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Where’s Tripp?

Tuesday, February 3, 2009

Most conspiracy theories persist because they are inherently impossible to definitively disprove. Sarah Palin could defuse this one with ease, yet it persists and she does nothing to refute it, other than condemn it. I could spin out a conspiracy theory on that one. Maybe she’s waiting to debunk it at an opportune moment for her political career, when she’s looking for sympathy. Maybe she’s laying a Machiavellian trap for a future political opponent. All such theories seem far more improbable than the admittedly weird theory that the Bristol pregnancy was a fake.


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A prediction

Monday, February 2, 2009

Once again Paul Krugman nails it in this morning’s Times. The Obama Administration, whether through timidity or ideological rigidity on the part of its economic team, seems poised to follow in the footprints of the Bushies. Well, not precisely. Bush spoke softly and carried no stick. Obama speaks harshly, but goes similarly unarmed.

When I read recent remarks on financial policy by top Obama administration officials, I feel as if I’ve entered a time warp — as if it’s still 2005, Alan Greenspan is still the Maestro, and bankers are still heroes of capitalism.

“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” says Timothy Geithner, the Treasury secretary — as he prepares to put taxpayers on the hook for that system’s immense losses.

Meanwhile, a Washington Post report based on administration sources says that Mr. Geithner and Lawrence Summers, President Obama’s top economic adviser, “think governments make poor bank managers” — as opposed, presumably, to the private-sector geniuses who managed to lose more than a trillion dollars in the space of a few years.

And this prejudice in favor of private control, even when the government is putting up all the money, seems to be warping the administration’s response to the financial crisis.

…

If news reports are right, the bank rescue plan will contain two main elements: government purchases of some troubled bank assets and guarantees against losses on other assets. The guarantees would represent a big gift to bank stockholders; the purchases might not, if the price was fair — but prices would, The Financial Times reports, probably be based on “valuation models” rather than market prices, suggesting that the government would be making a big gift here, too.

And in return for what is likely to be a huge subsidy to stockholders, taxpayers will get, well, nothing.

Will there at least be limits on executive compensation, to prevent more of the rip-offs that have enraged the public? President Obama denounced Wall Street bonuses in his latest weekly address — but according to The Washington Post, “the administration is likely to refrain from imposing tougher restrictions on executive compensation at most firms receiving government aid” because “harsh limits could discourage some firms from asking for aid.” This suggests that Mr. Obama’s tough talk is just for show.

What we need is temporary nationalization, which is what worked in Sweden a while back.

And here’s where I come to my sure fire prediction. In a few years, thanks to all this no cost to the banks government largesse, these banks will be back making money and planting the seeds of yet another meltdown. When that time comes, the people who are now paying themselves bonuses on our dime will be lecturing the federal government about its budget problems, insisting that it must curb its massive deficits, deficits it incurred in rescuing them.


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Ben Stein expelled from Vermont

Sunday, February 1, 2009

There has been a bit of a storm brewing in the reality based scientific community, Darwin division, since Ben Stein was named to be the commencement speaker at the University of Vermont. Stein was the front man for a film called Expelled, which was ostensibly about the victimization of Darwin doubting scientists, but which was, in reality, a screed on behalf of the fantasists who insist that we teach religion as science. Along the way he stopped to blame Darwin for the holocaust. I wrote about the movie some time ago.

Several prominent scientists, among them Richard Dawkins, wrote to the president of the University president. Stein is no longer going to speak, for reasons unclear at the moment.

As I’ve noted, here and here, in addition to at the above link, Stein is an irritating know nothing about a lot of subjects. Among other things, he purports to be an expert on economics. Perhaps he is, in the BIll Kristol sense of being so reliably wrong that you can just go with the opposite of whatever he says. So I was somewhat amused when I read this portion of the email from the president of the University of Vermont to Richard Dawkins:

Although we have recently learned that Mr. Stein will be unable to receive the honorary degree here or to serve as Commencement speaker, please know that it was our expectation that his remarks would address the global economic crisis and that he would speak from his widely acknowledged area of expertise on the economy. (Emphasis added)

It would be interesting to know who, besides Stein, has acknowledged his expertise. This is the guy who, back in 2007, told us not to worry. Everything was going to be just fine. He repeated himself in July of 2008. Just recently, in an attempt to show us that he understood our pain, he oozed sympathy for a woman who is paying $12,000 a month on an interest only mortgage on a 2.7 million dollar house. The poor dear is about to see her alimony/child support cut in half to a mere $10,000.00 a month, and she’s about to ditch her sugar daddy who has been paying all her bills. She’s never held a job in her life. Only a Republican, which Stein most definitely is, could proffer such a story as emblematic of the current hard times.

There must have been a time when a person was considered an expert only if they actually knew what they were talking about in a given field. Only in our corrupt and declining age could people such as Kristol and Stein be considered experts. What’s shameful is that the economists of the world did not protest Stein’s speaking engagement as vigorously as the scientists.


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Hygienic Art Show, XXX

Sunday, February 1, 2009

This is Super Bowl Sunday. Super Bowls are counted in Roman Numerals, and so are Hygienic Art Shows. For those of you not from the New London area, the Hygienic Art Show is a yearly event held in what was once a restaurant, and is now an art gallery. The rules are simple: One Piece Per Artist, No Judge, No Jury, No Fees, No Censorship. This year the show has spilled over into what was once a furniture store on Golden Street. We avoided yesterday’s mob scene opening and went today.

For those of you unfamiliar with the Hygienic, here’s a smattering of the offerings. The welcoming side outside. We brought the face with us:

The Cafe below is a downtown New London fixture. The two characters in front aren’t quite New London fixtures, but they would fit right in.

A few pictures featuring our four legged friends:

The Golden Street exhibition hall:

And, finally, an Obama loving giraffe:

The exhibition runs through the 14th, and is on 79 Bank Street in New London, a stone’s throw from our Drinking Liberally meeting place, the Bulkeley House. There’s a great ice cream place across the street, for those inclined (like me) to more juvenile gastronomic treats. Unfortunately, the web site doesn’t give the hours for the exhibition, so it’s not at all clear that one could combine a visit to the Exhibition with a stop at our next Drinking Liberally, which will be this Thursday.


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Our funny Senator

Sunday, February 1, 2009

Lieberman jokes about waterboarding (via Think Progress):

More from Senator Lieberman: ‘We had hoped Vice President Cheney would be here tonight. I hope it’s not his back injury that’s keeping him away.Apparently, he hurt it moving some things out of his office. Personally, I had no idea that waterboards were so heavy.

It might be sort of funny, if not for the fact that Lieberman voted against barring waterboarding, since it’s not as if you were putting hot coals on people’s bodies.

I don’t believe in torture, but I must say that it would be poetic justice to try waterboarding on Joe to see what he thinks about the experience.


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Connecticut Slipping?

Sunday, February 1, 2009

This being Sunday, Super or not, it’s an appropriate day to try to offend some religious sensibilities, but I’m sorry to say that in the process I must take my home state to task.

I reported back in June that Connecticut was NUMBER THREE!, trailing only Vermont and New Hampshire, in the degree to which its residents were not religiously inclined. It was a ranking about which we could be deservedly proud, and it seemed at least possible that we could overtake our frozen neighbors.

So imagine my dismay to find (via the Washington Monthly) that we have slipped to Number 10, according to Gallup:

The unkindest cut of all is that we trail Alaska, home of the Weird Witch of the North.

Before I go on to try to exculpate our common home from this blow to our reputation, I must shift a bit. Take a look at this:

The greener the state, the more religious. Now what’s interesting about this is that the extent of religiosity bears a more or less direct relationship to some other rankings. This being Sunday, therefore a day of rest, I’m not going to go to the trouble to prove all this, but I know I’ve read elsewhere that these deep green states also lead the nation in out of wedlock pregnancies, divorce rates, lousy education (except California is now in the latter group, despite its lack of religiosity), low incomes, low reading rates, and just general overall ignorance. No surprise there.

Anyway, back to Connecticut’s relatively poor showing. The answer may lie in the differing polling techniques. The Pew poll I reported on in June asked respondents whether they were “absolutely certain” that God or some god-like analog existed. The Gallup folks asked a different question: “Is religion an important part of your daily life?” Apparently, if you believe the numbers, religion is an important part of the life of every Nutmegger who is certain of the existence of the Hairy Thunderer. There’s reason to believe we would rise in the rankings if the question were slightly different. Still, being behind Alaska is somewhat humiliating.

Now, in defense of our Bible Belt neighbors, it is only fair to say that the high negatives obtained in those states are probably the result of massive lying on the part of the respondents. After all, they live in a culture where people are expected to say that religion is an important part of their life. Here in the Reason Belt, we have a more tolerant attitude. Confidentiality or not, people tend to say what they believe is expected, rather than what they really think.


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Friday Night Music-Bettye LaVette and Jon Bon Jovi

Friday, January 30, 2009

I was holding a bunch of Friday Night suggestions from a liberal drinker in reserve, but the first few I checked either had embedding disabled or had been pulled down. My wife suggested this song, from the Obama Inaugural Concert. It doesn’t top the Pete Seeger clip, but it’s right behind it.


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Grandmaster Obama

Friday, January 30, 2009

Greg Palast seems to think that Obama played the Republicans just right:

Republicans are right. President Barack Obama treated them like dirt, didn’t give a damn what they thought about his stimulus package, loaded it with a bunch of programs that will last for years and will never leave the budget, is giving away money disguised as “tax refunds,” and is sneaking in huge changes in policy, from schools to health care, using the pretext of an economic emergency.

Way to go, Mr. O! Mr. Down-and-Dirty Chicago pol. Street-fightin’ man. Covering over his break-your-face power play with a “we’re all post-partisan friends” BS.

And it’s about time.

It is about time, if that’s what’s going on. All this should become much clearer over the course of the next few weeks.


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What should be done with the Norwich Hospital property

Friday, January 30, 2009

The Town of Preston is about to lose control of the former Norwich Hospital site. Both the state and Preston went about marketing the property in a back asswards way. The site needs to be cleaned up. The state should clean it up and then market it, if market it they must. They’d be likely to attract serious people, instead of scam artists like Joe Gentile.

A better idea, of which I was reminded today by an email from a frequent commenter on this site, is to turn the property to an educational use. It’s a beautiful piece of property, and would make a first rate campus for an educational institution. He suggests that we develop a first rate technical school, in the MIT mold. Why not? We already have two high quality small colleges here. We have the Pfizer research facilities. A technical/research institution would fit right in and could be just the catalyst we need to diversify the local economy. Of course this is whistling in the wind. Preston had just enough sense to avoid being ensnared by Joe Gentile, but not enough to avoid dealing with him in the first place. The state lacks imagination, and isn’t likely to improve in the next several years.

My guess is that the property continues to decay. The only question is whether it, or the hole in downtown Mystic, will be developed first.

Parenthetically, I’d love to be allowed to wander around with my camera on the grounds over there. The area has become ghoulishly picturesque.


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Told you so, even if I didn’t understand it

Thursday, January 29, 2009

Last year I wrote a post about credit default swaps. A few days later I was on a cable access television show and I was asked to explain them. I wonder if what I said made sense. From what I read then, it seemed clear that these instruments were a potential economic land mine:

… There are outstanding policies on debt that far exceeds the actual amount of the debt. So in fact, this is not insurance, it’s actually a sophisticated form of gambling in which, of course, you and I will be the biggest losers. There are $45 trillion, that’s right trillion dollars, or credit default swaps out there. That exceeds the value of all the stock in the stock market.

For reasons explained in the linked article, which I fear I can not accurately summarize, this is a potentially big problem. If the losses could be restricted to the schemers that dealt in these instruments it would be a good thing actually, but of course, it never works out that way.

If nothing else, the prediction at the end of that quote is coming true. Over at Firedoglake, we learn that we are possibly at the beginning of a massive bailout of these gamblers:

The last round of financing to Bank of America, that last $100bn, was in large part due to problems with Merrill Lynch CDSs, according to Gretchen Morgenson in the NYT. If this is like what happened to AIG, Merrill Lynch had to post collateral for a huge amount of CDSs, and wasn’t able to without taxpayer assistance. So, for the second time we have been forced to save this worthless excuse for a market. There is no reason to believe it won’t get worse, and that Citi and BoA will have to put up more collateral, and we have no idea whether they can post it.

By the way, to put that 100 billion in perspective, I learned today that the $15 billion Wall Street gave, by way of recent bonuses, to the folks who brought us credit defaults swaps, is more than the stimulus package has set aside for mass transit. On the other hand, the 100 billion we gave to Merrill Lynch is, if my math is right, less than .1% of the credit default swaps out there. Now, some of them may not go belly up, but a substantial amount will do so. They were never grounded in reality in the first place, but now that they’ve gone south, we may need to come up with real money to bail out this “industry”.

I cruised around and found this still mind-numbing explication of these instruments. The Eisman mentioned in the quote is Steve Eisman, a fellow who recognized that the subprime market was a fraud, and who apparently loaded up on credit default swaps so he could cash in when the market collapsed.

More interesting is Eisman’s realization that he was actually providing the liquidity necessary to keep the market going. But I’ll let Lewis describe it:

…Here he’d been making these side bets [buying Credit Default Swaps to short mortgage backed securities and CDOs] with Goldman Sachs and Deutsche Bank…without fully understanding why those firms were so eager to make the bets. Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for [high yield fixed income product]. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans.

The question is: why do these gamblers deserve to collect their “winnings”. Or, not to put too fine a point on it, why should we pay them? They are and were merely speculators. Whether we nationalize or bail these banks out, is there a reason why we can’t do it without paying these speculators. The subprime mortgage scam at least had the limited up-side of putting people in homes, and those homes, whatever their present value, have a real existence. I’d like to see a lucid explanation from someone with expertise spelling out precisely why we should not just cut these people loose and let them take their lumps. Maybe there’s a reason, but it escapes me. How are they any different than folks who lose their shirt at the casino? And, by the way, how is this whole house of cards any different, functionally, from a Ponzi scheme. Didn’t the whole thing, ultimately require a constant in-flow of new money, whether real or fantasy?


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