The Sad Truth about TARP

Today's New York Times has a damning opinion piece about the Troubled Asset Relief Program (TARP), Where the Bank Bailout Went Wrong.  (see, I don't always disagree with NYT editorials!).  Though the government declares that TARP has been "remarkably effective", the author, Neil M. Barofsky, who was the Special Inspector General of the program, strongly disagrees.  Yes, the program "saved" our big banks.

From the perspective of the largest financial institutions, the glowing assessment is warranted: billions of dollars in taxpayer money allowed institutions that were on the brink of collapse not only to survive but even to flourish. These banks now enjoy record profits and the seemingly permanent competitive advantage that accompanies being deemed “too big to fail.”

But, as is painfully apparent to anyone, TARP failed in another goal, to protect home values.  

Treasury, however, provided the money to banks with no effective policy or effort to compel the extension of credit... not even a request that banks report how they used TARP funds.  ... It was therefore no surprise that lending did not increase but rather continued to decline well into the recovery.

Later, the Home Affordable Modification Program was announced, and has been a "colossal failure."  The housing bust means that (very roughly) 10 million homes could face foreclosure, and this program has modified only 540,000, about 5%.  Mortgage writedowns, where banks lower the principal on a mortgage (and take a big loss) were seen an "inevitable" in 2009.  But as of 2011 there haven't been many, as banks refuse to take the losses, and the government is still crafting proposals.


Even Treasury Secretary Timothy Geithner admits that the mortgage servicers are “still doing a terribly inadequate job.”  But Treasury Officials aren't fixing this.  Instead, Americans know that they were taken for a ride by "fat cat" bankers who exploited the crisis to save and enrich themselves, while many homeowners take a financial licking.  The last paragraph is chilling:

Indeed, Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals — whether born of incompetence, timidity in the face of a crisis or a mindset too closely aligned with the banks it was supposed to rein in — may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy.

Fantasy Baseball 2011 Starts

Our fantasy baseball league started again - in the wee hours of the morning the computer did an automated draft, and I woke up with much anticipation - what did Santa Claus being me this year?  Before the draft, you can adjust the ranking of players.  I targeted SS and 3B due to positional scarcity.  For example, I had moved Troy Tulowitski up the ranks.  Other teams seem to have targeted catchers, starting pitching, or relievers.  Here are "my" picks, round by round.  (I'm "Boomer's Wallbangers", picking sixth)  Note that we are a head-to-head league with fairly "sabremetric" scoring, so some of the player's values vary from the more common 5x5 format.  For example, steals aren't nearly as valuable in our league as in many, and walks are valuable.  Though most of the GMs are very baseball knowledgeable, it's a "fun" league, not too serious. And, the computer sometimes does strange things...

1.  Evan Longoria   I love it!  Had him last year, he's great and fills a relatively shallow position.
Many of the league members are Boston fans, so that somewhat explains the Pedroia and Lester picks.

2. Troy Tulowitzski  again, I'm very happy.  There aren't many good SSs.  I've now have elite players at two hard-to-fill positions.  The Daisuke pick is strange.  I'm surprised that Matt Cain went so high but he's done great in this league for two years.   Joey Votto at #19 looks like a steal for the Nerds.

3. Josh Hamilton.  In a "live" draft, I may have picked Mauer instead, but this seems a good pick.  Zimmerman is a good pick by the Marauders.

4. Nelson Cruz.  I'm disappointed that Tex went just one pick before.  (especially since I end up with no solid 1B at all!)  Then, though I'm not a big Kershaw fan, McCann, Carpenter, Fielder and Posey might be better picks.   But Cruz should put up huge numbers in Texas.  Some of our league members value relievers highly, which explains why they are starting to fall earlier than would be usual.  (I don't value them as much, but you do need a couple of good closers on your team)

5.  Jose Reyes.  I really don't need a second elite SS.  But, the players picked shortly after don't excite me.  So I can't blame the computer too much.  I'm a bit disappointed that I barely missed out on Jered Weaver and Tommy Hanson.  I've had Hanson on my team the past two years, and watching him grow and improve has been fun.  Good picks by the Pirates and Penguins.

6. Jayson Werth.  O.K.  But computer is picking too many outfielders.  I might have picked Kinsler or reached for Carlos Santana.  But a solid pick.  I had Jason Heyward last year, fun to watch him too, but I'm glad my friend Steven, who live and breathes Georgia sports, got him.

7. Michael Young.  Darned, missed on Carlos Santana by one!  Young is an interesting pick, especially if he stays in Texas and becomes eligible at multiple positions.   None of the next 10 picks excite me too much, so, o.k.  My team is getting a little "Texas heavy".

8. Zack Greinke.  About time to get a pitcher.  Two of the other teams (Comets and Pirates) obviously targeted top line pitching.  I targeted "undervalued good pitching".  At the end of the year we will see how well I rated them.  Also, have to admit (as you'll see soon) I wanted to get a bunch of As and Giants to root for.  :-)  Assuming Greinke's health is not an issue, he should be a solid pick.  I like the Prado and Stanton picks by the Penguins and Nerds.

9.  Chris Young (OF).  Picked him up last year and he was a pleasant surprise.  Another outfielder, but the next 10 picks aren't all that exciting - maybe Konerko or Billy Butler to get a 1B?.  Too bad I missed on Josh Johnson by 2 picks - a good pick by Displaced Braves Fan.  Victorino to the Nerds scotches my plan to lock up all the Hawaiian born players.  :-)

10.  Max Scherzer.  Love this pick, he was great for me the 2nd half of last year.  Even though I'll desperately need a 1B, I prefer him to Billy Butler.

11. Kelly Johnson.  O.K., gives me a good 2B.  Sorry I missed out on Zobrist, Drew Stubbs and Panda - good picks by my opponents.  If I didn't hate the Dodgers I might prefer Billingsly or Lilly.  Actually, live, I might have picked Shaun Marcum or my next round pick...

12. Joe Nathan.  If he's healthy, this is an awesome pick.  But Shaun Marcum (who goes next) is a safer, good pick.  Hard to say.  I'm a bit surprised that Papelbon and Bucholz go so late.

13. Tim Hudson.  Like him.  And I need some quality pitchers.  I'm a bit disappointed that Chris Perez, who did a good job for me last year, is off the board.  But I wouldn't pick him till later anyway.  Garza and Anderson are good picks by Monsters and Ewoks.

14. Jonathan Sanchez.  You need some patience with him, but we'll see.  I would have preferred Brett Anderson, but you can't have it all.  Angel Pagan is a good pick by Monsters.

15. Brian Roberts.  Another 2B?  And injury prone.  I don't like this pick.  But the other picks later in the round aren't exciting either - that's what you start to get around pick 150...  So, o.k., and some depth is good.  I think Hudson and Putz are good picks by Nerds and Braves Fan.

16. Andrew Bailey.  I like it - a good local reliever.  Hope his arm works.  Between Nathan and Bailey I may have to check the waiver wire for relievers the first couple of weeks.  Myers and Hellickson look like good value picks for Falcons and Nerds.

17.  Trevor Cahill.  Like it.  As you see, I bunched up many of the promising Bay Area pitchers in this area, and many have been drafted or will arrive soon...   Brandon Morrow is a good pick by Monsters, and Neil Walker might be a great pickup for the Comets.

18.  Madison Bumgartner.  Like it - another promising local pitcher.  Too bad Gaby Sanchez went two picks before, as I still don't have anybody for 1B!

19. Tsuyoshi Nishioka   Like it - I had bumped him "up" on the draft list.  But not sure why I need three second basemen!  More depth.  Live I may have picked Romero or Matusz, good value picks by the Falcons.

20. Denard Span.  O.K.  Solid outfielder who will probably improve over last year.  Beckett and Wieters look like good alternative picks by Penguins and Monsters.

21. Gio Gonzales.  I think this is an awesome pick.  Also like Asdrubal Cabrera and Ike Davis picks by Pirates and Comets.

22. Kurt Suzuki.  He was my catcher last year, and does a solid job.  If you don't get an elite catcher, he is a solid pick.  Escobar and Shields are good picks by Penguins and Monsters.

23. Austin Jackson.  Not sure why he fell so low, but he's pretty good for round 23, right?  I'm a bit disappointed that Freddie Freeman and Ryan Rayburn went just before.  Other than Dexter Fowler, not sure who I would have picked instead, so lets hope Austin learns to make better contact.

24.  Wade Davis.  I like this pick too.  A reasonable pitcher with upside.  Jair Jurgens might be a good value pick by Pirates.

25. Logan Morrison.  He's a good player, especially under our league rules where walks count.  I like the pick, though I'm getting too many OF.  Jake Peavy is the other interesting pick this round, by the Comets.

26. Michael Pineda - glad I got him.  He was one of my "sleeper" picks.  I'm really surprised that Posada, McLouth, Garland and Lackey fell so low.  They could be great value picks.

27.  Kila Ka'aihue.  Another one of my "sleeper picks".  And, a real 1B, finally, in round 27!  Not sure what the computer was thinking.  De La Rosa is a great value pick by Monsters.


Other than 1B, I'm happy with my team.  So far...

Another nearly fact-free Paul Krugman editorial

Though, to his credit, he doesn't rant about how his opponents are knowingly ignoring the facts in pursuit of an evil agenda.

In a recent blog, Krugman discusses a Lancet study on cancer survival rates in various countries.  The USA fares well in the study, and many opponents of ObamaCare cite that as evidence that the US health care system is superior.  Here is the summary graphic taken from Krugman's article:

Krugman argues that the longer USA survival rate may be due to better and earlier diagnosis of the disease, whether or not the actual treatment is any more effective.  He provides an excellent illustration of how this might happen

"Here’s how I understand the over-diagnosis issue, in terms of an extreme example: suppose that there’s a form of cancer that kills people 7 years after it starts, and that there is in fact nothing you can do about it. Suppose that country A screens for cancer very aggressively, and always catches this cancer in year 1, while country B chooses to invest its medical resources differently, and never catches the cancer until year 4. In that case, country A will have a 100% 5-year survival rate, while country B will have a 0% 5-year survival rate — because survival is measured from the time the cancer is diagnosed. Yet treatment in country B is no worse than in country A."

So far, kudos to Krugman.  However, does he resent any facts that the USA does indeed "over-diagnose"?  No.  One would think he could at a minimum support his argument with something, anything.  But he doesn't.  He ends with a short snipe at opponents of ObamaCare, "you shouldn’t buy the spin."

Plus, isn't early detection of cancer a good thing?  Well, as Science Based Medicine discusses, the facts are mixed.  The article explicitly discusses Krugman's theory, and states "there is a grain of truth buried under the absolutist statement but it’s buried so deep that it’s well-nigh unrecognizable".  The article has a great (if lengthy) discussion, repeating and elaborating on many of Krugman's points, including the issue that early detection can make survival rates appear to be longer, even if actual survival is no different.  Do they agree with Krugman?  Well... (italics added by me)

"Does all of this mean that we’re fooling ourselves that we’re doing better in treating cancer? That, after all, is the charge being made. Not at all."

In other words, it's complicated, but Krugman's argument that early detection is "spin" that might fool us is wrong - Krugman himself is providing the "spin".

I'd like to add something both Krugman and Science Based Medicine fail to mention.  Maybe today there are cancers for which early detection provides little or no benefit, because there are no effective treatments.  That doesn't mean that we will never develop effective treatments.  And, when we do, early detection will almost certainly be valuable.  So, early detection is an important step in the treatment of cancer.

In conclusion, I wish Krugman could have provided some facts to support his argument that the USA over-diagnoses cancer.  He may well be correct.  And, to his credit, he does hint at the complications, that "Real life isn’t that simple".  For the record, I'm completely undecided on the benefits of ObamaCare.  But, it Paul Krugman wants to convince me of his arguments, he needs to bring some facts.

What were they thinking?

Still filling in for my friend Ray who blogs at Remember Jenkin's Ear.

As most people with any information about Pakistan know, relations with the USA are badly strained over the Raymond Davis incident, where a CIA contractor killed a couple of Pakistanis.  Eventually, we ended up paying off the families of the victims, and things may eventually quiet down.

However, relations are still rough.  It's easy to find pictures of protesters burning American flags.  (also here).

So what does some US genius do?  Do we cool it for a while?  No, we pour gasoline on the fire by ordering a drone strike.  This drew a sharp rebuke from Pakistan's army chief, Gen. Ashfaq Kayani (also here) for allegedly killing mainly civilians.

Now, I believe that the strike intended to hit terrorists, not civilians.  Perhaps the Pakistanis are mistaken in their claims that it was a peaceful jirga of tribal elders.  They could be protesting because right now we are very unpopular, and they want to, or need to, "stand up" to the USA.  And. maybe they cynically complain in hopes of landing another large cash payout.

No matter.  Unless the US strike took out Osama Bin Laden, it was a darned stupid idea.  Not worth the risk.  At a time when relations are terrible, we didn't piss off some shadowy ISI types who, IMO, aren't our allies to begin with.  We pissed off the Pakistani army chief.  Bad idea guys.

Filling in for my Friend Ray a Bit

My friend Ray, who blogs at Remember Jenkin's Ear, is temporarily out of action.  He's posted a lot about the Raymond Davis situation in Pakistan.  Davis is the CIA contractor who "allegedly" shot a couple of armed Pakistanis who approached his car. This understandably created a small crisis in US - Pakistan relations, which seemed to be growing into a large crisis thanks to things like the ISI stating that he was CIA, and intervention by Pakistani Prime Minister Yousaf Raza Gilani.  Davis was formally charged with murder.

Ray speculated that this incident could lead to an Egypt-like uprising, and pointed out the general "fishiness" of the whole story.

Looks like money will be the fix, averting a crisis in US-Pakistani relations.  For a reported 2.4 million dollars to each victim, (and, I assume, an apology, as least implicitly) Davis has been released. Another article here.

 "In Pakistan's legal system, charges against people accused of murder can be dropped if "blood money" is paid to the family of the victim's relatives.".  

While I'm glad that this may have averted a serious break in US-Pakistani relations, it makes me wonder just how serious the Pakistani protestations really were.  Frankly, this just supports my belief that the Pakistanis are, to some extent, "using" the US, playing us for as much money as they think they can get, especially given the extensive past misuse of much of the aid the US provides.  I almost agree with one of the Islamicist parties,  "The Islamist Jamaat-e-Islami party condemned the release of Mr. Davis and said it would demonstrate."  Unfortunately, as long as we are over-extended in Afghanistan, we need to remain on good terms with Pakistan..

New York Times Editorial Misses the Point

Today's New York Times Editorial misses a couple of key points in their discussion of the Wisconsin situation.

"Some union benefits are exorbitant, but no politician was forced to hand them out. Lawmakers are free to end this practice and should, but ending the basic rights of unions is a very different matter."

1) It is not a basic right for public employees to have a union.  Federal employees are, for the most part, not-unionized.  They lack the key power of unions: "federal unions can’t advocate striking or actually go on strike."


2) Just how does the New York Times expect politicians to cut back on exorbitant benefits?  When, by their own admission a couple of lines above, they give a lot of support to one party, the Democrats?  Here in California, former governor Arnie was creamed by public employee unions when he attempted reforms.  Now in fairness, this applies to more than just public employee unions.  Senior citizens will fight long and hard to maintain their Social Security benefits, companies fight for their tax-credits, everybody for their tax cuts, etc.


Somebody needs to step up and tell Americans the unpalatable truth and lead.  Provide cover for wavering politicians in both parties.  That somebody is President Obama.  So far, he has been, IMO, all too weak on the leadership front.  Please, President Obama, lead!  Frankly, I expect that much of the time I will dislike your direction.  But it's better than no direction at all.  Follow up on the recommendations of the Budget Commission.