Thursday, May 28, 2009

Here's the full text of Sotomayor's controversial speech

Here.

Rereading it in full, I'm somewhat less upset by her now infamous "better conclusion" comment. However, the speech is rife with identity politics. By my quick counts, the word "Latina" or "Latino" occurs 39 times. In contrast, the word "justice" (in the context of impartiality and adhering to the truth and the law) does not appear. The word fairness appears only once, and she agrees with the goal but wonders if it is possible. The word "objective" appears once, and she argues against it, quoting a colleague who said "there is no objective stance...". For better or worse, she is a post-modernist full of identity politics.

I found one section (from page 5) very disturbing:
"For people of color and women lawyers, what does and should being an ethnic minority mean in your lawyering? For men lawyers, what areas in your experiences and attitudes do you need to work on to make you capable of reaching those great moments of enlightenment which other men in different circumstances have been able to reach."
Apparently only men need to work on reaching enlightenment. Try switching the words around, say, "Men, how does your experience of "fair play" in sports on the fields of Eton enlighten your lawyering? Women, what do you need to work on to reach that level of enlightenment?" We'd be aghast. These (reversed) arguments sound like those used against woman's suffrage.

Sotomayor will likely be confirmed, and likely be a decent Justice. But I'm hoping this gives you a feel for her philosophy.

Wednesday, May 27, 2009

Progessives cannot admit to racism by one of their own

It's clearly wrong for anybody, let alone a Supreme Court nominee, to say that "a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male". She could surely reach a different conclusion. But Sotomayor didn't say "different", a point that OpenLeft conveniently leaves out. She said "better".

Blue Virginia calls out Newt Gingrich, again, conveniently not noting her comments.

I don't think it's all that big a deal what Sotomayor said, we all make mistakes, she should apologize and go get nominated. But if progressives cannot call out such blatant gender/ethnicity bias, so long as it comes from one of them, (instead, they are obfuscating it like the OpenLeft "different" article, or name-calling Newt) maybe they aren't as progressive as they think.

Deccan Chargers go from Last to First

The Deccan Chargers won the 2009 Indian Premier League, defeating the Bangalore Royal Challengers 143 / 137. A great turnaround (in the USA, we call it "last to first") since the Chargers came in last in 2008.

The match was tense, with Bangalore mounting a comeback when Charger's bowler Andrew Symonds "struck out" Ross Taylor and Virat Kohli to kill the rally. Anil Kumble bowled well for the losing side and was named "Man of the Match".

Hopefully I didn't mangle the terminology too much (I know the proper term isn't strike out", but that's the US baseball word for stateside readers), and sorry if I did.


The next big cricket event is the ICC World Twenty20 from England, June 5 - June 21. In the USA, it will be shown on DirectTV for $125.

Monday, May 25, 2009

Even 9/10s Full is "Empty" to Paul Krugman

Interesting article in the New York Review of Books. (I first noticed it in a Huffington Post link). In overview, let's say that economists still disagree on some things. Though there seems to also be some agreement.

I found most interesting the comments near the end.

Paul Krugman "we need a boring banking sector again. All of this high finance has turned out to be just destructive". I agree. His point that finance is generally non-productive, but just shuffles numbers, is well taken.
The other thing not to miss is the importance of a strong social safety net. By most accounts, most projections say that the European Union is going to have a somewhat deeper recession this year than the United States. So in terms of macromanagement, they're actually doing a poor job, and there are various reasons for that: the European Central Bank is too conservative, Europeans have been too slow to do fiscal stimulus. But the human suffering is going to be much greater on this side of the Atlantic because Europeans don't lose their health care when they lose their jobs.
Here we might agree to disagree. The disadvantage of the strong safety net is that in times of growth, the USA economy does better. To use Krugman's phrase, "In terms of macromanagement", the USA does better in both growth and decline. Does this benefit outweigh the human suffering that occurs in a steep recession? I'm not sure. Might depend on how hard hit you are by the current recession. :-)

One could argue that recessions "only" happen every 10 years or so, and last about a year. Overall, long term growth is significantly higher in the USA. So 9 out of 10 years the USA is "better". I think it all goes back to my earlier posts where conservatives see the glass as half full, and liberals as half empty. To Paul Krugman, even a glass that's 9/10 full is "not full".


Niall Ferguson, more free-market centric, is not happy with the general plan of increased state spending and regulation.
Where were you in the 1970s when all these wonderful regulations were in place? I don't remember that going too smoothly. But what else are we going to do? We're going to print money. Almost limitlessly we'll print money. That's going to be fine, too. And when we're done with that, we're going to raise taxes. What a fabulous package we have in store for us. You know, back in late 2007, I was asked what my big concern was, and I said, "My concern is that we're going to get the 1970s for fear of the 1930s." It's very easy to forget, in your iron indignation at the failure of the market, where the true mainsprings of economic growth lie. The lesson of economic history is very clear. Economic growth does not come from state-led infrastructure investment. It comes from technological innovation, and gains in productivity, and these things come from the private sector, not from the state.
Bill Bradley looks back at the mistakes we made, so as to avoid them. He cites two events from 1999: the elimination of the Glass-Steagall Act, and "the explicit decision by the Clinton administration and Congress not to regulate derivatives". And the SEC's decision in 2004 to allow banks increased leverage. If Bradley is correct, these are regulations that should be put back into place.

One keeps hearing "evil Republican deregulation caused this mess". Maybe it did. But I've always wanted to know exactly which regulations do we need to restore, and what evidence we have. Bradley makes an attempt.

For the record, Republicans passed the initial "de-Glass-Steagall" bill in 1999, but, in the final reconciliation vote, it passed with broad bi-partisan support, in the Senate 90-8 and the House 362-57 and was signed into law by President Clinton. SO this particular deregulation is hardly a Republican mistake.

Saturday, May 23, 2009

Politicians and Lobbyists Profit, We Lose

Henry Waxman is allowing insider politics (dare I say lobbying and campaign contributions?) to ruin one of President Obama's key campaign pledges. Instead of auctioning off all of the carbon emission permits, the vast majority (85%) will be given away to select corporate interests. In direct contravention to earlier campaign pledges (see the first bullet, "100 Percent Allowance Auction", and administration statements, such as this one by budget director Peter Orszag to the House Budget Committee:

"If you didn't auction the permit, it would represent the largest corporate welfare program that has ever been enacted in the history of the United States" ...

"All of the evidence suggests that what would occur is that corporate profits would increase by approximately the value of the permits."

Not only is this bad policy, fattening polluters profits, is costs us money, as the WSJ notes:
Without the auctions, there isn't any revenue. Mr. Obama's budget proposal projected more than $75 billion a year from the auction...
Now, one might argue that Waxman hopes that state regulators will hold the line on corporate profits. No. He's just spreading the lobbying loot around to them as well. Well, I guess it's job creation - time to apply for a lobbying position at a utility company.

We have direct, recent evidence of exactly what will happen:
Consider the example of the European Union's Emissions Trading Scheme (ETS). Launched in 2005, the ETS cap-and-trade scheme handed out nearly all of its emissions permits gratis. The result was windfall profits for emitters and higher energy prices for consumers, and, until the advent of the global economic recession, almost no reduction in carbon dioxide emissions.
Will giving away the permits save consumers money since utilities won't "pass on" the fees? No. As elegantly illustrated in this analogy by economists James Barrett and Kristen Sheerhan
Try buying World Series tickets from a scalper. Would he charge you any less if he found the tickets on the ground? Of course he wouldn’t. Like energy, the street price of World Series tickets is based on supply and demand.
Even a republican global warming sceptic, Joe Barton (R-Texas) agrees.
"If you're going to do it, I support the auction because I think that's more equitable," Barton said last week in an interview. "The whole point of it is to try to reduce the amount of what it is that's being auctioned. And the way to do that is to charge for it, and not give it away."
Long term readers of this blog know that I'm no far-left progressive corporation / lobbyist hater. Nor is the Wall Street Journal, initial source for much of this article. But I do support a cleaner environment and smart, efficient policy that benefits all of us, not just corporate lobbyists and career politicians. Waxman's plan is bad policy that Obama should change, or, failing that, veto.

Wednesday, May 20, 2009

When should we stop digging?

To see how deep a hole we are in, check out the (extremely long) report on the US Budget from the Office of Management and Budget. Chapter 13 has a bunch of scary graphs. I'll try to analyze them and answer my question.

Friday, May 15, 2009

Just what economics lesson does Norway teach us?

The New York Times has yet another slanted and misleading article, Thriving Norway Provides an Economics Lesson. Here's the lead paragraph:
"When capitalism seemed on the verge of collapse last fall, Kristin Halvorsen, Norway’s Socialist finance minister and a longtime free market skeptic, did more than crow."
Apparently, based upon this breathless prose, something about socialism in Norway was far superior to us free market types and preserved their economy. What did they do? They invested and saved their North Sea oil money. Did they expand socialism? No. Since 2003, "public spending in Norway fell to 40 percent from 48 percent of G.D.P". They were frugal. "We cannot spend this money now; it would be stealing from future generations.” They ended up with healthy cash reserves that they could invest when the market was near bottom.

So, the New York Time's lead paragraph in praise of Socialism is poppycock. Based on the information presented in their own article, it isn't socialism making the Norwegian economy look good, it is the old fashioned virtues of thrift and saving.

"But in Norway, there is instead a sense of virtue."

The article does mention tight bank regulations, which one could argue are socialism. But that's about it for the plus side of socialism.

It finishes by praising their welfare system that provides for a 32 year old drug addict who has never had a job and will never look for one. Whether this is a good thing or not, it is a lesson in social justice and welfare. It is not a positive example for Norwegian economics, since the result is one person who will never perform any productive work.

How Not to Create a Consensus

David Sirota vents on health care. Private providers have signed on to President Obama's laudable desire to cut health care costs, pledging to cut future increases in costs to save $2 Trillion over the next ten year. The details are vague, but one would think that working together to cut costs and decrease inefficiencies would be a good thing. Especially as health care providers have opposed previous attempts at universal coverage, one would think that working together with Obama on what seems to be his primary focus, reining in health care costs, should be praised as "bipartisanship" or "cooperation" or "progress". Some do.
One official described the participation of the private sector as a "game changer" in the discussion of health care reform.
...
AARP believes the agreement of providers to slow the skyrocketing cost of health care is critical for the health reform we are all working toward.
What does Sirota think? He thinks this is proof that the health industry was planning to "pilfer $2 trillion from Americans". They are "thieves", "plotting to fleece consumers" and engage in "grotesque profiteering". He then goes on to rant against Obama for negotiating with these private interests.

Clearly, Sirota is yet another far-leftist who will never be satisfied with anything coming from private business. If they were not cooperating with Obama, surely he'd be lambasting them as negative, standing in the way of the common people, working with the party of "no", etc. But when they do cooperate with Obama, they earn no praise, instead, they prove that they are profiteering thieves.

Note to Sirota: without cost containment, there will be no affordable universal health care for Americans. This is a necessary step towards what you want. Be happy. Be an optimist. Your side is winning! Will the hard left will ever be happy? Don't think so - I'm more and more convinced that they are somehow just programmed to see the worst in everything.

Instead of supporting something that helps universal health care, he'd rather vilify private health providers. He'd rather make political points than actually help Americans.

(followup added after original posing)
Jason Rosenbaum at Huff Post also rants, bringing totally fake controversy as to when these reductions will be made. the health industry follows up with the exact same vague promises and targets from the original press conference. They clarify that they expect an instant 1.5% savings, just that, over 10 years, they target that. That seems to be the only dispute. Seems pretty reasonable - who could expect an instant 1.5% cost reduction? Maybe the health industry is backing off of the initial promise, but, eventually, they support the cost containments.

What's most clear is the attitude of the far left, they just will not be happy that they are winning concessions that will help all Americans, instead, more political points and a refusal to gracefully accept concessions (dare I call it "bipartisanship"?) from their enemies. Instead, Jason writes:

"They're liars. They're cheats. They're greedy"

Thursday, May 14, 2009

Glass Half Full or Half Empty?



Looking at Pew Hispanic Center data on minority home ownership, starting in 1995 but including the recent bust, the Wall Street Journal views the glass as half-full, with the headline "Housing Boom Aided Minorities", and the lead paragraph:
Minorities in the U.S. increased their levels of homeownership at a faster clip than whites during the recent housing boom, according to a new report, and narrowed the ownership gap with the majority despite taking a bigger hit during the subsequent bust.
Homeownership among all groups rose over the last decade:
As of 2008, 48.9% of all Hispanic heads of households owned a home, up from 41.9% in 1995. During the same period, black homeownership climbed to 47.5% from 42.1%. Among Asians -- who raised their homeownership level faster than any other group -- 59.1% owned a home last year compared with 49.1% in 1995. Homeownership among whites stood at 74.9% in 2008, up from 70.5% in 1995.
The recent bad news is fairly prominent in the 5th paragraph, "Since the housing bust, however, homeownership levels for minorities have fallen more steeply than for whites..." despite a reasonable balance pverall, the article has an optimistic tone, with lots of uses of the words "climb", "jumped", etc.

Based on the exact same data, The New York Times sees the glass as half empty, with the headline "Homeownership Losses Are Greatest Among Minorities", and the lead sentence "...gains made in homeownership by African-Americans and native-born Latinos have been eroding faster in the economic downturn than those of whites.... The fourth paragraph emphasizes the declines in the past few years:
After peaking at 69 percent in 2004, the rate of homeownership for all American households declined to 67.8 percent in 2008. For African-American households, it fell to 47.5 percent in 2008 from 49.4 percent in 2004. Latinos, native and foreign-born together, had a longer period of growth, with homeownership rising until 2006, to 49.8 percent, before falling to 48.9 percent last year. Homeownership for native-born Latinos fell to 53.6 percent from a high of 56.2 percent in 2005.
The good news about the overall increase since 1995 is burned halfway down the piece in the 9th paragraph, and immediately followed by a "but" clause...

Even with the decline, the rate for all groups together remains higher than before the boom, with nearly 68 percent of American households owning homes last year, up from 64 percent in 1994.

The gaps between white and minority households remain significant...
There is no doubt in my mind that the NYT article is excessively and deliberately downbeat. They use the word decline 5 times, and fall or fell 3 times. To my mind, most people looking at the Pew data would say "gee, that's going up"

Both articles point out that minorities used sub-prime loans disproportionately to increase their home ownership.

Monday, May 11, 2009

Rewarding Foolishness

The Wall Street Journal has an interesting article about Ford Motors. The point is that while GM and Chrysler have been able (or are trying) to shed a lot of their debt, by either restructuring or semi-bankruptcy with President Obama as a wingman, Ford, with about the same huge debt as GM, has been responsible and is stuck with it.

So Ford is like a homeowner who planned prudently and can pay his mortgage, while his spendthrift neighbors get their mortgage reduced by some new federal program. ...

But the bottom line is that we live in a world where wisdom can be punished and where foolishness can be rewarded.

Better to be Ford than GM, but I wonder if we are rewarding foolishness too much. The more we reward foolishness, the more we will encourage foolishness.

Thursday, May 7, 2009

Age Effects on Supreme Court Nominees

Brookings Institute has an interesting article on how older jurors have become less and less likely as nominees for the Supreme Court. The trend is towards younger jurors (such as Alioto and Roberts) who will serve for a long time, making "their mark". A few insightful quotes:

"gender, ethnicity and age have, from the very start of the search for Souter's replacement, placed off-limits many lawyers and judges whose colleagues regard as some of the best in their profession"

"Older judges brought experience to the table, and because life tenure is shorter for them than for younger judges, the stakes are lower in their confirmations"
"The result is a strange conversation about who should replace Souter -- one that self-consciously omits many of the judges whose work is most actively studied by those who engage day-to-day with the courts"

I'd add that younger nominees have less of a paper trail, so have simply had less time to make bad, controversial, or egregious rulings that galvanizes opposition. The opposition is always there, but without concrete examples of several bad rulings, it's hard to get the political strength to make the opposition stick. In other words, they have less dirt. But it's harder to know what you are really getting.

If the Senate were more evenly divided, and our parties were less partisan, I could see a compromise, president Obama gets to nominate a strong liberal of his choice, so long as he/she is old. With Obama's popularity high, and Democrats in strong control, I expect somebody very young, very liberal, and very controversial. But maybe Obama will surprise me - with the economy still in bad shape, he may choose to save his political capital for the more controversial aspects of the budget or health care reform. Time will tell.

Monday, May 4, 2009

Tax Loopholes or Good Policy?

Following up on his campaign promise, President Obama announced plans to change the US tax code to stop tax breaks that ship our jobs overseas. "The goal is to reduce the incentive for U.S. companies to base all or part of their operations in other countries." He also called for more transparency in bank accounting in tax havens like the Caymans, to cut down on tax avoidance there. Can't argue much with that part, though it was fun to visit the Caymans shortly after The Firm was filmed and see a lot of filthy rich people, and even meet a few.

In a comment of supreme irony, Treasury Secretary Timothy Geithner complained of these "indefensible tax breaks and loopholes".

However, a paper by Mihir Desai, a professor at the Harvard Business School, argues that there is very limited evidence that current tax policy is a subsidy, nor does it ships jobs overseas. He argues that we should tax overseas activity less, not more. Selected quotes:

"Across Europe, firm level studies have found a positive association of foreign expansions and domestic employment"
"no negative effects on employment domestically of the decision by Italian, French
and German firms, respectively, to initiate production abroad"

"Japanese firms increasing their overseas activity increase domestic employment at rates that are three to eight percent greater than comparable purely domestic firms"

(in the USA) "10% greater foreign investment is associated with 2.6% greater domestic investment, and 10% greater foreign employee compensation is associated with 3.7% greater domestic employee compensation."


I have a few doubts, concerns and questions about the paper, for example, it could just be the more successful firms that can afford (or have the "vision") to do overseas investments, so naturally they still do better domestically, but it raises some interesting points. Chances of a rational discussion of this in the US Congress? 0.0001%.

Sunday, May 3, 2009

Taliban Admits to Murder of Prisoners

In the revival of fighting in Swat, two Pakistani troops were discovered with their throats cut. Pakistan officials also claim they were mutilated. Some claim they were kidnapped and beheaded and mutilated. Let's just stick with throats cut.

"On top of that list, two security personnel were discovered with their throats slit and their bodies and faces mutilated Sunday in Swat, a security official said on condition of anonymity because he was not authorized to talk to media on the record.

The Taliban spokesman said the men were killed in revenge for the military's killing of two insurgents."

If the victims were shot or killed by shrapnel from an explosion, that would indicate they were killed "honorably" or "fairly" in action. But throats slit is generally not what happens to a soldier in fair combat. It's what happens to prisoners.

Since Taliban spokesman Muslim Khan admits to the killings, he admits that the Taliban murders captured enemies. I don't think the fact that they do this is a surprise, but one would think that blissfully admitting to it should be surprising. Let's hope his stirs up their opponents to greater determination and efforts, and alerts their supporters of what they are supporting. I'm waiting for the anti-American far left to rant about this war crime and violation of the Geneva Convention. I'm waiting to hear from the Spanish Courts.

What are the unforgivable curses?

Adam Freedman, in a Sunday New York Times op-ed piece, argues that the F and S words should not be prohibited on TV. Or, at least, that "fleeting" use should be allowed, as the Supreme Court considered in FCC vs. Fox. So my question is this: what curse words are worse than the F and S words? Maybe I'm an old codger, out of touch with society and new hi-tech developments in profanity, but I can only think of one worse curse, the one with Oedipal connotations, that includes that F word anyway.

My point is that allowing the F word on prime time TV effectively allows any language. Besides, it mainly involved celebrities like Cher, Nicole Richie and Bono. They have plenty of opportunity to express themselves, using whatever language they want, in their lyrics. So this is not limiting their speech.

(Addendum added May 4) Don't forget the song "It's Easy MMMKay" from South Park the Movie. "F--- is the worst word that you can say".