Friday, October 29, 2010

Douche-con 5: A Strategy for the Final Days Before the Midterms

The Friday Before.

Both sides are officially in high dudgeon.. Either it's a conservative pounding a fist about "the gutter media's attacks on conservative women." or it's a liberal sanctimonifying about the GOP's gains being the fruits of an evil sham based on nothing but unscrupulous lies.

The takeawy for the sane?

Clearly we're now at douche-con 5, folks. DOUCHE-CON 5.

 Red  Alert. The future of the republic rests on a razor's edge, and the outcome is in your hands.

So, 4 days until the election. You won't see or hear any new arguments in these closing days. Just higher volume, higher frequency, more vitriol, and more dirty tricks. Pretend revelations. Arm-waving.

 What a great weekend not to watch TV or answer the phone or read a poll or an editorial. Hug your kids, Take your spouse to dinner. Go for a walk. Let things settle and digest. Remain calm. Don't be afraid. If the poison energy of the election comes your way, take the long way round.

Then, on Tuesday. Please vote. Think both of yourself and of your fellow Americans. Do the best you can. On Wednesday the sun will rise, Earth will turn, and we'll keep picking up the pieces.

Sunday, October 24, 2010

Should Riskmakers Be Able to Sell All that Risk?

Subprime lending fueled a real estate bubble that later collapsed. It had to do so eventually, as prices outstripped what buyers could afford to pay.

Bubble-inflating lending was fueled by loan originators packaging and selling their loans to other people,  offloading their risk to other people. The ability of originators to offload all of their risk removed any incentive to accurately assess borrower creditworthiness and loan viability.

Shouldn't we try to revise the system to insist that loan originators of most sorts must retain some substantial portion of the risk they create by originating the loan?

Or at least ensure that such risk is not obscured in a haze of complexity? I am not arguing that we repeal caveat emptor. But if you look at the chain of custody of this risk-selling, you see that ratings agencies gave high investment-safety marks to a swath of investment vehicles which not only collapsed, but were loaded with packages of high risk loans. If entities which set themselves up as experts are this dumb and or compromised, what hope is their for the rest of us.

I think we either need to make the risk-makers keep some of their risk, or reform the system so that bullshine salesmen are penalized when their bullshine proves to be just that.

Friday, October 22, 2010

Bragging on My Home State

In more than one place I have seen articles bemoaning the quality of political discourse and the caliber of candidates in some places. People deign to say they feel sorry for Nevada or Delaware or California. And hey, maybe so. If I had to choose between a partisan technician and kant-spewing kook, I'd be pissed.

I mention this as a prelude to a big chest thump for my home state of Massachusetts. I watched an hourlong governor's debate between incumbent dem Deval Patrick, GOP challenger Charlie Baker, and possible spoiler also rans Tim Cahill (ex-dem independent) and Jill Stein(green party I think).

What I saw was 4 very capable and well-informed people. Their hearts seemed to be in the right place, they had a good understanding of the issues, they made good points. And I came away thinking that wow, we are pretty lucky as a state that get that caliber of candidates. Leaving aside the ugly polluting and muddying TV commercials by interest groups on all sides, democracy seems alive and well here.

Another interesting note? This debate and this race shows the conceivable problems we might face should the major parties atrophy to the point where it's common to see a 3, 4, 5 candidate race. Even if 2 or 3 of the candidates are only polling +5 single digits, the final outcome could end up seeming sort of random. The ultimate winner seems like so m uch less of a clear winner, at least in my eyes.

 I definitely like the idea of a future where more candidates who are neither democrats nor republicans can truly influence the ongoing debate and get elected to important offices. But at the same time, I think we'd be well served if the election systems evolved so that the final round of voting involves only the top two choices. But if we do that, I think the last 2 rounds of voting should be close together.

Wednesday, October 20, 2010

What the Tea Partiers Want

I hold Jonathan Haidt in high respect because I think his book The Happiness Hypothesis is jammed with insight about psychology and human nature. Packed. FWIW, I tend to regard the self-help genre with high skepticism, because I think it's populated by too many opportunists, con folk, charlatans, etc, etc.  I hold Haidt as an exception.

So when my buddy let me know that Haidt had written an article called What the Tea Partiers Really Want, I was eager to read it. And Haidt didn't let me down. In attempting to find an on-point 3-paragraph excerpt that encompasses the gist of the article, it became very clear that there is in this case no substitute for reading the whole thing. Please do that!

Because a generalized love of liberty doesn't distinguish tea partiers from other Americans, liberals have been free to speculate on the "real" motives behind the movement. Explanations so far have spanned a rather narrow range, from racism (they're all white!) to greed (they just don't want to pay taxes!) to gullibility (Glenn Beck has hypnotized them!). Such explanations allow liberals to disregard the moral claims of tea partiers. But the passion of the tea-party movement is, in fact, a moral passion. It can be summarized in one word: not liberty, but karma.

The notion of karma comes with lots of new-age baggage, but it is an old and very conservative idea. It is the Sanskrit word for "deed" or "action," and the law of karma says that for every action, there is an equal and morally commensurate reaction. Kindness, honesty and hard work will (eventually) bring good fortune; cruelty, deceit and laziness will (eventually) bring suffering. No divine intervention is required; it's just a law of the universe, like gravity.

In the tea partiers' scheme of things, the federal government got into the business of protecting the American people—from market fluctuations as well as from their own bad decisions—under Franklin D. Roosevelt. During the Great Depression, most Americans recognized that capitalism required safety nets here and there. But Lyndon Johnson's effort to build the Great Society, and particularly welfare programs that reduced the incentives for work and marriage among the poor, went much further.

Hope you read the whole thing. I even hope it leads folks to checking out The Happiness Hypothesis. I think Haidt is spot on with the idea that the best impulse of the tea party to re-establish a firmer link between rights and responsibilities, where honest good-faith effort is rewarded and laziness and deceit is punished. And FWIW, if you disagree with what Haidt says, please give me a better reason than the fact that the WSJ published it.

Critical Thinking About Political Opinions

If you're here, it may be because you enjoy talking about politics and related big ideas, And maybe you have experience with interesting threads suddenly devolving into nasty, pointless flame wars, If that troubles you like it troubles me, maybe you're interested in some introspection on it. As opposed to, you know, continuing to assume its the other commenter who is the 100% a-hole.

The blog Overcoming Bias has an insightful post on the idea that folks run into trouble when they voice opinions (consciously or subconsciously) to signal ability or loyalty, instead of as part of a good faith effort to estimate truth. This rings extremely true to me, since it relates to the idea of "weak-sense" versus "strong-sense" critical thinking that Richard Paul espouses, and which I studied and liked in grad school.

At the risk of running afoul of netiquette regading excepting, I am going to post the whole list, with attribution to Robin Hanson...Opinion Warning Signs:

  1. You find it hard to be enthusiastic for something until you know that others oppose it.
  2. You have little interest in getting clear on what exactly is the position being argued.
  3. Realizing that a topic is important and neglected doesn’t make you much interested.
  4. You have little interest in digging to bigger topics behind commonly argued topics.
  5. You are less interested in a topic when you don’t foresee being able to talk about it.
  6. You are uncomfortable taking a position near the middle of the opinion distribution.
  7. You are uncomfortable taking a position of high uncertainty about who is right.
  8. You find it easy to conclude that those who disagree with you are insincere or stupid.
  9. You are reluctant to change your publicly stated positions in response to new info.
  10. You are reluctant to agree a rival’s claim, even if you had no prior opinion on the topic.
  11. You are reluctant to take a position that raises the status of rivals.
  12. You care more about consistency between your beliefs than about belief accuracy.
  13. You go easy on sloppy arguments by folks on “your side.”
  14. You have little interest in practical concrete implications of commonly argued topics.
  15. Your opinion doesn’t much change after talking with smart folks who know more.
  16. You are especially eager to drop names when explaining positions and arguments.
  17. You find it hard to list weak points and counter-arguments on your positions.
  18. You feel passionately about a topic, but haven’t sought out much evidence.
  19. You are reluctant to not have an opinion on commonly discussed topics.

Thoughts? Since this comes from Robin Hanson, folks who lean liberal are likely to attack it on that basis. In the interest of sidestepping that rut, this post explicitly stipulates that it is possible that he is evil or an a-hole or both, and declares that point irrelevant to the discussion of the merits of the list. In other words, this thread is not interested in what you think about Robin Hanson. Thanks.

Open Thread: Risk Aversion

I'm going to do a double duty open thread. One part of it is the usual renewal of the call for folks to say what's on their mind, in the spirit of good-faith non-ideological political inquiry. Or whatever it is I'm trying to foster here. Apparently, what I like is a discussion that is civil and insightful, and lengthy is also ok. So, for example, if you've had multiple occasions to complain that someone else's posts are too long, you might not be happy here. Clever glib unconsidered comments in the service of winning an argument? Can you do better?

The other part is an invitation for Tully and the hairshirt hedonist to expound some more on an exchange from a lengthy open thread where they discussed monetary theory.

Tully: If I weren't so personally debt-adverse and could be assured of my ongoing income, NOW would be the time to borrow at locked-in low fixed rates.

HSH: I'm pretty debt-averse myself. The only debt I have is my mortgage, which I very recently refinanced to get the low fixed rate available. But I wouldn't go looking for new debt, either, regardless of the low rates. I'm just not built for that.

I'd call this an old-fashioned value that hasn't been "au courrant" enough for some time now. In other words, a good argument can be made that our current problems have been caused by insufficient attention to the gap between what folks want and what folks can afford.

I also carry only a mortgage as debt. This approach that HSH and I share used to be the dominant one, or at least more prevalent. And once upon a time, the approach Tully uses was in high favor. Or maybe even the only available approach.

We've seen a period in America where many borrowers have become cognitively and emotionally detached from debt and risk. And at the same time, lenders have found ways to functionally detach themselves from  the financial risk they create, by offloading the risk onto a chain of other entities.

That's a problem. Any thoughts? Take this wherever you want guys, make any connections you want.

Sunday, October 10, 2010

What If We're Slowly Starting to Bounce Back?

I see a hair's breadth of potential for the economy to begin picking up slowly over the next year. It cratered so deep that it's almost inevitable that it will begin to creep up following the recent period where it's basically stabilized without growing nearly enough to console those hurt the worst by the fall.

Republicans will try to take post-mid-term credit for it. Just as democrats would have if the bounce had been quicker, and just as democrats will no matter when that happens. But hey, that's politics. Both parties are always certain that all the bad things are the other party's fault and all the good things are things they made happen. They're like infants. Let them cry themselves to sleep, right?

My personal view is that the government did a number of arguably necessary things to prop up the economy when it cratered, during the tail end of the Bush Presidency and the beginning of the Obama Presidency. Surely preventing the collapse of credit markets needed to happen. Surely some of the bailed out banks needed to be bailed out, though perhaps not all.

Arguably America might not have liked a world where we had only one of the remaining big automakers. And arguably the big stimulus package policies, wasteful and poorly aimed though many were, stemmed a number of ill tides. Since all that spending DID occur, it's pretty hard to say how bad things might have been without it, at your company, in your state, in your town. Though every Democrat is sure it was crucial and every Republican is certain it was folly, I don't pretend to know with much certainty or detail.

My guess is that plenty of the spending was wasteful, but much of it was helpful. And it seems that most of the really important necessary things passed without too much bickering. This indicates to me that no matter what either party said then or is saying now, these particular things would have been enacted in some form regardless of who was President and who was running congress.

I'm old enough now as I enter my later 40s to have seen several generations of politicians and both parties do their best to take partisan credit for for such things. Congress generally does a passing job of taking care of crises somehow or other, with partisan shadings on whatever available approaches seem obvious. Thus barely doing, umm, their jobs. Neither PARTY deserves much credit for the fact that this somehow barely happens in cases when the sh!t really hits the fan.

So if and when the economy recovers, I have no plans to pat EITHER party on the back for "fixing" it. Instead, both parties deserve blame for fostering the long-term environment of easy credit and the subsequent real estate bubble that caused the collapse in the first place. We had a big fall caused the powerful greedy corrupt narcissists and egomaniacs running congress.

Now, after that big fall, regular folks are still alive but bruised, many facing lowered expectations. Maybe a crappier job or no raise. Smaller retirement savings. Or none, with worse career prospects. Different ideas about consumer consumption.

Slowly but surely we can hopefully dust ourselves off and go on as best we can. And THAT, amigos, is what will cause a recovery. Not Republicans and not Democrats. The sooner we all wrap our heads round that, the better.

Thursday, October 7, 2010

Open Thread

Smoke 'em if you got 'em! Looking for post ideas, visits, whatever you have on your mind. So go ahead, rub one out.

I'll also be inviting folks at Donklephant to swing by here and continue a conversation that has been stifled by a moderation queue glitch.

Instapundit Warns Republicans

In a Washington Examiner editorial, the Instapundit Glenn Reynolds warns Republicans they'd better understand the nature and limits of the support they're expecting in the fall elections:

Both political parties are out of touch, and ordinary Americans are very unhappy about it, as they watch the Treasury being looted, the economy sink, and the political, journalistic, and financial ruling-class figures escaping the consequences of their ham-handed and self-serving actions.

But while ordinary Americans are mad as hell, this time they really don’t have to take it any more. Institutions have failed them, but Internet tools like blogs, Twitter, and Facebook, and personal tools -- like the cheap handheld video cameras that beat back bogus charges of Tea Party racism again and again -- mean that they don’t have to rely on failing institutions....

...But those establishment GOP figures who think that they’ll cruise to victory and a return to the pocket-stuffing business-as-usual that marked the prior GOP majority need to think again. This election cycle is, in a very real sense, a last chance for the Republicans. If they blow it, we’re likely to see third-party challenges in 2012, not only at the Presidential level but in numerous Congressional races as well.

I've been saying this for some time time. Business as usual is not going to cut it. Ultimately, the most interesting thing about the results of the upcoming mid-terms is going to be how the President and the next Congress respond to deep voter dissatisfaction. Together, they need to get past partisan bullshine and find substantive bipartisan ways to address big issues like gross gov't overspending, entitlement reform, immigration, the glut of unrealistic loans clogging the real estate market, and healthcare costs (as opposed to access), If they don't. I think we'll see a pretty noticeable move towards legitimate viable independent candidacies.