Threat to US and Israeli Security, Revisited

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Here’s another story on the disastrous nuclear deal that the Bush administration has cut with India.

Money quote:

India’s leftist parties object strongly to the accord. They say it undermines the country’s sovereignty and its right to conduct nuclear tests. They insist the government stall negotiations, scheduled with the International Atomic Energy Agency and others, until their objections are met.

So, what are the consequences of this deal?

  • India’s nuclear weapons program at best continues at the current pace.
    • Most likely scenario: this frees up resources from civilian nuclear power to go into the weapons program.
    • Almost as likely scenario: Civilian resources are hijacked to serve the military program.
  • Pakistan accelerates its nuclear program in response.
    • Pakistan’s state security apparatus is thoroughly infiltrated by Islamists and supporters of the Taliban.
    • Pakistan is very close to a failed stated, with the northern areas not under governmental control, a ruler installed by coup, civil society opposing the current government, and a large segment of the population supporting a Wahabi theocracy.
    • In the event of an Islamist takeover, it is likely that nuclear materials will be under the control of Islamists, who would seriously consider using them against the US and Israel.

This is quite literally a bigger blunder than invading Iraq.

The New Republic is Done…Put a Fork in It.

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There was an interesting post in Gawker about how the most recent issue of “The New Republic” was nearly ad free.

All that subscriptions pay for is ink on paper and postage, and generally, not even that. The money in newspapers and magazines in the ad revenue.

The fact is that TNR has been a weapon against liberals since Marty Peretz took it over. You hear it over, and over, and over again from Conservatives, “Even the liberal New Republic…..”

There will be a part of me that will be sad, because for its first 60 years it was a decent magazine, but since it’s become a welfare program for plagiarists (Ruth Shalit), fabulists (Stephen Glass), sock puppets* (Lee Siegel), and enthusiastic endorsement of poorly researched racist agitprop (Andrew Sullivan).

When you consider the contributors before it Peretz, John Dewey, W. E. B. DuBois, Walter Lippmann, George Orwell, Virginia Woolf, Hannah Arendt, Philip Roth, etc., it’s a bit of a pity that it will likely go away, and a bigger pity that Marty pissed all that down the drain.

*Full disclosure, I’ve sock puppeted. I acknowledge that this means that I have no personal credibility. Confirm what I write by going to the links I cite, and reviewing my arguments. Seriously. FWIW, I’ll try not to sock puppet in my own comments section. I haven’t yet.

Seriously, if I say the sky is blue, go check the Weather Channel to confirm this.