Thursday, April 17, 2008
Coase Theorem Smackdown
Kudos to Mike Moffatt for doing a whole series of articles debunking the validity of the oft cited Coase "Theorem." I shouldn't really call it a theorem since a theorem, in it's most used definition, is an idea or set of ideas that can be shown to be logically true that has value outside of itself. But as Mike makes clear, the theorem basically assumes the answer it wants, and then of course arrives at the answer. The Coase theorem is a crock and is based on a series of loose assumptions that mainstream (re: conservative) economists use to try to defend perfectly free market capitalism.
Tuesday, April 15, 2008
McCain Economics
Sen. and Republican Presidential Nominee Apparent, John McCain has unveiled some economic policies yesterday. Among them: a summer freeze on the federal gas tax (dumb), halt all (except that which involves killing people of course) increases in discretionary spending for a year to conduct a government audit of programs (dumber).
About half of the discretionary budget is 'national defense,' a government-defined function area that roughly corresponds in common parlance as 'military.' However, this category does not include foreign military financing, security assistance, and other programs commonly thought of as military. Other types of discretionary spending include the budget for education, many health programs, and housing assistance. (Nationalpriorities.org)
So, McCain wants to put a bandaid on our energy problems (a bandaid that at best just helps the oil companies), and he wants to tell educators, health specialists, and people hurting from the housing crisis that they get no more money this year - no increase in funds to account for the increasing inflation and burden.
Well, what can you expect from a guy who doesn't like economics.
About half of the discretionary budget is 'national defense,' a government-defined function area that roughly corresponds in common parlance as 'military.' However, this category does not include foreign military financing, security assistance, and other programs commonly thought of as military. Other types of discretionary spending include the budget for education, many health programs, and housing assistance. (Nationalpriorities.org)
So, McCain wants to put a bandaid on our energy problems (a bandaid that at best just helps the oil companies), and he wants to tell educators, health specialists, and people hurting from the housing crisis that they get no more money this year - no increase in funds to account for the increasing inflation and burden.
Well, what can you expect from a guy who doesn't like economics.
Wednesday, April 2, 2008
My Letter to Indiana Senator Evan Bayh
Dear Sen. Bayh:
I am a 28 year old male with excellent credit and a FICO score above 700. I've been a loyal customer to Capital One for 5+ years now and have consistently paid my credit card bills on time and usually well over the minimum payment required. I originally had a rate of 7.9%. That shot up to 12.9% late last year. Capital One says that was due to "competition." Fine, I can understand that. But apparently in the last year I missed 2 payments by a few days and so they decided to increase my rate from 12.9 to 26%! That is ridiculous. I didn't notice that they did that until today, and I've been paying that finance charge for the past 3 months. I'm not a 26% risk. I've since called them and talked them down to a lower rate, but let's get real here. Capital One says it's "industry standard." They also told me that the rate jumps if the computer says so. That's inexcusable. If I, a successful person with an education and excellent credit is given a 26% rate on a whim, imagine what is happening to the less fortunate in our state and country. I'm asking you to clamp down on the special interests of the credit card industry and start writing legislation to regulate this out of control industry. In this time of credit crisis, we can ill afford to continue standing idly by while credit card companies dictate our financial lives. People NEED credit. They know this - and they misuse that to their advantage. Please help us with this issue.
Sincerely
Garth A Brazelton
I am a 28 year old male with excellent credit and a FICO score above 700. I've been a loyal customer to Capital One for 5+ years now and have consistently paid my credit card bills on time and usually well over the minimum payment required. I originally had a rate of 7.9%. That shot up to 12.9% late last year. Capital One says that was due to "competition." Fine, I can understand that. But apparently in the last year I missed 2 payments by a few days and so they decided to increase my rate from 12.9 to 26%! That is ridiculous. I didn't notice that they did that until today, and I've been paying that finance charge for the past 3 months. I'm not a 26% risk. I've since called them and talked them down to a lower rate, but let's get real here. Capital One says it's "industry standard." They also told me that the rate jumps if the computer says so. That's inexcusable. If I, a successful person with an education and excellent credit is given a 26% rate on a whim, imagine what is happening to the less fortunate in our state and country. I'm asking you to clamp down on the special interests of the credit card industry and start writing legislation to regulate this out of control industry. In this time of credit crisis, we can ill afford to continue standing idly by while credit card companies dictate our financial lives. People NEED credit. They know this - and they misuse that to their advantage. Please help us with this issue.
Sincerely
Garth A Brazelton
Monday, March 31, 2008
Paulson Plan Cause for Alarm?
Am I the only one worried about the increased moral hazard the new plan by Sec. Paulson would potentlially create? The plan basically gives the Fed "official" powers (that were previously under the executive branch) to regulate and act as overseer of investment / financial institutions. Does this mean we can expect more Bera-Stearns-like bailouts in the future? What does that mean to the credibility of the Fed when they are allowed to help certain wall street financial firms under the guise of "maintaining stability?"
Should the Fed have the power to pick and choose who lives and who dies in our economy? I for one can't forsee if the Paulson plan, if enacted, would be a net positive or negative - but it does cause me some alarm to see the largest supposedly non-political institution of our government (the Fed) now being offered new discrectionary powers that could easily be corruptable.
Should the Fed have the power to pick and choose who lives and who dies in our economy? I for one can't forsee if the Paulson plan, if enacted, would be a net positive or negative - but it does cause me some alarm to see the largest supposedly non-political institution of our government (the Fed) now being offered new discrectionary powers that could easily be corruptable.
Wednesday, March 19, 2008
So stupid it's laughable.
I just commented on Obama and his brave, honest and intelligent speech on race relations.
Now let's talk about George Bush (ie. Commander in Stupidity).
http://news.bbc.co.uk/2/hi/americas/7305023.stm
Bush gave his own speech today, to mark the 5th anniversary of an unecessary, money wasting, life destroying war. He called it a "strategic victory in the war against terror."
Couple things:
First, it is not, has not, and probably never will be a strategic "victory." He can fly all the "mission accomplished" banners he wants, but thousands of Iraqi's continue to die in the violence, and our soldiers are still getting killed for NO policial progress at all. Second, Iraq has nothing to do with the so-called "war" on terror. Al Quaida did not exist in Iraq prior to our invasion - Bush CREATED the link between Iraq and Al Quaida.
Second, to throw a little economics in the mix here, he said, "The costs are necessary when we consider the cost of a strategic victory for our enemies in Iraq."
No, the sentence should be, economically speaking, "The costs MAY be necessary when we consider the PROBABILISTIC cost of a strategic victory for our enemies in Iraq."
In other words, it's not so black and white as what Bush makes it out to be. Yes, much of our costs are sunk in Iraq - they have taken place and we can't reclaim them. But if Stiglitz et. al. are correct, we could only just be at the base of what will be an astounding cost (in terms of money - not to mention lives). Obviously the Iraqi government doesn't feel enough pressure yet - we need to light a fire and give a timetable for complete withrawl. Otherwise, we are just burning money and killing our own citizens and the citizens of Iraq.
Now let's talk about George Bush (ie. Commander in Stupidity).
http://news.bbc.co.uk/2/hi/americas/7305023.stm
Bush gave his own speech today, to mark the 5th anniversary of an unecessary, money wasting, life destroying war. He called it a "strategic victory in the war against terror."
Couple things:
First, it is not, has not, and probably never will be a strategic "victory." He can fly all the "mission accomplished" banners he wants, but thousands of Iraqi's continue to die in the violence, and our soldiers are still getting killed for NO policial progress at all. Second, Iraq has nothing to do with the so-called "war" on terror. Al Quaida did not exist in Iraq prior to our invasion - Bush CREATED the link between Iraq and Al Quaida.
Second, to throw a little economics in the mix here, he said, "The costs are necessary when we consider the cost of a strategic victory for our enemies in Iraq."
No, the sentence should be, economically speaking, "The costs MAY be necessary when we consider the PROBABILISTIC cost of a strategic victory for our enemies in Iraq."
In other words, it's not so black and white as what Bush makes it out to be. Yes, much of our costs are sunk in Iraq - they have taken place and we can't reclaim them. But if Stiglitz et. al. are correct, we could only just be at the base of what will be an astounding cost (in terms of money - not to mention lives). Obviously the Iraqi government doesn't feel enough pressure yet - we need to light a fire and give a timetable for complete withrawl. Otherwise, we are just burning money and killing our own citizens and the citizens of Iraq.
Obama and Race
Blah Blah more rate cuts, more evidence that the economy is going to be in the crapper for a while....not news.... I'm over it.
So taking a break from economics to talk about a more universal question - one of race and specifically Obama's recent speech. I don't know how this will all play out any more than the next person, but I hear a lot of negative talk about Obama, saying that Obama only now tries to dissavow his former pastor's remarks because it has been brought to light. Comments like this, I'm finding prevelant on the internet:
"Obama has chosen to belong to this racist church for 20 years, and now because of exposure by the press, he tries to fool the American public once again. "
The perhaps mistaken assumption made by people that make such comments is that Rev. Wright spent every minute of his sermons with Obama in attendence over 20 years preaching anti-American and racist rhetoric. I doubt this to be the case. I've attended some rather spirited church functions and I can see how a pastor can get caught up in the moment, and given his crowd, say something that when taken out of context is especially racist and derogatory - and just plain wrong.
Given that that can occur, why should Obama have denounced his preacher? I can understand if it were a regular occurence, but it sounds like it wasn't. It sounds like Rev. Wright has been there for the Obama family - and it sounds like Obama's relationship to him is really none of the American people's business, unless you actually believe Obama is anti-American, or racist, or somehow biased toward blacks - which I think you'd have to be an idiot to think. Americans of course love their drama and their ring-side television - frankly it's getting a little tired and disgusting. I can't decide if I should blame reality tv, Brittney Spears, or just the way the American culture seems to be progressing. But whatever the reason, it is ridiculous and it is not helping anything.
The speech Obama gave was pivotal - politically risky - but he did it anyway. Obama is willing to talk about taboo subjects like few politicians (certainly not Clinton or McCain) are. Race is still a major problem that goes unsaid. Voluntary segregation is visually rampant in this country. As I was growing up in school there were the white's that sat with each other, and the blacks that sat on the other end of the cafeteria. Very little mixing happend. It wasn't organizational segregation, but there existed this unspoken social norm of separation - like "we can't be seen together." It is an epidemic in our society that creates huge social costs - not the least of which is a sense of"Mine will take care of me, yours takes care of you." The United States is not fully united. As Obama expressed, it is a great country that will never be perfect, but it can be further perfected - and for my money, he is the best hope to achieve this for the next 4 years.
So taking a break from economics to talk about a more universal question - one of race and specifically Obama's recent speech. I don't know how this will all play out any more than the next person, but I hear a lot of negative talk about Obama, saying that Obama only now tries to dissavow his former pastor's remarks because it has been brought to light. Comments like this, I'm finding prevelant on the internet:
"Obama has chosen to belong to this racist church for 20 years, and now because of exposure by the press, he tries to fool the American public once again. "
The perhaps mistaken assumption made by people that make such comments is that Rev. Wright spent every minute of his sermons with Obama in attendence over 20 years preaching anti-American and racist rhetoric. I doubt this to be the case. I've attended some rather spirited church functions and I can see how a pastor can get caught up in the moment, and given his crowd, say something that when taken out of context is especially racist and derogatory - and just plain wrong.
Given that that can occur, why should Obama have denounced his preacher? I can understand if it were a regular occurence, but it sounds like it wasn't. It sounds like Rev. Wright has been there for the Obama family - and it sounds like Obama's relationship to him is really none of the American people's business, unless you actually believe Obama is anti-American, or racist, or somehow biased toward blacks - which I think you'd have to be an idiot to think. Americans of course love their drama and their ring-side television - frankly it's getting a little tired and disgusting. I can't decide if I should blame reality tv, Brittney Spears, or just the way the American culture seems to be progressing. But whatever the reason, it is ridiculous and it is not helping anything.
The speech Obama gave was pivotal - politically risky - but he did it anyway. Obama is willing to talk about taboo subjects like few politicians (certainly not Clinton or McCain) are. Race is still a major problem that goes unsaid. Voluntary segregation is visually rampant in this country. As I was growing up in school there were the white's that sat with each other, and the blacks that sat on the other end of the cafeteria. Very little mixing happend. It wasn't organizational segregation, but there existed this unspoken social norm of separation - like "we can't be seen together." It is an epidemic in our society that creates huge social costs - not the least of which is a sense of"Mine will take care of me, yours takes care of you." The United States is not fully united. As Obama expressed, it is a great country that will never be perfect, but it can be further perfected - and for my money, he is the best hope to achieve this for the next 4 years.
Thursday, March 13, 2008
Obama doing townhall in Plainfield, IN?
The Indianapolis Star has a link on its website stating Obama is going to be in Plainfield doing a town hall style meeting this Saturday....It's nice to see my little home state getting some love from potential future leaders. Hopefully he comes downtown too, cause I'm too lazy to drive to Plainfield ;) and risk not being to get into the little high school gym to see him.
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