Tuesday, March 31, 2009

Why Did Bodidharma Go To China?

Tyler Cowen wonders why Obama fired Rick Wagoner, and offers a pair of tendentious theories:

Theory 1: President Obama replaced Wagoner with Fritz Henderson as CEO of General Motors because he is convinced that Henderson will be a better corporate leader.

Theory 2: President Obama replaced Wagoner with Fritz Henderson as CEO because the A.I.G. public relations debacle taught him not to appear "soft" with corporate leaders receiving government money.

Which theory do you vote for? Which principles do you think should be governing the disposition of leadership in major U.S. corporations?

There are more things in heaven and earth, Professor Cowen, Than are dreamt of in your philosophy. The principal reason for firing someone ought to be failure to carry out their duties. Wagoner had come to the country, asking to be bailed out with taxpayer dollars. The government gave him some money (many billions!) on the condition that he come up with a plan to restructure GM that would return it to profitability. He failed, either by clinging to unrealistic hopes, lack of imagination, of by simply hoping to take the taxpayers for a ride. That's why he was fired.

The other reason was to send a message to all those others seeking federal bailouts. Sometimes you need to hang an Admiral every now and then, just to encourage the others. Obama needed to demonstrate that those who got the bucks would be held to account. This is less a political decision than a matter of leadership.

Monday, March 30, 2009

More Dyson and Climate

John of Cosmic Variance posts on Freeman Dyson and climate, and he even got to talk to Dyson in person recently. His believes in AGW, sorta believes the models, and thinks that the consequences might be pretty bad, at least for some (though I think his central valley home is safe from sea level rise for a few generations, at least). He also thinks that the chances for successful action to prevent it are remote. Sean naturally disagrees, and a very slightly disguised (because banned) Lubosh agrees.

My own thinking is pretty similar. I don't see the political will anywhere to take serious action against carbon emissions, especially in the three countries that matter most - China, India, and the US. Nor do I see any clear technological path from here to there - but I would be happy to be persuaded if anyone sees one.

All we need to give up is eating meat, driving cars, suburbs, electrical and electronic devices, having children, and travel. Either that, or find the magic energy beans somewhere. What are the odds?

The US has the best chance of really doing something, because we use so much energy, need to free ourselves from foreign source of energy, and could really use the money an energy tax would bring in. We should try it. Who knows, maybe the magic energy beans are hiding out there.

Sunday, March 29, 2009

Defending Geithner

I caught the Timolator on ABC's This Week, and he did a pretty good job of defending himself and the administration. I certainly wish the guy asking the questions had been Paul Krugman instead of George S., but oh well.

Meanwhile, Brad Delong weighs in with a good defense: Tim Geithner Is Not a Tool of Wall Street (Brad DeLong quoting Ed Luce quoting Brad DeLong)

Nor, says Mr DeLong, is it fair to paint Mr Geithner as a creature of Wall Street. “Hank Paulson is a man who grew up in American finance and cannot imagine a world in which America does well and its financial sector does badly,” he says. “Tim Geithner, by contrast, is a bureaucrat and a policymaker. He has never pulled down a multibillion-dollar bonus. They are not the same type of people.”

He meant multi-million dollar bonus.

It's certainly fair to claim that Tim G. is not a creature of Wall Street like Paulson, Corzine, or Bob Rubin, but he has spent a lot of time working in its neighborhood.

Geithner did make the case that the appropriate laws to deal with AIG were not on the books (and still aren't). The blame for that is shared by Bush, Paulson, Bernanke, Greenspan (the economic Godfather of deregulated finance) and Congress, Congress, and, oh yeah, Congress.

Saturday, March 28, 2009

Dyson: Thinking Man's Skeptic

Nicholas Dawidoff has written a long profile of Freeman Dyson in the New York Times magazine. The profile takes a broad look at his life but focuses on his skepticism about the threat of global warming. So far as I can tell, he doesn't doubt the greenhouse effect, or the fact of global warming, but mostly doubts that it is worth much trouble to prevent global warming. In particular, he thinks that James Hansen and colleagues pay too much attention to their models, and mistake them for reality.

It’s a nice piece, even if it tells the famous Feynman/Dyson bordello sink story in the lamest fashion possible.

Dyson made his reputation sixty years ago with his work on the foundations of quantum electrodynamics, showing, among other things, that the rather different appearing approaches of Feynman, Schwinger, and Tomonaga were equivalent. At that point, he already had a slot at the institute for advanced study, and he didn't even bother with the formalities of collecting his PhD.

He also retreated from fundamental physics, perhaps from a congenital tendency to dabble or maybe because he realized that he could not compete with Feynman and Schwinger.

The occasion of current attention is mainly Dyson's role as the thinking man's AGW skeptic. He is neither idiot, fanatic, or a scoundrel. It would be nice if his type were more common.

Climate models, he says, take into account atmospheric motion and water levels but have no feeling for the chemistry and biology of sky, soil and trees. “The biologists have essentially been pushed aside,” he continues. “Al Gore’s just an opportunist. The person who is really responsible for this overestimate of global warming is Jim Hansen. He consistently exaggerates all the dangers.”

One can doubt the fairness of these remarks. Climate models don't include plants or soils or soils or the nuclear dynamics of our local star, but it makes sense to consider these things in models decoupled from the global climate models. That kind of analysis is what science does. There are a lot of biologists working at determining the effects of climate change on plants and soils. The feedback in the other direction should not be neglected, but it is very likely to be a very slow process.

Hansen is the John the Baptist or maybe the Cassandra of global warming. John the Baptist doesn't say "The Messiah might be coming." Cassandra doesn't say "umm, maybe we should think about this Greeks bearing gifts thingy." And Hansen doesn't have much patience for Dyson's version of "maybe that horse might look good in the park."

More interestingtly, Dyson thinks that there are a number of things we can do to suck CO2 out of the atmosphere. His principal suggestions in this regard are to make more topsoil and to plant a whole lot of trees. These are not crazy ideas, since trees are mostly carbon and water and topsoil too packs a lot of carbon.

If more skeptics were like Dyson, I would probably be one of them.

Dyson is a big believer in technological possibility - he has imagined, for example, a rocket propelled by nuclear explosions and civilizations that capture the entire energy output of a galaxy. He thinks that if too much CO2 turns out to be a problem, that it shouldn't be too hard to fix.

Eventually Dyson published a paper titled “Can We Control the Carbon Dioxide in the Atmosphere?” His answer was yes, and he added that any emergency could be temporarily thwarted with a “carbon bank” of “fast-growing trees.” He calculated how many trees it would take to remove all carbon from the atmosphere. The number, he says, was a trillion, which was “in principle quite feasible.” Dyson says the paper is “what I’d like people to judge me by. I still think everything it says is true.”
Eventually he would embrace another idea: the notorious carbon-eating trees, which would be genetically engineered to absorb more carbon than normal trees. Of them, he admits: “I suppose it sounds like science fiction. Genetic engineering is politically unpopular in the moment.”

The core of Dyson’s objection is to the cure people like Hansen, Gore and most others want to impose.

For Hansen, the dark agent of the looming environmental apocalypse is carbon dioxide contained in coal smoke. Coal, he has written, “is the single greatest threat to civilization and all life on our planet.” Hansen has referred to railroad cars transporting coal as “death trains.” Dyson, on the other hand, told me in conversations and e-mail messages that “Jim Hansen’s crusade against coal overstates the harm carbon dioxide can do.” Dyson well remembers the lethal black London coal fog of his youth when, after a day of visiting the city, he would return to his hometown of Winchester with his white shirt collar turned black. Coal, Dyson says, contains “real pollutants” like soot, sulphur and nitrogen oxides, “really nasty stuff that makes people sick and looks ugly.” These are “rightly considered a moral evil,” he says, but they “can be reduced to low levels by scrubbers at an affordable cost.” He says Hansen “exploits” the toxic elements of burning coal as a way of condemning the carbon dioxide it releases, “which cannot be reduced at an affordable cost, but does not do any substantial harm.”…

[Dyson] has great affection for coal and for one big reason: It is so inexpensive that most of the world can afford it. “There’s a lot of truth to the statement Greens are people who never had to worry about their grocery bills,” he says. (“Many of these people are my friends,” he will also tell you.) To Dyson, “the move of the populations of China and India from poverty to middle-class prosperity should be the great historic achievement of the century. Without coal it cannot happen.” That said, Dyson sees coal as the interim kindling of progress. In “roughly 50 years,” he predicts, solar energy will become cheap and abundant, and “there are many good reasons for preferring it to coal.”

Dyson is a famous numbers man, so it’s a bit scary to try to argue numbers with him. He is convinced that trying to move quickly beyond coal would be too costly, but do his numbers for his own ideas make sense?

Eventually Dyson published a paper titled “Can We Control the Carbon Dioxide in the Atmosphere?” His answer was yes, and he added that any emergency could be temporarily thwarted with a “carbon bank” of “fast-growing trees.” He calculated how many trees it would take to remove all carbon from the atmosphere. The number, he says, was a trillion, which was “in principle quite feasible.” Dyson says the paper is “what I’d like people to judge me by. I still think everything it says is true.”
Eventually he would embrace another idea: the notorious carbon-eating trees, which would be genetically engineered to absorb more carbon than normal trees. Of them, he admits: “I suppose it sounds like science fiction. Genetic engineering is politically unpopular in the moment.”

So can an idea like this make sense? Trees are mostly carbon and water, so that part makes sense. For a trillion trees to do the job, they would have to be fairly big ones –several tons apiece. A ninety foot tall Douglas Fir is only about half a ton. A trillion trees is also a lot – nearly three times as many as the world currently has. Where do you put them? Using agricultural land would be catastrophic for world food supplies. If elsewhere, where do you get the fertilizer and water? There is a limit to the World’s primary biological production, and turning a few teratons of CO2 into tree and soil would suck up an awful lot of it.

In one respect Dyson probably has more in common with Hansen and the anti-global warming crusaders than with his conservative fellow skeptics:

Humans, he says, have a duty to restructure nature for their survival.

I strongly recommend Nicolas Dawidoff’s profile of Dyson.

Wednesday, March 25, 2009

More G & T

It's fun to see how bad bad writing can be,
this promised to go to the limit.
...................Joe Gillis in Sunset Boulevard

There is a certain awful fascination to reading Gerlich and Tscheuschner. One hundred fifteen pages of incoherent nonesense. An example from their attempts to disprove greenhouse effect claims:

In his popular textbook on meteorology Moller claims:
In a real glass house (with no additional heating, i.e. no greenhouse) the window panes are transparent to sunshine, but opaque to terrestrial radiation. The heat exchange must take place through heat conduction within the glass, which requires
a certain temperature gradient. Then the colder boundary surface of the window pane can emit heat. In case of the atmosphere water vapor and clouds play the role of the glass."
Disproof: The existence of the greenhouse effect is considered as a necessary condition for thermal conductivity. This is a physical nonsense. Furthermore it is implied that the spectral transmissivity of a medium determines its thermal conductivity straightforwardly. This is a physical nonsense as well.

Consider the first sentence of the "disproof." Huh? Nothing in the cited passage says anything like this. The statements that the operation of a standard greenhouse depends in part on conductivity is hardly the same as saying thermal conductivity depends on the greenhouse effect. The last sentence of the disproof is equally disconnected from any logical context. The whole thing is similarly incoherent. Errors of logic, errors of science, and pure disconnected thought streaming dominate the text. Babbling (with equations and diagrams!!) by the looney on the street corner, and some idiot published it. (The Editors of The International Journal of Modern Physics.)

The most substantive (and therefore hilariously wrong) claim in the paper is the claim that the greenhouse effect violates the second law of thermodynamics, because it depends on energy flowing from the cooler atmosphere to the warmer ground. More precisely, it depends on the fact that some of the radiation emitted by the ground is absorbed by the atmosphere, re-emitted, and returns to the ground. The fallacy, of course, is that the second law doesn't say anything about forbidding the movement of energy from cooler body to warmer body - what it forbids is net movement of energy from cooler to warmer. If Earth emits energy into the vacuum of space, essentially none of it returns. When it emits it into the atmosphere, some fraction returns - the point of the second law being that that fraction is less than one if the atmosphere is cooler than the Earth. This is freshman or high school level thermodynamics prof.

One bit of amusing effrontery is the dedication of the work by one of the authors to the great astrophysicist S. Chandrasekar, on the grounds that they had met (once!) in Chicago. That should give Chandra a spin in his grave - his hallmark was clarity, precision and meticulous accuracy - the opposite of everything in the Gearhead and Kachoo paper.

But hey, I too did once stay in a Holiday Inn Express.

The Ocean of Stupidity

Eli Rabett, who clearly has a masochistic streak, has undertaken the task of cleaning the Augean Stables of Gerlich and Tscheuschner, which some moronic editor has actually published. Among other nutjobbery, G & T claim that a greenhouse effect - any greenhouse effect - is incompatible with the second law of thermodynamics. If true (and of course it isn't) this would be bad for the second law, since greenhouse effects obviously exist and are huge in the case, for example, of Venus.

I know that guys like Bill Gray and Lindzen are not quite stupid enough to buy this crap, so why doesn't it bother them to be on the same ship of fools? The legions of denial are not small, but they certainly believe a whole lot of very ridiculous and mutually contradictory things. I guess the guys who think they are victims of a conspiracy aren't bothered by the fact that most their travelling companions happen to be nuts, even by their standards.

And Eli - you might need a bigger spoon.

Monday, March 23, 2009

Loving the Swindle

Arbitrage is what the Masters of the Universe think they know how to do, and Geithner's subsidies give them a big opportunity. Tyler Cowen notices what Hilzoy noticed the other day, and puts in some more detail. The scope for cheating could be enormous, and by his calculation, half a trillion dollars could be at stake.

With that big an incentive to swindle, does anybody think Wall Street won't be able to figure out how to do it, regardless of the precautions taken? No wonder the market loved Timmy's plan.

Way past time for the Timolator to go. Maybe he and Larry can get a shout show on CNFox or something.

Lipstick Legacy

You know you're in trouble when the supposed authorities start using the word "legacy" where everybody else uses "toxic." I guess Larry Summers thinks that if he just slaps enough lipstick on one more pig...

Sunday, March 22, 2009

Joe Stiglitiz Thinks So Too

Josh Marshall plays the interview.

Takeaways: they are in denial, the people at the table are the ones who created the problem.

You Suck, Geithner!

Hilzoy finds yet another reason to think the Summers-Geithner plan is a bad idea. It would subsidize certain plausible conflicts of interest aimed at looting the treasury.

Congress and Obama should be very slow to experiment with this.

Moral Clarity II

How do you say "Heil Hitler!" in Hebrew?"

The trouble with Moral Clarity is that it hardly ever is either clear or moral.

Larry and Timmy's Excellent Vegas Adventure

Obama's economic team has a plan: go into partnership with a bunch of hedge funds who will to go to Vegas and make some bets. I think it may work a little like this: if the bets make money, the government makes its share of the profits, whereas if they lose, the losses come out of the government's share first. Heads we both win, tails, the taxpayer takes the loss.

Sounds like a good plan, Larry and Timmy. What could possibly go wrong? Could there be anything in it that might lead those hedge funds into making some unreasonably risky bets?

Brad DeLong has a defense and a FAQ. DeLong likes it, but on the central question his answer is deeply dishonest:

Q: What if markets never recover, the assets are not fundamentally undervalued,
and even when held to maturity the government doesn't make back its money?
Then we have worse things to worry about than government losses on TARP-program
money--for we are then in a world in which the only things that have value are
bottled water, sewing needles, and ammunition.

I've got to call bullshit on this one Brad. My way or the apocalypse? There are a lot of degrees of bad, and the idea that the only alternative to Road Warrior is giving Citi group a bottomless taxpayer credit card is ridiculous. If the MBS are mostly as bad as the markets seem to now believe it is bad, but it's not the end of the world.

Jaime Galbraith says, "Hey, maybe somebody should actually look at the books and run the numbers before we spend the next trillion." What a concept.

Hilzoy rounds up the expert commentary here. Put me down with Krugman, Galbraith, and the other unbelievers.

UPDATE: Paul Krugman responds to Brad DeLong and, much more politely and precisely, makes the point I was trying to make above:

Brad gives it the old college try. But he shies away, I think, from the central issue: the non-recourse loans financing 85 percent of the purchases.

Brad treats the prospect that assets purchased by public-private partnership will fall enough in value to wipe out the equity as unlikely. But it isn’t: the whole point about toxic waste is that nobody knows what it’s worth, so it’s highly likely that it will turn out to be worth 15 percent less than the purchase price. You might say that we know that the stuff is undervalued; actually, I don’t think we know that. And anyway, the whole point of the program is to push prices up to the point where we don’t know that it’s undervalued.

So default on those non-recourse loans is a substantial possibility, which means that there is a large implicit subsidy involved. That’s why Christie Romer’s claim that we’re relying on the “expertise of the market” rings so hollow: we’re giving investors a big subsidy, so this has nothing to do with letting markets work.

And a final point: I’m with Atrios here. If getting the prices of toxic assets “right” isn’t enough to rescue the banks, that doesn’t mean that we’re doomed; it means that we actually have to, you know, rescue the banks, Swedish style, rather than rely on fancy financial engineering to make the problem go away.

UPDATE II: Arun, in the comments, endorses David Mizners take on Robert Rubin, Larry Summers, and how Wall Street got to own both political parties. I don't completely agree - I think that there were a lot of positive effects Rubin's policies - but anybody who wants to understand how we got here needs to read it. Obama is still trying to fight off the Reagan-Bush-Clinton-Bush depression with an economic team that was on board with many of the policies that created it.

And the poisonous air of conflict-of-interest still hangs over the whole group.

Saturday, March 21, 2009

Etherial Matters

Why does the luminiferous ether get so little respect? What is quantum electrodynamics but the theory of a Lorentz invariant, quantized ether?

Thursday, March 19, 2009

Conspiracy Theory

Hoaxes and Conspiracies in Science

A living science is constantly changing as new facts and theories enrich it. As a consequence, if you look back at earlier times it's easy to find examples of most or all scientists of the day believing things that we no longer think are true. The late movie producer and science fiction writer Michael Crichton exploited this phenomenon to come up with his theory of "consensus science." Briefly, this theory can be summarized:
(A) In cases 1, 2 and 3 most scientists believed X, but
(B) X was false and Y was true, and
(C) (by implication) If there is a consensus among scientists, it is probably wrong.

One doesn't need a PhD in logic to see the flaw in that one.

I was looking over some of the stuff presented at the Heartland Institute's anti-climate science conference, and some other papers by a couple of prominent attendees. The attendees all agreed that anthropogenic global warming was a myth and a hoax, but they had quite a variety of theories as to why: deep ocean currents, solar output, exotic feedbacks, cosmic and planetary influences. Mostly I didn't pay to much attention to those, because a lot of them were know-nothing idiots - let them fight it out amongst each other. Two guys interested me though, because they had some atmospheric science chops: Bill Gray, the retired hurricane predictor, and Richard Lindzen of MIT, a guy who can actually calculate.

Bill and Dick didn't agree with each other much either, but they did agree on one thing: there was a conspiracy that had seized control of atmospheric science, and it was perpetrating this giant hoax upon the world. Now I knew that there had been a number of hoaxes in the history of science, but I couldn't actually remember any big conspiracies, so I had to look at the record. Many of the hoaxes are famous, like the Cardiff giant and Piltdown man. Most of them are sort of pathetic - some guy fudges his data and then can't stop. I couldn't seem to find any that involved more than a couple or three perpetrators though. Was there any history of giant scientific conspiracies involving thousands of scientists all over the world?

Well, there have been some claims: the conspiracy to pretend smoking causes cancer, the conspiracy to pretend CFCs destroy ozone, the conspiracy to pretend HIV causes AIDS, the conspiracy to convince us that humans evolved from lower animals, and, that contemporary favorite, the global warming conspiracy. Oddly enough, there is a lot of overlap amongst the dauntless crusaders exposing all of the above - they include a lot of the same people, funded by the same think tanks and corporations. On the other hand, the usual consensus holds that these debunkings are bogus.

Is there any example of a conspiracy theory in science that was later vindicated - some wrong idea that was proven to be a large scale hoax? Scientists have often been wrong, of course. Anybody who looks at a globe can hardly not notice the way North and South America seem to fit with Europe and Africa. Alfred Wegner noticed it in 1910, and he also noted a continuity of fossils across the oceans that was highly suggestive of the idea that the continents had split apart some time in the past. Most geologists of the time were skeptical. Nobody could figure out how to make the physics of continents plowing through rigid ocean crust work, and there didn't seem to be any good ways to test the idea. Fifty years later, new experimental discoveries opened the way to examining the ocean bottoms, and that led to a revolution in the understanding of continental drift. Wegner was vindicated, but the doubters had not been wrong to doubt - nobody knew enough to make the judgement at the time. There was no hoax and no conspiracy, just the normal advance of scientific knowledge. Many similar examples can be found, but I have yet to find one that could plausibly be described as a hoax or conspiracy.

I am pretty sure, in fact, that if AGW really is a giant scientific conspiracy, it is the very first ever. Which is why I am pretty confident in calling bullshit on Gray, Lindzen, and all their lesser cohorts. It could certainly turn out that global warming theory is wrong, but even if it is, Lindzen and Gray will still be nuts.

They are neither the first nor the most prominent scientists to doubt the conventional wisdom, and sometimes such people prove correct. But once you start seeing the bogeyman under the bed, you have probably gone over the brink.

Science is very poorly organized for supporting conspiracies. Scientists are contentious by nature, and one way to get noticed is to expose the flaws in some other scientist's thinking. The reward structure is also not set up to really reward conspiratorial work. Scientific rewards tend to flow to those who innovate - those who are doing something different from the crowd. If you are in science for the bucks, a better shot is becoming a mouthpiece for some wealthy and powerful economic interest that has skin in the game. Even in that racket though, there is hardly scope for a conspiracy of thousands - at best, a few dozen can make a living in that way.

A prominent scientist told the story of going to see a lecture by an elderly Sir Arthur Eddington, and realizing to his distress that Eddington had left the real line. "Will that happen to us?" he asked his companion. "No" was the answer, "a genius like Eddington may go nuts, but guys like you just get dumber and dumber." Sadly, though, he was wrong. Dumb guys go nuts just like the smart ones.

Wednesday, March 18, 2009

Pro Bonus

A strong circumstantial case appears to be building that Larry Summers and Tim Geithner pushed Chris Dodd to take anti-bonus language out of the TARP bill.

If so, Obama has only a short window to fire them, or risk much of his program. Will he dare to pull the trigger?

Meanwhile, Bernanke is cranking the printing presses up into high gear. Where have they tried that before?

Tuesday, March 17, 2009

Crime and Punishment: Bonus Time!

Anger at injustice is a fundamental ingredient of civilization and probably of human society generally. It likely predates law and is a primary motivator for it. The manifest injustice of paying huge bonuses to the very people with proximate responsibility for bringing down the international financial system in general, and AIG in particular, has stirred a storm that threatens to capsize Obama's economic plan. At the same time, I can't quite escape the suspicion that the whole bonuses dustup is a smokescreen to distract us from the larger scale injustice of who winds up with the big bucks that the US pumped into AIG - Goldman Sachs, et. al., their primary co-conspirators. Maybe the whole deal was to pump up the bonuses scandal, publically sacrifice the AIG employees in question, and hope nobody notices about the other 170 billion dollars.

The sight of Bernanke and others publically wringing their hands about the injustice of handing over taxpayer bucks to the undeserving and extortionate rich seems both phony and cringing - it seems that we had to hand over Czechoslovakia because otherwise that Mr. Hitler would do bad things. As it happened, Munich both facilitated and encouraged all the terrible things Hitler did subsequently do. Will our genuflecting before the big banks turn out differently?

The Roman judicial system supposedly had a motto: "let justice be done though the heavens fall." Sometimes, at least, the more serious celestial threat is failing to ensure that justice is done.

Sunday, March 15, 2009

The Seen and the Unseen

Most religions with nature gods give pride of place to the sun and moon. For the most part both follow a very regular schedule in their behavior, but there is one prominent exception - eclipses. The key to explaining eclipses was the discovery by the ancients of the lunar nodes - the points where the line of intersection of the planes of the ecliptic (the Sun's apparent path through the sky) and the orbital plane of the moon intercept the sky. Eclipses only occur when Sun, Moon, and node are all aligned.

These ancient astronomers didn't know that the Earth went around the Sun, or even that it was round, but they had discovered that there were these mysterious antipodal spots that moved around the sky and had power over Moon and Sun. Unlike Sun and Moon, though, they couldn't be seen. Some think that these unseen powers were the origin of the idea of an unseen god, which seemed to have power over even the mightiest of the other gods.

The unseen, or at any rate, the not yet seen, was a common theme of twentieth century physics. Much of the thrill of particle physics arose from the remarkable predictions, subsequently confirmed, of new kinds of particle - the neutrino, the positron, the pi meson, the omega, and the quark - the last still unseen (directly) and very likely to remain that way. The culmination of the century of particles was the standard model, now about forty years old, and the discovery of all its predicted particles shortly after.

Except one. That last one has proven elusive, but it is also essential, because it is that "Higgs" particle that plays the main role in giving the other particles mass.

This week, most of the usual suspects ( NEW, TRF, CV) have posted on the latest Higgs news. The news is that there isn't much news - the Higgs hasn't been found, but a bunch of new places (in the energy spectrum) have been searched with negative results. There are good theoretical reasons to believe that there aren't many more good places to look.

If the Higgs isn't found, that is probably bigger news than finding it. It's absence can't kill the standard model - that model works too, too well for that - but it will show that it is incomplete in some very fundamental way.

Anti Boob

Hanna Rosin's The Case Against Breast Feeding in the Atlantic doesn't stray from the facts in claiming that the benefits of breast feeding have been somewhat oversold - for infants in the advanced world. She seems to believe that the emphasis on breastfeeding infants is mostly an anti-feminist conspiracy.

In the parts of the world without clean water and well-regulated baby food industries, infant diarrea and related intestinal infections are major killers - major killers that are greatly diminished by breastfeeding. Her article is likely to be pushed hard there by the formula peddlers. It might well kill more children than George Bush.

Summers - Over Already

Larry Summers is a very bright guy who can't seem to open his mouth without saying something really stupid. Something so stupid that it threatens to destroy whatever enterprise he is engaged in.

Here he is defending the AIG bonuses and incidentally trying to blow up the Obama Presidency:

We are a country of law. There are contracts. The government cannot just abrogate contracts.

This is bullshit, and Summers knows it. The government has plenty of power to abrogate contracts, most relevantly here in the bankruptcy laws. AIG is bankrupt, and the attempts to pretend it isn't are spreading anger and chaos throughout the economy.

The public, which has already funnelled an immense fortune into AIG, is justifiably enraged. I don't think that Congress can or will be able to protect Obama's back on this one. If conventional bankruptcy is not adequate to handle the AIG case, Congress needs to pass new laws immediately.

Rubin, Summers and Geithner are too deeply associated with those who ran this scam to be trusted. It is probably not an exaggeration to say that Obama is risking losing his whole program by letting this fester.

Time to kill the zombies.

Time to fire Summers.

Geithner has to go also, but maybe not this week.

Saturday, March 14, 2009


I have an excellent memory, and always have had, for as long as I can recall.

Unfortunately, I eventually started finding out that some of my most interesting memories never actually occurred. I blame the intertubes for revealing this oddity. Back in the old, old, days, before Tim Berners-Lee revealed the web, I used to post to some usenet groups.

Naturally, everything I wrote in those days was exceptionally pithy and clever. It seems that somebody archived all those old posts, except for my cleverest ones, and that the ones they did archive were never quite so clever as my memories thereof. Worst of all, some of the deeds that I was the hero of, seemed to have turned into the doings of someone else.

Anyway, did I ever tell you about the time I was trapped for a week in a snowbound railroad car with the entire U of BC cheerleading squad?

Welfare Capitalism

Even in the age of Reagan and the Bushes, the welfare system is alive and well. The principal beneficiaries of such government largess are not the "welfare queens" that Ronnie used to talk about though they were always conveniently black - but also purely fictitious. Nobody ever managed to exhibit one.

The big welfare bucks went to white guys who already happened to be rich and politically connected. The American professional sports franchises classically epitomize this phenomena. Unlike professional sports franchises in most countries, ours are exempted from anti-trust laws and spend a hell of a lot of effort maintaining their monopolies. Because they are monopolies, team owners have a lot of leverage over their host cities - they can always threaten to take their ball and go fishing elsewhere. There are a dozen or so professional football (soccer) teams in London, but no American city has more than two NFL or professional baseball teams. This pays big time when it comes to extracting subsidies from cities.

George Steinbrenner is the champ. At the same time that Rudy Giuliani was saving the city of New York big bucks by cutting police, parks, and libraries, he arranged for several hundred millions to be funnelled into Steinbrenner's pockets. Steinbrenner is no one dimensional welfare queen though - thanks to friends in Congress he got several hundred million more for failing to build some ships the Navy needed. Honorable mention has got to go to an up and comer named George W Bush. With little to recommend him except for being the son of the then current US President, he put together a syndicate that talked the city of Arlington TX into seizing some local land (using eminent domain) and giving him $202 million plus in subsidies. He and his partners garnered $250 million on their $86 million dollar investment when they sold the franchise a few years later - a pretty nice gift from the taxpayers.

The politicians who facilitate them get more for their trouble than those other welfare queens could ever match - campaign contributions, prominent seats and featured billing on the local sports scene.

(Courtesy of David Cay Johnston's Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill))

In the Beginning

American conservatism has been pretty much reduced to three issues: low taxes for the rich, gay marriage, and abortion. Only the last of these looks to me to have any moral traction.

A favorite "trick question" for the right-to-life crowd is "when does life begin?" Strictly speaking, the question doesn't make sense. Life didn't begin any time recently. Everything alive today is descended in an unbroken chain of living cells from life that began more than three billion years ago. The point, however, is still a good one: when do human rights first attach to developing human life?

Early pro-choice answers were quite absurd, for example the rather silly notion that a fetus was merely a disposable part of a woman's body, like a fingernail, until birth. The favorite answer of the pro-lifers, that the moment of conception is that point seems only slightly less ridiculous to me, but it makes a certain amount of sense in that that moment represents the distinct point at which a new genetic individual comes into being.

For the believers, I suppose, that moment represents the most convenient time to imagine the great spirit sprinkling the magic pixie dust that inserts the ghost into the new machine. The testimony of science suggests that the whole idea of the ghost in the machine - of Cartesian dualism - is misguided, and that mind is an emergent phenomenon in and of the machinery of life. If one takes that seriously, it seems most natural to assume that humaness, to the extent that there is such a thing, develops gradually. Mind develops with brain, and human rights should develop with mind and brain.

That point of view offers no easy answer those who might want a bright line in the sand. I personally find it hard to associate much special human nature with an as yet heartless and brainless blob of cells that though potentially destined to be a human being, is still rather hard to distinguish from quite similar blobs destined to be snakes, frogs, or starfish.

On the other hand, I find the notion of harvesting organs for transplantation from fetuses, as some now contemplate, beyond creepy. William Saletan quotes:

Calling for studies into the feasibility of transplanting foetal organs, Sir Richard, an advisor to Britain's fertility watchdog and the Royal Society, said he was surprised the possibility had not been considered, and that experiments in mice have shown that foetal kidneys grow extremely quickly when transplanted to adult animals. Sir Richard said: "It is probably a more realistic technique in dealing with the shortage of kidney donors than others."

Once upon a time, a then fellow student of mine suggested that abortion should be completely legal up to a certain stage, with a gradually increasing penalty applying from then on as birth approached. Perhaps if abortion had been legalized by legislative negotiation rather that judicial fiat, something like that might have arisen.

Cramer vs. ...

I'm not as big a fan of the Cramer - Stewart sitdown as many seem to be. Jon Stewart is very funny and effective as satirist - but as a moralistic scold - not so much.

For Stewart to criticize Cramer and CNBC for being unserious is - uh, silly.

Friday, March 13, 2009

Off the Mass Shell

From a galaxy, far, far, away:

For example, Forbes writes
The richest people in the world have gotten poorer, just like the rest of us.

Like the rest of us: really? The reality is that most average people haven't been affected by the crisis at all. Aside from a few exceptions, it is only the rich people who suffer. Of course, this suffering is the billionaires' type of suffering, but relatively speaking, it is much more intense suffering than what any group of average people has experienced.

Because having to shave ten meters or so off your planned 200 meter yacht is so much more painful than losing your job and having to live in your car.

This proved a bit wack for all but the most crack besotted among the author's right wing sycophants, since many of them have to live in the real world.

Making Off

Would Al Capone have gone to all that trouble if he had known how simple stealing a few billion could be?

Thursday, March 12, 2009

Ross Douthat

Douthat - I think it's pronounced to rhyme with "da Hutt", as in "Jabba da Hutt" - is the new occupant of the NYT's second chair conservative op-ed column. He can hardly help but be an improvement on Kristol Meth.

His Harvard undergrad scribblings are less than inspiring, but the content is more bothersome than the style. It seems that he didn't like Gays and other perverts, Asians, clannish and weird math-and-science types, the ill-informed and stupid American multitudes, and abortion, but he loved Cheney, Condi, Rumsfield[sic], Wolfowitz, and, slightly less fervently, Bush.

His more recent writings would seem to indicate that he has subsequently become better at concealing the fact that he is an asshole - or, best case scenario - he might even have become less of an asshole.

The One

The one conservative that I faithfully read is Andrew Sullivan. No conservative has been more disappointed in his political creed and yet remained faithful, but he continues to wrestle with the Devil. By comparison, David Brooks and George Will might occasionally twitch a bit in Satan's arms, but Bill Kristol is snuggled up to every cloven hoof or forked tail.

Jesus Christ, Socialist Superstar?

One problem for the Christian right is the testimony of one Jesus Christ, as recorded in the Gospels. Economic development in his time hadn't actually reached a stage when socialism could be usefully contemplated, but he was surely a passionate redistributionist.

And he was pretty unequivocal in saying that the rich were damned. James Dobson and all you TV preachers - he was talking to you!

Don't Trust a Ho

It's usually a poor idea to trust habitual liars.

Wednesday, March 11, 2009

Astounding Ignorance

[Twansmitted surreptitiously from his rubber room.]

Brad DeLong exposes yet another example of the astounding ignorance of a professor at the most prestigious economics school in the country. Luigi Zingales tries to pass off Bush's spending as Keynesian:

With zero personal saving and a large budget deficit the Bush administration has run one of the most aggressive Keynesian policies in history. Not only has adherence to Keynes's principles not averted the current economic disaster, it has greatly contributed to causing it. The Keynesian desire to manage aggregate demand, ignoring the long-run costs, pushed Alan Greenspan and Ben Bernanke to keep interest rates extremely low in 2002, fuelling excessive consumption by the household sector and excessive risk-taking by the financial sector. Most importantly, it has been the Keynesian training of our policy-makers that has led them to ignore the role that incentives play in economic decisions.

You only need to know the smallest bit of Keynes to know that this is total BS. Keynes did not advocate constant deficits, he advocated countercyclical government policy - deficit in recession, surplus in prosperity. Reagan, Bush, and Bush carried out completely different policies, running huge deficits in good times and bad. We would be much rich today if they hadn't. DeLong points out that he gets a lot else wrong too.

Can Zingales really be this ignorant? Or is he just lying for politcal purposes.

Ink by the Barrel

(Dr. P passed this post out through the slot in the door of the rubber room wherein he is currently resident - the neighbors)

There is an old newspaper joke about the hazards of getting into an argument with someone who buys ink by the barrel. Jon Stewart updates this advice for Jim Cramer here. Joe Scarborough, come on down! You too can play!

Tuesday, March 10, 2009

Never Forget

Never forget that it was the policies of the sorry bastards at the Cato Institute, the Hoover Institution, the American Enterprise Institute, the Friedmanites, and the University of Chicago that led the economy to this sorry pass. Just like their 1920's counterparts Hoover and Mellon they relentlessly promoted the power of the oligarchy over everyone else, but their inept economic analysis again rose to bite them in the ass. These people want to destroy everything of value on the planet to support their market fantasies.

Blame them, and don't let them escape without paying part of the penalty.

Another post inspired by the rage of reading Free Lunch. [This time the part where Friedman and his buddies decided that parks and schools had to be abolished and sold - given - to the rich.]

At least we can thank Bush for showing us where Friedman's vision leads us - a kleptocratic oligarchy ruling a planet of endless war and crime, with the rich huddled in gold encrusted squalor in their gated communities while everyone else squats in shit encrusted squalor without.

Who Do You Trust?

It is one of the peculiarities of the human situation that sometimes, in some situations, we have to depend wholly or in part on other people's judgements. Doctors, politicians, preachers, scientists and a million others all seek to advise us to do this, believe that, or choose some side of a dispute.

Ideally, we can check and understand most of the key evidence ourselves. Is there a benevolent God? All of us have lives littered with the evidence. Should I buy this something or other that somebody really, really wants to sell me? How much do we need it?

Other cases are harder. Is bailing out the big banks who got us into this financial mess really necessary? Is anthropogenic global warming a big threat to our children and grandchildren? Is now a good time to invest in the stock market? Will a financial stimulus be likely to be worth the economic risks it entails? Will my future and our departments be better if we decide to hire this string theorist or that cosmologist? We can apply a lot of methods to try to decide these questions, but in most cases we can not do all of the necessary analysis ourselves. We have to depend, at least in part, on the judgement of others who are, or present themselves to be, more expert.

The evolution of the human brain seems to have equipped us with a number of strategies to evaluate this kind of "expert" testimony. A few usually relevant considerations:

(1)Do we know the purported expert or his (or her) other work?

(2)Is he honest?

(3)Is he nuts?

(4)Do his arguments seem to make sense?

(5)Does he have a dog in this fight, and, if so, to what extent are his interests likely to be aligned with mine?

(6)Can he explain his reasoning? Will he engage intellectually and answer questions, or is he evasive, dismissive, or other wise slippery?

(7)Does he exhibit good judgement on other counts?

(2), (3), and (6) are the biggies for me. How can I trust a liar or a nut? Why should I trust someone who won't or can't explain his reasoning.

It is amazing to me that most people hardly seem to use the above strategies. Instead, they seem to rely on another evolutionarily certified tactic, common affiliation: is the would be persuader a member of my group, gang, or club? Bernie Madoff did not obviously fail most of my criteria above, but he obviously and conspicuously failed numbers (6) and (7), and nonetheless people with huge sums of money chose to bet on him. Why? It seems to have been a mixture of common affiliation (Madoff belonged to the nicest country clubs and the best connected temple, sat on the boards of prestigious institutions) and irrational greed.

Many a good salesman learns to adopt some of the protective coloration of his surrounding - he starts talking like and gesturing like the potential customer. Madoff managed to become a self-created monument in the landscape.

One of the most potent affiliations turns out to be shared resentments. Each of us manages to feel somehow downtrodden or disrespected by some part of the surrounding world. They (we) rage to strike back at those who we perceive to threaten or disrespect us, whether they be supercilious professors or uppity minorities. These resentments and fears are the food of the demagogue and the radio show host. Most of us, I suspect, see Bill O'Reilly, Rush Limbaugh, and Ann Coulter as comical if rude buffoons. For their adherents, the buffoonishness is a sort of badge of challenge against all they resent, much like the weird clothes and body piercings of high schools goths and freaks.

Next episode - climate change.

Monday, March 09, 2009

Dear Lou Dobbs

(Another in our Letters to Stupid World Series)

About your characterization of the "Obama" bear market.

Paul Krugman said this about something else but the shoe fits you too:

Here’s mine: you’re looking at some building, and you hear the fire alarm go off, and smoke starts trickling out the windows. Then a lot of fire trucks and firemen arrive — and only after that do flames start shooting out the top of the building.

Clearly, the fire department turned a small problem into a crisis

I guess you must be angling for one of those Faux News gigs.


Letter to Stupid World

I recall some market religionist (economist) saying that having American car companies go under wouldn't be so bad - after all Toyota, Volkswagen, etc. now make cars in the US, and they aren't about to shut those down.

Free Lunch has a tale for him. Back in the 90's, GM had developed a process for a radically improved magnet, a magnet that had critical technological and military uses. China wanted this technology, GM wanted access to the China market, and wanted to buy the GM subsidiary. Politically well connected bankers put together a deal, Clinton free trade fanatics pushed for approval, and concerns about national security were swept aside by including a proviso that China should keep the manufacturing facilities in the US.

China next bought all the other magnet
manufacturers and moved all production to China. The Bush administration was too distracted or too corrupt to object.

Market fundamentalists are so blinded by their religion that they can't seem to grasp that there are in the world some who think beyond their next quarterly earnings report and care about things beyond Mr. Ricardo's theories. And therein lies the secret of how China again became a great power and the US frittered away its world dominance.

Sunday, March 08, 2009

Reality Nips Again

No principle is more sacred to conservatives generally and the wingnotosphere in particular than the Capitalism destroying consequences of high marginal income tax rates. John Cole's (h/t Brad Delong, Steve Benen, and Matt Yglesias) chart of the top marginal income tax rate since 1920 shows this to be yet another notion that fails to survive its encounter with reality.

In the real world, it seems that some of the lowest maximum marginal income tax rates occurred before the great depression and in Bush bubble world. Predictions of the economy destroying effects of tax increases proved false in the Clinton boom. I don't advocate 1960s level top rates, but the idea that the relatively tiny increases planned by Obama would destroy the economy are ridiculous.

The Horror! The Horror!

I may have to read Atlas Shrugged in order to understand contemporary political discourse.


NBC's MTP and ABC's TW have senators on making sense!! Shelby and Graham want to nationalize now. Schumer says, look first, then nationalize.

The other people on were pretty much idiots, of course, except for some guy whose name I can't pronounce or remember, and Erin Burnet.

Roundly Condemned

There are many things to dislike about the ABC and NBC talking head shows (people named George, people named David, Newts and other pre-reptilian vertebrates) but one is not ideological. I mean those stupid round tables.

It's bad enough having to look at the unnaturally tanned Stephanopoulis or the unnaturally pale Gregory, but why should I have to simultaneously look at the backs of four other people's heads?

Saturday, March 07, 2009

Free Lunch: Preview

I have been reading David Cay Johnston's book Free Lunch and it's a very difficult book to read - every few pages I find myself putting the book down in a rage.

The American economy grew quite slowly from 1980 until 2005, but it did manage to increase the GDP per capita by 68%. Every penny of this increase, and more, went to the top 10% of money earners. The other 90% actually lost ground. Even among the top ten percent, a vastly disproportionate share went to the top 1%, and even more so to the top 0.1%. Almost all the money went to the rich, the very rich, and the super rich.

Why so? Part of the reason is the changed tax structure. Ronald Reagan decreased taxes on the rich and dramatically increased them for the middle class. That theme is not at the core of this book however. The same forces which permitted Reagan to greatly alter the tax structure also led to a number of special privileges which funneled tax dollars into the pockets of the super rich. Modern electoral campaigns are so expensive that it is nearly impossible for candidates to get elected without the support of powerful sugar daddies - rich men, or associations of rich men, who put a lot of money into politics and get their quid pro quo.

One egregious example - the stealthy, thief in-the-night way local, state, and federal government officials conspired to present billionair George Steinbrenner with $600 million dollars woth of subsidy for his new ball park while stealing city parks to build it. How did Steinbrenner manage this? Flattery, bribery with Yankees tickets and other stadium owner indulgences. All this was done quite secretly, and announced as a fait accompli before citizen's protest could be organized. A nice gesture, I think, would have been to open the new stadium by burning Giuliani, Bloomberg, the city council, and other criminal conspirators at the stake.

Did I mention that this stuff really pisses me off? Time to go read about the next outrage.

Friday, March 06, 2009

Smolin on theThe Landscape

Of economics, that is.

Earlier I mentioned Lee Smolin's recent paper on economics and gauge theory: http://arxiv.org/PS_cache/arxiv/pdf/0902/0902.4274v1.pdf At that time I was pretty skeptical, but having now read much of it, I have a different view.

For one thing, he gives a nice introduction to General Equilbrium Theory in economics written in a fashion to be understandable to physicists. He also succinctly explains the underlying assumptions, the strengths of the model, and its weaknesses.

The biggest strength is that it says that there is a locally Pareto efficient equilibrium. [Pareto efficient meaning no other nearby states are better for all participants in the market]. This is sometimes [mistakenly] cited to claim that classical economics shows that the market cannot be improved upon. Unfortunately, it is not clear that these equilibria are either unique or stable, and quite likely, they are neither. There could well be an entire landscape of unstable equilibria with little to prefer one over another - moreover, local Pareto efficiency doesn't imply anything globally.

Even more unfortunate from the physicist's standpoint is the fact that the model has no time or dynamics. There is nothing to indicate how the economic systems approach equilibria or how they evolve in time - this is "block time" economics - minus any hint of geometry or metric in the block.

Smolin and some other physicists, mathematicians, and economists hope to exploit certain gauge like freedoms in the model to attempt to introduce a dynamics. I have no idea how likely this is to succeed or how useful it might be if it did.

Given that classical economists seem to be pretty wack, somebody ought to try something, and something mathematical enough to get their attention seems like a good place to start.

Thursday, March 05, 2009


Who is getting all those taxpayer dollars that are being flushed through AIG? Zachary Roth at TPM has some names (but the WSJ and NYT did the investigating).

This Journal story from October 2008 names the following nine American and foreign banks as having bought swaps from AIG: Goldman Sachs; Merrill Lynch; UBS of Switzerland; Credit Agricole SA of France; Deutsche Bank of Germany; Barclays, and Royal Bank of Scotland Group, of Britain; and CIBC, and Bank of Montreal, of Canada.

This is just about as bad as anyone could imagine [except it is pretty much what Cynthia has imagined, and said]. I don't think Geitner has much credibility left. This won't help.

Where's Buffy?

Paul Krugman once again makes the case that it's time to lop off some zombie heads.

Here’s how the pattern works: first, administration officials, usually speaking off the record, float a plan for rescuing the banks in the press. This trial balloon is quickly shot down by informed commentators.

Then, a few weeks later, the administration floats a new plan. This plan is, however, just a thinly disguised version of the previous plan, a fact quickly realized by all concerned. And the cycle starts again.

Why do officials keep offering plans that nobody else finds credible? Because somehow, top officials in the Obama administration and at the Federal Reserve have convinced themselves that troubled assets, often referred to these days as “toxic waste,” are really worth much more than anyone is actually willing to pay for them — and that if these assets were properly priced, all our troubles would go away.

Obama clearly understands that the zombies are a - or the - problem, even if Geithner, Summers, and Bernanke can't seem to face the arithmetic. This could be a first big test for Obama. If Geithner can't bring himself to pull the trigger on the banks, Obama may need to pull the trigger on Summers and him. Tomorrow would be a good day to start with Citi. Later might be too late.

Gotta See

Everybody is recommending it, but if you haven't seen it yet, watch John Stewart eviscerate CNBC.

And feed the entrails to his cat.

Wednesday, March 04, 2009


Having exhausted all the usual refuges of scoundrels, the right wing talking heads have fallen back on screaming "Socialism" at anything they might not like at the moment. Consequently, I would just like to get this little dictionary definition on the record:

so⋅cial⋅ism  –noun

1. a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.

2. procedure or practice in accordance with this theory.

Note that there is nothing in that definition about taxes, welfare, or any of the other bogeymen that haunt the dreams of wingnut wackos.

In the United States and Western Europe, ownership of the means of production and distribution, capital and land is overwhelmingly in private hands. Every country assigns some services to the state, however: especially defense, police, money and taxation. Schools and major features of infrastructure like roads, harbors, parks, dams and canals usually are included. Health care is socialized in part in every advanced country, least of all in the US.

The US, like every other country, is a mixed economy, with socialized and private components. Get used to it, because that's the way it is always and everywhere - and thats the way it will be even if Ron Paul gets elected - assuming the country could survive such an event.

Nobody said it better than Lincoln: the government should do for the people only such things that they can't do, or can't do as well, for themselves. It is fine to argue about which functions belong in which category, but going around crying hysterically about "socialism" is as pointless as baying at the moon. We have always had a degree of socialism, and always will. So does every other country. The successful countries are those that used logic instead of hysteria to choose the balance.

It's safe to say that a lot of those yelling loudest are not actually interested in socialism at all. What they are interested in is keeping the network of special deals and privileges that strongly favor the rich - their vision of the legacy of Reagan and the Bushes.

"You Can't Handle the Truth"

Tim Geithner gets to play the Jack Nicholson part here but you can be sure that he won't be getting any Academy Awards. Oddly enough, the American people would like to find out where AIG's almost $1000 per person is going, but Geithner et. al. really, really, don't want to tell us.

So what are Obama, Summers and Geithner so afraid of? There is some speculation that it's because a lot of the money is going to Goldman Sachs, but I suspect that a more likely recipients are a whole raft of European banks. Maybe, just maybe, the American people would not be too happy to know that they were investing the price of a nice LCD HDTV (for each man, woman, and child) in propping up European banks that made some unsound investments.

So why do Obama, Summers, and Geithner think it's necessary? the argument is that an AIG default would set in motion a chain reaction of bank failures that would bring the whole international economy down. There is a good chance that they are right.

Like the Colonel says, "You can't handle the truth."

If Congress really wants the answers, though, they just tell Obama "Not one cent until we get the story." I suspect, however, that the leadership is in on the scam. If the Repus wanted to fight I suspect that they would have no trouble finding enough Democrats to go along.

Tax Troubles

A surprisingly large number of Obama adminstration candidates have turned out to have tax troubles. Does this reflect some kind of Obama attraction to tax cheats?

That's not likely, but what it does reflect is the systematic gutting of the IRS's tax enforcement division at the hands of the anti-tax crowd. This mostly doesn't affect wage earners whose tax contributions are automatically withheld, but it has handed a lot of independent consultants and business men what they increasingly regard as a licence to steal. The Bush administration in particular systematically encouraged the development of klepto-capitalism in the US, from Enron to Bernie Madoff. Not only did they neglect regulation and enforcement, but they made a practice of punishing government employees who actually tried to enforce the laws.

Just another way we will continue to suffer from electing these crooks.

I suspect that the Bush equivalents of the tax dodgers weren't exposed because nobody was looking.

Tuesday, March 03, 2009

Economics, Gauge Theory, and Lee Smolin

Tyler Cowen notices that Lee Smolin is writing on Gauge Theory and Economics (arxiv:0902.A274v1).

It's hard to see that as a good sign.

Doofus Deduction

At least before Murdoch bought it the Wall Street Journal was a pretty good paper - if you took the precaution of discarding the opinion pages. Paul Gigot and friends have written some pretty stupid editorials over the years, but this one is truly below and beyond.

As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.

How f****** stupid do they think we are? How stupid are the people who actually pay to read this?

The stock market's recent collapse couldn't have something to do with the uniformly disastrous news that has come out in the past two months could it? That news consists nearly entirely of data measured before Obama became President.

These are the same people, you might remember, who blamed Jimmy Carter!!! for the economy's collapse at the end of Bush's second term.

For the WSJ, it seems, the stock market is a flighty thing highly subject to the vapors. The collapse of production, sales, jobs, and the financial system could hardly be a factor. There is nothing real in your universe Mr. Gigot. Hope that Koolaid tasted good.

Monday, March 02, 2009

Freak Show

Watching the parade of buffoons, nutbags, sacred fools, ordinary fools and child Buddhas at the CPAC makes it more than a little difficult to imagine how this bunch ruled the country for thirty years. They didn't, of course, or rather, they were just the schlock troops or comic relief for the real controllers - the moneyed oligarchy and the network of stink tanks they created and congressmen, editors, columnists, professors and preachers they had purchased.

We ought to bear that in mind before we celebrate the buffoonery too heartily.

Asia's Fault?

Now that the sub prime crisis has spread to practically every other kind of borrowing, Paul Krugman wants to know why, and thinks he has found the answer in the writing of then economics prof Ben Bernanke.

The speech, titled “The Global Saving Glut and the U.S. Current Account Deficit,” offered a novel explanation for the rapid rise of the U.S. trade deficit in the early 21st century. The causes, argued Mr. Bernanke, lay not in America but in Asia.

In the mid-1990s, he pointed out, the emerging economies of Asia had been major importers of capital, borrowing abroad to finance their development. But after the Asian financial crisis of 1997-98 (which seemed like a big deal at the time but looks trivial compared with what’s happening now), these countries began protecting themselves by amassing huge war chests of foreign assets, in effect exporting capital to the rest of the world.

The result was a world awash in cheap money, looking for somewhere to go.

Where it went was mostly to the US. Why?

Mr. Bernanke cited “the depth and sophistication of the country’s financial markets (which, among other things, have allowed households easy access to housing wealth).” Depth, yes. But sophistication? Well, you could say that American bankers, empowered by a quarter-century of deregulatory zeal, led the world in finding sophisticated ways to enrich themselves by hiding risk and fooling investors.

And wide-open, loosely regulated financial systems characterized many of the other recipients of large capital inflows. This may explain the almost eerie correlation between conservative praise two or three years ago and economic disaster today. “Reforms have made Iceland a Nordic tiger,” declared a paper from the Cato Institute. “How Ireland Became the Celtic Tiger” was the title of one Heritage Foundation article; “The Estonian Economic Miracle” was the title of another. All three nations are in deep crisis now.

There is something odd and counterintuitive the fact that the money so often went where it could do the most damage. Why did it go for McMansions, war and HDTVs instead of, say, scientific research and new schools?

In any case, the mercantilist economic policies that produced the glut are still at work, and continue to damage both seller and buyer.

So that’s how we got into this mess. And we’re still looking for the way out.

Sunday, March 01, 2009

QO Some Other Day

John Cole:

This is a sputtering, rudderless, idea free movement. There is a reason the only thing they can do is yell “socialist” and attend tea parties (although given the turnout, it looks like they are just sticking to yelling socialist).

This isn’t a movement anymore, it is the political equivalent of the bearded lady.

Cole is also amused by the latest Republican sock-puppet, thirteen year old Johnathan Krohn


Brad DeLong:

Shorter CPAC Conference...