Redefining "Dignity" and "Pride"

http://www.nytimes.com/2006/07/31/business/31men.html?adxnnl=1&pagewanted=all&adxnnlx=1318172581-aGaU9McISvTHvJDEZTsZDQ

This article is actually from a couple of years ago, pre-recession. But, the trends it gets into are multi-decade in nature. The mystery under examination is the huge number of American men, age 30-54, who do not work, even in a period of 4% unemployment. Fully 13% do not work, some of whom are looking, most of whom are not.

It's useful, first, to separate those looking for work (unemployed) from those not looking (idlers). These are clearly distinct categories. The unemployment figures are well-known; the number of idlers is a more interesting issue. From the numbers in the article and supporting data provided, the trend toward increased idlers was mostly gradual in the 50s, 60s, and 80s. In the 70s, 90s, and 00s it increased rapidly. Approximate number of idlers in each year:

1968: 3%
1980: 6%
1990: 6%
2000: 7.5%
2005: 8.5%

Unfortunately, the stats (on race, education, income) the Times provides do not distinguish between unemployed and idlers--an idiotic misstep. After all, the point of the article is to investigate the mystery of increasing idleness.

Some percentage of the idle work off the books at any number of casual, temporary, informal, or illegal jobs. Mostly, this type of thing is ill-paid and irregular. The main inducements to idleness are likely disability and Medicare benefits or a wife who takes up the slack with her income. A third of the unemployed and idlers have $50k+ household income--either they have significant financial resources or spousal income.

Given that the federal disability program increased its charity cases from 3 to 6.5 million from 1990 to 2005--it's fair to say it's being gamed by millions. This was a time period when jobs were becoming less strenuous and dangerous and population only grew 15%. The problem is that neither the Social Security bureaucrats nor the administrative law judges, who determine whether someone qualifies for disability payments, have an incentive to ensure a fair decision. They take the easy way out--approval (sometimes after appeals of the initial decision) for almost everyone who applies for this charity. No doubt many more will suddenly become disabled during this recession.

The racial breakdown for these men (unemployed and idlers), somewhat disguised by the statistical presentation the Times chose, is thus:

White:     11.5%
Black:      27%
Hispanic: 13%

The blacks are a special problem, as in so many other areas of life. Their excessive rate reflects various causal factors: a high rate of criminality, residence in areas with few jobs, poor education and training levels, the alternative appeal of criminal activity (esp drug dealing), the collapse in black America of the tradition of men supporting women and children, habituation to the low income/welfare dependency lifestyle.

A Republican in Name

I think in the end those who should be most pleased with the Bush administration and its consequences are the Democrats. Bush (and the congressional peons who enabled him) has inflicted more damage to the Republican party than anyone since Nixon--though Nixon was more competent in certain respects, he was probably still worse than Bush in a total accounting. It must be recalled that Nixon got a lot of people unnecessarily killed in Vietnam, that he was an extremely aggressive regulator, a most enthusiastic socialist, an architect of race-based selection in America, an inept manager of the economy, a totally cynical politician, and, of course, Mr. Watergate. And his timing was wonderful too, continuing the disastrous momentum built up by LBJ. Bush was simply never energetic enough to do as much long term damage as these catastrophists. All that now remains for Republicans is to wait, and hope that the Democrats blow their chance at once again building up the kind of political dominance that FDR created for them after Hoover's failed regime. In any case, it looks like the Republicans are in for a long period of reflection on the mistakes of the last 8 years.

On the Nature of Evil

http://www.ted.com/index.php/talks/philip_zimbardo_on_the_psychology_of_evil.html A solid talk. Conclusion: some few are actively evil, some few actively good--and the great majority are born followers; they will follow whoever happens to be the established leader, be he good or evil--because they are either incapable of independent thought or have no moral courage. But, his evidence, examples, and analysis are worth hearing (and seeing) for their own sake.

The Affirmative Presidency

Now, if Obama did not slide into Columbia and Harvard Law by "affirmative" means, he might heretofore have released his academic records. Virtually every black in attendance at those schools is an affirmative action case. This is well established. There is no reason to believe that Obama constitutes an exception in this regard. This means if he weren't "black" he probably would not have made it into a top twenty school for undergrad or law--much less the top five Columbia and Harvard. Yet, I merely infer probabilities from available statistical information on these matters. Obama'a academic records could prove him the highly improbable exception to these inferences. One indicator of his intellect is that he never, as a law professor at a top five law school, actually published anything. This is extremely unusual, a flagrantly inadequate contribution. I see no sign anywhere that there is any substance to this man. He's smoke and mirrors. He presents as the sort of black man the liberals have long been desperate to believe they could bring to life--yet he's nothing, nothing in himself, only a collective liberal dream-delusion of a dreamer.

Health Care Realities

I posted this response to a Krugman editorial that denounced McCain's health care policy proposal (which seems to be based on salutary market principles, but appears highly questionable in practice):

There is a fundamental distinction between health care and other sectors of the economy. The great majority of Americans will not in practice or in theory accept the appearance of unequal health care between the rich and the poor. In virtually every other area there is acceptance of this inequality, even in education. And, since the affluent demand a high level (ie, an expensive level) of care, the rest of society expects to receive a level of care reasonably comparable. This means health care will be very expensive and a significant part of society will be unable to pay the true price of their health care. Consequently, the affluent subsidize the less affluent through various government programs and in a number of other less visible ways (like free care for the indigent in emergency rooms).

 

The republican party notices this final result and denounces the economic unfairness of such redistribution and its economic inefficiency (stemming from lack of incentive to reduce medical costs on the part of those who do not pay for them). The democratic party notices that care is not in fact perfectly equal (though it is much more nearly equal than income)—and it denounces the unfairness of unequal treatment and its economic inefficiency (due to relatively limited preventive care available to the poor, which causes health problems to be ignored until they become serious and expensive).

 

McCain’s solution is absolutely irrelevant because it will never pass Congress. Why even analyse it?

 

But, Obama’s plan takes on a special signifance because the democrats will control Congress. One element not in his plan is any credible attempt to limit the increases in health care costs as a whole. This is the essential problem: health care absorbs 16% of GDP, and health costs grow much faster than GDP. Instead, Obama wants to shift around the costs by forcing productive members of society to pay yet another subsidy to unproductive (or less productive) members of society. The health sector is already massively redistributive (government pays, directly or indirectly, for 60% of total health costs), and Obama’s plan would probably have only a modest impact in increasing the level of redistribution. But, the underlying problem of cost is not addressed; it is entirely ignored. Yet, this is one of the major threats to our current position as the leading economy in the world—and also one of the principal reasons why median incomes in the U.S. have been flat for 30 years (it has consumed about half the gains that would have been realized through productivity growth).

 

 

The Two Stooges

An edifying quote, from Joe Biden, in the VP debate:

“When we kicked – along with France, we kicked Hezbollah out of Lebanon, I said and barack said, ‘Move NATO forces in there. Fill the vacuum, because if you don’t know--- if you don’t, Hezbollah will control it.’

“Now what’s happened? Hezbollah is a legitimate part of the government in the country immediately to the north of Israel.”

I recall that statement--and, yes, it was multi-level stupidity, inarticulate, inaccurate, misleading, absolutely absurd. Of course, Palin made no move to challenge him on it during the debate--something she could have done to great effect if she had the slightest notion of this part of history herself--but she does not. These two are jokes--but Biden looks better (as it were) due to media connivance in smothering his blunders and media connivance in highlighting Palin's.

Discovered: The Source of Bush's Self-Confidence

"The difference between stupidity and genius is that genius has its limits."
-Albert Einstein

How to Prequalify for Financing

http://londonbanker.blogspot.com/2008/09/learning-from-rudi-bogni-thin-space-of.html
I found an article (embedded in the above blogpost) written by the CEO of UBS Private Bank, Rudi Bogni, a few months ago in Wilmotts. This is a man who famously responded to the derivatives-induced bankruptcy of Barings Bank in 95' by resigning his post as CEO of a Swiss bank to take a masters in applied mathematics--in order that he might actually be able to understand the derivatives that had now "become the financial market." He gives here a fairly common sense clarification of what conditions are necessary for the financial system to function properly. It is also, I might add, a relief to read something that was conceived at a salutary distance from the petty, ad hominem political squabbles about assigning blame to particular individuals. He approaches the question from a higher and broader conceptual level, and one can only hope that these notions which he expresses are comprehended by the political powers and financiers.

The Triumphs of Republicanism

Thinking about the role of the federal housing agencies in this financial collapse led me to wonder: have the republicans ever managed to extinguish a socialist or entitlement policy in the party's history? Fannie Mae and Freddie Mac have always been harbingers of socialism. The republicans may be less complicit in their creation than the democrats, but why haven't they been killed? Why didn't the republicans do anything to restrain unions during their reign of corruption (2000-2006), when they controlled all 3 branches of the federal government. Oh, I forgot, that's because they were busy inventing a new entitlement. The republican party has not only failed to halt the encroachments of socialism, it has actively abetted this destructive trend. Reaganite populism may have revived the republican party, but this populist tendency has grown decadent and lost touch with its principles. What we now have in this country are two socialist parties: the socialist proclivities of the first range from rabid to merely shameless and of the second from complacent to actually conscience-troubled. Yet all submit to this levelling tendency, with its detrimental knock-on effects of contracting liberty and increasing pyschological (and not only psychological) dependence upon the government. 

More Power = Less Accountability

It is a fact that both the Clinton and Bush administrations worked to increase home ownership rates (which governmental interference also had the side-effect of accelerating the rate of home price inflation). The Byzantine manouevrings of Congressmen relevant to this issue I have only a general notion of--though Republican control for 12 of the last 14 years might lead to some inferences. The only way to increase home ownership rates in a short period of time is to persuade lenders to give loans to ever less qualified buyers. Consequently, risk built up over time and, since a real estate bubble had clearly developed (with house prices rising far faster than personal income), when prices began to decline the full shock of accumulated risks undertaken in the course of many years all hit at once. And these risks were undertaken by high risk buyers, by lenders, by investors in mortgage debt instruments, and by the federal government, which is ultimately responsible for overseeing the financial markets and for preventing, in particular, such a systemic threat as we now face. All of the above parties have suffered in some measure, even those who received bailouts.

 

This crisis was caused in the main by a failure of comprehension, a failure to exercise informed intelligence on the part of the federal government authorities--I mean incompetence in action at the SEC, the Treasury, the Federal Reserve, the White House, and in Congress. Note that no one has gone down for this disaster, not a single federal-level casualty to date. Shareholders have been wiped out, homeowners kicked out, workers and managers cleared out--but, the leaders and regulators, who should have had a global view of this problem, the only people in a position both to see the totality of the problem and to develop preemptive solutions to it--remain unscathed.

 

This is a cultural problem in America. Accountability is necessary for any institution to function effectively.

Japocracy

I cannot help but be pleased that this nation is in terminal demographic decline. What hopeless, disgusting cowardice and conformity they soak themselves in! They might even be more conformist than the Chinese. Result: there are no individuals in Japan, only an indistinguishable mass of insignificant people frightened by the possibility that by some misfortune or mistake they might actually become significant. There are no leaders, no innovators, no exceptional thinkers, no great artists--just the great mass of over-socialized, like-minded mediocrities. This is Zarathustra's nightmare in action. The extinction of individual consciousness, of individual importance, is nihilism and nothing else. This rant is brought to you courtesy of: http://www.physorg.com/news141643079.html