Obama's stimulus defense

Saw Obama's talk last night. These guys have got to start reassuring me. The salary caps they plan for business is instructive. One of the rules in economics is that if you freeze the value of something, it disappears because the production decreases and the demand increases. You freeze the price of oil, it gets scarce; if you freeze the price of mortgages, mortgages get scarce. It's like a pool: the lower the price that is fixed, the smaller the pool. On the other hand, if you artificially fix a price higher than the product is worth, the supply of the product will rise to meet it. The pool will fill more. So if you fix a salary for carpenters and do not let it adjust, you will have fewer carpenters and more demand. If you raise the price you will have more carpenters and less demand. This can get really complicated and that is what these guys are creating: they are supplying money to the system in various specialized areas and the system will determine what it is worth. The only problem is that for the first time I believe Harry Reid; they don't know what to do. So they are going to do something.

Watching the Obama speech last night was unsettling in a number of ways. One thing that surprised me was his remark about "cable t.v." and "talking points". This was said in the context of criticizing the doubt that has arisen about the "stimulus plan". The cable audience is really small. O'Reilly is the most successful show and he draws 3 million viewers at most. That may be good advertising numbers but, in a country of 300 million, it's small. And it is strange to attribute the skepticism about the plan to this minority. There's no question that Fox talks to a group that has been driven to it by Obermann and will probably be right of center but Lou Dobbs sounds right of center any more. Acting as if this tiny minority has some huge impact is peculiar, especially when they don't get mainstream attention. Years ago Ms. Smeal of the National Organization of Women could cause a stir representing less than 60,000 members because the media liked them. Nothing on Fox gets media attention. I really wonder what the thinking is here. I hope it isn't scapegoating but it sounds it. And Obama saying things like "This is not my plan" is not reassuring.
I think objections like this are legitimate: http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020502766_pf.html
I don't think they can be just brushed off by being the result of goofy cable guys and intense special interests. And if that will be the government position, I think we all have some serious trouble.

Something Else D.C.

More on the Greeks. They believed that the polis, the city, had an intimate relationship with the individual: good laws, good citizen, bad laws, bad citizen. (This is opposed to the Enlightenment idea of the citizen subject to natural laws where the citizen had to be controlled, the general drift of western europe and America, although the American Constitution had high hopes of the individual potential with most of the mischief originating in the government.) But there was more than esprit in the Greek view; the state was constructive. Looking at this mess in Washington made by these pirates and morons, it is hard to imagine how they thought. Worse, if they are right, the citizen in this country is going to have a terrible downturn.

We should change the name of Washington to something else until some real leaders emerge. Actually, that is my new campaign. Change the name of Washington D.C. to Something Else D.C. until we get good, responsible leaders who put the state and the people first. Then we'll change it back.

Solon, Tellus and Thugs

I've been reading two topics, one about the Thugs and one about the Greeks. Fascinating, both of them, because both create intact, consistent self contained worlds that are coherent and yet completely at odds with each other. The Greeks, of course, are more interesting as they have a direct line to us. Solon , the famous "Lawgiver of Athens," was a respected wise man. Herodotus has a story about him that is often quoted and says a lot about him and the Greeks. Solon met Croesus, the Persian, the richest man in the world . After showing Solon some of his riches he asked him "Who is the happiest man in the world?" (expecting "You, O Magnificent One!) Solon answered, "Tellus of Athens," someone no one had ever heard of. Why? Because his Polis (town) was flourishing, he had good children, and he died in a righteous cause (the defense of the Polis).The Greeks were more than just successful; they were wise. They made a real effort to understand themselves and their world. And this effort was a struggle; they did not always agree. Sometimes they came to no conclusion. But they did know that happiness depended on several basic things: the composure of the state, the integrity of one's children, the code of your life. Remember, these people had a very distant relationship with their gods. They had no belief in an afterlife. Their lives were stripped down to the basics. Whether one believes them or not, they must be taken seriously as every individual searches for his own answers.

A Government Stimulus, Literally

This stimulus package has me worried. It looks so full of junk it is hard to believe these people take themselves seriously. I am reading a book about the Thuggee movement, an ancient brotherhood of thieves who practiced ritualistic murder on a huge scale. Some of these people killed thousands of people. The movement lasted centuries. The group had a quasi religious quality so they had a meticulous, devout air about them. They also were horrified and indignant about some crimes--as long as they were not responsible for them. Reminds me of that story about the police in Oakland, California who during their shifts would break into safes. They were discovered when, during one of their robberies, they heard a robber next door and the criminal police rushed out to apprehend the criminal criminal. A cop was shot and the subsequent investigation revealed two robbery sites and only one robber.

These politicians are just killing us during the day and saving us during interviews.

The Japanese, the Greeks 'n' Us

I reread my note from yesterday. It sounds a bit angrier than I meant it. I do despise these grasping politicians and their incestuous self righteous handmaidens in the press but I don't think that alone explains it. I think there is a malaise abroad in the land. I think the reality of the size of our problems is beginning to sink in and people don't like it. Nurses are talking politics; they never talk politics. A scrub nurse today talked bitterly about government, about her 20 year old--an employed, hard working tax paying guy--who is being haunted by the local police because of the look of his car, so much so he sold it. Many hospital people talk openly about collapsing their retirement plans because no one is to be trusted. Some openly criticize the new immigrants brought in as refugees by Catholic Charities for gaming the system and plan with their families how they can do the same thing, not for money but revenge.

The national news is bad. Barney Frank and his ilk are not going away. Obama goes hat-in-hand to Arab t.v.. Pelosi wants to have hearings on Bush administrators. Rahm Emanuel, for heaven's sake. No one knows where 350 billion dollars went. Obama wants to retrofit the auto loans with environmentally friendly requirements, as if these will sell better.

There are some interesting parallels in history. The Japanese remade their country completely, twice, in one hundred years, first after encountering Perry when they went from a feudal culture to a modern world culture and then after the devastation of the Second World War. Perhaps it is easier after military annihilation but they did it twice. And the Greeks are interesting too because they created a culture that was new to the world, entirely new, as they created the polis based democracy that ruled the world and formed the foundation of most of the worthwhile things after it. That culture did not evolve; it appeared. We are early in this mess and many of those responsible are still here. But so are the children of the people who built this country. These times could get rough. Think of the Roaring Twenties becoming the Depression in three years. If I had any advice to offer it would be this: protect yourself. People will get stupid. They will give up on good things and start up bad. For all the wonderful philosophy underlying this country, its basis is work, hard work. Think like a farmer. Work hard every day, plan for the future but know that today's work allows you to eat next week. Enjoy your life and the world you live in. Ignore the jabber of the non-producers; build yourself and your life. The world is living beyond its means. Be prepared so that when it contracts you are able to be self sufficient and content. A lot of very demanding people in history were very content in cultures that were minuscule compared to us.

Arthur Levitt and the New York Times Seduce Eachother

Here is a link to a NYT mini interview with Arthur Levitt. http://www.nytimes.com/2009/01/25/magazine/25wwln-Q4-t.html?_r=1
This thing must have been done at night because I think both of these people represent well the respective positions of their ignorant armies. Levitt is an arrogant functionary, a guy living of the gravy of the land in business and politics, who has no real confidence in the structure or the workings of the programs he is essentially responsible for. He stays at it, bravely, because the peons and the little people like us need leadership and, laughably, have faith in what he is doing even though he does not. He tolerates interviews like this because he knows the interviewer will come across badly because he is so fine.
The interviewer comes across badly because she is a devout believer in the progress of government and its perfectibility. She believes that the S.E.C. can actually catch somebody who lies to them because they are efficient, caring professionals rather than rapacious freeloaders feeding off the productivity of others. Her prime source of her investigative journalism is Michael Moore who stages confrontations with professional actors and is then taken literally by everyone who wants to believe the event true and dismissed by everyone who doesn't want to believe it. The coup de gras is her Carlyle Group insinuation. The Carlyle Group is an investment organization who owns Dunkin' Donuts. If there is a story there--especially showing collusion or conflict of interest other than a lot of guys who go to the same restaurants--investigate it, publish it, win the Pulitzer Prize and glow with satisfaction when they take the criminals away. But my bet is there is no such investigation coming.
These two probably bonded well because they indeed have a common bond. Smugness. The guy in the business suit, the girl in the gypsy dress--both bathed in self righteousness and knowing they are doing as much as they can within the limits of this all-too-human world.

Science and markets

I have put a moratorium on investing over the last year, not because of any real changes but because we had met our objectives in investing in--certainly not in return out. I had a call last night from a friend who has been devastated by the market downturn in the last year. I have mixed emotions; I think the gains of the past few years have been imaginary so I don't think the losses are real either but I am concerned how we, or anyone, can make good decisions in this environment. Everyone makes an investment every time he invests or doesn't. A hamburger is an investment. The market has shown that neither the participants nor the regulators have anything other than themselves in mind so decisions are hard. It is a good lesson for the young: Everyone will put themselves first in commerce. And they will smile and lie. I have had people try to solicit money from me in an investment that was long term (five years) when they knew the business was so flawed in would last only a few months longer.
A corollary lies in the problem of investigation and analysis. The mortgage crisis was precipitated partly by the active encouragement by the government of home ownership. The idea was that home owners were better citizens. That may be an association but it may not be a cause and effect. Perhaps saving money so you can afford a home makes better citizens. Maybe renting selects out nasty neighborhoods and hence nasty neighbors you can't escape and who make you a bad citizen. These are hard to tease out but impossible to base policy on. Global warming is another example. This link is interesting but you have to read only the first paragraph to see my concern. http://co2sceptics.com/news.php?id=2575 A very competent scientist is stating she could not, for various reasons, make an honest statement until now. If our scientists have trouble being honest, don't expect a guy with a 2 million dollar mortgage in N.Y. selling options to be. And that is at the core of our society's problems today.