Certain people on the far right are acting a little freaky

Here's Alan Keyes, I know hardly mainstream, but still - he was the Republican pick for US Senator in Illinois running against Obama, and he run for president in 2008 (I bet you didn't know it).

But I've heard folks like Rush Limbaugh be similarly shrill.

I know, I know, there were folks on the left saying similar things about G. W. Bush, but at least most of that came after Bush showed some solid years of ineptness. How long has Obama been president? 1 month? This mess is still Bush's not Obama's, lets not forget it.

Anyway, watch for yourself:

Moral Hazard is the thing of the past

Excellent show on frontline here that outlines the history of our financial meltdown pretty clearly. Its spine chilling, I strongly recommend every single person watch this. This is our history... someday we will talk to our kids and grandkids about how the biggest financial collapse since the Great Depression affected us personally. To not really understand what is happening around us would be tragic, so in my hopes of furthering the education and the discussion, please watch the frontline video.

By the way, its pretty clear the Republican party has no clue on what is happening to them, they've been sticking to stupid ideology throughout. Most poignantly, when they pointificated on the floor of Congress about why they couldn't support Paulson's financial bailout plan, then when it was voted no, the stock market completely tanked, and they had to come back with their tails between their legs to vote for a slightly revised version of the same bill.

Also, its interesting to see the conversion of Hank Paulson from a free market idealogue to one of the most interventionist Treasury Secretary in our history.

The video plainly outlines how his single decision to let Lehman Brothers fail was the leak in the damn that caused the complete global financial meltdown. It can be argued that if he would have bailed Lehman out similar to the way he bailed out Bear Sterns, we would be in a mess, sure, but not near the mess we're in right now. Lehman's bankruptcy single handedly took down AIG, caused the credit markets to freeze up and is now causing our government to spend trillions of dollars on a financial market bailout.

Sometimes, ideology gets in the way. You need to be flexible. Right now, the Democrats are showing a much greater flexibility.

Even non-sports fans should love this article

But how in the world am I supposed to know, I'm a sports fan (although I'm trying to quit), but its probably impossible for me to put myself in the shoes of a true-blue sports hater. At any rate, this article was mind-blowingly good. Its about Shane Battier, a basketball player for the Houston Rockets, former Duke star. From a statistical point of view, Battier, should be out of the NBA, but from the basis of helping a team win, he should be an all-star.


Here are some of my favorite parts of the article:

"Here we have a basketball mystery: a player is widely regarded inside the N.B.A. as, at best, a replaceable cog in a machine driven by superstars. And yet every team he has ever played on has acquired some magical ability to win." 

"Battier’s game is a weird combination of obvious weaknesses and nearly invisible strengths. When he is on the court, his teammates get better, often a lot better, and his opponents get worse — often a lot worse. He may not grab huge numbers of rebounds, but he has an uncanny ability to improve his teammates’ rebounding. He doesn’t shoot much, but when he does, he takes only the most efficient shots. He also has a knack for getting the ball to teammates who are in a position to do the same, and he commits few turnovers. On defense, although he routinely guards the N.B.A.’s most prolific scorers, he significantly reduces their shooting percentages. At the same time he somehow improves the defensive efficiency of his teammates — probably, Morey surmises, by helping them out in all sorts of subtle ways. “I call him Lego,” Morey says. “When he’s on the court, all the pieces start to fit together. And everything that leads to winning that you can get to through intellect instead of innate ability, Shane excels in. I’ll bet he’s in the hundredth percentile of every category.” 

"Having watched Battier play for the past two and a half years, Morey has come to think of him as an exception: the most abnormally unselfish basketball player he has ever seen. Or rather, the player who seems one step ahead of the analysts, helping the team in all sorts of subtle, hard-to-measure ways that appear to violate his own personal interests. "
"They knew, for example, that stars guarded by Battier suddenly lose their shooting touch. What they didn’t know was why. Morey recognized Battier’s effects, but he didn’t know how he achieved them. Two hundred or so basketball games later, he’s the world’s expert on the subject — which he was studying all over again tonight. He pointed out how, instead of grabbing uncertainly for a rebound, for instance, Battier would tip the ball more certainly to a teammate. Guarding a lesser rebounder, Battier would, when the ball was in the air, leave his own man and block out the other team’s best rebounder. “Watch him,” a Houston front-office analyst told me before the game. “When the shot goes up, he’ll go sit on Gasol’s knee.” (Pau Gasol often plays center for the Lakers.) On defense, it was as if Battier had set out to maximize the misery Bryant experiences shooting a basketball, without having his presence recorded in any box score. He blocked the ball when Bryant was taking it from his waist to his chin, for instance, rather than when it was far higher and Bryant was in the act of shooting. “When you watch him,” Morey says, “you see that his whole thing is to stay in front of guys and try to block the player’s vision when he shoots. We didn’t even notice what he was doing until he got here. I wish we could say we did, but we didn’t.”" 

"The reason the Rockets insist that Battier guard Bryant is his gift for encouraging him into his zones of lowest efficiency. The effect of doing this is astonishing: Bryant doesn’t merely help his team less when Battier guards him than when someone else does. When Bryant is in the game and Battier is on him, the Lakers’ offense is worse than if the N.B.A.’s best player had taken the night off. “The Lakers’ offense should obviously be better with Kobe in,” Morey says. “But if Shane is on him, it isn’t.” A player whom Morey describes as “a marginal N.B.A. athlete” not only guards one of the greatest — and smartest — offensive threats ever to play the game. He renders him a detriment to his team." 

"Knowing the odds, Battier can pursue an inherently uncertain strategy with total certainty. He can devote himself to a process and disregard the outcome of any given encounter. This is critical because in basketball, as in everything else, luck plays a role, and Battier cannot afford to let it distract him." 

"Wetzel watched this kid, inundated with offers of every kind, take charge of an unprincipled process. Battier narrowed his choices to six schools — Kentucky, Kansas, North Carolina, Duke, Michigan and Michigan State — and told everyone else, politely, to leave him be. He then set out to minimize the degree to which the chosen schools could interfere with his studies; he had a 3.96 G.P.A. and was poised to claim Detroit Country Day School’s headmaster’s cup for best all-around student. He granted each head coach a weekly 15-minute window in which to phone him. These men happened to be among the most famous basketball coaches in the world and the most persistent recruiters, but Battier granted no exceptions. When the Kentucky coach Rick Pitino, who had just won a national championship, tried to call Battier outside his assigned time, Battier simply removed Kentucky from his list. “What 17-year-old has the stones to do that?” Wetzel asks. “To just cut off Rick Pitino because he calls outside his window?” Wetzel answers his own question: “It wasn’t like, ‘This is a really interesting 17-year-old.’ It was like, ‘This isn’t real.’ ”" 

Battier had once again turned Bryant into a less-efficient machine of death. Even when the shots dropped, they came from the places on the court where the Rockets’ front office didn’t mind seeing them drop. “That’s all you can do,” Hinkie said, after Bryant sank an 18-footer. “Get him to an inefficient spot and contest.”

"The team with the N.B.A.’s best record was being taken to the wire by Yao Ming and a collection of widely unesteemed players. Moments later, I looked up at the scoreboard:
Bryant: 30.
Battier: 0. 

Hinkie followed my gaze and smiled. “I know that doesn’t look good,” he said, referring to the players’ respective point totals. But if Battier wasn’t in there, he went on to say: “we lose by 12. No matter what happens now, none of our coaches will say, ‘If only we could have gotten a little more out of Battier.’ ”"

Sorry for the random assortment of quotes, but I'm hoping this will encourage you to read the article. Its incredible, really, the sport of basketball. How much more important it is for success that all the players play well together as a team, offensively and defensively than individual statistics. And how an athlete like Shane Battier (whose destined for a future in politics by the way), uses very below level athleticism, but far superior intelligence to become literally one of the best players in the game if you measure best by how much that player actually helps a team win.

Can the suns trade Amare Stoudemire straight up for Shane Battier?

Phoenix in the top ten most desirable cities?

Loved this op ed by David Brooks right here where he says that Phoenix is one of ten cities that people most want to move to:

"Third, Americans still want to go west. The researchers at Pew asked Americans what metro areas they would like to live in. Seven of the top 10 were in the West: Denver, San Diego, Seattle, San Francisco, Phoenix, Portland and Sacramento. The other three were in the South: Orlando, Tampa and San Antonio. Eastern cities were down the list and Midwestern cities were at the bottom."

And this one:

"If you jumble together the five most popular American metro areas — Denver, San Diego, Seattle, Orlando and Tampa — you get an image of the American Dream circa 2009. These are places where you can imagine yourself with a stuffed garage — filled with skis, kayaks, soccer equipment, hiking boots and boating equipment. These are places you can imagine yourself leading an active outdoor lifestyle."

"These are places (except for Orlando) where spectacular natural scenery is visible from medium-density residential neighborhoods, where the boundary between suburb and city is hard to detect. These are places with loose social structures and relative social equality, without the Ivy League status system of the Northeast or the star structure of L.A. These places are car-dependent and spread out, but they also have strong cultural identities and pedestrian meeting places. They offer at least the promise of friendlier neighborhoods, slower lifestyles and service-sector employment. They are neither traditional urban centers nor atomized suburban sprawl. They are not, except for Seattle, especially ideological, blue or red."


It's funny because the cities I would like to move to are on this list, including:

Austin (not on the list), Seattle (tons of high tech - beautiful weather, cool downtown), Portland (my sister lives there), and Denver.

Would love to move to San Diego or San Fransisco - but too expensive.

On most days, though, I'm happy to be in Tempe, AZ

A Reallignment Ahead?

There are some really exciting potential consequences of this current global recession, especially if governments around the world do the right thing, and it appears to me anyway, that most countries are trying to do the right thing. Let me name a few:

1) A realignment of world economies: We have had a global situation where the really poor countries manufactured all of the goods we, Americans, consumed. So, since we were buying and not consuming, most of our money went overseas to China, Iran, Russia on either manufactured goods or oil. Those countries either put the money back into our economy through investments (China) or kept it highly concentrated within the ruling class leaking just enough out to keep their people happy (Iran, Russia, etc.). This was hardly a sustainable way to manage the world economy and it produced economic conditions that led very directly to the bubble and its eventual bursting that we're experiencing right now. What a realignment would mean is that if China could (and it seems that they are) pull some of that money back and spend more heavily on its citizenry - in schools, health care, infrastructure, they will see an increase in internal wealth distributed broadly. They will then be in a better position to consume more of the world goods, putting us in a better position to produce some of those same goods. Countries like Iran and Russia have lost much of their political leverage both internally and abroad, and hopefully this can give them an impetus toward reform and give us more leverage to encourage reform.

2) An opportunity to assist the most desperately poor in the world. One of the consequences of the booming economy was that there was a run-up in the global cost of food worldwide as recently as last summer. The poorest of us were literally starving, their governments were literally going to have to contend with riots. One of the consequences of the economic collapse is the global price of food (and oil) has fallen, easing the pressure on those countries. Solving world poverty is a solvable problem, I'm not sure exactly how the global recovery from the recession will help exactly, but there was a good consequence of the current global recession for those folks anyway.

3) We are in potentially a better position to fix some of our own internal problems in health care, dependence on foreign oil, education, and infrastructure. All of these things could be seen as economic stimulus. We have literally underfunded local infrastructure in favor of both tax cuts, military spending, and wasted, inefficient entitlement spending. The conservative argument that government is the problem has ironically allowed Republican government to really live up to that mantra. We now have a president who believes that government can and should contribute and perform and that it can and has done so efficiently and effectively. Now is the opportunity to reform our health care system, our schools, reach for alternative energy solutions.

4) We have a huge imbalance between the halves and the have nots. Too much of our local GDP was controlled by a very small percentage of our working population. We had many, many people working hard, doing meaningful work but barely getting by. Right now there's a real palpable anger at the excesses in wall street, the exorbitant salaries and bonuses. I hope this allows us to work toward an economic system where the salaries are more broadly distributed, both through the markets and if necessary enforced through tax policies. Success should be rewarded, but its been far too easy to game the system to benefit the few. Hopefully, there will be a resurgence in better regulation and more responsible CEOs and business leaders.

This is my hope for the future.

It's going to be a long time before I vote Republican

I cannot fathom how horribly dysfunctional this current incarnation of the Republican party has become. Not one vote for the stimulus bill in the House, very little apparent support in the Senate. Even after all of the efforts Obama has made to garner bi-partisan support. What's worse, it appears the Republicans have made every effort to weaken the stimulus bill even as they continue to vote against it. It all has the stink of ugly partisanship.

The thing is that this crisis is suited perfectly for Democrat-style solutions. Republicans need to show a little more pragmatism than they are currently showing. Its not a game to enhance Republican political power. Our government should actually think of solutions that will actually help this country.

Sorry, McCain and Kyl, you've lost my vote.

Here's Obama explaining the stimulus and its importance:

I'm still learning about this Economic Crisis

Just listened to an excellent Diane Rehm discussion about the global economic crisis described here: http://wamu.org/programs/dr/09/01/29.php#23955 where they discussed the causes of this global recession and solutions.

The causes are complex and multi-faceted and its easy to get in a counter-productive blame game, but I think its important to figure out the causes because it will help sort out solutions (a point made by one of the guests, Zanny Minton Beddoes, economics editor, "The Economist;" formerly, economist at the International Monetary Fund).

In fact Beddoes is who I related to the most, she put a lot of the blame squarely on the imbalance of the world markets. Too many emerging markets (primarily China) were saving exhorbitantly at rates of 50% (that 50% savings rate comes from this Fresh Air interview with James Fallows I heard a few weeks back: http://www.npr.org/templates/story/story.php?storyId=99039196). This money was dumped into our market (being the largest market in the world) and was the primary reason credit has been so cheap and so easy to get for so many people the past few years. For a really good explanation of this, listen to this "This American Life" podcast broadcast a bit ago: http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355 That describes how the global supply of money doubled in seven (?) years. Not fake money, real money because, globally our capacity has improved dramatically as countries like India and China have developed, and technology has improved.

I know some people like to blame Greenspan for all of our problems, and he definitely shares some of the blame, but the bubble was really part of this global tsunami of events that largely was out of any one person's hands to control.

Some of the problems, I feel have come through some pretty significant imbalances in the world between rich countries like the US who were largely consuming assets manufactured by poor countries who produced it.

Also, the imbalance within the US has been part of the problem as well.

This article summarizes pretty nicely the imbalances in the US economy:

http://www.theatlantic.com/doc/200810u/consumption-compromise

"Until recently, many observers, most of them on the left, have puzzled over why rising inequality hasn't sparked an outright political revolt. Well, here's why. Real income matters less than quality of life. And for the last two decades, a delicate Consumption Compromise has tamped down economic discontent among working-class voters by driving down the cost of living—we've been living in the era of cheap food, cheap gas, cheap credit, and, of course, cheap Chinese-made goods."

So, even as wages for middle and lower case Americans have stagnated (even as GDP and stock prices were increasing), most people were still able to buy everything they needed and wanted even if some of that was through their visa cards.

But the income inequalities were real, much of the US wealth was being concentrated in the top 1% of earners, much of the world wealth was being dumped into US markets.

And because US wealth was so poorly distributed, many middle/low income earners really counted on cheap credit to get by (and to buy their SUV's of course). As gas prices, health care prices, and education costs most prominently rose beyond inflationary rates, cheap credit became all the more important for these families just to stay afloat in many cases.

The entire world stability hinged on American consumption demands, which of course was not sustainable.

Again, I don't see this as the whole story. Regulation broke down, American consumers were irresponsible, a lot of corrupt people around were hoping to make a quick buck.

But in my view, these two inequalities I feel explain much of what went wrong in our economy.

The Case for a Big Government

Loved this post.

Especially the last half:

"Meanwhile, one needs to understand that, somewhat counterinuitively, when you have a very efficient economic sector what happens is that it tends to go away. Consider agriculture. Our modern-day agricultural technology is way better than what was available 200 years ago. But agricultural progress hasn’t meant that everyone goes to work in the super-charged high-tech agriculture of the future. It’s meant that more food than ever is grown with fewer person-hours of labor than ever. We should expect this to continue apace. For all the talk of trade’s impact on American manufacturing, the bigger issue has been automation and robots. But either way, even though people will continue to consume manufactured goods—just as we still eat—manufacturing will be a less-and-less important part of the economy. Not because manufacturing “isn’t important” but because it’ll get more efficient. And that’s how the whole private sector part of the economy will go. Markets, doing their work, will make those sectors more and more efficient leading them to shrink as a share of the overall economic pie.

What will be left is big government. Or, rather, bigger and bigger government. Teaching kids. Taking care of the elderly. Patrolling the streets. Making the SUPERTRAINS run on time. And it’s going to be fine.

Which isn’t to say we should crank spending up to 93 percent of GDP next year. But it does mean I don’t think we should set an arbitrary limit. And it also does mean that it’s always important to find ways to make the public sector more efficient and more effective. It can be done. Public agencies are better-and-worse managed and offer better-and-worse performance. But it’s difficult to do and it doesn’t happen automatically the way it does in a well-functioning market. And it also means, as I’ve been taking to saying lately, that we need to think about garnering more revenue in ways that have non-revenue benefits. For example, market-rate prices for street parking not only raise revenue, but allow for more efficient allocation of parking spaces. Similarly with congestion pricing on crowded roads. Auctioning carbon permits will keep the planet habitable and raise some money. Taxes on alcohol and sweeteners would have public health benefits. And on and on down the road."

I do think the author overstates the elimination of private sector jobs through automation a bit. The automation of manufacturing and agriculture has eliminated a lot of previously labor intensive and manual jobs, but they have been replaced with smarter jobs many in the service industry. They don't all necessarily need to be replaced by public sector jobs.

But I think the point is a good one, that just because government is growing bigger doesn't mean we're heading toward socialism, it just means the dynamics of our economy is changing and more government is required.

But more automation I feel is an exciting opportunity especially in context of the recession we're currently facing. In many ways, we no longer need to work. Technology has allowed us to cheaply mass produce plasma tv's for every single house in the world if we wanted to. Or mass produce houses for everyone (which is what we did here in Phoenix and now we're stuck with a glut of homes and a credit crunch and the potential stupid mix of homelessness and empty houses), or feed the world. If we wanted to live simply and possession free, we could just idle our lives away in our mass produced house, eat our mass produced food, and be fat, dumb and eventually die young, Wall-E style.

But we don't have to do that. We can spend our excess money on education, art, the local gym, on yoga instructors, on travel, on living more sustainably in the world, on all kinds of wonderful research. We can strive to cure previously incurable diseases. We can strive to make sure every single child receive incredible music lessons, and as we do that, we can then enjoy incredible music firesides in our old age when our children entertain us.

We can strive for more. And all of this doesn't necessarily have to be government driven. It would be better if most of it was not. It would be better if the strivings for something better were both top down and bottom up driven. We definitely need smart, driven leaders to drive our communities toward something better. But what we need more is for every single one of us, standing up and demanding more from both ourselves and our leaders.

This whole idea of a world where the necessities of life being produced in an ever more automated and less expensive ways opening up employment opportunities in ways previously unimaginable is a really exciting thought of mine. I want to write more about this another time.

But its also why the prospects of heading toward double digit unemployment is so distressing for me, because it also implies that many more will be out of work at least a portion of the time and still more will be massively underemployed. Its a sign that our society is broken, that we are misusing our talents, and that we are not garnering the most out of ourselves. The longer we get entrenched into it, the deeper sense of tragedy this is. And government alone is insufficient in solving the problem. Again, it requires all of us becoming more interdependent with each other. We need to trust in each other more.