I dream of living in ... a World Without Dictators! I'm a Libertarian Paternalist in Slovakia - Freedom with Responsibility - 10% of income into your own Pension; Tax Loans for education, health, housing; now supporting Employment Maximizing Companies!

blog posts on immigration at The Truth Laid Bear

First bailout fails -- buy houses, not paper

Here's my alternative bailout plan:
$400 billion to buy up to 2 million houses at 50% of their last mortgage price, with an average price per county no more than $200 000 / house. An alternative would be at the last 1995 rate.

All those sub-prime loans "nobody knows how much they're worth" are worth 50%.

There are two issues:
1) value
2) uncertainty.

It is the uncertainty which causes the credit clogs, altho the loss of value is also huge.  A clear but low floor means firms will think they can get better deals by working harder with somebody else -- so they WILL work harder with somebody other than the Federal Gov't.

Buying the houses lets the finance and legal system settle the paper issues.
See the Burning Down the House video.

Posted by: TomGrey at 09/30/08 01:07 | link | comments (1)
economics

Against the bailout

Fab says:The US financial system is burning.

And your evidence? 1) overpriced homes have a higher foreclosure rate, after 2) no-money down poor speculators (liar loan users) stopped paying, causing 3) rocket science 'financial instruments' used by 'top banks' to meltdown?

Sorry, I don't think so.  Conservative local banks have lots of cash for good local loans.  Depositors, and borrowers, DO have lots of options on where to go.

See WaPo on local banks.

The primary 'Main Street' purposes don't need the Wall Street overpriced bankers.  The gov't maybe made a mistake with AIG, and certainly did with Bear Stearns -- should have allowed failure. 

I was wrongly in favor at the time, thinking it would be enough for stability. 

Fab's great Financial Debt graph above shows the huge need to rapidly reduce that debt.

Best long term would be debt to equity swaps, between different financial institutions that were imprudent, but even more chapter 11 bankruptcies would be OK.

There are FAR TOO many 'top bankers'.  The bailout keeps too many of them.  The non-financial economy doesn't need so many of them in financial institutions -- and as Lehman Bros. look for work, big companies wanting to put out bonds directly will be an increasing possibility.

Investment bankers were always just intermediaries -- with special contacts more than special knowledge.  Now both are easier and cheaper to come by for those with real products.

We should accept far more banking failures than we're likely to see.  With low Fed interest rates, banking failures today will NOT spill over nearly as much to the production economy. Depositors are insured, somebody will try to enforce the borrower's promise to repay.

Where is the 'rush'?  What loans haven't been made?
The rush is to save the multi-millionaire top bankers, not the real economy.

Posted by: TomGrey at 09/27/08 03:44 | link | comments
economics

Official gov't blogs!

The US gov't has started some blogs!  Three, really, according to the welcome message.

My own favorite, Myths and Rumors, Urban legends of Politics. It talks about the mis-information of the Russian gov't.

There are also: Campaign Trail Talk and Democracy Roundtable.

Naturally, I recall my own criteria for a Human Rights Enforcement Group, or a League of Democracies:
1) democratic elections that are 'fair', plus
2) Free Speech, and
3) Free Religion.

On Free Speech, other democratic governments should be able to produce critical, even anti-administration news articles, that clearly state facts.  Possibly in ways the current admin doesn't like, but only true facts.

Posted by: TomGrey at 09/20/08 02:00 | link | comments
blogs, human rights

US Income Tax system

The US income tax system, and the Bush tax cuts, explained by 10 friends and beer (via Ben Novak), plus the Obama plan for the future!

 

 

So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by $20. 'Drinks for the ten now cost just $80.The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers?

Posted by: TomGrey at 09/20/08 01:37 | link | comments (1)
politics, justice, envy

Maybe I should read Nudge

David Frum does a good quick review of this book, Nudge:
"Sunstein & Thaler propose that public policy should apply a gentle “nudge” – not to compel anyone to do anything, but to encourage people to make decisions that will make people better off."

Well, this is a lot like my Libertarian Paternalism.

Posted by: TomGrey at 09/17/08 01:17 | link | comments

Breasts on women, not girls

A comment on an old post led me to an interesting discussion of neoteny, by Hugo winning David Brin.

It was pointed out that both Men compete for women, as is usual among almost all species, but also that women compete for the right type of men.  The women's competition is quite unusual.

As in peacock tails, sexual selection competition results in enhancements of certain features.  One, obvious and likely, is our big brains.  But there is also, especially among women, the competition to look young.

Yet in this competition to look young, there is also the need to show adult fertility.  Perhaps that's what the big breasts are all about.

Very very speculative.  But interesting.  And I'd guess, likely to be true.

Thanks to the commenter.

Posted by: TomGrey at 09/09/08 02:17 | link | comments

Palin's Ice Rink issue

As Mayor, Sarah Palin didn't quite have full legal ownership of a piece of land upon which she constructed a big, Fed subsided Ice Rink / sports complex.

The WSJ reports on the on-time, under-budget construction:
The only catch was that the city began building roads and installing utilities for the project before it had unchallenged title to the land. The misstep led to years of litigation and at least $1.3 million in extra costs for a small municipality with a small budget. What was to be Ms. Palin's legacy has turned into a financial mess that continues to plague Wasilla.

Posted by: TomGrey at 09/07/08 01:43 | link | comments
politics, property rights

Obama's terrible housing result

Obama's record on housing: Boston Globe's "Grim proving ground for Obama's Housing Policy".

504 apartments subsidized by the federal government for people who can't afford to live anywhere else.

But it's not safe to live here.

About 99 of the units are vacant, many rendered uninhabitable by unfixed problems, such as collapsed roofs and fire damage.

The Globe goes on in excellent detail about the problems of many of the these partnerships, but especially the ones that were big campaign contributors to Obama:

Unfortunately, the guilty companies are depressingly similar when inspected:
The fund found the buildings in terrible condition. In a 2001 plea to the state to temporarily suspend payments on its mortgages, a fund executive wrote that heating problems, lapsed maintenance, and uncollected rent made the buildings almost impossible to manage

Construction subsidy should leave a big amount, perhaps 48%, to be paid monthly only when there are no complaints of contract violations.

Posted by: TomGrey at 09/07/08 01:37 | link | comments
politics

Sarah! - Palin the responsible choice

David Frum argues that Palin is an irresponsible choice in the National Post.

"So this is the future of the Republican party you are looking at: a future in which national security has bumped down the list of priorities behind abortion politics, gender politics, and energy politics. Ms. Palin is a bold pick, and probably a shrewd one. It's not nearly so clear that she is a responsible pick, or a wise one."

I don't see this as true at all -- Winning in Iraq is FIRST.  That's John McCain, better than Bush for winning.
McCain isn't so hot on other politics, so Sarah helps out.  Well.

I especially feel David is wrong when he says: "If anything were to happen to a President McCain, the destiny of the free world would be placed in the hands of a woman who until the day before Friday was a small-town mayor." 

She is governor, and fought corruption in her own party to win against a Rep incumbent.  She has more EXECUTIVE experience than senators McCain, Obama, and Biden combined.

Posted by: TomGrey at 09/03/08 00:05 | link | comments (2)
politics, democracy