Compare these two sets of credibility scores:
1 - “In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” Warren Buffet, in his 2002 report to shareholders. Buffet is now an economics advisor to Barack Obama.
Also (on the same side of credibility), there’s the tale of Freddie Mac's Chief Risk Officer, who expressed concerns in mid-2004, that the company was buying bad loans that "would likely pose an enormous financial and reputational risk to the company and the country...leading to his being fired in 2005."
...as opposed to....
2 - "Hands Off Hedge Funds" by Sebastian Mallaby, a fellow currently in McCain's brain trust, writing in Foreign Affairs, February 2007: "Moreover, hedge funds collectively do not so much create risk, as absorb it…Hedge funds can also reduce the danger that economies will over respond to shocks." Thus…"restrictions on hedge funds are the wrong way to deal with it."
Which isn’t as staggering as what the GOP platform said in 2004. “The most significant barrier to homeownership is the down payment. We support efforts to reduce that barrier, like the American Dream Downpayment Act and Zero Downpayment Mortgages.”
Or take the worst example of all -- the actions of McCain’s chief economics advisor, former Senator Phil Gramm, to forbid and remove all oversight from derivatives market! An act that today’s shame-faced SEC Chairman Christopher Cox now calls directly and clearly responsible (along with rampant greed and failure of “self-policing”) for the mess we are in.
Note, how the right wing bloggers are desperate to shift responsibility... now they are trying to blame a Quadrillion dollars in foolish wagers -- and twenty billions in corrupt commissions -- on a few tens of millions of dollars in loans to poor hispanics... who actually happen to repay at a rate well above the national average!See the excellent documentary Inside Job, directed by Charles Ferguson with its insightful portrayal of the 2008 financial crisis.
Key point: which of those two groups (above) should have higher credibility scores?
--Or deserve more of our trust?
--Group number one or group number two?
What can we conclude from all this? Other than the fact that Obama’s economics advisor has been right a lot and McCain’s have wrought only catastrophe?
Well, let me put it quite simply. Since we seem about to have a “bailout package” as a done deal, whether we like it or not.
But there is still time to shout and holler and yell for one last element of sanity, to be inserted into the bill!
Let’s pray that a single senator has the guts to stand up, threaten a filibuster, and make one demand, on our behalf.
Put Warren Buffet is put in charge of picking the securities that the Treasury will buy, with all those tax dollars. That’s Buffet... and not Paulson or anyone else who helped to make this mess.
It is a simple position to take, easy to defend. And an easy modification to make. And the result will be the best possible chance we have of breaking even, instead of this becoming a socialist klepto raid to save the hash of Paulson’s rich friends.
This is an idea that is so simple, so obvious, that even we economics dunces ought to be able to insist on it. Instead of trusting the foxes to save the chicken cook THEY have demolished... let's hire the watchdog who warned us in the first place.Give “the world's greatest investor" one more chance to buy low and sell high.
For all of us.
Viral it.
==Hiding from the Truth==
Want a metaphor for the monomaniacal way that our beloved ostrich friends and neighbors hide from the truth? Faced with cognitive dissonance that would make lesser delusions shatter into dust and gas, these stalwarts cling to rationalizations that vector upon the hysterical. Conjuring up incredible stories like “illegal hispanics defaulting on zero-down mortgages caused the collapse of a quadrillion dollar Ponzi scheme.”(Seriously, that fantasy is hitting the rounds!) Oh, and Obama is a marxist-muslim.
Okay, I thought of just the right metaphor! They Live is a 1988 movie directed by John Carpenter, based on Ray Nelson’s Sheckleyish 1963 short story "Eight O’Clock in the Morning". Rent it! It is truly wonderful. And there's this scene that will make you laugh & cry at the same time, in which these two big, decent-but-dumb guys beat the crap out of each other over whether the black dude will simply put on a pair of special sunglasses that will let him see the aliens who are enslaving the Earth.
Oh, but what a perfect metaphor! THAT is how bad it is with ostriches. There are no levels, no criteria under which anyone could rationally defend anything that has in any way been done by the Republican party since the 1995 Welfare Reform Act. Today, they are a wholly owned subsidiary of the S'udiroyal court and every path they have sent America down has led to our further ruination. It is as clear as the twin towers were, out the window of every passenger on those planes.
But how they’ll fight for their illusions! Oh, if only it were as easy as forcing our neighbors to put on some sunglasses.
== Catch a SPORE ==
A couple of years ago, Will Wright asked world renowned tech artist and professor Sheldon Brown - and me - come up and visit Will’s shop in Berkeley, because he heard we were working on a concept somewhat similar to SPORE. He was relieved to learn we had 1/10,000th of his funding! Still, in order to grasp what had him (briefly) worried, see our Exorarium Project Proposal ... (and if you hear of any big money groups that want to compete with SPORE, let us know.;-) If ever carried to completion, the Exorarium would offer many of the same delights as SPORE -- such as building your own, evolved species and playing interactions with others. Only, with some crucial differences.
1) Wil's concept is classic-patterned game. The player has a budget and "buys" species traits, then earns a bigger budget by winning battles. Yeah, my kids enjoy it (good job Will!) But there are alternatives, and some perhaps just as fun, while being a lot more like nature.
While SPORE starts small, in a droplet of water, the Exorarium asks the player to begin by choosing a star, then a planetary system, a planet, an ecosystem... etc... and letting the chips fall where they may. As you dial in with your choices, the vast forrest of evolutionary pathway-possibilities gets chopped and winnowed, getting narrower with every decision, till you wind up with a slender tree of possible evolved outcomes. Still a matter of “choice” I guess. Only our approach emulates and incorporates and joyfully explores the range of possibilities offered by science.
Because of this (and Will got a chuckle when I said it), the Exorarium is a simulation of evolution, while SPORE is much more like "intelligent design"!
2) Because the Exorarium revolves around real science, there is obvious potential value as an education tool. In fact, the worldwide game would ideally be "anchored" with two or three or four lavish installations in some of the great science museums, like the Hayden or Griffith Planetariums. (See the gorgeous conceptual drawings, created by Sheldon Brown.) Though of course, 99.9% of the players - and revenue - would be generated by home and internet-based players. Both museum kinds of users would have the option (not required) of learning about all the different sciences that helped to make us, from astronomy to chemistry to biology.
3) At the end of the fun process of unleashing (rather than controlling) evolution, each player winds up with his or her own species, just like in SPORE. Only with a surrounding ecosystem and companion/dependent/competitor species, as well as a place on a complex food chain! These can then be played in Phase Two of the game --the "extraterrestrial terrarium" -- in First Contact scenarios that follow some of the methods used at the venerable CONTACT Conferences. Guessing the motives of other species, based on limited knowledge, would make up half the fun. And war is only one of many possible outcomes!
4) Of course, a David Brin design would have to include Uplift!
Ah, well. Of course this would take somebody with deep pockets, who either cared about mass science education or else wanted a “killer” game to compete with this year’s killer game! Ideally.... both.
= = Some interesting alerts! ==
NewsFutures is excited to announce the first Wisdom of Crowds Consulting Workshop, to be held in New York City on October 27th, 2008. It is designed especially for small and medium-size business consultancies who would like to acquire a working knowledge of how to put collective intelligence to work for their clients. A couple of days later I’ll be in Boston (MIT etc) Almost went to this. Anybody in the area, care to go attend and report? ----- Finally accepting the value of transparency and citizen action? The Pentagon this past spring launched its so-called Minerva initiative - a hunt for more information on the Chinese military, ways to marginalize al-Qaida, new anti-terror strategies. Thirty years ago, it might have been top-secret stuff. Today, the military is asking everyone for help - and will post the results in full public view. It's another example of a new world of problem-solving that seeks answers in the public square. Defense Secretary Robert Gates calculates that the transparency of Minerva is also its strength, that by looking to everyone for advice and letting the crowd weigh in on the results, the communal know-how will be that much richer.
----- A fan wrote in: “Joss Whedon’s new TV show, Dollhouse, is very reminiscent of Kiln People sans the kiln. Hope you’re benefiting in some way. If not its great to see original ideas on the tube for a change, just wish the originator gets some kudos.”
----- Here are my latest books available on Kindle.
== More Stuff ==
An extensive article about alternative energy... See the part about Masda City becoming the first carbon-neutral city...
United Solar Ovonic of Auburn Hills, MI, has teamed with Centria, a major roofing company, to create a metal roof system that integrates easy-to-install, flexible thin-film amorphous-silicon photovoltaic modules. (EnergyPeak) The partnership offers seven different prefabricated systems
Google is considering deploying the supercomputers necessary to operate its Internet search engines on barges anchored up to seven miles offshore. The "water-based data centers" would use wave energy to power and cool their computers, reducing Google's costs. Their offshore status would also mean the company would no longer have to pay property tax.
Saudi Arabia plans to build a petascale supercomputer system in two years that could rank among the 10 most powerful systems in the world, and beyond that, an exascale system (1000 times as fast as petascale).
Google, celebrating its 10th birthday this month, today unveiled a $10 million effort to implement ideas that can "change the world by helping as many people as possible." As part of the Project 10^100 (pronounced Project 10 to the 100th), Google plans to ask its users to submit ideas until Oct. 20 for ways to improve people's lives. Google will choose what it feels are the 100 best ideas and then allow its users to vote on which of them should be funded. The users will narrow the results to 20 finalists, and a panel of judges will choose up to five ideas that will receive funding, Google said.
Satellite company O3b Networks has linked up with Google and other investors to bring cheaper high-speed wireless Internet access via 16 satellites to areas unlikely to see investments in fiber infrastructure. O3b stands for "other 3 billion," a reference to the world's population that still can't access the Internet.
Wikileaks has developed an uncensorable Wikipedia for untraceable mass document leaking and analysis. Wikileaks opens leaked documents up to stronger scrutiny than any media organization or intelligence agency can offer and provides a forum for the entire global community to relentlessly examine any document for its credibility, plausibility, veracity and validity. Its primary interest is in exposing oppressive regimes in Asia, the former Soviet bloc, Sub-Saharan Africa and the Middle East, but it also expects to be of assistance to people of all regions who wish to reveal unethical behavior in their governments and corporations. The interface is identical to Wikipedia and usable by all types of people. To date, it has received over 1.2 million documents so far from dissident communities and anonymous sources.
The sun has reached a milestone not seen for nearly 100 years: an entire month has passed without a single visible sunspot being noted. The event is significant as many climatologists now believe solar magnetic activity – which determines the number of sunspots -- is an influencing factor for climate on earth. In the past 1000 years, three previous such events -- the Dalton, Maunder, and Spörer Minimums, have all led to rapid cooling. One was large enough to be called a "mini ice age".
If the 100 largest cities in the world replaced their dark roofs with white shingles and their asphalt-based roads with concrete or other light-colored material, it could offset 44 metric gigatons (billion tons) of greenhouse gases.http://www.kurzweilai.net/email/newsRedirect.html?newsID=9413&m=15453
Intel has reported on "free cooling" using air-side economization. An air-side economizer can draw on outside air to cool the inside a datacenter, then push the hot air that exits the machines back outdoors allowing machines to be cooled by air temperatures as high as 90 degrees Fahrenheit.
Sir Tim Berners-Lee's new World Wide Web Foundation is looking for ways to give websites a label for trustworthiness.
Melbourne-based ExitReality said its application allows users to turn any regular website into a 3D virtual environment, where an avatar representing them can walk around and meet other browsers viewing the same website. Founder Danny Stefanic said that previously only specialized websites such as Second Life and World of Warcraft allowed users to enter a 3D environment. "ExitReality goes far beyond that," he said. "It allows you to view not just one website but the entire World Wide Web in 3D."
==The Endless Universe==
The Doppler technique measures the reflex radial motion of a star induced by the presence of companions and is the most successful method to detect exoplanets. If several planets are present, their signals will appear combined in the radial motion of the star, leading to potential misinterpretations of the data. Specifically, two planets in resonant orbits can mimic very efficiently the signal of a single planet in an eccentric orbit. We quantify the physical implications of this solution degeneracy using the well known harmonic expressions of keplerian motion. We find that a significant fraction of the published eccentric one-planet solutions might instead be multiple planet systems in near circular orbits, and that several planets with masses comparable to Earth could have already been detected.
In a bold move, astronomers have begun a new search to understand and explain the origin, nature and prevalence of intelligent life in the universe. Called which stands for Wait for Extra Terrestrial Intelligence, the institute employs an entirely novel approach to achieve its goals. Instead of actively searching for extraterrestrial intelligence, the idea is to simply wait: Wait until the ETs find us. "Waiting is a notoriously under appreciated method in our efforts to search for extraterrestrial intelligence," says the "It is cheaper and less stressful than any other type of research. The WETI Institute is part of OPEU, the Organization for the Passive Exploration of the Universe.
Patches of matter in the universe seem to be moving at very high speeds and in a uniform direction that can't be explained by any of the known gravitational forces in the observable universe. Astronomers are calling the phenomenon "dark flow." The stuff that's pulling this matter must be outside the observable universe, researchers conclude. (Go ahead, read up and have your mind blown.)
Only, now consider what I can’t get anyone to talk about! Until about 5 years ago, the consensus among physicists appeared to be that our Big Bang cosmos was “all there is” and that the bag did not explode “into” anything at all. Any other universes (and they admitted that, say, black holes might either create or lead into other cosmoses) were “forever detached with different metric and no method of informational contact. In fact, so sure they were that the entire PREMISE of the Big Bang was that it arose out of a fluctuation in the Uncertainty principle... and yet would not entertain discussion of any pre-existing cosmoses within which there was an Uncertainty Principle, which could fluctuate and cause a bang!
Um... right. Only, suddenly, a few years ago, it seemed that everything changed. Suddenly, cosmologists are talking about a vast “Macros Cosmos” within which our Big Bang occurred... sharing the same essential (though vast) background context of extensive space! In other words, even though zones of this macro cosmos are supposedly forever out of contact, because of speed of light limitations, nevertheless, we share the same overall (though unbelievably vast) continuously extending metric of the same general dimensions, and pocket universes like ours exist physically side by side, boundaries touching and all that...
...which means the Bang DID “explode” INTO someplace! And... this article now implies... there are even edges that may feel an external force stronger than we do, here. ANd there may even be beings in our Bangiverse who can see what we cannot... the edge into something else. Another realm. Maybe even weird.
Oy! Which is more boggling. These revelations? Or the blithe way the cosmologists appear to have made this change, without more than a wry shrug and a low-voiced “ooops!”
...Meanwhile -- Respected scientists have proposed a flock of theories to describe what might have happened before the birth of our familiar universe of space and time. The concepts have fanciful names such as "the big bounce," "the multiverse," "the cyclic theory," "parallel worlds," even "soap bubbles." Some propose the existence of multiple universes. Others hold that there's one universe that recycles itself endlessly, rather as Buddhists believe. Judeo-Christian theologians may have difficulty accepting any of these notions. Most of the hypotheses are variations on an older idea that the universe has no beginning and no end, contrary to the big-bang theory, which says that our universe originated at a specific point and will end sometime in the distant future."Neither time nor the universe has a beginning or an end," two leading cosmologists, Paul Steinhardt of Princeton University and Neil Turok of Oxford University, wrote in their 2007 book, "Endless Universe: Beyond the Big Bang." "The evolution of the universe is cyclic, with big bangs occurring once every trillion years or so, each one accompanied by the creation of new matter and radiation that forms new galaxies, stars, planets and presumably life," they wrote. "Ours is only the most recent cycle." Some scientists contend that observational evidence may be found to back up the speculation. They say that no scientific theory can be considered valid until it's been tested.
Huhnnnnnn... is Fred Hoyle having the last laugh, after all? And is nobody noticing that all of this is TOTALLY different than just 5 years ago?
Oh, but I did hint at it in some stories!!! ;-)
Look, we’re already in the unlikely side universe in which humans were smart enough not to fry themselves with nuclear weapons. Is luck and karma balancing out now? Oh, to ride the quantum collapse wave, like a character in a Greg Egan novel!
==Congratulations Elon!==
Elon Musk, and his great crew at Space Exploration Technologies, have succeeded in the first privately funded launch of a craft into earth orbit. This history-making effort comes as the fourth launch attempt for the new SpaceX Falcon 1 rocket; the company has launches scheduled going forward for this LEO-oriented satellite launcher, even as it continues development on two versions of the nine-engine Falcon 9.
Congratulations Elon! And to the entire enterprise.
Have a glimpse of the new look at davidbrin.com! (Thanks to our wondrously skilled and creative webmaster, Beverly Price.) Comments and suggestions (and digg etc points) are welcome.
116 comments:
But none of those theoretical cosmology items are at all news.
The inflation driven big-bang producing an internally unbounded region as a phase transition domain in a larger cosmos was even in SciAm back when I was still reading it (which is turn of the century or thereabouts); and Turok's cyclic ekpyrotic universe is the best part of 5 years old as well.
Oh, and good luck with spreading the carbon black to combat a little ice age.
Dr Brin
Exorarium sounds like a nice idea, but technically... well *highly* ambitious. Maybe borderline plausible now or in the near future (you are a futurist I suppose).
I wish I had the deep pockets you need, but I would have already blown the money (and beat you and Will Wright/Maxis to the punchline ;)) When I was working on the Avida project with Charles Ofria we discussed exactly how to do a real evolution based game at huge length while avoiding working. The most tractable and commercially viable idea was Project Von Neumann, which sadly never went anywhere despite it's very limited scope.
Anyway, if you ever get Exorarium moving, I humbly suggest contacting Charles Ofria (now a CS prof at MSU). Hell, I'd like to help too... but I'm not 1/10 the programmer or designer or team/lab leader Charles is.
PS: Back when I was working at Caltech, we had all the components of a kick ass game design workshop except the money. All the CS and design disciplines of course, but also some excellent writers and story people including an insanely talented and funny Biochemist who happened to be an (Oxford IIRC) English Lit major as an undergrad. The only expertise missing was visual art design, and my brother happens to be a very good (IMO at least) professional illustrator. Oh, pointless reminiscing, but hopefully brings a smile to your face too.
Oh good, now I don't feel guilty posting this and being off-topic. ^^
A study is linking solar activity to hurricane intensity. The study has found that sunspot activity has an effect on the intensity of hurricanes due to increases in ultraviolet radiation that results from high sunspot activity.
The current low in sunspot activity is happening at the same time that hurricanes are becoming nastier and nastier. This unfortunately will have political repercussions, especially concerning global warming.
One argument concerning global warming is that the increased temperature of the Earth has manifested with an increase in the intensity of hurricanes. This current evidence will be used to refute that and claim that global warming is a lie.
Already some people are claiming NASA predicts lower temperatures in the next few decades. People will believe the lie. They will cling to it with an obsession that is truly sad, if it weren't horrifying in its final implications. And they will use honest facts to prop up their lies.
Robert A. Howard, Tangents Reviews
And touching upon another theme Dr. Brin has talked about in the past, Athiest soldiers are fighting back against religious radicalism in the U.S. Military. I believe that we are seeing the military wake up to the danger nestled to their bosom, and now that the Shrub and the arch-conservatives are on their way out, starting to fight back.
Hopefully, if Obama is elected, we will see our military move away from being a Christian Army and back to being a secular military establishment.
Rob H.
U.S. Mint suspends sale of gold coins due to excessive demand.
Link.
Credit crunch banker jumps in front of express train (that's a headline we'll be seeing plenty more of in the coming months and years).
Link.
Fortis Bank in Belgium, leveraged at 30:1 and with current derivatives liabilities greater than the GDP of Belgium, has just been bailed out. However, Barclay's Bank is leveraged at 50:1 and if its derivatives go, they will take a sum equivalent to the entire GDP of Great Britain.
This is only the beginning. Major German state-owned banks are now in trouble and may soon have to be nationalized.
As Nouriel Rubini predicted, the next group of financial institutions to collapse is the entire hedge fund industry, which is now starting to fall apart due to record redemptions, as well as their exposure in debacles like Lehman Bros.
"Reckless people have deluded themselves that this was a subprime crisis. (..) But we have problems with credit-card debt, student-loan debt, auto loans, commercial real estate loans, home-equity loans, corporate debt and loans that financed leveraged buyouts."
Link.
Japan exports cars, Saudi Arabia exports oil, China exports computers and flat-screen TVS -- what's America's No. 1 export? Debt.
Link.
U.K. economist says "I've watched the economy for 30 years. Now I'm truly scared."
If more people understood what has happened in the British and American banking system, the financial crisis would only be containable by the immediate partial nationalisation of every bank in Britain and America. There was not a run on the banks by depositors queuing in the streets to withdraw their savings. Rather, it was an escalating and terrifying run on the banks in effect by themselves, which, if it spread to millions of small savers, would reproduce the events of 1929.
In Britain, the money markets that the banks organise between themselves completely froze. Such was the break down in trust and sense of panic that some of the most familiar names in British high street banking would not lend to each other at all or, at best, just overnight. Instead, the Bank of England had to supply tens of billions to banks who found the normal sources of funds blocked.
I have been writing on the financial markets for nearly 30 years. I have known the system was becoming increasingly fragile, but for all the ferocity of my criticisms, I never expected the scale of today's events.
Link.
Perhaps most ominously of all, the Chinese central bank may need to get bailed out by the Chinese government.
Link.
John Gray in Britain summarizes:
Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.
Link.
Latest from James Howard Kunstler's blog pretty well sums it up:
Any way you paint this grotesque panorama, it looks like a very new chapter of history for life in the USA. Basically, we are a much poorer nation than we were even a couple of years ago, and we have a much-reduced ability to project our will around the world, or even among our own floundering sectors and regions. Most troubling to me is the question of legitimacy that now hangs over the proscenium like a guillotine blade. Factoring in the old saw that history doesn't repeat but it rhymes, I think the situation emerging is rather like the crisis of legitimacy that preceded the Civil War. Then, in the 1850s, the nation's two symbiotic political parties, Whig and Democrat, entered a zone of fatal discredit. The White House had been occupied by a sequence of empty cravats named Fillmore, Pierce, and Buchanan, and so much pent-up mistrust roiled the centers of power that the nation entered a convulsion.
At issue then was the great festering unresolved polity of slavery. The Whig party, in its oafish, craven fecklessness, disappeared so quickly from the scene that an embarrassed God Almighty seemed to have hooked it off-stage in a nanosecond. Into the vacuum stepped an awkward lawyer from Illinois -- widely mocked by the coarser elements of what was then called the press as a figure resembling an ape in a stovepipe hat. He accomplished one crucial thing in the process of his emergence: he deployed a potent rhetoric that captured the essence of the crisis and clarified it for all to understand what was at stake -- and then the convulsion commenced in earnest.
The Republican Party amounts to today's Whigs. Their candidate for president, John McCain, is trying to run away from his own party -- as one might shrink away from a colony of importuning lepers. I am actually not kidding when I label the Republicans "the party that wrecked America," because I believe that is truly how the popular strain of history will regard them when (maybe if) the wreckage of their ministrations ever clears. But history doesn't repeat exactly. The current figure from Illinois, Barrack Obama, has yet to offer a truly crisis-clarfying rhetoric, though he labors under the expectation of being able to do so. Like his long-ago predecessor, he is mocked by the coarser elements of what we call "the media" these days -- Fox News and the moron-rousers of talk radio.
Some of the issues yet-to-be-clarified concern the behavior of the American public in the broad sense. We have obdurately resisted the reality of the energy crisis that hangs over everything we do (as slavery hung over the 1850s), from the way we inhabit the landscape to the way we do daily business in our 240-million-plus fleet of cars and trucks that ply the ribbons of asphalt and the lagoons of parking that now run from sea to shining sea where the fruited plain was replaced by the Wal Marts.
Mr. Obama isn't kidding either when he alludes to the change America faces, though history has not yet rhymed enough for his rhetoric to really set forth the terms of this change in its stark particulars. And even if he is able to articulate these things, he won't forestall the convulsion anymore than Lincoln held back a war between the states. That prior crisis was when America learned good and hard how tragic life could be, and it colored our national character for a century -- until we chucked it all to become a society of overfed clowns, with God Almighty replaced by Ronald McDonald. That pageant of happy idiocy is now ending. Like everyone else in this fraught and nervous land, I'm standing by to see what transpires in the days just ahead.
Link.
I remember reading a comic book (either Legion of SuperHeros or Classic Star Trek), back in the mid/late '70's, where they had the repeating expanding/collapsing universe. It think it even mentioned different physical rules, universe to universe. Heh. What goes around comes around.
Dr. Brin.
I was hoping Spore was more like Exorarium. I wanted branching and a "cost" to upgrade creatures. Like big brains means more metabolism would be taken up and the creature would have to lose some other abilities -- you know, like real life. A low gravity + cooler climate MAY allow for larger creatures. However, who would have predicted dinosaurs on earth getting so large and not being underwater creatures (I suppose hollow bird-like bones to cool the body helped)?
Anyway, good luck with it. There are always educational government programs looking for things like this.
Perhaps you could go more towards the "Pokeman" card-game like format, and make this a lot cheaper. You get a random selection of traits and upgrades in a hand and have to figure out the best way to combine them each turn -- to "populate" your world. Then just some heuristic-style programming as a simulation kept changing your world from the added creature -- just a thought.
>> I'm glad we are on exactly the same page on the Wall Street robber baron bail-out. Either we are both smart or both crazy.
>> It is just driving me nuts, however, that I have to argue with otherwise rational people like my brother, that this mess has nothing to do with defaulting home loans. PMI and rates should take care of the risk -- the banks certainly know how to factor this into costs.
The underlying problem -- fundamental to what is wrong with America perhaps, is the cognitive dissonance. I can talk about the Quadrillion dollar Derivatives market -- I can point to REAL articles and stats. But people go back to the Bank Bailouts -- because this concept is not real to them -- it is too large.
Again, they CANNOT allow themselves to think that the very foundation of their faith in life is suspect. The TRUTH means that they must contemplate that it is all a scam. If THIS is a scam, then the S&L bailout was a scam. In fact, the reason that someone is on top and they are struggling to keep up is part and parcel with Castle Building.
>> At what point, when the Derivatives market became more than all the productive output of the planet -- did rational, wealthy, and smart people not say; Perhaps this is a bit unrealistic? They did not work, or create anything of value -- merely a new scheme to move assets to look like money on bank balance sheets through monetization -- and then put it back as a new bet -- over and over again.
You must either think the Robber Barons are delusional, or that they knew the ultimate consequence -- and that the past 8 years they've been preparing for it.
>> Either way, I think that I'm not going to wait for everyone else to FINALLY figure out what I know for a change. I have enough life experience and evidence of my own wisdom to realize: we are not getting out of this mess without REAL pain and suffering.
So much for bipartisanship. The Bailout Package crashed and burned. The majority of Republicans refused to jump on board. One member of the Republican party has apparently requested a motion to reconsider, but it's doubtful that will go anywhere.
I wonder just how badly the stock market is going to crash today because of this political grandstanding. And it's truly a shame... we see just how many politicians are in Washington to keep their jobs, rather than do what is needed. No doubt the ones who voted "no" will blame their opposite numbers for the resulting flameout of Wall Street.
Rob H.
A shame? You didn't really think this 700 billion was anything more than a temporary band-aid, did you? The total amount of derivative leveraging in the world economy right now is somewhere north of 600 trillion dollars. That's 600,000 billion dollars. Compare with 700 billion. This so-called "bailout" isn't a bailout at all, it's 0.00116 cents for every dollar of leveraged derivative debt that's hanging over the world economy like a 20-ton-weight right now.
Moreover, this worthless 0.00116-cent-per-derivative-debt-dollar band-aid still includes massive outright smash-and-grab theft like 2.5 billion dollars in bonuses for key Lehman employees.
After they burned through all their clients' money and after they ran their company into the ground -- these asshats still expected to get 2.5 billion payout bonuses for all that.
Thousands of people are marching on the Golden Gate bridge asking why there's no money for national health care, but all the money in the world to give billion-dollar bonuses to these thieves? And you still wonder why congress rejected this non-bailout, which will almost certainly not fix the interbank loan credit freeze in any case...?
Some people around here are very much out of touch with what's going on in America. I mean...seriously...the world financial system is rocking through the worst systemic shocks since 1929, and Dr. Brin chose to post today about...a PC video game? And cosmology?
There's a bizarre air of surreality here. Nobody seems to grasp what's really going on. As with the recent $140 a barrel oil price spike, people just sort of blink and then when the crisis momentarily goes into partial remission, they just ignore the whole thing as though it never happened.
This worldwide unwinding of 28 years of Reagan-Bush-crime-family bad debt + credit card debt + skyrocketing collegte tuition costs & college loan debt + soaring health care costs + zooming oil prices + collapsing infrastructure bill is going to be much wider and much deeper than anyone is currently talking about. This thing is rippling right across the world, from America to England to Europe and then to Asia and pretty soon to the Chinese state-owned banks. And this thing is not just a few mortgages. It all of it, the whole ridiculously overleveraged house cards, the insane cost of college, the crazy price of real estate on both coasts, the nutty cost of giant flat-screen digital TVs, the wacky cost of a day's stay in a hospital, the looney cost of dental care, the crazy cost of car or health insurance, the insane cost of our military-industrial complex, the lunatic cost of outsourcing all our middle class jobs, the hallucinogenic cost of our ever-widening trade deficit with China, the unthinkable cost of deregulating our financial markets and letting crazily inefficient monopolies take over every area of American industry, the nutty cost of skyrocketing ever-increasing cable TV and internet bills even as the service degrades and the quality worsens... It's all unsustainable, all of it. It's been unsustainable for years.
Have you been in the stores lately? Analog TVs used to cost $150 to $200. They were commodity items. Now, you walk through an electronics store and there isn't a flat-screen TV that costs less than $1500. It's insane. Microsoft Vista doesn't even work. It's a piece of garbage, and the company wants $400 for it, and you have to buy a $900 PC just to get it run decently. Meanwhile, anyone with a brain can buy a used disc of Windows XP for $50 on ebay and get it to run faster than Vista Premium on a $299 PC. This is pure lunacy. People aren't demented, they're not brain-damaged, they're not going to stand for this.
Do a google search of the keywords unsustaianable American policies and you'll see it all there, laid on on the first search page. Health case, Pentagon budget, trade deficit, infrastructure collapse, it's all right there.
Now the bill's coming due. What did you expect? Did anyone really think the hedge fund guys were going to get to keep their billion-dollar bonuses in the middle of all this...?
And what's the alternative, Zorgon? Letting the financial system crash and burn, watching financial systems across the planet fall into chaos and tumble like a bunch of dominoes, and wringing your hands once you've lost your job and your savings because nothing was done when there was one chance at slowing the plunge, a chance at slowing things enough to shift course and keeping things from being merely a disaster instead of a calamity?
The house is on fire. You don't go "woe is me, all we can do is let it burn around us." Instead, you fight the fire and you work to extinguish it and then rebuild with what's left. And if you extinguish the fire soon enough, your repairs are significantly less than razing the structure and starting anew.
Rob H.
And now... tardy but welcome... the Special Prosecutors begin,
Attorney General Michael B. Mukasey appointed a special prosecutor on Monday to investigate whether criminal charges should be brought against former Attorney General Alberto R. Gonzales and other officials in connection with the firings of nine of United States attorneys in 2006.
The move came as the Justice Department released a report by its inspector general severely criticizing the process that led to the firings.
http://www.nytimes.com/2008/09/30/washington/30attorney.html?exprod=myyahoo
The Republicans stopped it? Fine. Now's the time for the Dems to back off and fine tune the thing. Any panic can be blamed on the goppers.
Again, I do not mind this intervention, so long as the process is utterly taken from the hands of Paulson and his crowd.
1) Buffet and friends would not spend a dime unless they think they are buying value.
2) The FACT THAT the buying process is taken away from Paulson would be a bold political statement! It would reassure Main Street and taxpayers and it would bloody the neocons' noses.
Seriously, viral this one suggestion. That the actual purchases be made by the "world's greatest investor"... the one man on Earth who could look us in the eye and say "I am buying value for you folks."
Buffet or nobody!
Part of the failure lies with the scope of the bill. No one wants to be responsible for $700 billion that will likely not be recovered. So the question is this: what can we do in a small scale that can enact needed changes that can help slow this economic landslide?
Hell, if we managed to pass a similar bill but with a couple of modifications - $200 billion rather than $700 billion, limitations on tax deductions for executive salaries above $100,000, and other changes to limit executive privileges, the Democrats might be able to push it through alone. Given the choice of that or nothing, and knowing his legacy is at stake... Bush may very well vote it in, especially after being abandoned by his own party.
I still see this as a travesty of politics... and think that the repercussions are going to echo through the economy for the next few weeks. It may even be responsible for destroying the McCain campaign... for he was stating "I saved the bailout package" only to have it smack him in the face and spit on him when he was down.
Rob H.
From everything I've read it seems that all parties (home buyers, brokers, mortgage lenders, insurance companies, investor, voters, and politicians) behaved in ways that served their short term interests. From a behavioral, game theory, or evolutionary perspective all of this is expected. It is only natural to game the system.
Therefore it seems that the solution to this problem is to arrange the environment so that these bad behaviors/fiscal practices go extinct and other behaviors/fiscal practices thrive.
This lead to two general classes of questions:
A) What type of fiscal entities do should exist and what environment will help them thrive?
B) How can we soften the extinction event through the transition?
Escapist therapeutic science news (ignorance prevents my joining the greater conversation):
MIT invents underwater "helicopter".
2% sales tax on all trading in paper.
Payable at time of sale.
I'm not kidding.
Not on loans, of course, since those aren't sales. This would actually push cash toward interbank lending and the Money Markets.
The risk and cost of short-term flipping and speculation would increase, and Uncle Sam would take a cut.
At the same time, no more capital gains tax.
There is nothing else we could do which have the same effect of driving people away from short-term speculation and back toward thinking about dividends and real value.
Rob
I was a firefighter.
Your analogy may have had some value five years ago. Now, we've got a 5,000 acre fire burning in an area that hasn't been allowed to burn in 80 years. The fuel load is massive, the humidity is at 5%, and we've got winds gusting up to 40 mph.
It's too late for the smoke-jumpers. They not only won't put this out, they'll also die if we force them to try.
I know people who have never fought fire seem to think it's all about rushing in whatever the risk...hollywood.
Reality is that you pull back to a major highway or river in this situation, or start cutting line literally miles from this fire. We're going to lose another 20,000 acres, or we're going to lose 50,000 - 100,000 and a lot of firefighters.
A Man Gulch mentality doesn't do anyone any good.
This is a rare occurrence.
For once, I am absolutely thrilled with the Republicans. They've managed to kill this Robber Baron bail out bill -- which would not have dealt with the problem, AND they will be taking the credit for the short-term downside to the market.
Once again, I think that Zorgon understands what is going on better than most.
Since I want the Republicans to go the way of the Dodo bird, but I didn't want this bail out -- this is the best of all possible worlds. Hopefully, the Dems are just playing politics and weren't actually thinking they could do anything good by making Bush, Paulson and Bernanke happy.
First you have to address the corruption and fraud. And I think I've pushed a few articles by Denninger on how best to do that.
If we one day get out of this financial mess (and it will get far worse before it gets better -- but the bail out would not have stopped that), then we need to look at investments again, as vehicles to allow innovation and growth. Not a craps table.
You can't be making money on top of money, moving around money. Anything that would facilitate such a farce again should be illegal. Growth for growth sake has got to stop being our end all and be all of existence. The planet cannot support the metastasizing human race and we need to look at sustainability, quality of life, and "what this all means" first and foremost.
Perhaps stocks in companies can only be traded every 6 to 9 months. Nothing should ever be a quick turnover. There shouldn't be politicians holding stocks, or holding companies. We shouldn't allow multinational corporations, and we should limit the size and scope of corporations we have. If a company becomes too big to fail -- it either needs to be broken up, or be Nationalized.
If you have a company, that is part of the infrastructure, runs best as a large monopoly, or you don't want to profit from (Fire Rescue, Hospitals, Etc.,) that that is a type of business that should be run by the states.
Also, we need to decentralize a few more things to state levels again, because not every idea works. Have competing techniques and solutions on a state-wide basis, and allow states to opt into or out of different plans. You know, like education.
Barriers to people moving needs to be less than that of states being able to move. There needs to be some Federal limit, however, on what a state can give a company to move there -- because they give away the store. However, new incorporation limits may deal with that issue anyway. And back to the founders idea of perhaps liquidating corporations every 40 years.
>> Anyway, I wonder if Nature isn't going to also hit us with a whammy, while we are considering that our little corner of the world is seeing the worst thing ever because our economic system is collapsing. You know, things like the magnetic pole reversing and such. As bad as a great Depression could be -- much worse to me, is to continue on our empire building and exploitative ways, and destroying the planet. Economies come and go, but I hate sacrificing the notion of what America is about, for the comfort of a bigger car.
No matter what happens with paper shuffling, Americans can innovate out of it. As long as we have fair play, institutions we can trust, and the rule of law. Things that have totally broken down. All we had for the past 8 years is ATM cards and lapel pins proclaiming our pride in McJesus Americana.
I don't want Communism, but I don't think it will hurt any of us to apply some elbow sweat and bicycle to work. We will all probably live longer if we can exit this rat race and become human again.
>> I also look forward to thinking about possibilities, science fiction and the like on this thread, rather than shouting my rage at ignorant Conservatives.
Rob H, I think you need to review what the final bill on offer actually had. It was about as 'patched' along the lines you suggest as politically tractable.
The Dems should, IMO, take a two track approach.
They need to keep pressing the House GOP to accept the patched Pauslon plan (at least for a few more days).
They also need to start working on a plan with a better premise. Krugman favors directly buying preferred stock, which has a lot of nice features. It is a direct infusion of capital, we get an equity stake, and (although Krugman doesn't note this) it sets up nationalizing institutions which fail anyway.
I've mentioned the bottom-up bailout idea, just using nationalized institutions and maybe the fed itself to keep the consumer and sane business credit markets running by actually making loans directly. Not sure if that is really tractable, but seems like a decent idea to partially decouple the overdue pure financial crash from the real economy.
The Buffett thing is not a bad idea, but not a plan. What are we going to do, appoint Buffet dictator? It does nothing for the political problems getting the plan passed to replace Paulson with Buffet. The people who would be swayed by Buffet's inclusion are willing to hold their noses and vote yes.
--
Zorg, Einstein didn't stop doing physics during WWII.
Yeah, there most definitely is a crisis going on, but Dr Brin is doing pretty much all he can on that front by keeping informed and politically active. It isn't any of us are the Fed Secretary or even members of congress.
Anyawy, IMO, if more people got how evolution works on the large scale, then we would have more people who would at least have a half decent feel for why the economy is blowing up.
--
I haven't played Spore (yet), but from what I've heard it is quite disappointing. Will Wright 'gets it' from everything I've seen over the years (SimLife for example), but I think the constraints of actually making a game which doesn't require a petaflops computer to run and actually might make some money seriously limited what he could do.
Also, Wright (and Maxis) are interested in making games where the player actually has an engaging role. An 'evolving fish tank' is cool, a massive scale one even cooler... but not really a game IMO.
I am a first time poster to your blog, although I e-mailed you a while ago regarding SPORE. I browse the official SPORE forums a lot, and people are wishing that it had a lot more depth than it does. I bet a lot of them would be very interested in the Exorarium project.
>> Rob.
I'm with Zorgon, and I work at a company that deals with Financial products.
YES, we can try Dr. Brin's suggestion of bringing in Buffett, but, sticking to history -- the capitalists that always cause these problems, cannot believe that those fools they criticize all the time; you know, they hippie-communist-regulating-liberals could have a point. If you make a Million+ a year, you are a genius.
So the Geniuses will go down with the ship.
The WORST thing that can happen, is immunizing people from bad decisions. Likely, that will mean all the people who saved money, will also lose much of that.
There are two paths to go down as I've said before: 1) America tries to hold its status quo, but this will devolve into more wars for profit, and more grabs on resources. A draft will be necessary to maintain order, and keep the haves with their stolen goods, while keeping the lower classes paying of the debts on their behalf at the point of a gun.
The $10 Trillion in debt has to be paid by somebody eventually -- and we can tag on whatever the fallout left over from the Derivatives mess will be -- 1% of which, will make the debt look like chump change. Who do we owe THIS money too? Whoever wins the LOTTO from the financial house left standing. They will have some fantasy number left over, and all the IOUs of the politicos, and they will tell us that this is something we owe -- even though we were never going to benefit from it, nor did we invest in it.
The second path would be that we declare Jubilee. Nobody owes anybody. We no longer owe $10 Trillion as a company. The third world doesn't have to pay back US corporations those debts that were forced on them from bought out politicians. The American people don't have to pay back the Robber Barons -- sure, maybe 20% was honestly derived.
And sure, those people who didn't save, get to win a bit more than those who did.
You start over with what you have. And the government for a few years creates temporary credits to pay everyone exactly what they are making at the jobs they have. Another fund for special cases.
Public works projects for everyone else working on the infrastructure.
Then a Green Economic system and Apollo project for Energy.
>> Yeah, what I'm talking about is either Martial law with a war-based economy, or interim Martial Law, but with a Marshall Plan for America.
We have been occupied and concurred by the Banks. But they hung themselves with their own discount rope. Most of the world will rejoice if the super wealthy Robber Barons lose everything. And in fact -- you and I will be much better off.
>> I kind of feel like I'm talking into an echo here, however. Everyone seems to think that times won't change drastically.
But I've felt this was inevitable since Bush took office, and it was clear to me that elections could be stolen, if a Politico would just sell out 100% to the military and Corporatists. Well, that was the beginning of the inevitable end for a Democratic USA.
It just appears that most people don't see it yet.
A Jubilee would require -
calling in all greenbacks
a worldwide registry of ownership of tangible things (if you don't register it, you don't own it)
a one time wealth tax... (suggested, a few years ago) by DONALD TRUMP of all people
a credible (!) promise by all of society to stick by the deal.
Not likely.
Zorgon, and please pardon my economic infelicity, I'm trying to agree with you: I've never understood, and always thought mortally bizarre, the modern notion of "hypothetical", nonexistent money. Credit, loans, mortgages, these are all, in my view, euphemisms for a hypothetical, theoretical pseudo-ownership. You don't really quite ever possess your house (not especially if it's clustered high density). It takes years to get your car.
I'm rare in that I spend what I literally, concretely have. Everything else, as I see it, rides a perpetually momentary, foundationally vaporous installments crest where the discrepancy between value-imbued paper money and real value is a hopelessly awesome chasm. And the values fluctuate by region!
I'm frankly amazed the cat's cradle of "continually promised" money has lasted this long. I suspect the ultimate solution lies well beyond some future technological breakthrough or series of breakthroughs. There must be a path back to real ownership without impossible "30 year" prices and other forms of nonexistent money.
Speaking of games and global catastrophe, is anyone else in this forum going to try their hand at Superstruct? It starts next week.
(I know, financial melt-downs and fizzy clathrates and sunspot shutdown and the rest make global superthreats and impending extinction all sound a bit tame. Still, I thought it would appeal to wannabe forecasters)
Why did the bailout fail? Not so much from failing the smell test as the hearing test, it seems:
"Republican house leader John Boehner said: "We could have gotten there today had it not been for the partisan speech that the [democrat] speaker gave on the floor of the House". "
What? Not going to vote with those name calling Democrat whiners? So how thick is the skin of an elephant?
According to Truthout the Nays were 135 Rep, 95 Dem. Ayes 140 Dem, 65 Rep.
The parties may be arguing about who to blame but it looks like dissent was strong on both sides.
I'm surprised no one has suggested that this is the "October Surprise", come a bit early.
Sure, it doesn't help the Republicans as a party - but maybe you're thinking too small.
By November 4, will we have martial law and elections "delayed for the duration"?
In case these are of any use or interest.
http://www.thegreatschlep.com/site/index.html
http://www.youtube.com/watch?v=K2VFRt5W4FM
http://www.youtube.com/watch?v=W3ijYVyhnn0&eurl=http://andrewsullivan.theatlantic.com/the_daily_dish/2008/09/les-misbarack.html
As for an Octiber surprise. This ain't nothing.
Canned good... I mean goods. All the other stuff. Buy and get others to but em. There are people who notice such trends and will say -- "the sheep are looking up."
Maybe there wasn't an October surprise planned.
Maybe there's no conspiracy. No attack on Iran, no staged terrorist threat. Maybe "they" are just a bunch of ideologues who played their hand and are not just plain out of ideas.
I wouldn't count on the GOP joining the Whigs, but I wouldn't rule it out.
What might do it: The Justice department probe coupled with the economic turndown. Having Obama in office would be a must, although I wouldn't rule out a very savvy McCain looking to firm up popular support by supporting the probe. Throwing the neocons under the bus could win him a lot of the support he'd need to get tough and unpopular things done.
Assuming there's no grand "manchurian" conspiracy and only the visible (astounding) levels of venality. Then of course the "dogmatic and delusional and massively stupid" theory -- the Standard Model -- holds central place.
But another character trait of the neocon era -- cronyism and utter loyalty to friends -- is (I'm afraid) an utterly central theme of John McCain. He never ratted his comrades in that filthy Hanoi cell and he'll never do it as a prexy. It is what got him into the Keating 5 scandal and it is why Phil Gramm is STILL his top economics advisor.
(Yes, the exception: his first wife. Ah well.)
Anyway, if he's president, he is likely to put that loyalty above torching the republican party for the sake of the nation. But even if he did go down that road, the party elders would take cheer from VP Sarah Palin.
Oh, and McCain's (missing) medical records are a legitimate issue. Dermatologist discussion groups are NOT happy with the type of recurring melanoma he's shown. Nor - if he's elected - should we.
Finally -- if Obama does win, he'll inherit one helluva mess. This will mean
1) he needs a cosmically effective first 100 days, similar to Johnson's in 1965. Before things bog down.
2) Sarah ____ Palin... 2012... Nehemia Scudder. A prize to anyone who finds any connection. An accrostic? Letter numeralogy? Oooooog
tintinaus,
Make no mistake, the House Repubs punked the Dems. Yeah, only 60% of Dems voted for the bill, and most of those were holding their nose and thinking "it is the least horrible option we've got". But that is what you expect from a real tough compromise.
I'm all for the Dems spending the next few weeks working on real 'progressive shock doctrine' bill. Hell, for those campaigning make their ability to use a phone and 'phoning it in' to the meetings part of their campaign.
Most likely the Rebubs and Bush Dog Dems will block it in the house. If it actually passed the house, it would probably be filibustered in the Senate. If a miracle happened and the Dems actually got a good Dem plan out of the Senate, Bush would probably veto.
All of this is good politics for the Dems. Force those votes. Make the Senate Repubs actually read from the dictionary.
Even better, we would have a debate among the sane and quite possibly come up with a real plan for the next congress and president Obama to pass on day 1.
The level of dementia on this forum remains unbelievable, an apt reflection of the hallucinogenic mindstate of America as a whole.
It doesn't matter who becomes president or which party wins in November as long as the American people continue their crazy behavior.
We're moving right along without changing a thing, just repeating all the crazy behaviors that got us into this situation in the first place...and somehow, we think this time it'll be different. Sure, just inject a few hundred billion dollars of liquidity into the financial and we can keep right on doing what we've been doing for the past 28 years, and everything will turn out fine.
That's insane. In the midst of a crisis, continuing to do exactly what brought you to that crisis in the first place, and expecting everything will turn out all right, is the very definition of insanity.
Robert runs around hysterically like a chicken with its head cut off shrieking about burning houses and scare tactic metaphors and then he asks me my alternative.
We have to stop doing what we've been doing for the past 28 years that caused this crisis. Okay? That's the FIRST thing we have to do. Right now. Today. This minute.
Paulson's plan doesn't talk about that. It's doesn't even suggest that. That's the first and most important thing we need to do. And nobody is talking about this, nobody. That's my alternative.
[1] Days before this massive bailout bill, the congress passed another 680 billion dollar defense appropriation bill so we can continue to build crazy superweapons that don't work to fight a nonexistent Soviet Union that doesn't threaten us any more and continue to bog down in a lunatic war in Iraq that serves no purpose.
That's insane.
680 billion, people! That's the size of the entire bailout bill! And it's being pissed away on nothing, for no reason.. Our military budget is a complete waste of money, we can't even win a war in a third world hellhole against 15-year-old kids armed with IEDs that cost less than a pizza. And no one in congress even discussed cutting the Pentagon budget. That monster Pentagon budget got passed by voice vote, by acclamation.
That's insane.
[2] Not one person has suggested that the very first, elementary, basic prerequisite for any bailout on Wall Street is: we reinstate the Glass-Steagall Act.
Nope. Not on the table. No one even mentions it. No, we're just going to flush three quarters of a trillion dollars down the toilet, but the banks continue to invest in risky derivatives, and the brokerage houses can continue to act like banks, and we'll all just keep on doing the crazy stuff we learned back in 1929 was lethally destructive to our financial system -- letting banks get into risky securities, and letting brokerage houses and hedge funds take on some of hte characteristics of banks (namely, soliciting deposits from the public, as in all those Merrill Lynch Cash Management Accounts and free Schwab checking accounts, but without any FDIC depsoit insurance).
People, that's insane.
[3] Not one person in congress, or anywhere else in America as far as I can tell, has suggested that a basic precondition for any bailout should be an immediate end to the war in Iraq and an instant withdrawal of all U.S. troops and equipment and bases from Iraq. Not in 2011, not in 2010, but next week.
But no, everyone in America seems to think we can continue to piss away 70 billion dollars a month fighting a pointless war we're losing badly in a third-world hellhole for no reason, and we can just keep right on throwing more money at this bailout while also pissing away hundreds of billions of dollars a year in Iraq for a pointless war without end...a war we were lied into, for no reason, and which we are losing.
That's insane.
[4] Not one person in congress has suggested as a prerequisite to any bailout that we ratchet the bizarrely low 15% capital gains tax back to something reasonable, like the 56% it stood at during the Eisenhower years. No, we don't have to do that, we can continue to let hedge fund managers who make 3 billion a year in bonuses skate out of paying taxes on their income because it's capital gains and they wind up paying less percent tax on their income than a minimum wage cashier in Wal-Mart.
That's insane.
[5] Not one person has suggested ramping up the tax rates from the ruinously low levels Reagan and company brought them down to by the end of the 1980s, back to a traditional level, say, the level of the maximum tax rate during the Eisenhower administration, 56%. Kooks will scream that this will destroy the economy, to which the obvious rejoinder remains: if a 56% marginal tax rate on the highest bracket didn't destroy America in the 1950s, why would it destroy America today?
[6] Not one person in congress has suggested that as a precondition to this bailout, we immediately take drastic steps to slash our balance of trade deficit (which we can do easily enough by cutting our military and outlawing job-destroying outsourcing). No, we can just continue to ship all our skilled jobs overseas and we can continue to buy vast amounts of cheap goods from China and run up a colossal balance of trade deficit year after year, in the middle of a gigantic fiscal crisis, and everything will be fine.
That's insane.
[7] Not one person in congress has suggested that the very first thing we need to do before any bailout can even be considered is to set up emergency measures to cut our dependency on foreign oil so as to stop the hemorrhage of trillions of dollars per year going into the sovereign wealth funds of the Saudis and the UAE.
If rich people want a bailout of their Wall Street firms, then they should have to accept some quid pro quos: all SUVs should be banned by law, we should set aside one lane of every freeway for mopeds, we should make carpooling mandatory with heavy fines for anyone who refuses to pitch in. Airlines should be forced to raise their fares until the number of people burning up irreplaceable JP-6 jet fuel drops precipitously. We shoudl outlaw all fuel-wasting private jets instantly.
We should pass laws today, right now, this minute, forcing American car mfrs to drastically raise the fleet efficiency of their cars as a precondition for any bailout.
But no, we just continue to tool around in our 8-mpg SUVs and take those cheap flights on bargain airlines and we just keep hemorrhaging trillions of dollars to the middle eastern dictatorships. Got a private jet? No problem, piss away all the jet fuel you want, you dont' have to crimp your lifestyle just because you bankrupted America and now come begging to the American people, hat in hand, whimpering for a bailout. No, we just keep burning oil like there's no tomorrow, so we can continue to borrow crazy amounts of money from foreign banks in order to continue doing it, and somehow everything will turn out fine.
That's insane.
[8] We need to pass a law as a precondition for any bailout saying that if you worked in a hedge fund or an investment bank this year, then 95% of the money you made in bonuses gets confiscated by the government.
But no, 2.5 billion dollars of the bailout has already been slated to get pissed away as bonuses to "key Lehman employees" -- the very people who helped create this mess in the first place.
That's insane.
[9] Instead of going off half-cocked in Paulson's bogus Ponzi scheme in which the government buys up "toxic paper" and then promises to sell it later at a ludicrously unlikely profit (which will never happen), not one person in congress has suggested that the government nationalize these banks (as Paul Krugman and Nouriel Rubini and many other economists have forcefully advocated) and take an equity stake. Or maybe -- how about this -- maybe we even make some of these institutions non-profit enterprises, like credit unions? No bonuses at all. No billion-dollar paydays. People who work there get the pay of government employees. How about that?
No, we don't have to do any of that, we can just continue to hurl three quarters of a trillion dollars at the same con artists who scammed us into this crisis in the first place without demanding any equity stake or asking anyone to forgo bonuses or million-dollar paydays, and we'll elt the guys like Paulson decide which assets to buy and how much of the government's money they need to spend, and somehow it'll all turn out all right.
That's insane.
People, if you're doing something that has created a crisis, the first rule of thumb is...you need to stop doing whatever it was that caused the crisis. That's numero uno. That's the first thing on the agenda. Stop creating the problem you're trying to solve.
Nobody's talking about that. Nobody's thinking about that. The American people seem to believe we can sail right out oblivious to everything, continue pissing away 1.25 trillion dollars on an unsustainable Pentagon budget to fight for no sensible reason unsustainable foreign wars we can't win, and everything will turn out great. We're broke as a nation and we think somehow we don't have to cut any of our expenditures and instead we can fix a crisis of too much debt by creating more debt and pissing it away into investment banks and hedge funds. We think that with trillions of dollars gushing out of our treasury every years into the middle east to pay for our massive oil addiction, ew can somehow continue to roar around in 8-mpg SUVs and get all over the world in 757s and everything will turn out just fine.
The American people are living in a crazy dream world. They still haven't woken up. America as a nation will have to cut back on our expenditures and raise taxes on the top 20% back to where the tax rates were in the 1950s, circa 50 to 60 percent, and stop buying $2000 flat-screen TVs on credit that are imported from China. We need to pass laws that outlaw crazy predatory interest rates on credit cards, 35% interest in an economy with 2% inflation, because that's insane and it's unsustainable.
But nobody is talking about this. Nobody is even suggesting any of this.
It's insane. Pure, wild, rampant, abject lunacy.
Zorg, take a deep breath...
Yeah, we are in some seriously insane shit now. Screaming at the choir won't help much though.
Some of your 'we need to do X right now!' stuff is kind of insane. Don't get me wrong, a lot of good points, but about half your fixes would require an absolute dictator and spawn cataclysmic economic disruptions (making it impossible to do anything else) if not done in a careful incremental way. At very least, you'd have to put cutting the military at the end of the list, cause you'd need that military to enforce some of those other ideas. ;)
Your venting is quite understandable, but once again, please don't insult people for no reason. Who here has said "everything will be fine". Several people have brought up many of your points before. Just because someone isn't running around with their hair on fire doesn't mean they don't get it.
As for the bailout... again, I don't think a single person here or even most of the proponents in congress suggested much less said it would make everything alright. It is supposed to be a short term band-aid. A band-aid can keep you from bleeding to death on the way to getting more serious medical attention.
Until the government starts to function a bit sanely, the crappy compromise bailout was actually a good faith attempt at doing what little is actually possible. You shouldn't malign those involved for not demanding conditions which would have made it certain to never be passed.
BTW: The plan the Dems put to a vote (and got punked by the House Repubs) did include getting equity stakes.
Oh dear. Looks like rational Zorgon got displaced by foaming-at-the-mouth Zorgon again. Well don't worry, Zorgon. We have some dried frog pills for you right here, just take a couple and calm down. ^^
The problem with the alternatives you keep talking about, Z, is that you can't force widescale change on people overnight. They won't accept it. Change must come gradually and naturally.
Take abortion. It's wrong. Banning it will just send it to back alleys and the like. Obama's plan of making the alternatives far more attractive help to encourage people not to have abortions and to choose an alternative that doesn't consist of being shamed by the government and your community because of an accidental pregnancy.
So too with the credit issue. The big thing is this: encouraging banks to start loaning to each other again. I've not seen a bailout plan that could be passed by House and Senate and by the Shrub. This is why I saw the Bailout Package, as bad as it was, as the best chance we had.
Anything the Dems try to cram down the throat of Bush will fail. And the Republicans won't accept any of their plans either.
So we're left with Rome burning until a new Emperor is crowned. Unfortunately, that scenario leaves us with Rome burnt to the ground. I want to avoid that.
Rob H.
Minerva link in original post got busted but this works: http://www.kansascity.com/105/story/777515.html
With respect to the financial crisis: it's classic Disaster Capitalism, using a real or invented crisis to shock us into doing something stupid.
The solution is to do something smart. I won't pretend to know what the best direction to go may be, but the direction that the man with the cattle prod wants us to go .... is probably not it.
Paying off the arsonist is not how you fight a fire, Rob.
"A band-aid can keep you from bleeding to death on the way to getting more serious medical attention."
No, TravC, it can't. It can help prevent the infection of a minor scratch or cut.
Band-aids and grease fire analogies are worse than useless here.
Nothing about Zorgons last post - other than the fact that a lot of what he suggests simply will not happen because so many people are still in denial - was at all a screed.
Unless, you know, you're insane enough to think that paying a premium for bad-paper poison and then releasing that poison back into the system at a cut-rate is a good idea.
No one seems to be willing to discuss that this is ALL paulsons plan ammounts too. We'll pull the spear out of our sucking chest wound, and then stick it back in just not quite as deep.
Do we want to save banks? Great. Let's let them go into recievership, lend them a few billion if we really think they're good for it, take their bad debts off the books, and put them back out there.
I mean, FDRs boys would have been thrilled to get their hands on a bank like WaMu or Wachovia. They would have restructured them and put them back out there.
Instead, the FDIC and the Fed are actively participating in Morgan and Rockefeller schemes to drive down stock prices, and the siezing banks and giving them away. This is a banking crisis? My ass. This is a raid.
"You're 35 days late on your mortgage, so we're siezing your house and selling it to the neighbor for ten bucks".
You want to restore investor confidence? Set leverage limits back to where they should be. Restore Glass-Stegal. Stop supporting corporate raiders.
None of that costs the tax-payer more than the enforcement cost, and it would do a hell of a lot more for confidence than a bailout.
This plan is water on a raging oil fire. Sure, it make a few dim bulbs feel better in the short term, but it will only make the problem worse.
Sadly, there is one other thing that needs to be done, but the Federal Government isn't doing it. It needs to break up the superconglomorate banks. Instead, it's breaking pieces off of failing banks and feeding them to other banks to make THEM bigger.
Too Big To Fail has been proven to be a fallacy. But rather than deal with that specific problem, the Shrub administration is building other Too Big To Fail banks. I believe Zorgon said that we need to break up these monopolies in an earlier moment of lucidity. He is right. If a business becomes Too Big To Fail, then it's too big and needs to be divided up.
The merger frenzy that has happened over the past few decades is not healthy. It encourages short-term thinking rather than long-term strategic business planning. This needs to end, and putting more constraints on mergers and some added tax benefits for small businesses are vital steps in this process.
That is not to say business alliances shouldn't be allowed. They should. But having say Google and Yahoo work together in advertising is different than having Microsoft devour Yahoo for its advertising. In one, two companies exist separate but working together. In the second, one company becomes bigger and the second company ends.
There wouldn't be as big of a financial crisis if banks hadn't been allowed to grow to such a monstrous size. If a dozen smaller banks failed... then there'd still be hundreds of other banks to take up the slack. This is why the current financial crisis is such a big deal. It threatens to rip down the vast majority of our financial system through the failure of just a few companies.
My hope is that Obama will start dismantling the monopolies out there. And while I suppose it would be simplicity itself to dismantle the ruined remains of the financial system, I'd much rather preserve part of the system and then once it's stabilized start cutting it into smaller, more stable units.
(Small note: the Fed is going ahead with Paulson's plan from the sounds of it. It's just they're not asking for permission while tossing money at the problem. Or oversight.)
Rob H.
Robert, and travc, before you accuse me of being mentally ill, you should realize I'm just collating what a lot of other thoughtful people have said and presenting in one place.
For example:
Bloomberg analyst: $700 Billion Bailout Could Balloon to $5 Trillion
Link.
Why? Here's the best explanation I've seen:
Link.
This economist also points out the same thing -- namely, that if this bailout is handled poorly, it will make things worse.
Link.
Given that the guy who will be overseeing the distribution of the bailout fund is one of the very thieves who created this crisis, I have zero faith in Paulson's ability to supervise the bailout wisely.
Fund manager & PhD in economics John P. Hussman suggests that instead of just hurling trillions of dollars of cash, willy-nilly, into this gaping abyss, we should force the afflicted institutions into receivership in a streamlined much-sped-up Chapter 11 proceeding:
What the financial system has needed most has been for Congress to streamline the bankruptcy process for investment banks, so that in the event of failure, the “good bank” (assets and liabilities, ex the debt to bondholders) could be cut away quickly and liquidated to an acquirer, leaving the proceeds as a residual for the bondholders. Indeed, that's exactly how it works for regulated banks. What investors overlooked in last week's panic was that we actually saw the largest bank failure in history – Washington Mutual – with absolutely no losses to customers or the U.S. government, precisely because the good bank was seamlessly cut away and sold to J.P. Morgan, wiping out shareholder equity, preferred equity, and subordinated debt, with partial repayment to the bondholders. Snap – just like that.
...And then use a "super-bond" to pay back the taxpayers while safeguarding these firms from further asset deterioration:
A better approach would be for the government to provide capital directly, in the form of a “super-bond,” in an amount no greater than the debt to bondholders. The “super-bond” would be subordinate to customer liabilities, so it could be counted as capital for the purpose of capital requirements, and would be seen by customers as a legitimate cushion of protection. However, in the event of bankruptcy, it would have a senior claim in front of both stockholders and even senior bondholders. Do that, and you've actually got a mechanism to protect the financial system while at the same time protecting customers and taxpayers. Ideally, the super-bond accrues a relatively high rate of interest so that financials have an incentive to shift to private financing as soon as possible, but you would also defer the interest until the bank meets a minimal level of profitability to make sure that the financing doesn't strain the institution's liquidity.
But then, Congress didn't do this because nobody thinks in terms of balance sheets. So after a nice pop to maybe 1300 or even 1400 on the S&P 500, we can expect all hell to break loose again.
Link.
Whether this will work or not, I don't know - but from the way Hussman describes the situation, the bailout certainly will not work in the long term. All that will happen is that these financial institutions we're bailing out will go underwater again as soon as the SP& 500 jags downward again in another shock. Nouriel Rubini is saying the same thing.
Yet another respected economist comes down squarely against the Paulson plan:
Link.
A poll of Chartered Financial Analysts (CFAs) shows that 40% of them oppose the current bailout plan that was just voted down in the house. CFAs are the people charged with managing clients' money in big brokerage houses, and these people have to pass some stiff tests to get a license to do that. A CFA really has to know something about finance. If 40% of these people oppose the current "bailout" plant, then I would humbly suggest that there must be some serious problems with it.
M&A specialist Roger Ehrenburg identifies what seems to me to be a key problem with the bailout plan as the house voted on it: namely, a total lack of transparency.
"The key question is to be answered is:
Do we really have a firm grip on the exposures arising from these opaque agreements, and understand how these contracts lead to a deeply interconnected (and, therefore, highly correlated) financial system that can collapse if only one link in the chain gets broken?
Sadly, if the events of the past few weeks are any indication, the answer to this question is certainly not.
Link.
Ehrenburg really sums up why the bailout got voted down in this piece -- "Lack of transparency. Intellectual dishonesty."
Link.
This squares with Krugman's one-line diagnosis of the current problem: the current maladministration has lied and lied and lied and blocked their key people from releasing any information to congress or the American people for so often that now, when we really do face a crisis...nobody believes them. This time Paulson and the White House are probably telling the truth, but everyone remembers all the lies ("We know where the WMDs are," "America doesn't torture," "These tax cuts target the middle class," "A vote for the Democrats is a vote for the terrorists...") so that no one can believe them now, when it really matters.
So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch.
As a friend said last night, we’ve become a banana republic with nukes.
(Actually, we became a banana republic with nukes the instant we started kidnapping innocent citizens without charges and hauling them off to secret prisons without a trial and torturing them to death. We all became a banana republic with nukes as soon as the drunk-driving C student in the Oval Office started declaring that he had the right to declare people "enemy combatants" without judicial review and to write so-called "signing statements (invented by the senile criminal Reagan) which nullified or changed the meaning of any law passed by congress. Once that happened, America stopped being a nation of laws, and became a banana republic run by El Supremo and his cronies. The rest of the theft and lying was inevitable as soon everyone accepted the torture and willful violation of the constitution and open contempt of laws passed by congress.)
Ross Douthat lays out 3 scenarios, which seems like an accurate description. 1) Bipartisanship and a sensible plan (which seems unlikely right now); 2) We do nothing (which Michael Moore has irresponsibly suggested); 3) Some laternative version of some kind of bailout bill gets passed next week. Number 3 seems most likely, so this is not likely to turn into another Great Depression. But, boy, I sure hope they switch a Chapter 11 + super bond scheme.
Link.
This fits with brad DeLong's 3 options: 1) do nothing; 2) the Paulson bailout proposal; 3) nationalization, a la Sweden in 1993. He comes down on the side of door number 3.
Link.
Krugman arrives at the same conclusion.
Link.
Nouriel Rubini discusses his particul soultion to the housing part of this meltdown. Unfortunately, the mortgage defaults represent only a small part of the overall financial crisis, but at least if we can deal with the mortgage defaults, that's part of the crisis solved:
The policy alternatives in the post-housing-bubble world are painfully unpleasant. In my view, the least bad option is for the Federal Reserve to print money to help stabilize housing prices and financial markets. Yes, use reflation to soften the pain for Main Street and Wall Street. If instead we let housing prices fall another 25-30 percent--as predicted by the Case-Shiller Home Price Index--it's almost certain that Washington will end up nationalizing the mortgage business.2
Now we are seeing Washington move toward nationalizing the mortgage business at a cost (initially) of close to $1 trillion once the extra cost of the MBS bailout program is added to the cost of GSE bailouts and associated pork extracted by Congress in exchange for MBS legislation. Further, the resource misallocation that will result from the tidal wave of legislation from Congress in response to the mortgage mess could cost another trillion dollars. Sadly, the new wave of regulation will just replace extant regulation. Had existing regulations been implemented, they would have precluded, or at least mitigated, the housing bubble whose bursting precipitated a financial crisis that turned into a financial panic.
There is a simple solution to the fundamental housing-bubble problem that lies behind the panic. An institution that makes a mortgage loan should be required to keep that loan on its balance sheet. That will mean higher interest rates on mortgages, but that is unavoidable. If policymakers understand why that is so, the problem need not be repeated. If they do not, we will have another housing bubble.
Link behind Rubini's stupid registration wall. You have to register to read the full text.
Robert and others seem to have been panicked into buying this ill-advised and poorly-structured and almost certain-to-be-mismanaged bailout plan by the same tactics that stampeded us into invading Iraq. Here's some perspective:
Link.
Another voice of reason amid Paulson's hysteria.
Obviously we need to do something, but it's not clear why we need to pass Paulson's plan tomorrow. It seems to me that we ought to take some time, lay out all the options very clearly, hold public hearings, explore all options, then pass a sensible plan. Not this crazy crap full of provisions like "these decisions are non-reviewable." That's the same old bullshit we've gotten from this maladministrration since day one, the executive branch is above the law, no one can question their decisions, and their deliberations are secret and no one can see 'em. That's crap. That's not how a democracy works.
The reason we need to fix this financial mess now, incidentally, is because it's far from the only crisis staring us in the face. Aside from global warming and Peak Oil, we're looking at this one:
Medicaid long-term health care costs to soar.
People who accuse me of mental illness when I point out that it's just business as usual up in D.C. should take a look at these estimates by Nobel laureate in economics Joseph Stiglitz on the total cost of hte war in Iraq. We're throwing away literally trillions on that insanity, and no one is lifting a finger against it. That's crazy enough under ordinary circumstances, but in the midst of a huge financial crisis, it qualifies as batshit insane.
Link.
I don't see a lot of people calling Chalmers Johnson "insane" or "in need of medication." So why am I mentally ill for repeating Joseph Stiglit's cost estimates?
Incidentally, there's been some pushback against Brin's contention that the economy always does better under Demos than Repubs. The self-described conservatives on this forum have offered some nitpicks on David's numbers. Well, here's the single best collation of stats I've seen about the economy under Demos vs. Repubs, and as far as I can tell, the statistics support David Brin's claim right across the board. I can't see any measure under which the economy fared better under Repubs than under Demos over the last half-century.
Link.
As for my claim that we need to drastically change how our lives are set up, and we need to do it fast, here's Jimmy Carter's "malaise" speech from 1977. I keep coming back to it. We've lost 30 years of precious time, and Americans are still not willing to accept the realities Carter laid out for 'em back in 1977.
Link.
America had better wake up and start doing something soon. This current financial crisis is only a minor wake-up call. It's reminding us that America is currently pursuing unsustainable policies in a whole range of different areas, from energy to foreign trade to outsourcing our jobs to health care.
“In the last decade of the 20th Century, more technological progress occurred than was experienced in the entire first nine decades of the century … By 2010, technology will have doubled again to become 2,000 times more advanced than in 1900, which means that we will experience the same level of technological change in the first decade of the 21st Century than we experienced in all of the 20th Century.” -- Kip Nygren
Zorgon, I wasn't saying you are mentally ill. Dried frog pills is a Terry Pratchett reference, and was meant in good humor.
You just get really worked up on things and sometimes go off on tangents not even I'd think of.
I absolutely 100% agree with Robert's latest point about the urgent need to break up conglomerates and monopolies. We're living through the end of another Gilded Age, and just as back in the 1890s when trusts dominated American industry, today, colossal vertically integrated monopoly superconglomerates dominate America, and the world economy.
This is not only bad for business (Microsoft Vista, anyone?), it's not only financially unstable, but it's now twisting our entire society out of shape because of the bizarre laws passed by corporate lobbyists who are literally writing the legislation. This has got to stop.
I have some confidence that Obama will break up these giant monopolies and set things aright inasmuch as he will enter office with fewer IOUs to giant coporations than any president since Harry Truman.
I'm going to agree with Zorgon that the crazy batshit is running deep nation wide. (Not so much on this blog, though.)
Here's two pieces of evidence I came across recently to support that thesis:
In addition to the Raptors, the Air Force is buying more than 1,700 new F-35 Lightning jets. But the first batch of those planes won't be ready for action for a few more years. Each F-35 costs $104 million.
http://www.federalnewsradio.com/?nid=78&sid=1487989
What? 1700 more F-35s? That's got to be a typo.
Oh wait:
http://www.businessweek.com/ap/financialnews/D93H36F00.htm
Looks like they're serious. Let's see, that'll cost us $177 billion, so we can be prepared for maybe a decade for a war with countries that own our massive debts.
Second bit of evidence:
Grover Norquist wants to attach tax cuts to the bailout bill, and no one is publicly mocking him for retardation:
“In prior ‘emergency’ bills, there was some acceptable ratio of tax cuts to new spending,” said Norquist. “There were virtually no tax cuts in this bill, and a staggering $700 billion price tag.”
http://www.time-blog.com/swampland/2008/09/conservative_activists_propose.html
Just two of many, many pieces of evidence that everyone has gone insane.
"In other words, even though zones of this macro cosmos are supposedly forever out of contact, because of speed of light limitations, nevertheless, we share the same overall (though unbelievably vast) continuously extending metric of the same general dimensions [...]"
Um, I'm pretty sure that idea has been floated ever since the early days of inflationary cosmology (Alan Guth & co.) in the early 1980s. I mean, I think I first read about the idea in A Brief History of Time.
And the "cyclic universe" business is also old: I mean, it's in episode 10 of Cosmos: A Personal Voyage. Yes, there are always new versions of such ideas being spun out (like the recent Greene-Kabat-Marnerides models) but they are explorations in territory whose contours had already been charted. The Steinhart-Turok conception of a cyclic universe was published in 2001, by the way — whole æons ago in Internet years.
Nothing is as novel as the press releases make it sound. Or, one might add, as well-established: not everybody is happy with the math in that "galaxies over the edge of the Universe" paper.
In order to get Buffet named as the person running the bailout show, the Congress would have to overcome misconceptions about bills of attainder.
Since those misconceptions have appeared in school textbooks since at least the 80's, I can't imagine someone not crying "bill of attainder! unconstitutional" without understanding that "attainder" means sentenced by passage of law without a trial.
Thus, it's nice to dream, but not gonna happen. Buffet has five billion bones in the game, though, so perhaps that's a sufficient amount of control?
The slavering hellhounds cackle with delight.
Zorgon, nobody’s calling you mentally ill. But you should find it at least slightly interesting that a fair number of us (in tones of affectionate amusement and some respect) feel we can divide your posts into two very distinct stacks... say, Z+ and Z-. Hey, even the Z- rants are entertaining (though too long.) The Z+ ones tend to be informative and even brilliant! (Though too long ;-) Oh and for calibration purposes, you last one - though grouchy - was definitely Z+! See below.
Look, we all know this is a last gasp raid to steal from the American middle class. (I (in fact) go farther than anybody else in my paranoia, pondering whether the intent may go beyond simply outrageously vampiric theft to actual and deliberate murder of the Republic.) Moreover from my amateur perspective there are dozens of other things we might do than simply buy up a lot of bad bets made by imbeciles.
But look, some version of the Paulson Plan is going to pass. I hope they vastly increase the equity forfeitures and give Congress a veto-proof chokehold on the cash flow and many other fixes. But in fact, we have to keep our demands simple. So simple that they have a chance of going viral! Here goes.
Keep Paulson’s Paws off the Payout!
Either Buffet buys the bonds for us, or no deal!
Trust the man who warned that this would happen! Not one who helped make it happen. Let the “World’s Greatest Investor” buy low and sell high, on behalf of all of us!
Viral it.
-----------
Thanks, Z, for the compact “ostrich ammo” comparison of economic performance under the two parties! The jury is in, and almost overwhelmingly unanimous. Dems are decisively better managers of the economy. It leaves the standard republican excuse-making and rationalizing shattered and pathetic. http://tlrii.typepad.com/theliscioreport/2008/07/presidential-ec.html
The charts are stunningly persuasive, especially when you bear in mind that the dems’ one outlier - the 1944-48 “Roosevelt-Truman” term - had to manage the end of WWII and the biggest conversion of the economy in history, finding employment for five million men. In fact, that term was arguably the best-managed in all of US history! Likewise Roosevelt III - both waging WWII and yanking us out of a depression, kind of excuses that outlier in government deficit. Now make one more correction. You have to pull Eisenhower out of the Republican column, since his version of republicanism simply bears no genetic relationship with today’s. Anyone would properly call him a hybrid or independent. Having taken those three exceptions into account, democrats (and Eisenhower) always do better at balancing budgets. Always.
Note, these stats leave out the last year or so of the present administration (Bush 43), whose deficits extrapolate the “red” republican blood-draining to truly vampiric levels.
There is, of course, one exception to the dem’s almost perfect record of better economic performance... the inflation figures for (especially) Jimmy Carter’s term. Though one could easily blame that on backlash effects from trying to do both guns and butter earlier, during Vietnam. Also not completely perfect is the democratic advantage in stock market performance. Still, without question, stocks do better - on average - under democrats. Note also that Truman again took a difficult transition and turned it into a boom. Of course, if you included the most recent year of Bush 43 in those stats, the stock performance imbalance would turn as blatant as any other democratic advantage.
Missing from this tally... and I suspect potentially just as devastating... would be Small Business Startups. I’d also be interested in rates of GDP growth and rates of monopoly aggrandizement. These last three would put the final nails in the coffin.
---
Blake welcome back!
And yes, the most wonderful cyclical universe riff was by Frank Tipler, Mathematical physicist, Tulane The Physics of Immortality. Marvelously bat-crazy and brilliant, if wrong. Still, cyclicality and pre-existing spacial context are two entirely separate matters. And you are wrong to say that cosmologists used to set the Big Bang inside a context of an infinite open-space metric. That makes the Bang an explosion and they reiterated till they were blue in the face that it was NOT an explosion INTO a pre-existing spacetime! They insisted on ex nihilio endlessly and utterly denied such a pre-existing spacetime, which now seems (without much comment about the change) to be the standard model! Which now means you can have preferential directions, an edge to our cosmos, privileged positions and all that! And they are finding all that!
Another interesting and tangential thought. If the concept of black-hole-as-new-universe-seeds is true, then we might be able to catch glimpses into that other universe. Indeed, with a high enough level of technology, we could force a glimpse into that other universe. There are two forces that can influence the size of an Event Horizon (the point at which light can no longer escape from a black hole).
The first is charge. The second is spin. If a black hole has sufficient charge and spin, black hole theory dictates that an event horizon can shrink in on itself until you have a naked singularity. At this point, the laws of physics break down.
(Unless of course... they're not being broken down but instead superimposed by the laws of another universe?)
If the singularity were in fact the seed for a new universe, it may be possible to glimpse that universe in some manner through the naked singularity. (Indeed, with spin a singularity transforms from a 0-dimensional point into a ring. Might this ring be a gravitational lens with which you see the other universe?)
On another aside... the fusion reaction process of stars runs into a roadblock once iron enters the equation. What, however, happens if a star were to consume a mass of iron (say like Mercury)? Would this cause stellar indigestion, forcing a star perhaps to undergo a premature death cycle once the iron reaches the star's core?
And how do stars manage to avoid "consuming" the iron found in planets in the first place? As the largest gravitational mass in a molecular cloud, wouldn't they not thus attract the most iron... and thus start out with an iron core that would impede on the life cycle of the star itself?
Rob H.
This guy lets just about everybody have it regarding the current mess. A fun read...
A classic line:
"Memo to Mr. McCain: Waste, fraud and abuse are the only things holding the system together at this point."
I have no idea what he thinks he means by that, but it's hilarious!
FWIW, his next words are "Obama is no better."
Zorg.
So far you seem the most sane. I'm not arguing against your points. Just that the American public is pretty insane, and this sort of thing needs to run it's course. The Zeitgeist of America needs to seriously move away from Joe Sixpack looking out for the interests of Gordon Gecko.
[2] Not one person has suggested that the very first, elementary, basic prerequisite for any bailout on Wall Street is: we reinstate the Glass-Steagall Act.
Well I have. Most of our problems started with Bush's speech on the "ownership society." If you find that speech again -- you will see all the attitudes about self-regulation that lead up to this. The loosening of these restrictions --was in order to STEAL.
>> ON Ramadan, pepper spray was sent into the nursery of a Mosk. This was in Dayton Ohio. Children who could not breathe as their parents rushed in to try and save them. This is no big deal to our media or the Christianists, who seem to only see the terrorism problem as anything that interferes with their status quo.
THAT is a sickness and we have to become the good guys again. THAT is much more vital to our national interests than what happens to the stock market.
LINK
The guy is pretty much an idiot, but...
"Two decades of crapulence by the political class has been prologue to the era of coprophagy that is now upon us."
That's a beautiful sentence.
The guy who wrote twinbeams LAT link.
Not any of you folks.
>> If I were the Democrats, I'd put in any bill the proposal that this Bush administration resign. WE HAVE NO BENEFIT in this bailout -- but if the fat cats want it, they need to be de-clawed with the removal of their puppet government.
The SEC allowed these Banksters to leverage 40:1. There was complete complicity in this fraud and it is criminal.
>> A sensible fix would entail:
Take all the bad loans via the government at fire-sale prices.
Convert to 30-year, 5% fixed rate.
Stocks and other financial products are taxed to individuals at 20% less than their tax bracket (so that Bill Gates doesn't pay a 15% tax bill). 1% tax on ALL transactions at all times by any agency for trades, with a limit of 3% charge to a customer for a transaction -- that will fund the FDIC and oversight organizations.
Again, to remind people of Denninger's points;
LINK
or the peanut gallery:
1. Level III assets must be fully disclosed along with all formula and models for their marks, quarterly, in the 10Q/10K.
2. Derivatives must all be moved to a regulated exchange with a central counterparty to guarantee margin supervision. No exceptions.
3. Leverage must be reduced to no more than 12:1 across the system. No exceptions.
Encode these three points into law or regulation and what Mr. Fisher has identified (correctly) as the root of the problem disappears.
Oh, and let's not forget:
"Since the beginning of the year, I have been worried about the efficacy of reducing the fed funds rate given the problems of liquidity and capital constraints afflicting the financial system. As I see it, the seizures and convulsions we have experienced in the debt and equity markets have been the consequences of a sustained orgy of excess and reckless behavior, not a too-tight monetary policy."
A sustained orgy of excess and reckless behavior that neither The Fed nor Congress has been willing to address.
Now we are out of time while both Ben Bernanke and Henry Paulson have attempted to exploit a crisis of their own making in order to ram-rod a haphazard coronation of a new King under the guise of "fixing the problem" when in fact following their prescription - or anything like it - will make the situation markedly worse.
If we do nothing or bail out the banks -- there will be a crash. Doing nothing might be a healthy correction because that fat cats will have to work for a living.
People with low cost loans pay them back much more often. Most of these people were actually eligible (about 60%) who were sold these NINJA loans. So THEY were ripped off for the most part because some salesperson wanted a commission. I'd much rather give a break to the poor or the property flippers, than the neuvo riche Wall Street people who should have known better.
Nationalize the Fed -- we need to own our own money. Printing money should be decided by Congress.
The three primary owners of the Fed; Citi-Group, Goldman Sachs, JP Morgan, are also the primary beneficiaries in the bailouts. When Mexico was bailed Carlos Slim owns 1/3rd of the value of all corporations in the Mexican stock exchange -- it also primarily helped Goldman Sachs and sent their economy into a tailspin.
I predict that Paulson will either go to jail, or be one of the wealthiest men in the world.
This is the biggest bank-robbery in history -- only nobody is needing to wear masks.
>> I don't think Congress or our leaders will solve this problem without moving the pain from the owners to the public, because the Greed is Good crowd is still in control and they only see any solution in terms of what helps them.
Hey - I know the market crash is supposedly linked to the failure of the bail-out.
But take a look at the chart on the front of USA Today (paper version, sorry). They show the market changing over the hours, annotated with the current votes for/against the bail-out.
In nearly every case, the market FELL when the bail-out pulled ahead, and ROSE when the bill was failing!
Then, after the bill finally fails and Congress takes a day off, today the market comes roaring back!
Seems like a pretty clear "message from the markets" to me - but I expect Congress heard"
"Nothing could be better than this bailout bill!"
when the message really appears to have been:
"This bailout bill is worse than doing nothing"
:-D
zorgon the malevolent said...
I absolutely 100% agree with Robert's latest point about the urgent need to break up conglomerates and monopolies.
What do you think of my idea that we go back to the Founders ideas about corporations?
NO majority foreign-owned corporations. NO multinationals unless they re-incorporate on a state level. 40 years and a corporation must liquidate. Any company too big to fail needs to be split up or nationalized.
Jester said...
Paying off the arsonist is not how you fight a fire, Rob.
I think you and I are on the same page. And I also don't think the current crop of people will come to the right solution -- merely more of the same Gordon Gecko thinking that got us here.
>> Obama or any candidate, will not be able to do ANYTHING that will really stop this collapse -- UNTIL the collapse happens. This is the mental illness that prevents us from solving this problem and it must run its course.
The Disaster Capitalists, will fan the flames and try to get more power. Because they don't think humans can wreck a planet, nor that parasites can kill a host. Well, at least these people have lots of money sitting in Dubai. But their friends may not -- and those Fascists who don't benefit from the Crony Capitalism and its ultimate failure are going to be PISSED.
Anything a knight in shining armor is going to do, won't be accepted until people are desperate. They still think any oversight or redistribution to the poor is socialism -- as if this is a sin. Gordon Gecko has been propagandizing the nation for the last 30 years. Then we have Fundamentalist thinking. Then we have just plain stupid people who regurgitate what someone in a suit told them.
There are not ENOUGH elite in this country -- people like those here on this Blog. That is the damn problem. I live in Georgia, and I can't have an intelligent conversation with 9 out of 10 people. I find more common sense with old folks working at home depot, or with Black Folks. But my fellow white People with good jobs, think that they are smart because they made good money. They think they've been living in a meritocracy and that people hate America for our Freedom and not because we've been bombing them and stealing from them.
TwinBeam said...
On another aside... the fusion reaction process of stars runs into a roadblock once iron enters the equation. What, however, happens if a star were to consume a mass of iron (say like Mercury)? Would this cause stellar indigestion, forcing a star perhaps to undergo a premature death cycle once the iron reaches the star's core?
>> Probably not. Iron is only consumed after all smaller elements are fused. You just add to the mass of the star and increase its burn rate a bit of the current gases.
>> My current theory on black holes is that they function like a super-accelerated Proton. Conservation of energy adds to the mass of one particle. In the super-colliders, accelerated particles swell in size. Einstein thought that this was something to do with relativity, that the gravity well distorted the object. An object could never reach light speed "in this Universe" or it would swell to the size of the Universe.
I, not to be presumptuous, think this is more a matter of TIME. Approaching the speed of light or a heavy gravity well slows down time. All objects are actually shrinking in this Universe (or space/time is growing -- much the same difference), and acceleration means that you reduce the amount of space/time exiting a particle and it grows larger (or shrinks less). The particle will not inflate to the size of the Universe, but the Universe may shrink one day to the size of a particle. Meaning -- no matter how much energy you add to the particle, it cannot inflate at an infinite rate. What is going on, is that a collapsing star is pushing particles with enough speed/gravity, that they achieve Universal Escape Velocity. There may well be a pocket Universe created -- but he mass of the energy is "lifting up" into the higher dimensions (where SPACE and TIME come from). If you don't keep "pushing" super critical matter into this hole -- it will close up. Quasars may be more like super-critical electrons where the upper dimensions are moving DOWN. I'm guessing that antimatter comes from these higher dimensions (space/time flows in reverse in these particles) and that Quasars would be a source of anti-matter.
The reason I think that black holes are a single particle -- is that this conserves more energy. The other super-critical particles are pushed into the upper dimensions, or are involved in keeping one particle super-critical. Otherwise you would get a rapidly fluctuating event horizon.
Stars maintain their volume by balancing the inward pull of gravity with the outward push of the energy released by fusion. When the Hydrogen fuel is mostly converted to Helium, the energy released can no longer compete with gravity and the star starts to collapse. As it is compressed, it heats up to the point (100 megakelvins) where Helium nuclei can spontaneously fuse, and this provides a new source of energy, producing elements like carbon and oxygen.
A similar process repeats as the Helium is used up, the core can't be supported any longer, and begins to compress again. If this reaches around a billion kelvins, the conditions for a number of more complex fusion reactions become favorable, and heavier elements like Sulfur and Silicon form, releasing more energy. [simplifying; I don't think this always happens in distinct stages, but has smooth transitions and is stratified in layers.]
The reason a star can no longer support itself once its nuclei reach Iron-56 is due to the relative binding energies of atomic nuclei. Iron-56 sits near the top of the binding energy curve; that is, fusing atomic nuclei into heavier elements releases energy, but trying to push past iron requires energy. (technically Nickle-62) [In fact, this is why fusing light elements produces energy, but splitting heavy metal atoms like Uranium & Plutonium releases energy] When supernovae blow, some of that energy goes into fusing the elements heavier than Iron.
So it's not that Iron is "sugar in the gas tank", it's more like once things have reached Iron, the tank is just empty. [And indeed, the Sun already contains over 8000 times as much Iron as the mass of Mercury.]
er, should be:
fusing light atomic nuclei into heavier elements releases energy, but trying to push past iron requires energy
That iron would have been there from the start of the solar system btw. There is no way the sun is ever going to provide the conditions that produce iron (which proceeds *damn* fast, incidentally)
Cliff's comments about unnecessary super fighters adds to a New Scientist article on intelligent cluster munitions, which can supposedly lock on and pursue targets for up to five minutes (with a questionable level of discernment: I wonder if they yell out 'you are false data!' as they come?).
[TinFoil]Would an ongoing failure to agree to a bailout package be construed as triggering the 'Continuity of Government during a 'National Emergency' clause under USPD 51?[/TinFoil]
Heading off on another tack: Ethan Zuckerman's musings on homophilia and xenophilia makes for very interesting reading (file under 'Otherness')
Tell stories.
Huh! Good stuff, guys.
Side note. Barr and Nader are climbing a little... with Obama so far being more of the loser. I wonder when we'll start seeing trade offers, like in 2004, where people in NY & CA offer Nader supporters in battleground states like Ohio to swap.
Much as I utterly despise Barr as a person, it makes sense to tout him to ostriches.
Oh, one place where Zorgon and I part company profoundly is over the US military. Yes yes, I know your position and how firmly you hold it, Z, and how much contempt you feel toward those who cannot see the obvious. But you see, I actually hate Bush for additional reasons to those that fire your belly.
I hate him for destroying Pax Americana, which was actually pretty damned good for the world. I know how bad things can get when there is not a pax. Moreover, under Clinton, most of the worl's people did not resent it.
Moreover further, the F35 is actually an astonishingly huge jump in capability for the buck. Ah, but Bush has wrecked the popularity that was far more important an underpinning of our pax. And demolished the Army. And ensured we cannot afford these weapons. Hence even in terms of the stated desires of the neocons, he and his gang have been utter traitors.
BTW I did a first cut search and found NO sites trying to organize vote swaps of the kind I just described. The prospect of Nader screwing us again....
Voting begins in US state of Ohio
...It comes a day after Ohio courts ruled that new voters could register and cast an absentee ballot on the same day.
Republicans, who argue same-day voting opens the door to voter fraud, opposed the measure; Democrats backed it.
...The ruling was welcomed by state Democrats, who hope to encourage college students and other groups such as minorities, the poor and the homeless to make use of the same-day voting period.
So, it's not all bad news. Just fraught.
http://www.fivethirtyeight.com/2008/09/tongue-jut.html
"BTW I did a first cut search and found NO sites trying to organize vote swaps of the kind I just described. The prospect of Nader screwing us again...."
Poor Nader. He was once a good public servant, and, to a point, still is. However, like so many he allowed the prospect of power to feed his ego until it removed all sense of practicality and compromise.
The 90's were such a happy-go-lucky time. Perhaps our biggest concern was the moral indiscretion of the president. Voting for Nader in those good times was a luxury we had. After all, what did it matter if Bush or Gore won? By and large, we had it good and the impacts of policies in Washington on our daily lives would be minimal at best; so long as our personal wealth grew, the expected politicking was of scant interest. We could afford to not compromise and vote our heart.
I remember when pundits were discussing Bush's now long forgotten stem cell decision saying this would be the defining issue of his presidency. If only they would have been right... *sigh*
Now the stakes our too high. American culture and freedoms hang in the balance. Whatever our ideals tell us, in darker days we need to be pragmatic. Asimov's Foundation novel (Salvor Hardin) speaks wisdom, "Don't let your morals get in the way of doing what is right." While many support many of Nader's platforms, today, idealism is a luxury we do not have.
So I am glad to hear that the Nader fan sites have not sprung up. I also cannot say that I am surprised either considering our current situation.
Jumping ahead some... apologies if I repeat.
Zorg,
I used 'insane' with respect to some of your 'we must do right now' points with tounge-in-cheek. I thought that was an obvious play off of your "that's insane" refrain.
My only real criticisms were:
1) You threw in an insult of everyone here for some unknown reason... since it seems most of us basically agree with you.
2) The fixes you offered (mostly) are not doable, at least in the short term.
I chalk that up to understandable venting... which I was poking a bit of 'good natured' fun at. Just don't want you getting me wrong.
Anyway, I fall pretty much with Krugman on supporting the bailout. Yeah it is a bad idea, but doing nothing is arguably worse. (That is arguable... disagreement between rational people is possible IMO.)
At this moment, I'd favor a case-by-case approach. Just take failing institution which are fundamentally OK into receivership. This immediate sell-off thing they did with WaMu and Morgan does seem stupid. Keep the the banks in receivership and use them to stabilize the situation (maybe turning a bit of profit when re-privatizing or even keeping some as nationalized GSEs... AiG could be really useful.)
Good info in your posts... wish they were in a threaded and categorized format though. Did I mention you should have a blog ;)
--
My band-aid line was just trying to point out that no one (with a brain) thinks the bailout is a fix. We can argue over if it would even be any help... it really isn't that clear.
Though, in defense of band-aids... They can be used to close wounds and staunch bleeding! I speak from experience ;) Yeah, the little butterfly closures and gauze pads are the right tools for the temporary job, but you work with what you have in your first-aid kit. I wonder if that could be another metaphor... :p
Oh, there are Nader fan sites. Just no Nader vote SWAP sites that would let his fans "vote" for him in California while helping Obama in OH or FLA. These swap sites are needed!
Oh this is actually a really good rant (yes, the comment #101):
Here
Have we identified Zorg's secret identity, or soul mate ;)
(That is supposed to be 'good natured' btw.)
In potentially better bailout news, some 'better dems' are drafting a new plan. The SEIU has already endorsed. I'll post details when I find them in a nice form.
Also, some liberals / progressives have remembered what lead to the New Deal. If right-wing kleptocrats are intent on triggering one crisis after another ala Shock Doctrine... well, who says that they get to dictate the response to the crisis.
A Liberal Shock Doctrine
--
An interesting bottom-up bailout idea that would be politically easy was floated by someone on Internet Infidels. Got me thinking of a retool that may be a good idea (or may be dumb for reasons I'm missing).
A rescue plan in the guise of a stimulus package.
Basically, the government gives everyone a one time tax credit of a few thousand dollars (somewhere $2-4K seems a reasonable number). The trick is you only get the credit to offset certain expenses/investments, such as:
- Paying down a mortgage or loan or credit-cards
- Refinancing a mortgage to a traditional fixed form
- Buying a mid/long term CD (and/or maybe money market)
- Investing in (and holding) a qualifying financial sector mutual fund. The government could even form a fund targeting banks that need capital infusions (and even backstop it by nationalizing firms in the fund which fail.)
Some other, less directly 'rescue' things the credit could offset.
- Qualified energy efficiency home improvements. CA has some pretty fine examples of qualifying and additional financing models.
- Investing in (and holding) a qualified "green energy" mutual fund.
Seems like a good idea to me. Not a complete fix, but maybe a rescue and a start. What am I missing?
PS: I know sane regulation (and enforcement) needs to happen. But it won't happen until next year at the earliest.
So Long and thanks for all the fish...
Get what you can in stock. Short-term, payrolls are going to freeze up and things are just going to stall out.
>> That's at least all I can discern from the moves of our so called leadership, who seem determined to make sure friends can keep ill gotten gains rather than help America in its time of need.
Never before have so few, done so much for so few. Never before have people so highly paid, botched something in the worst way that could have been easily fixed.
If you don't here about converting these NINJA loans to 30 year fixed at a reasonable rate by the Government, and something to deal with all the money leaving the system (for t-bills and such), so that small banks can meet payroll, then you know that our economic system is going to crash.
>> I could be wrong. This is not investment advice. But I may want to buy well drilling equipment with the shares of Apple Inc. I sold two weeks ago.
Looking at the latest hacks done to the "Rescue Plan," I completely withdraw my hopes that it passes. The current bill is a travesty (even more than the old one was) and is a huge mistake. Better to let the house burn to the ground and deal with the fallout than pass this bloated monstrosity that will leave the next President with a shattered ruin of a budget for 2009.
Rob H.
I don't have time to hang around very much today, but I'd like to comment on this, since we seem to be talking past each other.
And you are wrong to say that cosmologists used to set the Big Bang inside a context of an infinite open-space metric. That makes the Bang an explosion and they reiterated till they were blue in the face that it was NOT an explosion INTO a pre-existing spacetime!
We still don't know if it is or isn't. Many of the proposals for what might have happened "before the Big Bang" (a territory which is still up for grabs) don't treat it as an explosion in a pre-existing spacetime. Instead, you get some other form of spacetime which lived before the Horrendous Space Kablooie — maybe it shrank down before bursting out again, or something.
They insisted on ex nihilio endlessly and utterly denied such a pre-existing spacetime, which now seems (without much comment about the change) to be the standard model!
Hardly standard. The expansion of the Universe is still modeled as an expanding metric, after all.
Which now means you can have preferential directions, an edge to our cosmos, privileged positions and all that! And they are finding all that!
See previous comment: we're not yet sure about the "gravitational pull of galaxies over the edge" effect, since the people who wrote the paper were sloppy in their math. And you can have preferential directions even if the Big Bang was not an explosion in a pre-extant spacetime; it just requires some asymmetry in the pre-inflation Universe. The evidence for such preferential directions is, as yet, suggestive but inconclusive, so it's still entirely possible that the novel and revolutionary effect which will change everything isn't there at all. So, the cosmologists try everything they can think of and wait for the Planck satellite.
William_Shatner suggested we go back "to the founders' ideas about corporations."
Not clear what you mean here. Madison, Jay and Hamilton did the heavy lifting in The Federalist Papers while Adams and Jefferson laid out much of the framework for the constitution. These people had as little patience as Adam Smith for "syndicates of men" involved in a financial interest, because to them, that meant classic mercantilism. America had been on the receiving end of mercantilism in prohibitions against import of British loom technology, etc., in the same way third world countries find themselves on the sharp end of 21st century mercantilism when they're prohibited by U.S. IP laws from sharing copies of Microsoft Windows and other U.S.-designed software, or when they find themselves outrageously priced out of the market for basic pharmaceuticals by patents held by U.S. companies and enforced by U.S.-written patent laws.
The problem remains that Adam Smith lived in the 18th century. Modern conglomerates lay beyond the conception of Jay and Hamilton and the rest because the sheer scale of our modern industry would have proven unimaginable to the founders of America. It's not obvious how a business that builds, say, 757 jetliners consisting of a million component parts, and sells them all over the world, can be managed except through a modern corporate structure. Ditto modern pharmaceutical companies, in which hundreds of millions of dollars, tens of years of basic scientific research, and a dozen or more years of multi-round peer-reviewed clinical trials are required before a major new drug can get taken to market safely. To the founders, "industry" meant small workshops with artisans turning out handmade goods: they never contemplated a problem like thalidomide, or asbestos causing lung cancer, or that defective door on the DC-9 jetliner a few years back that was causing jet planes to depressurize and crash in mid-flight, killing hundreds of people at a time. Open source development and anarcho-syndicalism sound real nice, and they're conceptually very pleasing to libertarians, but in the real world, a 757 designed by anarcho-syndicalists and built using open-source methods isn't practical. You don't want to bring a pregnancy drug to market only to discover that it causes kids to get born with flippers for hands and feet because somebody missed a bug in the open source development process and it'll get fixed next time.
So it's hard to believe that pressing the reset button on corporate law back to the 1790s would work in today's world. We live in a fundamentally different economy. Global, rather than local, and industrial rather than agrarian in nature. Almost all modern products involve a great deal of basic science both in their testing and their manufacture and development. To do all that, you need large manufcaturing organizations in a free market, and history shows that large manufacturing organizations in a free market generally don't work unless they're arranged hierarchically, with many of the characteristics (not all) of modern corporations.
As for a 40-year limit on the lifespan of corporations...that would force Apple to shut down in 2017, 9 years from now. Anyone want to see that happen? Size and pathology, rather than longevity, seem more important in determining the appropriate lifespan of a corporation.
One thing we do need to serious take a look at: revoking the crazy legal decision from the 1860s that gave a corporation the legal rights of a person. That's nuts. We need to revoke that pronto.
We also need to do something serious about the unchecked growth of corporate power. That's one of the single biggest problems in the 21st century, along with global warming, peak oil, and the collapse in legitimacy of the nation-state with the concomitant rise of 4GW warfare.
---------
Dr. Brin:
It's not obvious that "some version of the Paulson plan will pass." You seem to be suggesting that the plan would prove acceptable if someone other than Paulson ran it. The plan has major problems regardless who runs it. It's not transparent, it's unaccountable to anyone, and worst of all, the Paulson plan in any form almost certainly will not fix the freeze-up of the credit markets, which is the major problem we're facing right at this moment. The Paulson plan won't fix the credit freeze-up because that's based on a lack of trust by major financial institutions in one anothers' balance sheets. Banks aren't willing to loan one another money even overnight, except at ridiculously high rates, because each bank think the other bank is lying about their solvency and has cooked their books, and consequently every bank is worried about losing money even on an overnight loan.
The solution to that involves a lot more transparency. The Paulson plan (whoever runs it) does the exact opposite, making the decisions of the U.S. Treasury Secretary or his proxies opaque and completely unaccountable. That's exactly the wrong way to go.
Moreover, the Paulson plan is a "dump liquidity into a black hole and pray" maneuver. The fundamental problem here remains the fact that credit default swaps are leveraged at 30:1 or greater. This means that for every 3% drop in property values, the CDSs lose around 100% of the value of the property. So if property values decline by 15%, CDs now represent a liability of 500% of the outstanding values of the mortgages. If property values decline by 28%, the CDSs become a black hole sucking in 900% of the oustanding value of the mortgaged properties. And so on. The Paulson plan does nothing about that. Some other solution, perhaps the "super bond" suggested by Hussman, or possibly the even more radical idea of resecting the parts of the companies that hold all that toxic paper and turning into independent non-profit credit-union-type institutions as Rubini suggests in return for a complete buyback of the depressed value of the defaulted properties, seems better. Clearly the Paulson plan as currently floated, even with an equity share, simply kicks the can down the road. When property values decline further, the Paulson plan will suck in even more funds into the black hole of the CDSs, with no end in sight. That's not acceptable. We can do better.
Last but far from least, the 500 point Dow Jones bounce yesterday after the defeat of the Paulson bailout suggests that the market is saying "the Paulson Plan was sh*t and wouldn't have worked well anyway." Clearly we must do something to unfreeze the liquidity trap that's killing overnight bank lending, because without a short-term credit market, businesses can't functionl. Every business in America, large or small, depends on standard 30- to 90-days accounts payable and receivable. If all U.S. businesses had to pay for goods and/or services in cash on delivery, American business would grind to a halt. There remain very few pure cash-and-carry businesses in AMerica today. Most of 'em are illegal, in fact, like the drug trade, or hiring illegal hispanic immigrants to do yard work.
Obviously the Wall Street players are going to make a desperate effort to get the Paulson plan (or a version thereof) passed once again this week, because it benefits them financially, preserves their power, keeps them unaccountable, and is above all familiar and doesn't change the current financial system (statis is the most powerful force in society, everyone wants things to stay familiar). It's not obvious that they'll succeed. Nobody knows yet what kind of plan will ultimately emerge. I'm no financial expert, but it's clear from reading up on the basics that better options have been proposed -- options which are more transparent, more accountable, which don't pay out huge unspervised bonuses to the same players who created this mess, and which don't put the people who created this problem in charge of fixing it, and most of all, plans which give some kind of equity stake or put a ceiling on the potential losses caused by the bailout. That can be done with bonds, senior debt obligations, or other straightforward types of financial instruments, instead of just hurling mountains of cash into the abyss and hoping the problem goes away before we run out of money to toss at it.
Regarding the military:
Dr. Brin, we really seem to be talking past each other on this one. I have no contempt for people who disagree with me about radically cutting U.S. military expenditures. In fact, if we had all the money in the world, I'd gladly go with your suggestion of trying to continue & extend a "Pax Americana." I also have no contempt for the intelligence or character of senior military officers in the Pentagon, even though I've described their Quadrennial Defense Review (accurately, I think) as "stupid" and "crazy."
How can I regard the actions of our senior military as "stupid" and "crazy" without having contempt for our generals and admirals themselves? Because this is a classic case of a bureaucracy strangling its best people. The greatest curse of modern society, as David Simon has shown in his classic HBO TV series The Wire, is the creation of malignant bureaucracies which stifle and ultimately defeat their best people, and wind up producing the opposite of the results intended by the bureaucrats. We see this everywhere in modern industrial society, but perhaps the best example remains the so-called "War on Drugs." In the War On Drugs, everyone involved, from the DEA to the cops on the street, to the prosecutors to the U.S. Attorneys to the judges to the legislators who craft anti-drug laws, have the best intentions. They all sincerely want to reduce drug violence, eliminate drug addiction, prevent young people from getting involved with using or dsitributing drugs, and reduce or get rid of all the social pathologies and dysfunctions which America's drug problem creates: chronic poverty, deaths from overdoses, gang violence, corruption from drug money, drug imports, the destruction of whole neighborhoods, annihlation of entire swaths of the American underclass, the felonization of a huge proportion of black males from age 15 to 30 (almost 1/3 of them are either in prison, or on parole, a staggering statistic). Everyone involved in the war on drugs sincerely wants to stop these problems cold.
But the drug war bureaucracy of which they are a part has systematically made the drug problem worse at every level since 1971, when we started the War on Drugs.
Drug gangs are more sophisticated today after 30 years of a "war on drugs," much larger quantities of illegal narcotics are now being imported into America than ever before, the street price of all types of drugs has plummeted astronomically, drugs today are much mroe addictive and potent than ever before (viz., crack cocaine, etc.), corruption is much more widespread inside anti-drug law enforcement in America than ever before (just look at the catastrophic implosion of the L.A. Rampart Division's CRASH anti-drug unit several years ago, or consider the fact that the DEA agent who slapped the cuffs on Noriega in 1988 got indicted for taking a $750,000 bribe from drug traffickers only a years later), our prison population has explodeed with non-violent drug offenders, drug use is way up since 1971 per capita, more kinds of dangerous drugs are available now than ever before (including weird stuff like meth which was a minor part of the drug trade back in 1971 when the War On Drugs started) our prison and parole system is breaking down under the strain, none of our states can afford the money to incarcerate all those non-violent drug addicts...and so on.
Meanwhile all the money and manpower getting sucked up in these anti-drug efforts starves the promising approaches (drug treatment programs, methadone clinics, etc.) of necessary funds.
So the anti-drug bureaucracy we've created to fight drugs winds up making the problem worse. And the more money we throw at the DEA and our prison system and local SWAT teams, the worse the drug problems get.
Clearly, the cause of our current ever-worsening drug problem is the anti-drug bureaucracy, not the good intentions of the people inside it.
The same problem afflicts the Pentagon. It has become a gigantic Politburo-like bureaucracy which now stifles its best people and systematically creates the opposite of the outcome desired by the people who run it.
We can see this in the war in Iraq and the even more catastrophically failed war in Afghanistan. The Pentagon bureaucracy takes brilliant highly-educated generals and admirals (who in many cases boast masters and doctorates) and creates a set of perverse incentives that force them eventually to either quit in disgust, or make matters worse.
The end result of the Pentagon bureaucracy is to:
[1] Stimulate and perpetuate the creation of wildly overpriced hi-tech weapons that often don't work, and, in exceptional instances when they do work, are designed for tasks that aren't useful in 21st century warfare; also, to create and perpetuate failed global military strategies like "the long war" (against "terror," in this case) which as Sun Tzu and Clausewitz reminded us many times, proves fatal for any nation even if it eventually wins;
[2] Frustrate & stifle our most innovative military thinkers, while rewarding and promoting the military leaders who are best at "working the system" to perpetuate the failed weapons systems and futile policies desired by our civilian leaders, while our best colonels and majors quit in disgust because they spend all their time tweaking powerpoint slides for elaborate presentations, instead of training for combat;
[3] Send the U.S. military to places it is not wanted, for missions which cannot be accomplished by an army (and instead require something like a cross between the Peace Corps, a U.N. peacekeeping force, and the British Raj), and then, when the mission breaks down, pumps more men and even more expensive and irreplaceable hi-tech materiel into the failed mission;
[4] Promotes future military planning based on the priorities of the Pentagon's internal bureaucracy, rather than America's national interest in the world of the 21st century as it really is.
Please don't imagine I think our generals or admirals are stupid. Most of 'em are lots smarter than I am, and many have PhDs in history or other disciplines that make them exquisitely more knowledgeable about grand strategy than your or I. The problem is that the Pentagon's bureaucracy has become so toxic that it warps and twists our mlitary leaders into acting diametically against America's best interests in the service of the Pentgon's own internal interests, or it destroys our best military leaders outright (John Boyd offers a good example of a guy who simply got crushed by the Pentgon bureaucracy).
2nd even more important point:
I have no contempt for people who disagree me that we must drastically downsize the U.S. military, by around 80% or more. It's just that no one has offered a credible alterantive to downsizing the U.S. military by 80%-plus.
We are faced with an upcoming fiscal crunch (not this present housing crisis, I'm talking the 30-year-out baby boom medicare crunch) that simply leaves us no choice. Given my druthers, sure, if we had infinite cash on hand, why not keep the world's biggest military?
The problem is, America faces 97 trillion dollars of future obligations in medicare and social security, and over the next 30 years, there is just no way of earth we can continue to spend what we're now spending on the U.S. military and maintain medicare. Social security, we can finesse somewhat, by extending the retirement age and means-testing.
But we can't can't finesse medical care for all those retired baby boomers. meaning, for you, Dr. Brin. There is just no way around this one. One or the other will have to go sometime over the next 30 years: the current U.S. military establishment, or medicare. I do not believe that the over-60 voting plurity in 2040 will vote themselves a death sentence when there will be nifty new custom-DNA-tailored anti-cancer treatments that could save their lives...if they could afford 'em.
If you can find a flaw in my logic, Dr. Brin, please let me know. No one has been able to find one yet. The Congressional Budget Office has laid out the figures in black and white, The numbers are stark and unappealable. We cannot continue to fund both our current military and provide the level of medicare promised to retiring boomers by 2035 or 2040. It is just not possible.
That's even without the current fiscal crisis, which only makes things worse and hastens the inevitable downsizing of the U.S. military.
This also leaves entirely out of consideration the fact that, as many from van Creveld to Lind to Bacevich have pointed out, modern wars between developed nations have simply grown too monstrously expensive to sustain. As a result, wars are now largely fought in third-world nations, with low-tech weapons like the technicals in Somalia, manned by kids chewing khat and using AK47s and russian rocket propelled grenades. Or the teenage kids in Iraq use who IEDs made from cellphones that cost less than the price of a pizza.
It's a clear proof of the Pentagon bureaucracy's massive dysfunction that in the midst of all this, they persist in creating wacky new weapons systems like particle beams, thought helmets to control UAVs, orbital "rods from god" ballistic projectiles, and the F-35 and F-22 joint strike fighter. Techically, these are all fabulous weapons, with amazing capabilities (in most cases -- in some cases, like the JSF, the weapons don't even work and are worthless as well as insanely overpriced)...
But all these futuristic Buck Rogers weapons systems prove useless against Somali warlords or Iraqdi insurgents, and those are the kinds of wars everyone wil be fighting in the 21st century.
Fact: The United States Air Force has not engaged in a dogfight for more than 30 years. Why do we need new fighter jet aircraft?
There's yet a third fatal problem with a huge U.S. military -- "capabilities create intentions," as the U.S. Army War College likes to remind us. Simply by creating an outsized U.S. military, we tempt civilian leaders to drink deep from the poison chalice of hubris. This is arguably what really accounts for the rise of the neocons. As Madeleine Albright fatally complained, "What's the use of having the world's greatest military if we won't use it?"
This is the kind of question that precedes a fall from a great height.
When you get into a death spiral of self-defeating pathologies because of self-destructive giant bureaucracies like the anti-drug bureaucracy or the Pentagon, history shows you can't fix things with "reform" or "new people" or "tweaking the system." When things get this bad, the only way to fix the basic problem is to shut the bureaucracy down.
We saw this with Prohibition and we saw it with slavery. Tweaking Prohibition wouldn't help. We had to stop Prohibition -- that was the only solution. Throwing more federal agents into busting more speakeasies was useless, and tinkering with, say, allowing beer but prohibiting whiskey and gin, was equally pointless. Prohibition simply had to end.
Likewise, all the tweaks around the edges of the slavery problem in the 1850s accomplished nothing. Having some states slave and some states free only made things worse; in the end, the only solution involved abolishing slavery altogether.
Now we're seeing this same kind bureaucratic death spiral with the War On Drugs and the U.S. military-industrial establishment.
The anti-drug bureaucracy is no longer designed or intended to reduce drug use or eliminate drug violence. Regardless of the intentions of the people inside the anti-drug bureaucracy, it now serves only to provide jobs for police and DEA personnel and siphon pork barrel money from state and federal coffers to local pork projects like DARE. Reducing drug use and ending drug violence has become completely irrelevant to the function of our courts and prisons and parole system and DEA and anti-drug task forces. Indeed, our courts and legislators and DEA and police are now eagerly looking around for new types of substances to make illegal so that the war on drugs can be extended and expanded. Thus, herbs like salvia divinorum are being made illegal. It's all just getting more and more pathological, more and more dysfucntional at every level, from drug sentences to prisons to DEA to local law enforcement -- and, as a result, the drug problem just keeps getting worse and worse, the bigger our anti-drug bureaucracy gets and the more money we throw at the DEA and DARE and anti-drug SWAT teams and prisons.
Likewise, the Pentagon now serves as a combination national jobs program + pork barrel for state contractors + life support for heavy industries of national strategic significance like Lockheed-Martin + lifeline for national labs like Sandia and Lawrence Livermore Lab + substitute for national technology development directorate, like Japan's MITI.
The function of the Pentagon no longer has anything to do with actually fighting or winning wars, which explains why most mid-level Pentagon officers now spend their time twearking Powerpoint presentations, instead of training at Fort Irwin.
Blake: yes, the old ex nihilio model is still around. But dig it, it was the ONLY model just a few years ago. I couldn't even get cosmologists to discuss a vague pre-existing "context" in which Heisenberg could operate. Now, contexts vary from pre-universes to pre-cycles to this vast meta-cosmos of flat spacetime. What bugs me is that I have seen so little commentary ABOUT the fact of this change of underlying zeitgeist.
Hey! Anybody have any comments on my new website look and utility? http://www.davidbrin.com
Eloquent Ostrich Ammo. Share and spread around -- and read aloud to your ostrich -- this “Letter to My Republican Father.” http://web.me.com/davidvwhite/Site/Welcome.html
Backing up one of its points: Economists unanimous: McCain advisor Phil Gramm most to blame for the current Wall Street crisis. http://wonkroom.thinkprogress.org/2008/09/20/economists-blame-gramm/
Z: Look, I hope the Paulson Plan sinks and something else is done. If so, yippee. But I bet it will pass now. And the US will be buying derivatives and such. In which case, buying them at their actual value, as wagers, would make sense! Hence, having them bought by a fellow who genetically buys low in order to sell high, would seem the right way to go.
Alas, I simply lack the time to address your lengthy essay, except to say that it was cogently Z+ and made good points. And I remain in disagreement over many. (One small point in favor of the F35... it is the 1st time that a plane was so good and so flexible that it will brilliantly serve the Navy, Air Force and Marines, all at the same time. This is a wondrous thing.)
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For a bit of good news in bad times, look at the docks.
The 7500-acre Port of Los Angeles is America's busiest container port, handling about a sixth of the U.S. seaborne cargo tonnage and container traffic. For the past decade, it has been busily unloading containers full of Asia's factory goods -- TV sets, clothes, DVD players, track shoes -- and sending most of them back empty for refills. Not in a single one of the 107 months between March 1999 and February 2008 did the port's full outgoing containers outnumber the empties.
In February 2008, for the first time in a decade, the LA port sent more containers out full than empty. Each month since it has done the same. In total, the port's data collectors recorded a jump from the 1.4 million full outgoing containers in 2006 (measured in TEUs) to 1.6 million in 2007; they may count 2 million this year. The same thing is happening at the other big container ports.
Here's hoping we see the Best Biden... and that the questions head into territory she does not expect.
The F-35 is a great plane.
It's also completely, totally, entirely useless against what some sci-fi author/general all around futurist I occasionaly read envisioned - desk-top virus creation.
Mockery with genuine fondness, you know. Seriously, Dr.Brin, you're falling for building the worlds best big-gun BattleShip in 1952.
Superior Cavalry in 1914.
The worlds best plate-armor in 1690.
__________________________
Hoover. 1931.
They tried buying up "bad mortages" to get liquidity into the system. Traumatized bankers just sat on the money and still refused to lend.
The answer? Cut out the middle-man. Don't buy junk assets. Just let the Fed start issuing 30 and 90 day loans. At Prime.
Wash hands. Get to work on stripping good mortages from bad bundles, and save the 60% of subprime borrowers who were steered into High-Cost loans by loan agents eager for a bonus even though the borrower had already qualified for traditional 30 year fixed rate Prime mortgates.
Accept recession. It's going to happen. Don't break the dollar.
P.S.
Bankers aren't scared to lend to each other because the other guy might have some shady paper on the books.
They're scared to lend to each other because the other guy might just get siezed by the Feds, stripped of his bad debts, and sold to Rockefeller or Morgan for 0.666 cents on the dollar.
Ah, where are the rapture freaks when you need them?
Recapitalise the banking system
By George Soros
The emergency legislation currently before Congress was ill-conceived - or more accurately, not conceived at all. As Congress tried to improve what Treasury originally requested, an amalgam plan has emerged that consists of Treasury's original Troubled Asset Relief Programme (Tarp) and a quite different capital infusion programme in which the government invests and stabilises weakened banks and profits from the economy's eventual improvement. The capital infusion approach will cost tax payers less in future years, and may even make money for them.
Two weeks ago the Treasury did not have a plan ready - that is why it had to ask for total discretion in spending the money. But the general idea was to bring relief to the banking system by relieving banks of their toxic securities and parking them in a government-owned fund so that they would not be dumped on the market at distressed prices. With the value of their investments stabilised, banks would then be able to raise equity capital.
The idea was fraught with difficulties. The toxic securities in question are not homogenous and in any auction process the sellers are liable to dump the dregs on to the government fund. Moreover, the scheme addresses only one half of the underlying problem - the lack of credit availability. It does very little to enable house owners to meet their mortgage obligations and it does not address the foreclosure problem. With house prices not yet at the bottom, if the government bids up the price of mortgage backed securities, the taxpayers are liable to loose; but if the government does not pay up, the banking system does not experience much relief and cannot attract equity capital from the private sector.
A scheme so heavily favouring Wall Street over Main Street was politically unacceptable. It was tweaked by the Democrats, who hold the upper hand, so that it penalises the financial institutions that seek to take advantage of it. The Republicans did not want to be left behind and imposed a requirement that the tendered securities should be insured against loss at the expense of the tendering institution. The rescue package as it is now constituted is an amalgam of multiple approaches. There is now a real danger that the asset purchase programme will not be fully utilised because of the onerous conditions attached to it.
Nevertheless, a rescue package was desperately needed and, in spite of its shortcomings, it would change the course of events. As late as last Monday, September 22, Treasury secretary Hank Paulson hoped to avoid using taxpayers' money; that is why he allowed Lehman Brothers to fail. Tarp establishes the principle that public funds are needed and if the present programme does not work, other programmes will be instituted. We will have crossed the Rubicon.
Since Tarp was ill-conceived, it is liable to arouse a negative response from America's creditors. They would see it as an attempt to inflate away the debt. The dollar is liable to come under renewed pressure and the government will have to pay more for its debt, especially at the long end. These adverse consequences could be mitigated by using taxpayers' funds more effectively.
Instead of just purchasing troubled assets the bulk of the funds ought to be used to recapitalise the banking system. Funds injected at the equity level are more high-powered than funds used at the balance sheet level by a minimal factor of twelve - effectively giving the government $8,400bn to re-ignite the flow of credit. In practice, the effect would be even greater because the injection of government funds would also attract private capital. The result would be more economic recovery and the chance for taxpayers to profit from the recovery.
This is how it would work. The Treasury secretary would rely on bank examiners rather than delegate implementation of Tarp to Wall Street firms. The bank examiners would establish how much additional equity capital each bank needs in order to be properly capitalised according to existing capital requirements. If managements could not raise equity from the private sector they could turn to Tarp.
Tarp would invest in preference shares with warrants attached. The preference shares would carry a low coupon (say 5 per cent) so that banks would find it profitable to continue lending, but shareholders would pay a heavy price because they would be diluted by the warrants; they would be given the right, however, to subscribe on Tarp's terms. The rights would be tradeable and the secretary of the Treasury would be instructed to set the terms so that the rights would have a positive value.
Private investors, including me, are likely to jump at the opportunity. The recapitalised banks would be allowed to increase their leverage, so they would resume lending. Limits on bank leverage could be imposed later, after the economy has recovered. If the funds were used in this way, the recapitalisation of the banking system could be achieved with less than $500bn of public funds.
A revised emergency legislation could also provide more help to homeowners. It could require the Treasury to provide cheap financing for mortgage securities whose terms have been renegotiated, based on the Treasury's cost of borrowing. Mortgage service companies could be prohibited from charging fees on foreclosures, but they could expect the owners of the securities to provide incentives for renegotiation as Fannie Mae and Freddie Mac are already doing.
Banks deemed to be insolvent would not be eligible for recapitalization by the capital infusion programme, but would be taken over by the Federal Deposit Insurance Corporation. The FDIC would be recapitalised by $200bn as a temporary measure. FDIC, in turn could remove the $100,000 limit on insured deposits. A revision of the emergency legislation along these lines would be more equitable, have a better chance of success, and cost taxpayers less in the long run.
---
In my story "The Giving Plague" Tarp is the name of a disease that almost wipes out humanity...
Lots of great ideas on here about What we COULD do to resolve this financial crisis. But unfortunately, I don't have much trust in the people at the helm. When you learn things like; "Bush never made any plans or orders to catch Bin Laden" -- you have to know that these people have their own agenda. You cannot devolve into helpless paranoia -- but you should be more cynical. The honest and decent actors in this administration have been weeded out.
Jester said...
They tried buying up "bad mortages" to get liquidity into the system. Traumatized bankers just sat on the money and still refused to lend.
The answer? Cut out the middle-man. Don't buy junk assets. Just let the Fed start issuing 30 and 90 day loans. At Prime.
Wash hands. Get to work on stripping good mortages from bad bundles, and save the 60% of subprime borrowers who were steered into High-Cost loans by loan agents eager for a bonus even though the borrower had already qualified for traditional 30 year fixed rate Prime mortgates.
@Jester -- that just makes too much sense. This plan would work and leave the taxpayer more money in the future than spent -- it will therefore NEVER happen. AIG turned down two or three buyout offers because it knew the US was coming to its aide with a better deal.
There is some evidence that the Paulson via the Fed and FICA is manipulating things to dry up capital. That graph I pointed the other day from Denninger shows that they were "removing slosh" -- or liquidity from the system -- NOT trying to increase it.
Look at Paulson's past and see who is benefitting; Goldman Sachs and AIG. Same group that benefitted from the "bail out" of Mexico. AIG had about a Trillion $ in unsecured insurance caused by one little group in an otherwise stellar company. That little group also was in Paulson's team. Bush chose this guy well.
Negroponte was authorized through national security to allow certain companies to bypass SEC rules and increase their leverage. 4 of the 5 companies have gone belly up but I'm sure some well-informed parachutes launched. Company #5 was Goldman Sacks... Does this benefit the nation that someone can just choose who wins and loses under the guise of defending the nation -- or does it make really great bedfellows? That was a rhetorical question.
Now, there are real problems with our financial system -- but not anything sane minds couldn't resolve. As I keep saying, however, there are forces that are too stupid, too greedy, or too self-interested to do anything about this. The NeoCons in the Bush Crime Syndicate, however, have the real controls and are going to use this to extort some sort of power grab and financial windfall. Other nations will probably be retreating from the dollar because they will lose faith -- which seems to be the plan. Faith can be restored by the people causing the problem -- and their timing in that matter would make some people very wealthy indeed. So, the winners are their friends, the losers are not bought in to the Country Club.
Do you see where this is going?
I think if you look at their track record, it is clear that they know what they are doing, and that their intension is to bring the US to its knees, and at the same time, make them wealthy with many of the benefits going to corporations headquartered in Dubai.
>> Maybe this could blow over. Hopefully, people won't panic when they can't buy things for a few weeks -- but I doubt it. The media will fan the flames. I know I've been worried, but I'm trying to alarm people to create a fire-break. Transaction cash will be drying up whether you run to the ATM or not -- so run to the ATM.
Enough said.
If you want them to know the sheep are looking up, buy canned goods.
If you want them to realize we aren't sheep...
Used rifles are cheap on consignment.
National ammunition sales are reported.
The website is looking quite good, David. The heading fonts look much crisper.
One technical fault is that the headings on the left hand column are getting clipped by the middle column when viewed in Firefox and IE.
You could also consider a little bit of shading to distinguish the header, and the middle news column, but that's getting subjective.
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If you want them to realize we aren't sheep...
Used rifles are cheap on consignment.
Democracy has been defined as two wolves and a sheep discussing plans for lunch, with Liberty a well-armed sheep contesting the vote.
So, armed or not, they'd still think you're a sheep.
A short "chime in" on the fancy weapons systems...
I'm all for developing these systems. The F22 and the JSF are both marvelous triumphs of technology. Worth spending a few tens of billions IMO to gain the know-how.
What I don't support is deploying these things, especially on a large scale. A few to a dozen or so (depending on what the thing is for and how useful it in a quick response scenario) is all we need. If we get into a massive war, you know we can always ramp up production of a trimmed down version for that task at hand.
Certain things shouldn't be developed IMO... miniaturized low yield nukes for example. Research is useful (so we know what one would look like and see what good 'spin-offs' may exist), but actually developing, no thanks.
The momment of clarity hit tonight.
The Fed has (the simple version) been accepting Mortage Backed Securities as reserves when making loans.
The Fed has loaned out about 500-600 billion dollars against this crap in the last 8 months.
Real money, or as real as fiat currency gets.
The Senate didn't pass "The Paulson Plan".
They passed the "Stop Paulson and Bernakes plan from entirely destroying the good faith and credit of the United States" plan.
Either congress essentially prints enough real money to back those loans, or we go bust. Better than two thirds of the reserve is gone.
So, it's some nasty inflation or we - as a nation - lose our credit rating and really do head down the "no cheap credit death spiral water slide to failed state status".
If the Fed can't recover what these idiots lent out, We're screwed. The only way to "recover" it is for the treasury to buy the crap sandwich.
Basically, the banks took a 5 dollar watch to the pawn shop, and the guy at the counter loaned them 100 bucks on it. They aren't comming back to get it out of hock.
We own the pawn shop. We own the watch.
This means going down like Japan did, weakening our currency as we print ever more money trying to keep our banking system solvent and substantially changing our standard of living.
Done right...well...there are a lot fewer Japanese tourists in the US and Europe than there were 15 years ago, but they're still a first world nation. They just have lower material expectations than they used to.
Done wrong?
Look south.
Robert:
Your questions about black holes and budding universes seem to reflect an understanding of physics that stops somewhere around the 1960s. The questions you've asked would be good ones, and would make good sense, if we were back in 1969. But particle physics and cosmology has moved on quite a ways since then, and many of your questions either don't make sense in the light of what we know (and don't know) about physics in the early 2000s, and particularly in light of recent astronomical and cosmological observations, or have been rendered moot by discoveries like dark energy (which eliminates the possibility of a cyclic ekpyrotic universe).
To begin with, you ask about naked singularities. Even back in the 1960s this was a controversial subject. Roger Penrose proposed the cosmic censorship hypothesis, postulating that all singularities must forever be closed off from the rest of the universe by an event horizon. See Penrose, Roger: "Singularities and time-asymmetry", Chapter 12 in General Relativity: An Einstein Centenary Survey (Hawking and Israel, editors), (1979), see especially section 12.3.2, pp. 617-629. For a less mathematical and more popularized discussion of cosmic censorship, see Penrose, Roger: "The Question of Cosmic Censorship", Chapter 5 in Black Holes and Relativistic Stars, Robert Wald (editor), (1994).
The question of why this doesn't prevent the formation of the universe involves a misunderstanding of general relativity, since, as Rabinowitz points out, "in the strict interpretation of EGR, the big bang singularity is not considered to be a part of the space-time manifold. It occurs at neither a place nor a time." See this link for additional discussion.
However, as attractive as the cosmic censorship hypothesis might seem, there abound a plethora of counterexamples involving simple solutions to the scalar Einstein equation proposed by Mark D. Roberts. For a list of Roberts' relevant papers, see this link.
There's also the matter of various Tipler machines. The best-known Tipler machine remains the rotating Tipler cylinder, putatively of infinite length but in practical terms it need only be long enough that edge effects of the gravitational potential shear drop off sufficiently toward the midpoint of the cylinder that they can be neglected as perturbative solutions to a cylinder of infnite length. (We find this kind of approximation all the time in the physics of cylindrical waveguides, for example, and it only means that the diameter of the cylinder must be much smaller than the cylinder's length, so the "infinite legnth" requirement is not a practical objection.) The Tipler cylinder was first introduced in the well-known paper Tipler, Frank (1974). "Rotating Cylinders and the Possibility of Global Causality Violation". Physical Review D 9: 2203–2206. This paper is well known because it's also the title of a story by Larry Niven. In the story, the ruler of a distant planet decides to build a Tipler cylinder in order to travel back in time to destroy his enemies. The instant the Tipler cylinder is completed, however, the ruler's sun goes nova in order to prevent a naked singularity from being exposed to the rest of the universe. This was either Niven's way of playing a joke, or a garbled misunderstanding of Penrose's "cosmic censorship" hypothesis, but either way, Niven's story is amusing and worth reading for the dry humour.
A Tipler cylinder rotating at > 0.5 times the speed of light theoretically exposes a naked singularity to the outside universe. Moreover, Tipler has shown mathematically that closed timelike loops are possible geodesics along the cylinder's axis which provide access (theoretically) to any point in space-time. Therefore, a spacecraft accelerating into the axis of a working Tipler cylinder should be able to travel to any point in time from the creation of the cylinder. To date no one has taken the obvious next step and posited an immensely ancient race which created Tipler cylinders near the beginning of the universe, though Frederick Pohl's Heechee series of books does make some nods in that direction.
So clearly there abound many theoretically and mathematically sound solutions to the scalar Einstein equations of general relativity which would both permit a naked singularity to be exposed to the universe, and time travel. The big problem with time travel is that it violates causality, which violently contradicts all the available evidence science has adduced about the behavior of the universe as we know it.
The best known evidence for discarding time reversal invariance and requiring a preferential arrow of time in the observed universe remains the decay of the long-lived neutral K meson into protons and antiprotons. As you know, particle physics experiments from 1964 onwards have shown conclusively a different probability of neutral K meson decay in the forward time direction as opposed to the reverse time direction. See this link for additional details. Violation of time reversal invariance requires that the neutron have a dipole moment, and extremely precise measurements of the neutron are currently underway to test for confirmation of a dipole moment. See this link in the arxiv for a discussion of the history of experiments testing for a neutron dipole moment, along with a summary of current results.
However, all of this merely takes us up to the mid-1970s, which is not the modern era of particle physics or cosmology.
In broad-brush strokes, it's generally fair to say that most physicists today reject the physical existence of singularties in our universe. A singularity really represents a breakdown in the equations describing space-time. As such, it involves less a point of zero diameter and infinite density, than the edge of the boundary conditions beyond which current physics fails to describe the physical universe.
Our current physics consists of mathematical models which involve many simplifying assumptions. In particular, the Standard Model of current physics works remarkably well (in fact so well that no experiments have succeeded in uncovering instances where it fails to give accurate predictions, with the trivial exception of neutrino fluctuations) over a remarkably wide range of conditions, temperatures, length scales, masses, and time scales, but the Standard Model remains only a set of simplifying assumptions backed by a mathematical model. As with any mathematical model, it is possible to exceed the boundary conditions, and postulate temperatures and densities and length scales and masses and time scales at which the simplifying assumptions break down and the Standard Model fails to give meaningful answers.
It's worth taking a moment to discuss why.
Right now, as of the early 2000s, contemporary physics splits along two different types of models: quantum mechanics, which depends crucially on the quantization of mass-energy and Heisenberg's uncertainty relation; and Einstein's field equations for general relativity.
The Einstein theory of general relativity describes gravity and it is a completely classical theory. It is entirely geometric. General relatively describes the four dimensions of space-time as a manifold (4-D surface) which can be twisted and bent. As with all purely geometric entities, if the space-time manifold is bent far enough, it can rupture, leading to a point of infinite density and zero volume at which the gravitational potential becomes infinite. In effect, you get a hole punched in space-time, a singularity.
Quantum theory, by contast, is full fo expectation values and probabilities. It is non-classical because Heisenberg's uncertainty relationship can be formulated in such a way that the uncertainty in the energy of a particle times the uncertainty in the time during which the particle has that energy most be equal to greater than Planck's constant times 2 pi. As a practical matter, this means that if we observe an isolated particle for a very brief time, say 10^-34 second, there is a high probability that the particle could fluctuate in mass by a large amount -- an amount large enough for it not to exist for a brief time. Contrariwise, we can say that if we observe empty space for a similarly brief time, there is a high probability that two particles, a particle and an antiparticle (to preserve charge -- positive + negative charge add up to zero, the net charge of empty space) could blink into existence momentarily and then annihilate one another and blink out of existence.
This suggests that empty space must be full of a boiling malestrom of paired particles and antiparticles which appear and then disappear over an incredibly brief period of time.
Now, you might think that this is just a theoretical exercise, but theory shows that there should be a small but measurable force exerted by these particle under certain conditions. The experiment has been done, and this force -- known as the Casimir force -- has been measured. In fact, the first such experiment wasa done in 1958 -- see this link for more info.
Since the Casimir force has been measured and shown to exist in the real world, we must conclude that the pair production of virtual particles in empty space is part of the real universe around us. Indeed, quantum chromodynamics demands it as well, since according to Schwinger-Tomonnaga-Feynman QCD, virtual pair-produced intermediate guage particles, mesons, are the carriers of the electromagnetic force. And, just as the most reasonable conclusion upon hypothesizing the existence of universal gravitation is to conclude that gravity doesn't just stop at the mooon, but occurs everywhere in the universe no matter how far we go from the earth, the most reasonable conclusion in regard to pair production of virtual particles is that these virtual particles blink into and out of existence over distance scales and time scales which are arbitrarily small.
This, however, creates a problem for general relativity. Because obviously if we posit a sufficiently short time over which particles and antiparticles might exist, their probable masses eventually grow large enough that they must form sub-micro black holes. John Wheeler recognized in the 1960s that at the very small scale of the length of 10^-33 meters, this requires that space-time must be discontinuous. That is, on the scale of the Planck length, the boiling maelstrom of virtual particles which fills empty space should be nothing but a seething mass of micro-black holes (actually, tp be more specific. spontaneously forming and evaporating micro-wormholes, but never mind -- that's a minor quibble). Alas, the event horizon of a black hole is discontinuous, any geodesic (path we take through space-time) must be interrupted at the event horizon of a black hole. This means that the Planck length and below, space-time breaks up and becomes a discontinuous "quantum foam." See this link for slightly more detail.
This throws general relativity and black holes in particular into disarray, because a black hole occurs when we have a star bigger than the Chanrasekar Limit which collapses into a singularity when gravitty forces its mass down into zero vvolume with infnite density. But on the micro-level of the Planck length, 10^-33 meters, we can never reach zero width. If we try to get to a small size than the Planck length, the concept of length becomes meaningless, because space-time breaks up into discontinuous quantum foam. It is as though you tried to measure the length of a line drawn across a piece of paper pierced with an unlimited number of holes. The concept of length would no longer make sense. Likewise, quantum theory tells us that we cannot get temperatures greater than the Planck Temperature, roughly 1.4 x 10^32 degrees Kelvin. See this link for slightly more detail, though as usual Wikipedia does a rotten job of explaining the concept. The Planck Temperature is the maximum temperature that can theoretically occur in our universe because it's the temperature at which each photon becomes a black hole. Once again, if we were to reach the Planck Temperature, every particle in the universe including photos would become a black hole, and at that point, the usual definition of temperature along with matter and particles becomes meaningless, since at the Planck Temperature you've got no bosons and no leptons, but just a boiling mass of black holes.
So black holes create a wide variety of problems. Hawking has shown that black holes should emit radiation -- the larger the black hole, the most slowly it radiates its energy away, but all black holes must eventually radiate away to nothing (energy = mass, so any time a black hole radiates, by definition it loses mass, and thus eventually a black hole must eventually lose all its mass and evaporate. This occurs because the enormous gravitionatl potential near an event horizon generates myriads of virtual particles which flicker in and out of existence around it over very short times on the order of 10 exp -33 second. Since these particles are generated in particle-antiparticle pairs, however, in order to conserve the zero charge of empty space, some of the particles will be generated within the event horizon and some outside: those generated inside the event horizon are trapped and can never escape, while those generated outside the event horizon get emitted as Hawking radiation).
Aside from the obvious conclusion that this should leave a bunch of naked singularities wandering around in the universe, there's an even bigger technical problem, because Hawking has also shown that any spectrum of energy going into a black hole must come out as a non-prferetial broadband blackbody spectrum. Which is to say, that any information going into a black gets lost when it comes back out as Hawking radiation. This is a big problem because Hawking radiation is featureless thermal black body radiation with no distinction information content, so the entire process violates Liouville's Theorem. In more common terms, information equates to energy by the well known relationship that the minimum amount of energy required to encode any given amount of information is given by the log to the base 2 of the number of bits of information times Rydberg's constant. Since this means that information equates to mass-energy and since we know that mass-energy is conversed, the destruction of information by a black hole violates the conservation of mass-energy.
We have, moreover, a significant problem with Hawking radiation because, after 35 years of diligent search, no astronomer has yet detected it. If Hawking radiation exists and is being emitted, we ought surely to have detected some by now.
So black holes simply run counter to the properties of the observed universe in many ways. They require infinite pressures and infinite temperatuers and infinity densities and zero lengths quantum mechanics tells us we can't get, because of the limits imposed by the Planck length and the Planck temperature. Black holes potentially violate causality under certain conditions, which runs coutner to the experimental results for the decay of the neutral K meson, as well as the generally observed invariance in the arrow of time. Too, black holes violation the conservation of mass-energy by destroying information that goes in. (Not rearranging it or scrambling it, mind you, but actually destroying te information.) Singularities also prove problematic in a general sense because they're points at which physics breaks down. We can't speak of what's "outside" a singularity because it's not so much a physical event, as the range fo conditions under which our current mathematical models of physics fall apart. It makes no sense to speak about "universes on the other side of a singularity" because a singularity is shorthand for where current physics stops.
One thing we can say is that travelling anywhere near a black hole is likely to generate temperatures and pressures and gravitational tidal stresses which are not only great enough to rip apart any possible spaceship, but will even rip apart all elementary particles going in. Unless a singularity could be completely disconnected from its event horizon and the gravitional potential associated with it, it makes no sense to talk about travellilng anywhere by going near or into a black hole.
Robert touched on the multiverse and branes and various other issues. We should be very careful about discussing any of that stuff because string theory has utterly failed to produce even a single experimental prediction in 30 years of work.
As Rabinowitz remarks:
Although the Big Bang is generally accepted, its initial singularity problem continues to be troubling. General relativity implies that at time zero, the universe was a point of zero volume with infinite density, temperature, etc. Gabriele Veneziano, one of the fathers of string theory, avoided this singularity by using string theory in which conventional point-like particles are replaced by one-dimensional strings having a very short length. Not only are the troublesome infinities eliminated, but string theory endows the univese with a past befor ethe Big Bang. previously we were told that there was `before.' Now we may view the evolution leading to the Big Bang in much the same way as the explosion or collapse of stars as detailed in a long, extensive report by Gasperini and Veneziano (2003)." Cited here. For the Veneziano refernce, see Gasperini, M. and Veneziano, G., Physics Reports, 2003, Vol. 373, pg. 1.
Before we rejoice in the glories of string theory, however, we need to remember that string "theory" does not even rise to the level of science, as physicist Paul Steinhardt points out forcefully here.
In my view, and in the eyes of many others, fundamental theory has crashed at the moment. Instead of delivering what it was supposed to deliver—a simple explanation of why the masses of particles and their interactions are what they are—we get instead the idea that string theory allows googols of possibilities and there is no particular reason for the properties we actually observe. They have been selected by chance. In fact, most of the universe has different properties. So, the question is, is that a satisfactory explanation of the laws of physics? In my own view, if I had walked in the door with a theory not called string theory and said that it is consistent with the observed laws of nature, but, by the way, it also gives a googol other possibilities, I doubt that I would have been able to say another sentence. I wouldn’t have been taken seriously…
But what angers people is even the idea that you might accept that possibility—that the ultimate theory has this googol of possibilities for the laws of physics? That should not be accepted. That should be regarded as an out and out failure requiring some saving idea…
What I can’t accept is the current view which simply accepts the multiplicity. Not only is it a crash, but it’s a particularly nefarious kind of crash, because if you accept the idea of having a theory which allows an infinite number of possibilities (of which our observable universe is one), then there’s really no way within science of disproving this idea. Whether a new observation or experiment comes out one way or the other, you can always claim afterwards that we happen to live in a sector of the universe where that is so. In fact, this reasoning has already been applied recently as theorists tried to explain the unexpected discovery of dark energy. The problem is that you can never disprove such a theory … nor can you prove it.
Link.
Despite all the hype, string "theory" is not even a theory. Much less Ed Witten's so-called M-theory, which adds another dimension to the 10 dimensions of space-time posited by string theory, for a total of 11 dimensions. All the fashionable current idle chatter about multiverses and branes comes from M-theory. But since it is not even a theory as such, but merely a set of incomplete and entirely isolated mathematical conjectures which have not even reached the state of a coherent conceptual framework yet, it's meaningless to discuss speculations about a "multiverse" or 11 dimensions.
To put it bluntly, this stuff is just idle speculation. String theory has spectacularly failed to produce even a single testable prediction. Consequently, string theory has lost much of its credibility, and as it grows increasing complex and increasingly incoherent without yielding any kinds of testable predictions about the real world, it is falling further and further into disrepute as time passes.
Peter Woit has pointed this out for a quite a while now. His blog Not Even Wrong covers each new claim by string theorists that they've finally found some test of string theory, and every time the test gets examined, it turns out to be pure hype with no connection to reality. To date, no tests for string theory have been devised, and string theory itself has never succeeded in producing a single prediction which could be tested in the lab.
This means that treating string "theory" as though it were anything but a high-end version of alchemy would be most unwise. Viz., speculations about spaceships travelling through a singularity from one brane of the multiiverse to another, and suchlike twaddle. This is as ill-advised as basing a science fiction story on rosicrucianism, or dianetics. Some science fiction writers have, unfortunately, drunk the string "theory" Kool Aid and swallwed the unsubstantiated claims of string "theorists" book, like, and sinker (all puns intended), but the results have proven deeply embarrassing.
While string "theorists" brashly claim that our universe has 11 dimensions, every experiment in the entire history of physics converges on the conclusion that we live in a universe with four space-time dimensions. Not one single experimental result in the entire history of physics points to the existence of any dimensions beyond the four we know about.
In sum, we can't talk meaningfully about "viewing other universes" through singularities, or about universes budding off from black holes, or about travelling from one brane to another in a multiverse, because physics has crashed and burned after hitting a huge brick wall. String theory has pretty much collapsed, yet at the moment their are no viable alternative theories, unless you count geometric langlands and quantum loop gravity, which very few people would right now. So everything is completely up in the air right now. The great effort of the last 30 years to unify GR and QM has blown up, and we are left to sort through the wreckage like Berliners in post-1945 Germany looking for chunks of coal amid the rubble.
At the most fundamental level, Einstein's classical geometrical theory of gravity and the quantum theory of particles remain completely incompatible. Quantum theory doesn't need gravity to work, and Einstein's general relatively doesn't require quantum theory to describe events on a large scale of many millions of light-years. Contemporary physics of the Standard Model is a quantum field theory which views the universe as fundamentally discontinuous, and interactions of particles as fundamentally probabilstic, with expectation values which get altered by observing the system. Einstein's equations describe the operation of gravity on space-time as fundamentally continuous (except at isolated points which form singularities in rare cases), and there are no expectation values. Moreover, quantum theory is a causal theory, while General Relatively extends causality in the most rudimentary way, i.e., an effect must belong to the future light cone of its cause. This becomes problematic when we encounter geodesics which form closed timelike curves, as in the Tipler cylinder and various other specific solutions of the scalar Einstein equation. Qauntum field theories modify the concept of causality by reqiring a condideration of the principle of locality (so that in theory, quantum entanglement of particles which, when separated, would permit a form of non-causal or FTL communication, as crops up quite often in Stephen Baxter's and Charlie Stross' science fiction novels, though it seems quite likely that this too will pass when a better theory debunks this apparent exception to FTL), while in Einstein's formulation, geodesics can form closed timelike loops which allow paths in arbitrary directions in time. (Niven, Haldeman and other science fiction writers have made much use of this in their science fiction.) So in theory, there's no reason why Einstein's equations would prevent someone from riding a spaceship into the axis of a Tipler cylinder and travelling back to the formation of the universe to tweak conditions such that life could never arise. This creates an obvious violation-of-causality paradox of the kind that typically don't arise in quantum mechanics.
So quantum theory and general relativity remain completely incompatible. They each describe their respective realms of the observed universe extremely well, adn all our tests of both these theories have only shown them to be more accurate, the more accurately we measure. But quantum theory and general relativity remain utterly opposed to another. There is simply no common ground between them. One theory, GR, allow infinite densities and infinite temperature and zero volume (actually the volume is 1 over infinity, which is perhaps not quite the same thing) and ruptures in space-time; the other theory, QM, places sharp limits on maximum temperatures and maximum pressures and smallest lengths. One theory, GM, allows non-causal solutinos (see this link for examples), while the other theory, QM, is causally constrained. One theory, QM, is probabilistic, while the other theory is wholly geometric and classical.
At present, no one has come anywhere close to bridging the gap between quantum theory and general relativity. String "theory," which fails to rise to the level of science, has certainly failed. No successors appear visible on the horizon of contemporary physics. Anytime we get close to cnnection quantum field theories with general relativity, as with Hawking's work on black holes, or cosmological theories close to the Big Bang, paradoxes appear and physics blows up. At present, we can only go back to about 10^-32 seconds after the Big Bang. Before that, we cannot speak about the observable universe on the basis of current physics.
Therefore it's presumptuous to talk about what the Big Bang really was, or whether universes might bud off from black holes. Currently physics blows up and stops working at a short time after the Big Bang. Trying to push our knowledge of what happened before that, back to the actual event which started the universe, goes beyond our current mathematical capabilities and far beyond our current understanding of physics. It's not just a matter of using perturbation theory, or a pushing the equations a little harder: around 10^-32 second after the start of the universe, when we try to run time backwards, our current equations blow up and give nonsense answers. We hit the Planck Temperature and can't go any farther. The universe shrinks down to the Planck Length and can't get any smaller becuase the entire concept of "length" and "volume" becomes wholly meaningless in a seething quantum foam.
My own personal intuition is that our tiny little primate brains have done a fabulous job getting this far in undsertanding the universe. Just during the last 10 years, we have learnt that an unknown "dark energy" appears to be pushing the universe apart at an accelerating rate, smoething no one suspected prior to 1998, and which remains unexplained.
Although it seems frustrating right now to realize how little we understand about any putative theory of quantum gravity, we must recall that humans evolved as apes designed to forage and sruvive on a hot dry savannah. The gratuitous growth of large frontal lobes which allow to time-bind and manipulate abstract symbols appears to have been a fortunate side effect of a Darwinian process which helped our hominid ancestors survive by using tools slightly better than the nuthatch or the crow. My own personal intuition is that we are going to need much more sophisticated mathematics to make significant progress in briding the gap between quantum mechanics and general relativity. Large part sof the Standard Model of physics remains an ad hoc jumble. For instance, we don't know where the Higgs Field comes from, or why the gyromagnetic ratio has the value it does.
So even though it's deeply humbling to look at (for example)_ DARPA's recent list of "the 23 greatest math challenges" and realize that as a species, we don't know much about any of these open questions in math, it's stille arly days yet. We've only been working on these kinds of deep mathematical questions for a few hundred years out of all the millions of years that homo sapiens has existed on earth. Given time, we are bound to make progress eventually...though likely not in my (or your) lifetime.
Clarification:
Before string fanciers rush out of the shower in a lather to defend Turok's crank speculations, let's clarify what's meant by the statement that the dark energy accelerating expansion of the universe eliminates cyclic ekpyrotic universes as a credible possibility.
A Big Bounce twixt colliding branes depends on the validity of M-theory, which (1) is not even a theory, as Ed Witten has repeatedly pointed out, and (2) points out how glaringly M-theory or string "theory" or any of that stuff has failed to anticipate real developments in contemporary physics.
The two biggest developments in physics in the last 15 years by far have been the discovery of oscillating neutrinos and dark energy accelerating expansion of the universe. Neither of these was predicted by either string "theory" or M-"theory." So entirely aside from the fact that neither strings nor M-theory have succeeded in making a single testable prediction which can be experimentally disconfirmed (which alone should condemn both so-called "theories" to complete ignominy and irrelevance as non-science), we have the further damning fact that neither strings nor M-theory are fertile. That is, they do not point the way to meaningful additional directions in contemporary physics. Instead, those provocative new directions have come entirely from experiment in the last 5 years: the neutrino detection tanks and astronomical observations leading to the dark energy hypothesis.
This points out with brutal clarity the utter bankruptcy of both strings as M-theory as science. Recall that Einstein's general relativity field equations predicted an expanding universe 15 years before Hubble detected a red shift in distant galaxies. That's the mark of good physics.
By contrast, strings and M-theory have failed to predict the 2 most significant results in physics in the last 15 years.
Thank you, Zorgon. I actually was able to follow 90% of what you were talking about. Then again, I do dabble in physics and the sciences so... ^^
The truth is, we don't know much about the universe. We cannot see dark matter or dark energy. We can only detect its effects on the universe around us. Likewise, we cannot unify the quantum and macro universes, even though they obviously are linked at some level. And we keep finding new things in the universe that surprise us time and time again.
Anyway... thank you for your insight and knowledge, Zorgon.
Rob H.
A large part of my job is reading and summarizing articles in a variety of fields (including finance). I'm currently working on a financial magazine in the 1980s and seeing the very seeds that led to our current financial calamity planted in the fertile soil of Reaganomics. However, I don't think all of the blame can be laid at the feet of the Republicans.
European and Asian banks likewise jumped into the pool back in the 1980s, with a move away from commercial banks and toward investment banks to get money needed for growth. In order to remain competitive, the commercial banks had to expand their venue... and in turn swallowed the very poison that threatens to destroy the financial systems of the world.
Perhaps the cure for what ails our financial system can be found in the financial magazines and journals of the 1980s. If we can gain a better understanding of the roots of our investment system... we can identify the source of the rot and hopefully excise it from our economy. That, more than all the bailout packages in the world, is what is needed for our financial system (and our country) to climb out of this sinkhole we've fallen into.
Rob H.
I'm walking outside at the beach today -- my wife is at a volleyball tournament. I wonder if too much time on the internet, skews us to worry about shadows. Maybe Paulson and the Fed have not been creating a financial problem. Maybe Bush just made a lot of mistakes -- and without some shadow government and threats, has made all of the Democratic congress except one or two patriots, keep their mouth's shut about impeachment.
Maybe. Or maybe things are only clear looking back -- I think it's important to do that right now;
Naomi Wolf, who has discussed "Fascist America, in 10 easy steps"
LINK
is saying that 9 and 10 have just happened this October 1st. The President has his private treasury and private army now. The 1st has been deployed in cities, along with police with tasers and rubber bullets, and un-identified, people in black outfits -- assumed to be Blackwater guards, who seem to have the few police with them for legitimacy. They are being deployed with the reason that "blacks will riot if Obama doesn't get elected."
>> I think a lot of us might riot with rigged elections -- which we all expect.
Our society is closing down.
Let's remind ourselves of the ten steps;
1. Invoke a terrifying internal and external enemy
2. Create a gulag (places of arrest and torture outside the rule of law)
3. Develop a thug caste (Blackwater)
4. Set up an internal surveillance system
5. Harass citizens' groups (in fact, the FBI seems to have mostly targeted Democratic and peace activist groups on their watch lists)
6. Engage in arbitrary detention and release
7. Target key individuals
8. Control the press
9. Dissent equals treason
10. Suspend the rule of law
>> Bush has not been adding to Presidential powers to hand this government over to a Democrat -- and to eventually be arrested for war crimes. The Democrats thought they could play it cool and take care of these crimes once they got back in power -- but they won't get the chance.
From Urban Survival last week; LINK A reminder of what this administration has put in place;
October 7th Watch
"9/11, our Constitutional rights have been systematically dismantled:
1. USA Patriot Act - A 342 page document presented to Congress one day before voting on it that allows the government access to your bank and email accounts, as well as your medical and phone records with no court order. They can also search your home anytime without a warrant.
2. USA Patriot Act II - This one allows secret government arrests, the legal authority to seize your American citizenship, and the extraction of your DNA if you are deemed a potential terrorist.
3. Military Commissions Act of 2006 - Ends habeas corpus, the right to an attorney, and the right to court review of one's detention and arrest. Without this most basic right, all other rights are gone too since anyone can be detained indefinitely. Now anyone may be arrested and incarcerated and nobody would know.
4. NSPD 51 - A directive signed by George W. Bush on May 9, 2007, that allows the President to declare martial law, effectively transforming the U.S. into a dictatorship with no checks and balances from the Legislative or Judicial Branches. Parts of this directive are considered classified and members of Congress have been denied the right to review it.
5. Protect America Act of 2007 - Allows unprecedented domestic wiretapping and surveillance activities with a reduction in FISA court oversight. Probable cause is not needed.
6. John Warner Defense Authorization Act - Signed by George W. Bush on October 17, 2007, this act allows the President to declare a public emergency and station troops anywhere in America without the consent of the governor or local authorities to "suppress public disorder."
7. Homegrown Terrorism and Radicalization Act - Passed overwhelmingly by Congress on October 23, 2007, is now awaiting a Senate vote. This act will beget a new crackdown on dissent and the Constitutional rights of American citizens. The definitions of "terrorism" and "extremism" are so vague that they could be used to generalize against any group that is working against the policies of the Administration. In this bill, "violent radicalization" criminalizes thought and ideology while "homegrown terrorism" is defined as "the planed use of force to coerce the government." The term, "force" could encompass political activities such as protests, marches, or any other form of non-violent resistance.
So when you add in:
§ Halliburton Confirms Camps Constructed
§ Halliburton's Immigrant Detention Centers
§ Homeland Security Contracts for Vast New Detention Camps
§ Halliburton Confirms Concentration Camps Already Constructed
§ KBR awarded Homeland Security contract worth up to $385M
§ From Halliburton's own website
It starts to get a little scary."
Z ++
---
Buy canned good...
...and whatever other stuff seems relevant
Travc:
I'm all for developing these systems. The F22 and the JSF are both marvelous triumphs of technology. Worth spending a few tens of billions IMO to gain the know-how.
These sorts of projects are great for the aerospace industry, which I work in.
My objections are that the government is pouring money into these things at a time when we have so many other problems to take care of.
Travc gets an essential point. These advanced weapons have the effect of detering peer-powers from trying to compete in a wide class of areas. When our super-tech weapons are two generations ahead, it makes others reluctant to even try.
True, this diverts them into cheaper, assymetrical paths. Submarines and cyber warfare... or subornation or economic sabotage by manchurian moles.... still, there is value even in the existence of a few squadrons of F22s and F35s. Maybe three of the former and six of the latter. Enough to make a foe assume that the US could dominate the air over any one battlefield.
Problem is, when you build that few, the unit costs are outrageous. STill, the deterence value of additional squadrons probably diminishes rapidly. For the cost of twenty more squadrons, you could research the NEXT technology, which will not only deter competition but offer spin-offs for the economy.
THEY LIVE!
Greatest film ever made!
Explains the phenomena of the "Republican Party" in great detail. Just ask David Icke!
Cliff,
I see a lot of weapons system development along the lines of government funded research.
Dr Brin brings up a good point about deterrence, but that wasn't really what I was thinking. Developing the capacity to build these things is not only a deterrent but also pushes knowledge. Development is not research, but it is important and a lot is learned in the process.
With respect to money/resources, my point is a bit like my view on the Army. It is very wasteful to maintain a large standing force. If we actually need one, 'war footing' the economy and a draft are entirely appropriate. Though, we have to maintain the know-how and capacity.
--
Zorg, Wow ;)
I've got a very limited knowledge of physics, but do have one possibly intelligent question. What if there is no such thing as a true singularity? IIRC, it is possible that objects which appear very much like black-holes can exist without being full singularities. Einstein was wrong, but we aren't really sure exactly how... if there is a conservation law (gravity?) or force which we are missing at those scales, then maybe there are 'black dots' or something instead.
To date no one has taken the obvious next step and posited an immensely ancient race which created Tipler cylinders near the beginning of the universe...
'The Avatar' - Poul Anderson
(in which a race of ancients seeds the universe with Tipler machines, with instructions on how to get to just *one* other location... and back again. I don't recall that Anderson covered the time travel aspect, though)
(How *do* you remember all that stuff, Z? Inner or outer google?)
Rosalind Williams, The Bern Dibner Professor of the History of Science & Technology, replied to an MIT survey on "what should be the next president's top priority in the areas of science and technology":
You are asking which dish should be served first when science isn't even on the menu. It needs to get back on the table for serious consideration, not as a special interest but as an essential element of every major challenge facing American society. This will not happen if the habits of mind and conduct associated with science and engineering -- curiosity, self-awareness, modesty, accuracy, respect for education -- are dismissed as elitist. A top priority for all Americans -- not just the next president -- is to cultivate these habits and to defend them vigorously. They are as essential for democracy as for science.
Brief, incisive!
More.
I doubt that was just Google and Wikipedia. It was written far too intelligently yet ready for the non-mathematically-minded to read and understand the basics behind it.
If I were to warrant a guess, I'd say that Zorgon actually has done extensive reading on the topic and has a bit of an understanding on it. I just happened to hit on a topic he's quite conversant on. =^-^=
Heh... I should have asked "how do you cause a star to go nova" instead. (It was going to be part of a story I wrote situated in Brian Lacki's Nagarrok's Children online novel (I was the Xellos (and later Tangent) who posted comments after various chapters, among other things), involving a group of humans willing to sacrifice tens of thousands of aliens in order to lure a battlefleet of an invading alien race into a star system in preparation to detonate the star system's star; fortunately, physics doesn't work the way I thought, so my original method of destroying the star would fail.)
Rob H.
Rob H.
Oh, I wasn't taking a swipe at Zorgon. He clearly knows this stuff and where to get the details. To clarify my gobbledygook:
inner google: brain space
outer google: Brin space (the other one)
The tradeoffs between types of Army have been debated since the beginning of the republic. The extremes are:
1 - all volunteer/professional (preferred since Vietnam)
2 - all-volunteer, augmented by overpaid no-bid contract services companies and harried, ruin-bound reserves. (All right, I had to slip that in.)
3 - Dependance upon mostly trained but not instantly combat ready militia.
4 - Dependance on waves of emergency volunteers (e.g. post Pearl Harbor)
5 - Dependance on draftees.
Or variant mixes. The Officer corps chose #1 overwhelmingly, since it allows maximum immediate force effectiveness and force multiplication through skilled application of high technology; minimal casualties, since pros know how best not to die; best surgical precision; least morale and accompanying problems; and so on.
In fact, they have relied heavily (far too much so) upon a harried and abused reserve system that now teeters on the verge of disintegration, having overused an emergency force for an extended and debilitating war of national policy, for which the reserves were never intended. This, plus horrific meddling by clueless, venal politicians, resulted in situation #2.
Point is that we've been at "war" for 6 years without ANY augmenting of the professional force... an unheard of travesty... while the vampire no-bid field services contractors got half a trillion dollars. Meanwhile, zero attention has been paid to how we might possibly use enhance #3 and #4 -- the truly traditional sources of manpower for extended American struggles.
I talk to generals and admirals pretty often. They have my sympathy and if you google you'll find I was the very first to speak of "the plight of the US Officer Corps," five years ago. But everybody, even these brilliant dudes, can get tunnel vision.
When I asked a general -- what if a BIG war happens, and your thin blue line is buckling, and TEN MILLION YOUNG AMERICANS line up, the way their grandfathers did, to either aid you or avenge you.... Do you have even a glimmer of a plan, how to use ten million volunteers?
One general looked at me, appalled. "I wouldn't know what to do with five thousand," he said, finally.
It's called "ramping up." And they have completely -- I mean completely -- forgotten how to do it.
The ramp-up inability reminds me of the scenario portrayed in Hackett's Third World War. He described the problems Russia faced in trying to sustain the tempo demanded by a modern conventional war, nine days into the conflict.
There's not much point having a ramp up strategy for ten million volunteers if that's the timeframe of operations.
That was over twenty years ago, and I don't think there's been a clear need for a protracted ramp-up since (Iraq being a glaring exception). Hence the ability has atrophied.
====
I probably wouldn't have used it in the debate to counter Palin's assertion that the surge has worked, but the lights appear to tell a different story
Robert asked about making a start go nova. If we re-interpret the question to the more general query of how to destroy a star, lots of ways come to mind.
Turning bosons into fermions would do it, ditto turning fermions into bosons.
Since all fermions must have half-integer spin while all bosons must have integer spin, some additional particles would have to be created to leave the total spin unchanged. Fermions are constrained by the Pauli Exclusion Principle, while bosons are not, so turning bosons into fermions inside a star would greatly increase its resistance to being compressed, which would produce a tremendous explosion. Turning a star's fermions into bosons would make it collapse into a Bose-Einstein condensate at high temprature. That would be interesting. Not sure what it'd do, but it would be fun to watch.
Gravity consists of 3 forces, the long-range Newtonian component and two very short-range Yukawa components, one of which is positive and the other negative. Nullifying the positive Yukawa component would cause the star to blow up violently because there'd be much less gravitational force to counteract radiation pressure. Nullifying the negative Yukawa component would make the star collapse into a black hole almost instantly.
Forcing photons to spontaneously convert into pair-produced decay particles of equal energy (preserving spin and charge with appropriate choices) would drop the electromagnetic forces between particles inside the star to zero (since photons are the carriers of the electromagnetic force). That would make the star collapse, since protons would no longer repel one another and radiation pressure would drop to zero without photons.
Forcing intermediate vector bosons to convert into pairs of fermions and antifermions with appropriate extra particle to preserve spin would zero out the weak nuclear force, which is responsible for particle decay, and that would shut off the nuclear reactions that create energy inside the start. That would be spectacular, since without radiation pressure, the star would collapse immediately.
But my favorite idea would be to dampen the Higgs field inside the star. Since the Higgs field creates mass, the mass of the star would drop to zero. However, mass-energy must be conserved, so the likely result would be the production of a vast number of photons with an energy equal to the star's mass. Since a supernova only converts < 1% of a star's mass into energy, dampening the Higgs field inside a star would produce an explosion several hundred times larger than a supernova.
Alternatively, if you could create a pocket universe inside the star and change the speed of light, you'd either greatly increase the amount of energy from its nuclear reactions (E = mc^2, so doubling c inside the star would crank up the energy of the star's nuclear reactions by a factor of 4), or greatly reduce it, which would collapse the star.
Likewise, a pocket universe which changed the value of Planck's constant inside the star would have lots of fascinating effects. Decreasing Planck's constant would reduce the cross-section for proton capture and dampen the proton-proton reaction that generates helium. Increasing Planck's constant would do the opposite. So you'd either produce a lot more helium + photons of energy and the star would blow up, or you'd produce a lot less helium and the star would collapse with less radiation pressure to counteract the force of gravity.
But if you could do something like decrease Planck's constant, you could create exponentially faster computers which could solve NP problems by brute force. An AI inhabiting a computer inside a region of space with a much lower Planck's constant would be superpowerful, many orders of magnitude faster than even the most superhuman AI from singularity science fiction. If Planck's constant were, say, 1/(10 exp -500) as big as our familiar Planck's constant, such an AI would be 1 x 10 exp 500 as powerful as any superhuman AI. (Doubling the speed of light would also increase the speed of a computer, but it would require 4 times as much energy. So increasing c to speed up computers is a win-lose -- 10 times as fast, but 100 times more energy. Reducing Planck's constant to speed up a computer is a win-win, because not only does the computer get faster, each quantum of energy gets smaller so the computer would need less energy.) Creating such a super-AI would be a lot more fun and far more useful than making stars blow up or collapse.
..unless, of course, the super-AI decided to rule the universe.
(Sigh.) It always starts with a friendly discussion about physics, and then before you know it, people are asking me how to blow up suns and create plenipotent artificial minds to rule the world... :-)
so the likely result would be the production of a vast number of photons with an energy equal to the star's mass.
In other words 'Let there be light!'
(The friendly discussions often end up going *there* as well!)
Zorgon - you cracked me up! Fun reading, though. Nicely written as well. Of course, the problem with writing up to the current state is that there is no consensus. Dissing string theory is in vogue, but I say let people mess around with whatever they want. Maybe string goes nowhere, maybe it serves as a framework.
There is an interesting article in this month's Scientific American about quantum loop gravity and the Planck length. It has some interesting ramifications and testable predictions. Take a gander.
Note: following discussion is by a physics aficionado - I am no expert in this stuff...
My take on black holes - they exist, sure, but they are not singularities.
1) the Planck length restricts all the mass from ever achieving singularity
2) time "dilation" (scare quotes because if you know what I am talking about you know it isn't really dilation, and if you don't, you get the idea) means a given particle neeeever quiiiiite gets there anyway - though it asymptotically approaches
3) if, in the fullness of time, mass did get squished down to the Planck length, it would bounce back, taking an equally long time to climb back out. No idea if the bounce would be fully elastic, but particles bouncing back from the center of a black hole would interact with the particles coming in behind it - very complex things occur - and I have no idea what would happen next. Big explosion? Time dilated heterodyning continually bouncing off the Planck length?
That is not to say that such a huge concentration of mass can't have an event horizon, accretion disc, etc. (By the way, with a large enough black hole {like at the center of a galaxy} you could even pass the event horizon and never even notice it {like passing the Continental Divide kinda} unless you tried to go back.)
So it is still a black hole, just not a mathematical singularity. It is a star that, due to the shape of space time, can't quite ever finish collapsing. No huhu.
Zorgon - from what I understand, Hawking radiation would be orders of magnitude smaller than the output of an active hole, and even for a non-active hole, a very tiny signal. Is there any reason to think that a) we could detect it at distance and b) there is some characteristic that would identify it as such?
Hawking radiation explains why smaller black holes rapidly evaporate even if they were to, oh, fall into the center of the Earth. ;-)
Also, I thought from Hawking's more recent explanation (the bet he conceded to Preskill) is that he now concluded that the information is not destroyed, that it is encoded in the Hawking radiation. (Though caveat emptor - there is not consensus on this.) Thus possibly resolving a major issue about relativity vs. black holes.
Ok, Palin made a great joke in her closing remarks I just have to share (via Digby
Palin's final quote was from Ronald Reagan, warning that without vigilance, "you and I are going to spend our sunset years telling our children, and our children's children, what it once was like in America when men were free."
In fact, Reagan was not warning about a general lack of vigilance about freedom, he was warning what would happen if Medicare was enacted.
--
Regarding making a star go nova... You forgot "drop an active stargate with a black-hole on the other end into it". ;)
I truly am a science geek. I was gleefully reading Zorgon's write-up on how to destroy stars and taking notes for my own stories. Of course, if you have the ability to do half of the things Zorgon mentions... then why destroy stars to destroy enemies?
Unless, of course, the process takes time and the process ain't instantaneous (meaning it's not an effective ship-to-ship weapon).
Rob H.
Z++!
Of course, I destroy stars & such before breakfast. Remember who you're talkin' to, guys. You betcha.
Naw just stick your enemies into a simulation that contains quantum limits and discrete planck lengths... because that's necessary in order for the Big Computer to handle the calculations! You don't think the BC can afford to keep diving into infinite smallness AND bigness at the same time, do you? Who do you think designed it, Mandelbrot?
No. Planck is proof. We're in a simulation.
Introducing the Z++.
New from Apple and Bell & Howell.
Bwahahahahaha.
David, do you know how many Mormon scriptures I could mangle and torture to completely support the idea that we're all in a simulation?
I may chuckle all day about that one.
(And, yes, I know you put a Mormon "heaven" in "Stones of Significance". Fun story. Too bad it was the popular misconception instead of the one the Church actually teaches, but there I go off on a tangent again!)
Rob, I ran that one past a number of Mormons. They said I was "close enough" as far as they were concerned. Certainly one is bemused by the incredible cognitive dissonance -- that Mormonism is, on paper, the most cosmological and "science fictional" major faith (aside from Scientology, of course). Of course, along with Bahai, it is one of the most recent offshoots and thus its theology was informed by science circa 1820.
-- and yet, as a matter of temperament and emotional inclinations, it tends to be hyper-conservative. This combination is fascinating to behold, among many other traits. I always enjoy the young missionaries, when they drop by.
Guys, I am fascinated (and shall write) about the shifts in voting patterns in Virginia, Colorado and North Carolina. All of these have seen major influxes of population from Blue America. But, till now, it was always assumed that these influxes would not change anything fundamental about political or social attitudes in those states. Rather, the trickle would be absorbed, the newcomers either outvoted by locals or converted to local tastes and attitudes.
What we are seeing, however, appears to contradict that common-wisdom. Instead, we may have seen a tipping point, where the increasingly educated and technologically-savvy -- and young -- populations (both newcomers and evermore educated locals) may be propelling some basic shifts in three (or more) "red" states.
If so, it would be justice, since the old Union of Abraham Lincoln long ago lost Indiana and seemed sure to have lost Ohio, as well.
Of course, one feels a taste of bile, having to look at recent history as The American Civil War, Part III. But how else can one interpret Culture War? Or the take-no-prisoners approach used by the ruthless Rovean Alliance? Or the blatantly obvious impression that one gets, simply by glancing at an electoral map?
Just as Blue America had to win CW Part I in order for the nation to survive at all... and had to win Part II in order for us to abandon racism and become a decent society... it appears that it will have to be (briefly, I hope!) a matter of some real militancy, before this phase ends, before the Republican Party rediscovers some sanity, and before we can re-unite as a forward-looking and advanced civilization, once again.
---
Oh, one last thing. Note that McCain while abandoning Michigan, seems to be pouring some effort into one congressional district in Maine. Because Maine and one other state abandoned winner-takes-all in the electoral college.
See:
http://www.davidbrin.com/electoral.html
More importantly, note that McCain pulled out of Michigan a week after it became clear that purging the voter rolls on a large enough scale to affect the desired outcome FAILED thanks to alert citizens fighting back and re-registering when needed.
Heads up, the rest of you "battlegrounds". Do you need a Devils Night for thirty years before you start paying attention?
Get your paranoid conspiracy theories here first.
Loretta Sanchez and Linda Sanchez are sisters, and both representatives from California.
Shortly after they voted against the bailout the second time this afternoon....their brother was reported missing at sea after a boat crash.
Do people really slip on Bannanas? Who knows.
I couldn't make this shit up.
Any comments on the controverisal letter (PDF) that Obama put out? It was allegedly sent from his campaign to local TV stations telling them not to air NRA ads. The letter feels (just a little) like a veiled threat of "don't air them or you'll be kicked off the air."
I'm going to trust Obama, because he's appeared to be upright so far, but I think that this was the wrong tactic. Anyway, over on another forum debating the accuracy of the NRA claims vs. the Factcheck.org claims.
This guy's pretty smart and writes well. OStrich stuff.
http://www.nytimes.com/2008/10/02/opinion/02Cohen.html?em&exprod=myyahoo
It's Ohio and Florida where the real experts at voting fraud lie. But then, the Diebold devils are smart. they surely have an end run planned somewhere else. One more reason to pray for a blowout. But note...
...Even if an Obama blowout makes them shy away from wholesale vote theft, they'll still do it on small scale projects, like keeping the dems from taking over some state legislatures. The smartest people know that's an important center of action, but I doubt there are major plans to do corrective pollwatching at that level.
Somebody trawl around and see if any Nader-Obama swap sites spring up. It is weird that there aren't any yet.
NRA member Biden -- bragging about his guns and -- weirdly -- warning his running mate he "better not try to take em away!" Jon Stewart had fun lampooning that one. Biden is clearly a highly superior individual. But he sometimes lets the broncos loose to run around a bit. Glad he didn't do it last night. He was spot on! And I think that will stick with folks.
(Well, sort of spot on. Solid. No errors. But DAMN! he could have said "McC wanted to invest social security in the stock market."
These two competing videos might be of interest:
I'm voting Republican because...
I'm voting Democrat because...
The second was created in response to the first, and it's substantially weaker. I'd say about half the first rang pretty true, maybe 3 items in the second came close to being true-ish. The rest was the usual partisan nonsense.
BTW - the second is getting air play on right-wing talk radio.
http://www.salon.com/opinio
n/greenwald/radio/
2008/10/01/johnston/index1
.html
Sorry about the goofy link, I'm functionally retarded in some ways.
"DJ" = David Cay Johnston, investigative reporter for the NYT
" DJ: Well, who is the leading company inventing and promoting these toxic products, and getting people into them? Goldman Sachs, and it was at the time that Henry Paulson was running Goldman Sachs that this was going on. So, even if you assume his heart is pure and all he is doing here is what he thinks is the best thing to do for the republic, you have to look at where he came from.
Now, they allowed a Goldman competitor to fail, Lehman, the only firm that they said they would nothing for. Then, they decided to rescue AIG, the insurance company, on the too big to fail theory -- who owes Goldman $20B, half its net worth? AIG. And who is the only non-government person in the room, according to The New York Times, when they made that decision? The current chairman of Goldman.
With the Secretary will now be imbued with the power to buy assets - he doesn't have to have auctions; he doesn't have to pay the lowest possible price. He can even buy assets from foreign governments and foreign central banks, so we're going to have American taxpayers bailing out Dutch banks and Luxembourg banks. There's no question being raised about, hey, these guys all were running huge off-shore operations, to not pay taxes in the US; they didn't run to the government of Bermuda and the Cayman Islands for help; they ran to the government whose system they abused. Why aren't we saying a condition of getting in the bailout is, you will, within five years, repatriate all your assets and pay taxes on them from the Cayman Islands and Bermuda. No-one's even mentioned that except me. And one tax lawyer that I know.
In buying assets, the Secretary does not have to buy a single asset from Goldman to rescue Goldman. All he has to do is buy assets from parties who, if they defaulted, would bring Goldman down. We ought to have a requirement that the counter-party be disclosed in every one of these cases so we make sure this isn't a bail-out of Goldman by its former chairman. Those are the kind of fundamental integrity questions that aren't on the table, and by the way, that oversight board - it has five members. One of them is the Treasury Secretary, who supposed to oversee his own operations; but there's no inspector general. "
@Travc:
Dr Brin brings up a good point about deterrence, but that wasn't really what I was thinking. Developing the capacity to build these things is not only a deterrent but also pushes knowledge. Development is not research, but it is important and a lot is learned in the process.
Let me clarify - I agree about the benefits of deterrence, the reseach and the technical know-how.
But maybe the effort could be deferred or at least downsized, until we don't have half a dozen looming crises to deal with.
And also, I'm pessimistic. You brought up researching low yield nukes, but not deploying them. I feel that once you make a fantastic weapon, the military will use it, or at least stockpile it just in case.
And I think we're seeing that with the F-35: Why buy a mere dozen when we can get thousands, as long as the chumps are willing to pay for it?
Scary economic news continues:
(from behind the stupid nytimes registration wall, so I'm posting the whole article)
Edge of the Abyss
By PAUL KRUGMAN
Published: October 2, 2008
As recently as three weeks ago it was still possible to argue that the state of the U.S. economy, while clearly not good, wasn’t disastrous — that the financial system, while under stress, wasn’t in full meltdown and that Wall Street’s troubles weren’t having that much impact on Main Street.
But that was then.
The financial and economic news since the middle of last month has been really, really bad. And what’s truly scary is that we’re entering a period of severe crisis with weak, confused leadership.
The wave of bad news began on Sept. 14. Henry Paulson, the Treasury secretary, thought he could get away with letting Lehman Brothers, the investment bank, fail; he was wrong. The plight of investors trapped by Lehman’s collapse — as an article in The Times put it, Lehman became “the Roach Motel of Wall Street: They checked in, but they can’t check out” — created panic in the financial markets, which has only grown worse as the days go by. Indicators of financial stress have soared to the equivalent of a 107-degree fever, and large parts of the financial system have simply shut down.
There’s growing evidence that the financial crunch is spreading to Main Street, with small businesses having trouble raising money and seeing their credit lines cut. And leading indicators for both employment and industrial production have turned sharply worse, suggesting that even before Lehman’s fall, the economy, which has been sagging since last year, was falling off a cliff.
How bad is it? Normally sober people are sounding apocalyptic. On Thursday, the bond trader and blogger John Jansen declared that current conditions are “the financial equivalent of the Reign of Terror during the French Revolution,” while Joel Prakken of Macroeconomic Advisers says that the economy seems to be on “the edge of the abyss.”
And the people who should be steering us away from that abyss are out to lunch.
The House will probably vote on Friday on the latest version of the $700 billion bailout plan — originally the Paulson plan, then the Paulson-Dodd-Frank plan, and now, I guess, the Paulson-Dodd-Frank-Pork plan (it’s been larded up since the House rejected it on Monday). I hope that it passes, simply because we’re in the middle of a financial panic, and another no vote would make the panic even worse. But that’s just another way of saying that the economy is now hostage to the Treasury Department’s blunders.
For the fact is that the plan on offer is a stinker — and inexcusably so. The financial system has been under severe stress for more than a year, and there should have been carefully thought-out contingency plans ready to roll out in case the markets melted down. Obviously, there weren’t: the Paulson plan was clearly drawn up in haste and confusion. And Treasury officials have yet to offer any clear explanation of how the plan is supposed to work, probably because they themselves have no idea what they’re doing.
Despite this, as I said, I hope the plan passes, because otherwise we’ll probably see even worse panic in the markets. But at best, the plan will buy some time to seek a real solution to the crisis.
And that raises the question: Do we have that time?
A solution to our economic woes will have to start with a much better-conceived rescue of the financial system — one that will almost surely involve the U.S. government taking partial, temporary ownership of that system, the way Sweden’s government did in the early 1990s. Yet it’s hard to imagine the Bush administration taking that step.
We also desperately need an economic stimulus plan to push back against the slump in spending and employment. And this time it had better be a serious plan that doesn’t rely on the magic of tax cuts, but instead spends money where it’s needed. (Aid to cash-strapped state and local governments, which are slashing spending at precisely the worst moment, is also a priority.) Yet it’s hard to imagine the Bush administration, in its final months, overseeing the creation of a new Works Progress Administration.
So we probably have to wait for the next administration, which should be much more inclined to do the right thing — although even that’s by no means a sure thing, given the uncertainty of the election outcome. (I’m not a fan of Mr. Paulson’s, but I’d rather have him at the Treasury than, say, Phil “nation of whiners” Gramm.)
And while the election is only 32 days away, it will be almost four months until the next administration takes office. A lot can — and probably will — go wrong in those four months.
One thing’s for sure: The next administration’s economic team had better be ready to hit the ground running, because from day one it will find itself dealing with the worst financial and economic crisis since the Great Depression.
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Nouriel Roubini (again behind a stupid registration wall) says:
Financial and Corporate System is in Cardiac Arrest: The Risk of the Mother of All Bank Runs
So far as I can tell by working the telephones this morning:
* LIBOR bid only, no offer.
* Commercial paper market shut down, little trading and no issuance.
* Corporations have no access to long or short term credit markets -- hence they face massive rollover problems.
* Brokers are increasingly not dealing with each other.
* Even the inter-bank market is ceasing up.
This cannot continue for more than a few days. This is the economic equivalent to cardiac arrest. Then we debated what is necessary to restart the system.
I believe that the government will do another Hail Mary pass, with massive guarantees to the short-term commercial credit system and wide open short-term lending by the Fed (2 or 3 times expansion of the Fed balance sheet). If done on a sufficient scale this action will probably work for a while. But none of these financial measures affects the accelerating recession -- which will in turn place more pressure on the financial sector.
(..)
And to confirm the near systemic collapse of the system of financing of both financial firms and corporate firms Warren Buffet declared yesterday, as reported by Bloomberg:
the U.S. economy is ``flat on the floor'' after a cardiac arrest as companies struggle to secure funding and unemployment increases.
``In my adult lifetime I don't think I've ever seen people as fearful, economically, as they are now,'' Buffett said today in an interview with Charlie Rose to be broadcast tonight on PBS. ``The economy is going to be getting worse for a while.' …The credit freeze is ``sucking blood'' from the U.S. economy, Buffett said.
We are indeed at the cardiac arrest stage and at risk of the mother of all bank and non-ban runs as:
- The run on the shadow banking system is accelerating as: even the surviving major broker dealers (Morgan Stanley and Goldman Sachs) are under severe pressure (Morgan losing over a third of its hedge funds clients); the run on hedge funds is accelerating via massive redemptions and a roll-off of their overnight repo lines; the money market funds are experiencing further withdrawals in spite of government blanket guarantee.
- A silent run on the commercial banks is underway. In Q2 of 2008 the FDIC reported $4462bn insured domestic deposits out of $7036bn total domestic deposits; thus, only 63% of domestic deposits are insured. Thus $ 2574bn of deposits were not insured.
(..)
- A run on the short term liabilities of the corporate sector is also underway as the commercial paper market has effectively shut down with little trading and no issuance or rollover of such debt while corporations have no access to long or short term credit markets and they are therefore facing massive rollover problems (over $500 billion of rollover of maturing debts in the next 12 months).
(..)
- The money markets and interbank markets have shut down as - despite the Senate passing the bail-out bill - yesterday USD Overnight Libor was still at 268bp after reaching an all-time high of 6.88%; the USD 3m Libor-OIS spread widened to record 270 basis points; EUR 3m LIBOR-OIS spread is at record 130bp; the TED spread is at record 360bps (TED was 11bps one month ago); Money and credit markets are dysfunctional also in emerging markets ; and agency bond spreads are also at highs again.
More here but you have to register to read it all.
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Spreads widen to record levels for insurance against default by major insurance companies.
Link.
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Historian suggests a more apt comparison involves the Great Panic of 1873. More here.
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Transcript of Charlie Rose's interview with Warren Buffett several days ago. Buffetts reports "I haven't seen this much economic fear in my adult lifetime."
Link.
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Schwarzenegger to U.S.: State may need $7-billion loan
In a letter obtained by The Times, the governor warns that tight credit has dried up funds California routinely relies on and it may have to seek emergency aid within weeks.
By Marc Lifsher and Evan Halper, Los Angeles Times Staff Writers
October 3, 2008
SACRAMENTO -- California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.
The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.
Link.
cliff said:
You brought up researching low yield nukes, but not deploying them. I feel that once you make a fantastic weapon, the military will use it, or at least stockpile it just in case.
Just to clarify myself... I was specifically saying some things (like low yield nukes) should not be developed because of exactly that reason... plus inadvertently accelerating adversaries efforts and the possibility of loosing a few them.
So we agree on that pretty much 100%. Temporarily pushing back military R&D because we have far more critical uses for those resources is fine... though I think if we stopped trying to maintain a ridiculously large standing military force we would have enough resources to handle the crisis and keep R&D going.
On to the next thread....
Rationalizing the Bailout
Credit is the creation of new money based upon the presumption that the borrower will be able to create the material wealth to back the new money issued. When money is created based upon credit instruments rather than upon material assets this creates a multiplier where the new "money" created will far outstrip the ability of the original borrowers to create new wealth.
The Federal Reserve is responsible for overseeing our nation's money supply. They had the right and responsibility over the last decade to intervene in these new markets or at least a strong obligation to be screaming to congress about the dangers. Note that in these last couple weeks Bernanke was running around Congress with his hair on fire. Greenspan and Bernanke have drastically dramatically failed in their prime obligation of oversight of our money supply.
To look where we are and stop pointing our fingers at the past (where have I heard that meme floated recently?) the question is what do we do now.
It actually does make sense to buy the most "toxic", highly leveraged and least valuable (as related to real assets) of such instruments and flush them. This removes the most "funny" money from the system at the lowest cost. It is certainly inequitable from a zero-sum view of economics and rewards those who did the most damage. But economics is not a zero sum game. This really is the best strategy - short of declaring such instruments null and void - for destroying the most of this "funny money" in the shortest time - Bernanke does know what he's doing with this bailout - and it is the FR being bailed out even more than Wall Street..
There will still be far more "money" in circulation than can be grown as material wealth in the economy by the time the remaining instruments become due. High Inflation is both necessary and inevitable. But the slowdown of the economy will at the same time create deflationary pressures greatly exacerbating the problem since traditionally expanding the economy is achieved by increasing the money supply. Today's problem is not a lack of money, but a concentration of money (funny money, but real in economic consequence) in institutions and vehicles which lock it away from investments that grow material wealth enterprises.
The next administration will have its hands full trying to deal with this mess. The biggest and most necessary trick is to get that funny money growing the "real" economy in the least amount of time. The first order of business is to find a means of discerning between income on credit wealth versus wealth created by investment in goods. Unfortunately any such distinction will be somewhat artificial, but if we can find a workable one taxing the former at a high rate while rewarding the latter is mandatory.
One such measure with political resonance would relate revenue to the number of employees and employee compensation. When the difference between revenue less raw materials exceeds some number - say quarter million - per employee, then the excess between that end employee compensation (capped by individual employee) should be highly taxed. Similarly financial institutions should be rewarded for investments in companies meeting this metric and disincentivized fof chasing money rather than wealth (consumable goods and services). A short term emergency wealth tax along similar lines should also be considered. Yes the neocons will argue - correctly - that this discourages people from making money. But that's the problem; we've allowed the creation of money in preference to the creation of wealth. As the foreclosure rate shows, we've now actually reached the point where the incentives for creating money are actually destructive to the creation and maintenance of real wealth.
As a country we need to dramatically change our policies so that they reward the creation of wealth far more than the creation of money.
-- TWZ
http://www.zensden.net/ColonelZen/index.html/37
When the difference between revenue less raw materials exceeds some number - say quarter million - per employee, then the excess between that end employee compensation (capped by individual employee) should be highly taxed.
Intellectual property probably falls under this. Blank CDs are cheap and Windows CDs are expensive, but they are made of the same stuff.
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