Thought from dinner: If the Greeks never give anything to humanity other than democracy and feta cheese, they will deserve to be honored forever.
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I just read on DailyKos about how the Boy Scouts leadership is now blaming gays and non-believers for the Scouts clear-cutting of forests that have had the misfortune of coming under the Scouts’ control. I just have to make a response, as follows:
Screw you effing sons of buzzards for taking something like the Boy Scouts, something that used to be so simple, good, and true, and turning it into something ugly and twisted, turning something that I used to support wholeheartedly into something that has to be opposed in the name of America. Your effort to blame others for your actions is just the latest evidence that the old Scout virtues of honesty and responsibility have been replaced by bigotry. Your reservation in hell has been made and confirmed.
There, I feel better. But seriously, my own memories of being a Scout have always made me a little uncomfortable about efforts to boycott the Scouts. There’s always been this nagging feeling that somehow I would be opposing the kids. But that’s all over now. I don’t want to see kids anywhere near this organization.
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I never cease to be amazed at the creative applications made possible by the openess of the Internet. Case in point is the site My Cool Signs.Net. They take words or phrases of your choice and write them using letters that appear in photographs on Flickr. Simple and fun.
Near as I can tell, they make their money purely by selling Google ads and links. That doesn’t seem like something that can generate tons of money, but it apparently works well enough for a completely automated service like this. Cool.
Thanks to Apples of Gold for the pointer.
Filed under: commons, economics, fun, internet | Leave a Comment
Paul Krugman has written a new column arguing that the government should receive equity, ownership shares in the financial firms in return for the capital we’re going to inject into them. I agree with him, but I think that his column neglects a critical part of the case for ownership.
At this point, absolutely no one expects the leaders of Wall Street to behave responsibly with money that is entrusted to them. For years now, they have demonstrated an almost unbelieveable lack of awareness of the crisis developing in their industry. Or, maybe it’s not a lack of awareness so much as a lack of concern, a lack of ability to change course, or a sense of responsibility. In any case, these are clearly people who suffer from catastrophic incompetence, a catastrophic lack of ethics, or both.
The safe bet is that these people will do the worst possible thing with any further money that is entrusted to them. In the current economic environment of danger and uncertainty, our current Wall Street leaders will each pursue their own, individual, best strategy for profit maximization. That strategy is to pull back, suspend business, shift your wealth to something safe like T-bills, and let other people undertake the risk of lending while you try to ride out the storm. If they all behave in this way, the economy will completely shut down, as it is doing even now. But since pulling back is the safest strategy for each of them, as individuals, we know that is what they will do as a group. We know it because they have already demonstrated that they will march right off the cliff as a group in the pursuit of their individual, short-run profits. So we can be certain that any money that we give these guys will not be used to resume normal business lending, which is what the economy desperately needs right now.
And when I say that “we”, I mean that everyone in the US economy knows that these people are not to be trusted. The money we pump into the financial industry will not reassure the public unless the public knows that it’s not going into the hands of the same corrupt incompetents who got us into this mess. No one has any faith that these fools can lead us out of the current collapse. Lots of people argue that handing money over to these guys is immoral, but what’s worse is the real sense that bailing them out is useless. That belief that the bailout is useless is a critical factor right now, because it leaves the public uncertain as to how and if the crisis can be resolved. And the economic decline has started to accelerate due to people cutting back in reaction to the sheer uncertainty of the situation.
So we have two problems: first, that our financial sector is run by fools, and second, that we all know it. The only solution I can see, the solution to both of our problems, is to assure the public that the fools are no longer unsupervised. The government needs to take get real, voting equity shares in return for the public’s money because the government, temporarily, needs to have a say in the management of these firms. No matter how much you may loathe government and politicians, the fact is that the government has much more of a stake in the success of the economy as a whole than the clueless clowns who currently run Wall Street. The government can be expected, as part owner, to demand that the financial sector use the public’s money to resume normal operations, rather than to squirrel the public’s money away in private ratholes.
A lot of people have argued for government equity stakes so that the public can have a shot at getting its money back after the economic recovery. That is a good and sound argument, but I think that the more important argument is that the bailout just won’t work unless the government has a say in how the money is spent. Otherwise we’re throwing $700 billion at people who have already pissed away more than that, and everyone in the world knows it. No one trusts Wall Street at this point, not even Wall Street, which is why the stock market is collapsing despite the passage of the bailout.
The financial crisis is not going to end until we get some regime change on Wall Street. We can get that change by just waiting for the economy to collapse along with the financial sector, and then the Wall Street clowns will go away along with our jobs, retirements, and homes. That’s the free market way to solve the problem. Or we can demand that the government get a voting, ownership share in return for the capital we have to inject into Wall Street, and thereby get a say in how the bailout money gets spent. I vote for option number two.
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Yesterday’s passage of the financial bailout provides an interesting illustration of logrolling, which is one of the most problematic parts of democratic government.
In theory, politicians elected to Congress are supposed to deal with issues that effect the United States as whole. In reality, politicians are generally concerned with trying to get the Federal government to do favors for the local voters and special interests who got the politician elected.
The problem for such a politician is to get other politicians to vote for these special favors. Why should other politicians vote for your pet projects? There’s nothing in it for them. It does them no good if the Federal government makes your voters happy by spending money in your Congressional district.
The answer, of course, is logrolling. A bunch of politicians get together and agree to vote for each other’s special projects. So a whole bunch of projects that only benefit small groups of people suddenly acquire widespread support in Congress and get passed into law.
These verbal logrolling agreements between politicians become formal contracts through the use of amendments and earmarks. I start by proposing a bill about, say, road construction. The bill includes a specific instruction, an earmark, that will funnel money to a particular road construction company that supports me. You amend my bill to include a loosening of regulations on banks, which helps the big bank in your district, and someone else amends the bill to include something about trade with Japan that will help some union in her district. Through amendments and earmarks, all of our unrelated pet projects get bundled up in one big deal. It has to be that way because we, as politicians, don’t trust each other. So for the deal to work we all want to have our pet projects passed together, as a package, all at once.
That’s how logrolling typically works. But in getting the House and Senate to pass the Paulson bailout plan, Senator Harry Reid has shown us another use of logrolling: logrolling as blackmail.
The House of Representatives voted down the Paulson bailout twice. But Reid knew that some of the representatives voting against the bailout badly wanted to pass tax credits for renewable energy. Renewable energy is currently a very popular with voters, and with good reason. I am strongly in favor of it myself. And the nascent renewable energy industry has been very clear that they need their tax credits renewed before the end of this year in order to maintain momentum in the drive to develop cheap, renewable energy.
Tax credits for renewable energy would easily pass on their own, if they were presented as a measure on their own. The tax credits don’t need any logrolling coalition to get passed. But by amending the Senate version of the Paulson bailout to include the renewable energy tax credits, Reid and other leading Democrats essentially held renewable energy hostage. Politicians were forced to either pass them both or reject them both. Either you vote for this ugly bailout or we’re going to shoot these adorable renewable energy sources.
The tactic worked, as logrolling usually does. We got the renewable energy tax credits we need, but we also got saddled with a Wall Street bailout that is potentially disastrous if the Bush administration maintains its usual level of competency.
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Everyone seems to acknowledge that California’s financial system has on the verge of collapse. The 80-day budget crisis that we are just now, hopefully, past and the sham of a budget that emerged from the crisis are only the latest, brutal, undeniable pieces of evidence.
The major reform being suggested is elimination of the 2/3 majority requirement for passing a budget and raising taxes. But the chances of passing that reform are slim to none since the Republicans have found that it gives them enormous power over the budget even though they are a minority. We know what we need to do, but we can’t figure out how to make it happen politically.
So here is my proposal to make reform politically acceptable. There are actually two political reforms that are currently being called for in California. One is the elimination of the 2/3 majority requirement. That proposal is favored by Democrats and good citizens, and opposed by Republicans. The other is the creation of a politically-neutral redistricting system, to eliminate the current shameless gerrymandering to prop up the Democratic majority. That reform is favored by Republicans and good citizens, and opposed by Democrats. Both of the parties have, so far, been able to prevent passage of the reform favored by the other party.
So let’s trade. Put the two reforms together into a package so that both parties get something they want. Republicans will lose their power as a minority to obstruct the budget, but they’ll gain a fair shot at becoming the majority in their own right. By righting two wrongs simultaneously, maybe we can actually do something to fix the mess in California.
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