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Wednesday, May 26, 2010

America's Shame

I just wanted to go record with this: I am so ashamed of my country. The oil spill in the Gulf of Mexico is such a worldwide catastrophic event that it puts Japanese whaling, poaching Africans, rainforest destruction, European wolf depopulation, yada yada, etc. etc. to shame. Its hard to imagine a more offensive affront to man, god or nature.

Obama, Bush II, Clinton, Bush I, Republicans, Democrats, Government Regulators, I blame you.

Oddly, I don't blame the oil companies. They're businesses, they're supposed to enlarge profits, and drop costs. They were doing what they were supposed to doing. It was government that dropped the ball. And the people, for letting themselves get hoodwinked into thinking that industry could or would self-regulate. Why do I blame the regulators? Well, that should be pretty obvious, but just to enlarge. Political purges of beaurocracy are pretty common, and the Bushies were particularly efficient at this, but the hypocrisy and degredation of those who call themselves regulators and allow these things to happen ought to be punishable by life in prison. I'm sure there are many principled regulators out there, and I don't blame them, exactly. But at a certain level, willful ignorance is acceptable only in certain areas. I don't blame financial regulators for looking the other way--not as much--because a failed financial system really only hurts humanity, and really only hurts humanity temporarily. But environmental and industrial regulators are really stewards of the entire earth, in perpetuity. When they fail, it not only hurts humanity, but it hurts humanity for the rest of its existence. When they fail, they not only hurt the environment, but the alter it indelibly for generations.

I'm so disgusted I can barely breathe.

as a caveat, I would like to add that I would never will any violence or physical unpleasantness for these people. But I absolutely hold that they should be prosecuted to the fullest extent of the law. And if the law isn't severe enough, it ought to be rewritten.

as a further caveat, I admit my own guilt. I've protested politics before, but I've never personally done anything, except for occasional donations to the WWF, to help the environment.

Tuesday, May 25, 2010

Athens and The Bond Kings of Pennsylvania

So this piece is a commentary on something I heard in Planetmoney this week. As usual, I'm one or two weeks behind the times, but the issue is the debt crisis in Europe. My commentary is based on an idea that was very much reflected in the American financial crisis.

Basically, the good people of PIMCO, one of the largest funds in the world, and others like them were buying bonds like water in Europe and other countries. Without getting too much into the finance of it--when it became clear that the bonds would not be paid off, PIMCO sold them and took the loss. But Greece still needed the money, and so they issued new bonds. Which, of course, nobody wanted to buy.

This is the basis of the European debt crisis.

The popular refrain on the fiscal right, is that it's the people's fault. They've been irresponsible with their money. This is certainly true--and there is little point in arguing it. But what I haven't heard is an acknowledgement that it takes two to tango. For every irresponsible dollar spent, there were just as many irresponsible dollars lent. Whether you blame the ratings agencies for giving Greece a triple-A, or the EC, for accepting false assurances in Greece's bid for acceptance into the EU, you have to admit, that "free money" came from somewhere, and usually it came from investors who were willing to take a higher risk in return for a greater return. That the turkeys came home to roost, is just part of the game.

But let's accept this premise that it's not the fault of the lenders, and ONLY the fault of the payees. Ok, but lets not forget that the BLS has proven that wages have fallen over the last thirty years and that the average American has less of his own money to spend. Those facts are probably the same for Western Europe as well. It's not surprising that given a credit card with a low interest rate, that people wouldn't go ahead and use them. I also resent the implication that the vast majority of these expenditures were completely frivolous. That's certainly the image that we are made to see, and shows like "The Real Housewives of _____" delivered on that promise. But those shows were popular precisely because people were outraged by the immoral spending of these profligate women. But is that how most Americans spent the last decade? I honestly don't think so.

When it comes right down to it, we all live beyond our means. I know that I certainly do. And I don't have an iPhone. I haven't taken a vacation in two years. There are weeks that I just barely squeak by. But it's like Citibank says, we want to "live richly." Yes, you can surivive on beans and rice, but a full and complete life means sometimes enjoying those fruits that are just out of our reach. I can't blame anyone for that kind of spending. I think there's a huge difference between paying for dinner five nights out of seven nights at midrange $12 entree restaurants, and wantonly buying $500 shoes or jewelry, random trips to Vegas or New Orleans, buying a new TV just because you're tired of your old one, and gettingnew phones everytime they're released, or upgrading computers every two years.

But maybe that's just a justification: I could also make the argument, that delayed gratification only works if you actually delay that gratification. The fact that we eat out five out of seven days of the week is really pretty obscene. And it's worked out so that we HATE our local restaurant options. We're bored to tears of them.

In the end, it comes down to risk management, and both parties are guilty of poor capacity to manage risk.

One last point. The Planetmoney podcast closed with the argument that bailing out Greece would just kick the can down the road. I totally get the economic arguments for that. But sometimes governments must do distasteful things to protect their people. That is, afterall, what democratic governments are set up to do, protect their citizens--not the purity of their markets. There are already riots in Greece. This is the type of conflagration that under the worst sorts of circumstances could end in war. Stability has a price, and that price is 350 billion Euro.

In accounting, a poor practice, or an illegal one in some contexts, is earnings cushioning. It infers lying to the investor, hiding debts of varying kinds, or paying off future debts in advance to inflate profits in the future. There are dozens of techniques for this--what people call "accounting magic." But this obscures one very crucial fact about accounting that us Ravingleftatics have a hard time swallowing: Lying about your finances is never good, but history has provided many examples of companies that got through hard times and managed to legitimately succeed, by these sorts of tactics. All of which to say, if the exuberant spending of the new millenia had been more carefully monitored, we could well have eased the debt out of the process without a financial meltdown.

Monday, May 10, 2010

Red Family, Blue Family

Ross Douthat, writes an interesting column on the NYT today. It's basically a book review for book by Naomi Cahn and June Carbone, entitled "Red Families v. Blue Families: Legal Polarization and the Creation of Culture."

I haven't read the book, but it's on my Amazon wishlist now. This is a topic I'm extremely interested in. As incomprehensible to me as right wingers, and their views are, I've always been interested to see from whence they came, and what effect it has on themselves and their families. This book seems to address this question adrioitly.

The book seems to nail my own demographic. Older, well-educated, northeast couple, has one child. (of course--it's more complicated than that, but this ravingleftatic is anonymous!) That goes for my parent's generation, and my own. I've always argued that education is the answer to world over-population, though I read an article recently that indicated the world's population already peaked, and will likely decline in the next thirty years. I can't swear to it, it was one article, based on one book, but it was interesting.

Regardless, Douthat points out some interesting trends from the Carbone Cahn book. For example, teen pregnancy rates are pretty much the same in Connecticut as they are in Montana, but the rate of abortions is twice as high. This dispels the idea that education keeps kids from having unprotected sex, but the lower divorce and single-parent rates, are much lower, suggesting that access to proper birth control (including but not limited to abortion) have exactly the effect that they are intended to produce.

Population statistics aside, I'd really like to know more about the middle of the country than I do. I have, admittedly, a very serious bias, based purely on my window to the world (the internet.) Most of the people I know from the midwest (and south) moved here because they hated it. Again--not a valid sample!