Age of Uncritical Thinking

Wilco (the blogpost)

2009-07-24T19:42:00.004-04:00

I have been listening to Wilco's new album so I picked some of my favorite Wilco songs for my first playlist. There are so many great songs I left out but here are the ones I picked in order of posting date (plays in reverse order):

1. Casino Queen from A.M. [1995]
2. Misunderstood from Being There [1996]
3. Outtasite (Outta Mind) from Being There [1996]
4. Nothing’severgonnastandinmyway (Again) from Summerteeth [1999]
5. ELT from Summerteeth [1999]
6. I Am Trying to Break Your Heart from Yankee Hotel Foxtrot [2002]
7. Hummingbird from A Ghost is Born [2004]
8. Impossible Germany from Sky Blue Sky [2007]
9. Wilco (the song) - Wilco (the album) [2009]

To recap from a previous post, "Each weekday I am going to try to add one song and then on Friday, I will post the playlist". The songs will play in an embedded playlist.

Also watch the awesome 4 minute Nels Cline guitar solo on Impossible Germany. Enjoy!

New Music Feature

2009-07-20T14:30:00.002-04:00

I added 1 song a few weeks ago as a test but as of today, I am officialy adding a playlist feature to the blog using Tumblr and streampad. Clicking on the bar at the bottom of the blog will start playing music (set to auto play right now). You can also pull up the playlist to change the song playing. Each weekday I am going to try to add one song and then on Friday, I will post the playlist and maybe make a few comments about the music. The music added each week could be random based on what I am listening to or have a theme (birth of rock, artist, etc.)

Wilco released a quality album a few weeks ago, Wilco (The Album), so to highlight their past work, each day this week I will add songs from a record or two beginning with A.M., their first record after the break up of Uncle Tupelo. A.M. is more straight alt-country than most of Wilco's other work but still a fairly solid record. Enjoy!

Food

2009-07-20T14:00:00.003-04:00

Last week I saw Food Inc., a new documentary examining America’s food system (hopefully I’ll have a review up at some point). For as long as I can remember I’ve been interested in food which has gradually translated into being interested in food policy. I’ve been thinking about it for a while but after viewing Food Inc., I’ve officially decided to start writing about food. I am planning on including posts examining policy, farm practices, and how I eat (first, open my mouth. sorry) among other topics. I wrote restaurant reviews for my college paper so I’m hoping to include a few of those as well. My first post is a brief overview of several food labels.

The last few years, it seems US consumers have reached the peak of accepting foods just because it is on the grocery store shelf, tastes decent, and is cheap. This includes processed foods that have a laundry list of unrecognizable ingredients and milk from cows treated with rBST. Recognition of the trend is exemplified by Haagen-Dazs (owned by Nestle). They recently released a new line of ice cream called “five” meant to highlight that the ice cream only contains five ingredients. The ingredients in “five” are the same as the equivalent flavor in the original Hageen-Dazs product line.

This is a good trend but as more people start caring about what they put into their body, trips to the grocery store are getting more complicated as a larger number of food manufacturers adopt labeling meant to convince potential customers of the products health benefits (or at least lack of detriment). To make things more complicated it is slowly becoming popular to actually care about the conditions animals were raised in. Imagine that! Now walking through most markets, not just Whole Foods, I see terms such as free range, grass fed, cage free, organic, and biodynamic. What do each of these terms mean? Keep reading.

Free range
Free range is used for all animal products but only claims on free range chicken are regulated by the USDA. Eggs are not regulated, just chickens. According to Consumers Union, publisher of Consumer Reports, “USDA considers five minutes of open-air access each day to be adequate for it to approve use of the free range claim on a poultry product.” Free range does not mean chickens are raised on grass. Open air access could very well mean gravel or concrete. Further, free-range has nothing to do with the chickens’ diet or housing conditions. The EU and UK have specific requirements for the number of chickens per hectacre while the US does not. Without knowing more about the producer, I will not pay extra for free range chicken.

Cage free
Caged laying hens are usually kept in spaces so small that it is impossible to stretch their wings. It is a cruel life which is certainly not healthy for the bird nor do caged birds produce great eggs. Cage free birds live in a better environment than caged ones but the difference is not always as large as you might think. Unlike the EU, the United States has no space requirement for cage free birds (surprise, surprise). Cage free birds do not have outdoor access or feed requirements. A good indication of the environment cage free chickens live in is the color of the egg yolk. If you buy cage free eggs and the yolk is the same color as regular eggs, find a different brand. Quality eggs from chickens that are allowed outdoors should be a deep yellow/orange.

Grass fed
Grass fed claims refer to ruminant animals. USDA verified grass fed ruminants must be fed 100% grass fed. This includes cereal grain crops in their vegetative (pre-grain) state. Be sure to look for the “USDA Process Verified” symbol (see below). According to Consumers Union,

Prior to the USDA Agricultural Marketing Service's (AMS) 100% grass-fed standard, grass-fed claims were overseen by the Food Safety and Inspection Service (FSIS), but there were no standards and no independent verification, although FSIS has the ability to verify grass-fed claims through the Office of Field Operations or the Office of Program Evaluation and Review. According to the USDA, grass-fed claims that were approved by the FSIS prior to the AMS standards will be grandfathered in. That means FSIS will retain oversight of those claims and they do not have to meet the 100% grass-fed standards. However, all new submissions to FSIS for a grass-fed claim must meet the AMS standards.

Organic
There are three organic definitions recognized by the USDA. They are “100% organic”, “organic”, and “made with organic ingredients. From the USDA website:

Products labeled as “100 percent organic” must contain (excluding water and salt)only organically produced ingredients and processing aids.

Products labeled “organic” must consist of at least 95 percent organically produced ingredients (excluding water and salt).

Processed products that contain at least 70 percent organic ingredients can use the phrase “made with organic ingredients” and list up to three of the organic ingredients or food groups on the principal display panel. For example, soup made with at least 70 percent organic ingredients and only organic vegetables may be labeled either “soup made with organic peas, potatoes, and carrots,” or “soup made with organic vegetables.”

Synthetic pesticides and fertilizers are banned in organic production except for a small number approved by the National Organic Standards Board. GMOs are banned in organic production. For livestock to be certified organic, they must be fed 100% organic feed, have access to pasture, and cannot be given antibiotics (vaccinations are ok). There is some controversy over the access to pasture requirements. The rules for organic livestock released in 2002 with respect to access to pasture were very broad which led organic activists to complain that large scale organic livestock operations are able to find ways to provide very little if any true access to pasture. It appears though that the rules are about to become more clearly spelled out if a draft rule introduced in late 2008 is made official. Overall, organic is a highly meaningful certification though there is heavy pressure from food conglomerates to reduce organic standards. The Washington Post had a good article recently addressing some concern entitled “Purity of Federal ‘Organic’ Label is Questioned”.

Biodynamic
Biodynamic agriculture is derived from a series of lecturers delivered in Germany by Rudolf Steiner (inspiration for Waldorf schools) in 1924. According to Wikipedia, “biodynamic agriculture is a method of organic farming that treats farms as unified and individual organisms, emphasizing balancing the holistic development and interrelationship of the soil, plants, animals as a closed, self-nourishing system.” Biodynamic agriculture is not recognized by the USDA but it is certified by Demeter, a respected certification agent classified by Consumers Union as highly meaningful. Some of the practices of biodynamic agriculture seem way out there but I do like the focus on a closed system.

I hope the above was a helpful, fairly quick review of labeling standards. Go check out Food Inc.

Movie Review - The Hangover

2009-06-15T09:30:00.001-04:00

In the movie business, summertime means a proliferation of big budget action flicks and to my delight, comedies. Most of the good comedies are saved for summer release though more and more it seems studios are releasing a few in March and April. This year has already seen “Adventureland”, “Observe and Report”, and “I Love You, Man”.

“The Hangover” is the latest comedic release. It has been getting positive reviews so I took the first opportunity I had to go see the movie. People I talked to gave glowing reviews so maybe I expected too much but I must say, the movie was a letdown. I do think the plot is a creative spin on the typical Vegas/bachelor party movie and the movie is well structured. The basic premise is that four friends, Doug (Justin Bartha; getting married), Phil (Bradley Cooper; frat boy friend), Stu (Ed Helms; nerdy friend), and Alan (Zack Galifianakis; crazy friend/soon to be brother-in-law), head of to Las Vegas two days before the wedding. After for a night of debauchery, Phil, Stu, and Alan wake up to find Doug missing. Most of the movie is spent retracing the steps of the night before so the remaining three friends can make sure Doug makes it back to Los Angeles for his wedding.

My favorite comedies come from Judd Apatow and crew. Apatow or Apatow inspired movies almost always provide at least one joke that I can say is comedy at its best and sometimes even comedic genius. The same cannot be said about “The Hangover”. There were funny moments -- with the funniest provided by Ed Helms (The Daily Show, The Office) -- but nothing side splittingly funny. There were too many jokes that fell flat or went too far. Not that I was offended by any of the jokes but sometimes it’s what you leave out that makes the movie. Addition by subtraction.

The movie was well cast. The best thing about the film is the emergence of Ed Helms as a movie actor. Stu was the only person I found consistently funny. He’s always been good on TV but this is the first time I can remember thinking, he could play the leading role in the right comedy. He’ll never be a star but has the potential to be a reliably funny wing man.

As for Alan, I can’t see many other people playing him. Zach Galifianakis does a fantastic job of making Alan crazy but not so crazy that the audience tires of him. Uttering odd, sometimes incomprehensible lines, Galifianakis always makes you think “what the hell” and more often than not the “what the hell” is accompanied by laughter.

Bradley Cooper did a good job playing Phil but he is the actor that could most easily be replaced in the film. This has more to do with the writing than Cooper’s acting abilities. His main role in the movie was to create the environment for Helms and Galifianakis to be funny.

One of the reasons I might not have loved the movie is that the two trailers for The Hangover gave away too many of the funny surprises. Overall, The Hangover was a fun movie but has nothing on my favorite comedy of the year so far, “I Love You, Man”. Coming July 31 is the movie I am most excited about seeing this summer, Judd Apatow’s third feature film, “Funny People”. Next up, “The Proposal”. Or not. Peace.

P.S.
I highly recommend seeing "Up" and "Away We Go".

Other reviews of "The Hangover"

Local DC Blogger - Plight of the Pumpernickel - Not only a good review of the movie but she also answers the question on everybody's mind: Does Bradley Cooper deserve heartthrob status? The answer might not surprise you.

My favorite movie reviewer - NYT's A.O. Scott

Best of The Tonight Show with Conan O'Brien (June 8th-12th)

2009-06-12T13:54:00.008-04:00

I never watched Late Night consistently but since Conan started the Tonight Show last week, I've been watching each episode the day after on Hulu. Starting today, I am going to post my favorite clips of the week. Enjoy the comedy!

New Chrysler Commercial

Twitter Tracker

Jim Gaffigan interview

Tonight Show Mug Shots

Norm MacDonald interview

Tonight Show Children (from last week)

Gun Fears

2009-06-12T10:00:00.003-04:00

Paul Krugman has an interesting non economics column in Friday's New York Times entitled "The Big Hate".
An excerpt:

Yes, the worst terrorist attack in our history was perpetrated by a foreign conspiracy. But the second worst, the Oklahoma City bombing, was perpetrated by an all-American lunatic. Politicians and media organizations wind up such people at their, and our, peril.

Check out the whole column. It is incredible that even with Democrats in control of the Presidency and the Congress, Tom Coburn, Republican from Oklahoma, was able to get through an amendment, to a credit card bill of all things, that allows concealed handguns in national parks. Really? Are we that paranoid of a nation that we think it is necessary to carry handguns wherever we go. Recent legislation in Tennessee would allow guns to be carried into bars. Great idea, or not. From the AP:

The legislation that takes effect July 14 retains an existing ban on consuming alcohol while carrying a handgun, and restaurant owners can still opt to ban weapons from their establishments.

Also, it is quite disturbing that gun sales are at record levels since Obama was elected. From the Pittsburgh Post Gazette:

On the gun counter at Ace Sporting Goods in Washington County, customers are greeted with a picture of President Barack Obama next to the caption, "Salesman of the Year."

"Obviously it's a little bit of humor," said owner George Romanoff. "But any time our politicians start discussing gun control, it has the adverse effect of what they intended. It's true across the country."

"I've been in this business for 33 years," said Mr. Romanoff, "and there's never been this demand."

Democrats don't want to outlaw gun s completely but we do want to renew the assault weapons ban. Could somebody please explain to me why any American other than a soldier needs an assault weapon? I just don't understand.

Learned Helplessness and the Age of the SUV

2009-06-08T16:05:00.006-04:00

I just came upon an essay Malcolm Gladwell wrote for The New Yorker back in 2004 entitled "Big and Bad: How the S.U.V. Ran Over Automotive Safety". It is a fascinating look at the claim that SUVs are safer than cars Below are a few excerpts. I highly recommend reading the whole essay.

In the parlance of the automobile world, the TrailBlazer is better at "passive safety. " The Boxster is better when it comes to "active safety," which is every bit as important.

The S.U.V. boom represents, then, a shift in how we conceive of safety—from active to passive. It's what happens when a larger number of drivers conclude, consciously or otherwise, that the extra thirty feet that the TrailBlazer takes to come to a stop don't really matter, that the tractor-trailer will hit them anyway, and that they are better off treating accidents as inevitable rather than avoidable.

S.U.V.s are unsafe because they make their drivers feel safe. That feeling of safety isn't the solution; it's the problem.

Read the whole thing.

Books by Malcolm Gladwell:

The Tipping Point: How Little Things Can Make a Big Difference

Blink: The Power of Thinking Without Thinking

The Profitability of SUVs

2009-06-08T14:10:00.004-04:00

James Kwak from The Baseline Scenario asks Why are SUVs more profitable?:

Many discussions of auto company economics include the assertion that SUVs and pickup trucks are more profitable than small cars, and so a shift from the former to the latter – as discussed by Felix Salmon, for example – will not be good for the auto companies, particularly GM and Chrysler (since they are in the news these days). I accept that as a historical statement, but I don’t understand why that is the case.

Textbook micro tells you that price equals marginal cost, so the gross margin on every product is zero; that’s clearly no help here. Profit margins should be higher in product segments with less competition, but basically every manufacturer makes a small, midsize, and large SUV, so I don’t think that’s the explanation.

He goes on to give several other reasons why SUVs might be more popular. There are a lot of good comments to the post and I found the exercise of answering the question very intellectually stimulating. Here is my response to the question why are SUVs more profitable?:

The answer to the question has a lot to due with consumer preference. SUV’s are, in a low cost of fuel environment, preferred to cars. The only reason people would rather buy a Civic than a truck/SUV is the low cost of a Civic. A minority would buy the Civic due to environmental reasons but most people won’t sacrifice comfort for the environment. SUV’s fit more people/stuff, make people feel powerful when they are able to look down on cars, and are safer (or at least perceived to be) in case of an accident. Car companies realize this so, since building cars has a high barrier to entry, the existing competitors compete on features rather than price for SUV’s and compete on price rather than features for small cars. This is one reason why Japanese automakers were late introducing multiple models of SUV’s. They had to understand the design aesthetic and features that Americans required for SUV’s and build the capabilities to meet the requirement whereas with a small car they could use their low cost advantage to profitably sell small cars and gain acceptance in the marketplace.

With their low cost structures, why didn’t the Japanese manufacturers lower prices on SUV’s to further pressure domestic manufacturers? The Japanese manufacturers probably realized that the domestic manufacturers didn’t want to risk lowering prices on SUV’s and not seeing a subsequent uptick in sales because the domestics had to make up the money they were losing on the small cars required by the CAFÉ standards. Thus the number of competitors that could compete on price was essentially cut from 6 to 3. With rebates an accepted practice in the car industry, Honda, Toyota, and Nissan could just start offering rebates if there was any real pricing pressure. Combined with the fact that until the past year or so foreign manufacturers did not have excess SUV manufacturing capacity, there was no real incentive to cut prices. Brands such as Hyundai are starting to build quality cars and gain a good reputation so it will be interesting to see if the profit margins continue to stay high.

Phosphorus Famine

2009-06-06T09:30:00.001-04:00

Scientific American - Phosphorus Famine: The Threat to Our Food Supply:

Land ecosystems use and reuse phosphorus in local cycles an average of 46 times. The mineral then, through weathering and runoff, makes its way into the ocean, where marine organisms may recycle it some 800 times before it passes into sediments. Over tens of millions of years tectonic uplift may return it to dry land.

Harvesting breaks up the cycle because it removes phosphorus from the land. In prescientific agriculture, when human and animal waste served as fertilizers, nutrients went back into the soil at roughly the rate they had been withdrawn. But our modern society separates food production and consumption, which limits our ability to return nutrients to the land. Instead we use them once and then flush them away.
...And flood control contributes to disrupting the natural phosphorus cycle. Typically river floods would redistribute phosphorus-rich sediment to lower lands where it is again available for ecosystems. Instead dams trap sediment, or levees confine it to the river until it washes out to sea.

Budget Airline to Charge for Toilet Use

2009-06-03T18:27:00.003-04:00

Its no joke. Ryanair, the Irish low cost airline, is going to remove 2 of the 3 toilets currently on their Boing aircraft and start charging $1.50 to use the remaining toilet. They are also thinking about implementing “'new baggage measures, which would see passengers replace baggage handlers to load luggage onto aircraft” are “under discussion”' and charging for "the privilege of checking themselves in online"

Here are the money quotes, and really the reason for this post, from the NY Times discussing the decision:

“We are flying aircraft on an average flight time of one hour around Europe,” Mr. O’Leary argued, “what the hell do we need three toilets for?”

Mr. O’Leary added that Boeing’s research department should have time to focus on his new toilet concept soon, since the “war in Iraq and Afghanistan is winding down.”

I think I'm going to start paying attention to what the CEO of Ryanair, Michael O'Leary, has to say. He seems pretty hilarious.

Another example of how Republicans are scared of science

2009-04-23T15:50:00.004-04:00

In a Washington Post story about the delay in confirming Kathleen Sebelius due to Republican concerns, one paragraph caught my eye.

Sen. Jon Kyl (R-Ariz.) opposes Sebelius because of the Obama administration's support for research on the comparative effectiveness of disease treatments. He said he fears the evidence-based approach, coupled with information on price, could lead to rationing of care.

Wow, absolutely unbelievable. WTF? Science and facts can be scary and make us face the hard truth that America isn't perfect which scares Republicans so much that they try to frighten us into ignoring science or as they call it "schmience". Isn't the free market blindly espoused by Republicans suppose to be all about transparency so consumers and businesses can make the right decision. Sure health care could be rationed or regulating emissions could destroy our economy but the country is much more likely to benefit from science.

I know that when I go to the doctor I want the doctor to have as much information as possible on the best ways to treat me. Quite a bit of research has been done documenting regional differences of the quality of health care and how some doctors prefer treatments they are familiar even when they are not the most effective. From an article in Time by Michael Grunwald entitled "How Obama is Using the Science of Change":

More information can make us healthier too, which is why the stimulus poured $1.1 billion into "comparative effectiveness" research. Orszag has reams of charts showing that medical tactics and costs vary wildly across the country, with little regard for what works. He'd like to document best practices — from emergency-room to-do lists that dramatically reduce infections to protocols for when pricey tests and surgeries really help — and then have all medical providers adopt them. This approach has helped American anesthesiologists reduce deaths as well as costs.

What Republicans will probably point to when arguing against comparable effectiveness research is how the UK's National Institutes of Health and Clinical Excellence judges the cost effectiveness of therapies. From a Harvard Business School blog post:

For years, the UK's National Institutes of Health and Clinical Excellence (NICE) has decreed whether certain therapies are more effective than others. It has gone so far as to judge the cost effectiveness of such interventions, e.g. that prolonging life for 6 months for $100,000 isn't worth the expense. The US government won't provide cost effectiveness edicts (at least not directly — payors will interpret the data and make their own decisions), but it will sponsor head-to-head trials.

Traditionally, therapies have been judged against placebos, which is not a very realistic comparator. This (comparable effectiveness research) is good news for medicine, but it is likely bad news for many drugs and devices

I don't think many people are arguing that the U.S. government tell us if a certain treatment is not worth living a few months but rather making sure that all health care participants have the appropriate information to reduce negative outcomes. Don't let Republicans get away with scare tatics to eliminating effectiveness research.

2009-01-22T10:54:00.002-05:00

I came across the following piece thanks to the Economist's View blog. Below the excerpt are my comments.

A breakthrough against hunger by Jeffrey D. Sachs

Today's world hunger crisis is unprecedentedly severe and requires urgent measures. Nearly one billion people are trapped in chronic hunger - perhaps 100 million more than two years ago. Spain is taking global leadership in combating hunger by inviting world leaders to Madrid in late January to move beyond words to action.

The benefits of some donor help can be remarkable. Peasant farmers in Africa, Haiti, and other impoverished regions currently plant their crops without the benefit of high-yield seed varieties and fertilizers. The result is a grain yield (for example, maize) that is roughly one-third less than what could be achieved with better farm inputs. African farmers produce roughly one ton of grain per hectare, compared with more than four tons per hectare in China, where farmers use fertilizers heavily.

African farmers know that they need fertilizer; they just can't afford it. With donor help, they can. Not only do these farmers then feed their families, but they also can begin to earn market income and to save for the future.

There is now widespread agreement on the need for increased donor financing for small farmers (those with two hectares or less of land, or impoverished pastoralists), which is especially urgent in Africa. The UN Secretary General led a steering group last year that determined that African agriculture needs around $8 billion per year in donor financing - roughly four times the current total - with a heavy emphasis on improved seeds, fertilizer, irrigation systems, and extension training.

Dozens of low-income, food-deficit countries, perhaps as many as 40-50, have elaborated urgent programs for increased food production by small farms, but are currently held back by the lack of donor funding.

Many individual donor countries have declared that they are now prepared to increase their financial support for smallholder agriculture, but are searching for the appropriate mechanisms to do so. The current aid structures are inadequate. The more than 20 bilateral and multilateral donor agencies for agriculture are highly fragmented and of insufficient scale individually and collectively.
Despite the dedicated efforts of many professionals, the response to the hunger crisis remains utterly inadequate. The 2008 planting seasons came and went with much too little additional help for impoverished small farmers. African countries search endlessly, and mostly fruitlessly, for the small amounts of funding needed for their purchases of fertilizer and improved seeds.
My colleagues and I, serving on an advisory committee for the Spanish initiative, have recommended that donors pool their funds into a single international account, which we call the Financial Coordination Mechanism (FCM). These pooled funds would enable farmers in poor countries to obtain the fertilizer, improved seed varieties, and small-scale irrigation equipment that they urgently need.
Poor countries would receive prompt and predictable financing for agricultural inputs from a single account, rather than from dozens of distinct and fragmented donors. By pooling financial resources into a single-donor FCM, aid programs' administrative costs could be kept low, the availability of aid flows could be assured, and poor countries would not have to negotiate 25 times in order to receive help.
The time for business as usual is over. The donors promised to double aid to Africa by 2010, but are still far off track. Indeed, during the past 20 years, they actually cut aid for agriculture programs, and only now are reversing course.
Meanwhile, a billion people go hungry each day. We need a breakthrough that is demonstrable, public, clear, and convincing, that can mobilize the public's hearts and minds, and that can demonstrate success. History can be made in Madrid at the end of January, when the world's richest and poorest countries converge to seek solutions to the global hunger crisis. The lives of the billion poorest people depend on it.
Jeffrey D. Sachs is Professor of Economics and Director of the Earth Institute at Columbia University.

China might have much higher crop yields than Africa but they also have a huge pollution problem caused partly by agricultural run-off. Studies have shown that organic crops yield more than conventional during droughts but yield 9-20% less during normal years (1). Given the occurence of droughts in Africa it seems growing organic in Africa should be looked at closer. I think Africa certainly needs intense agricultural education and improved seed varieties among other things but I strongly question whether heavy fertilizer use should be part of the best course of action. Soaking the soil in fertilizers might be the quickest solution but not the most effective long term.

WSJ misleading headline of the hour

2008-11-22T17:51:00.004-05:00

The WSJ has a short piece out on probable Obama Treasury Secretary Tim Geithner and the headline is extremely misleading. The headline is "Longtime Crisis Manager Pleases Wall Street, Mystifies Some Democrats".

The problem is that the article only quotes one person who questions the pick and that person, Andy Stern, is uninformed, as mentioned in the very next paragraph.

But Andy Stern, president of the Service Employees International Union, said recently: "I always worry about somebody who has spent his whole life at the Federal Reserve....I just don't know him."

Mr. Stern was exaggerating. Mr. Geithner, currently president of the New York Federal Reserve Bank, has been with the Fed just five years. Unlike most of his predecessors, he has little private-sector or political experience.

With the incoming administration being Democratic, I am expecting an increase in misleading headlines and editorials in the WSJ.

Why Republicans Should Love Community Organizers

2008-09-11T10:18:00.002-04:00

From A VC:

"If McCain and Palin are the really the defender of conservative notions like citizen's right to make decisions for themselves, and the rights of community groups like churches and other non government entities to empower people, they'd be celebrating community organization. But they only have one strategy which is to stick the knife in Obama and twist it and draw enough blood so that they win again."

http://www.avc.com/a_vc/2008/09/community-organ.html

Palin = Bush

2008-09-11T10:05:00.002-04:00

From the NY Times:

"Aides traveling with Ms. Palin have reported back to associates that she is a fast study -- asking few questions of her policy briefers but quickly repeating back their main points -- who already has considerable ease and experience before cameras.

“A former aide in Alaska who had helped prepare Ms. Palin for her campaign debates there said she had a talent for distilling information into digestible sound bites. The aide said she generally prefers light preparatory materials to heavy briefing books, and prefers walking through potential questions and answers with aides to holding mock sessions.”

Just what we need, another Republican politician who is intellectually lazy.

Typical Hypocritical Republicans - Jon Stewart exposes

2008-09-05T00:23:00.004-04:00

With the nomination of Sarah Palin for vice president the hypocrisy has reached a new level. I didn't know that was possible. Newt Gingrich is the guest.

Fox News Jokes About Killing Obama

2008-05-26T02:49:00.001-04:00

Don't think much comment is needed other than to say this is despicable even for Fox News.

SNL - Suze Orman sketch

2008-05-12T14:08:00.009-04:00

SNL has done several skits making fun of "financial guru" Suze Orman and they are quite good.  Here is one of them:



Minsky Meltdown
2008-04-27T22:09:00.004-04:00
I first read "The Plankton Theory Meets Minsky" by Paul McCulley last year after the credit problems we are dealing with now had already begun. It is required reading for anybody that wants to understand how the current situation evolved and be better prepared to recognize future bubbles before they burst.

Minsky, who passed away in 1996, was the father of the Financial Instability Hypothesis, providing a framework for distinguishing between stabilizing and
destabilizing capitalist debt structures. He first articulated the Hypothesis in 1974, and summarized it beautifully in his own hand in 1992:

“Three distinct income-debt relations for economic units, which are labeled as hedge, speculative, and Ponzi finance, can be identified. Hedge financing units are those which can fulfill all of their contractual payment obligations by their cash flows: the greater the weight of equity financing in the liability structure, the greater the likelihood that the unit is a hedge financing unit. Speculative finance units are units that can meet their payment commitments on ‘income account’ on their liabilities, even as they cannot repay the principal out of income cash flows. Such units need to ‘roll over’ their liabilities – issue new debt to meet commitments on maturing debt. For Ponzi units, the cash flows from operations are not sufficient to fill either the repayment of principal or the interest on outstanding debts by their cash flows from operations. Such units can sell assets or borrow. Borrowing to pay interest or selling assets to pay interest (and even dividends) on common stocks lowers the equity of a unit, even as it increases liabilities and the prior commitment of future incomes.

It can be shown that if hedge financing dominates, then the economy may well be an equilibrium-seeking and containing system. In contrast, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy is a deviation-amplifying system. The first theorem of the financial instability hypothesis is that the economy has financing regimes under which it is stable, and financing regimes in which it is unstable. The second theorem of the financial instability hypothesis is that over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system.

In particular, over a protracted period of good times, capitalist economies tend to move to a financial structure in which there is a large weight to units engaged in speculative and Ponzi finance. Furthermore, if an economy is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make positions by selling out positions. This is likely to lead to a collapse of asset values.”


GMO 1Q08 Quarterly Letter
2008-04-27T19:48:00.005-04:00
I highly recommend the 1Q08 letter from Jeremy Grantham of GMO LLC. As put by Barry Ritholz at The Big Picture, "The 1Q 2008 letter looks at asset bubbles and puts the role of the Fed under the leadership of Greenspan and Bernanke under the microscope, with a wistful nod to Paul Volcker:"

You can find the letter here. Below are a few of my favorite passages:

"Paul Volcker inherited about as big a mess as we have today. He worked out what he had to do and did it with unusual lack of concern about what Congress thought of the necessary pain involved and the number of enemies he might make. He paid the price for forthright behavior by being replaced, despite a record for correct and tough behavior that makes for the most invidious comparison today."

"This has indeed not been our finest hour in the U.S. Times are bad enough, in fact, to make us mourn the American leadership skills of WWII and the generosity and foresight of the Marshall Plan. We can all wonder at the incredible vision, drive, organizational skill, and willingness to sacrifice resources that were required by the Manhattan Project and compare it to the rudderless or even deliberate avoidance of leadership of the greatest issues today: climate change and energy security. We can only wonder what a Manhattan Project aimed at alternative energy might have accomplished by now, had it been started 15 years ago. What we have had in lieu of vision, leadership, and backbone is a series of easy paths taken."

"The idea that occasional economic setbacks might benefit the system in the long run was one of the early ideas to disappear. Yet if you prop up weak sisters who would otherwise fail and in failing present their more efficient competitors with extra growth, you must surely weaken the system. Desperation pricing from weak firms who simply should not exist can weaken the profitability of a whole industry, as it has for the airlines. The average efficiency of most industries is reduced with at least
some effects on our global competitiveness. With a slightly lower average return on equity, the ability to reinvest drops so that, in this world of moral hazard where recessions are few and mild, GDP growth is a little less than it might have been."

"The defense of bailouts is that the alternative is ugly. But surely the penalties for excessive risk taking, issuing flaky paper, passing it on – often in its entirety – to others, and not even understanding the consequences of the low grade paper that you yourself issue should be ugly. “Yes, of course, we would like to punish the excessive risk takers” goes the line, but we can’t do it without hurting the innocent economy. But we will never know what can be absorbed if the penalties are always removed by a bailout. In more traditional times, say, from 1945 to 1985, the economy could absorb substantial punishment from recessions and still grow faster than it has done in the last 10 years. So in a crisis à la Bear Stearns we now transfer pain from risk takers to innocent tax payers. Worse, even the routine treatment for the bubble breaking disease does the same. By raising the slope of the yield curve, the Fed deliberately benefits its bankers and hedge funds that borrow short and invest long and punishes pensioners and others who are trying to make a safe but still reasonable return at the short end."

"The real incompetence here goes back over 20 years: the refusal to deal with investment bubbles as they form, combined with willingness, even eagerness, to rush to the rescue as they break. It’s almost as if neither Greenspan nor Bernanke allows himself to see the bubbles. Greenspan was always conflicted and contradictory about whether bubbles could even exist or not. Bernanke, in contrast, has more of the typical academic’s certainty that the established belief in market efficiency is correct and therefore investment bubbles must be merely the product of investors’ overheated imaginations. It would be convenient to have such an important role as Fed Chairman filled by someone who actually deals with the real world, messy or not, that is given to inconvenient bursts of euphoria and riddled by considerations of career and business risk, which modify behavior far away from economic efficiency."



Pennsylvania exit polls
2008-04-24T04:18:00.002-04:00
I was going through the PA exit polls and thought a few breakdowns were quite interesting.

Age: Obama easily beat Clinton in the 18-39 age group while Clinton was much stronger among 40+.  The major difference was the 40+ age group accounted for 78% of total voters.

Religion: Catholics voted for Cinton over Obama 70% to 30%.  Those who identified there religion as none went for Obama 62% to 38%

In previous contests the major divides other than race were education and income.  In PA Clinton had a 55 to 45 edge among voters making above and below $50,000.  Clinton led among college educated voters 51% to 49% and 58% to 42% among voters without a college education.


Agh
2008-04-24T04:04:00.002-04:00
I don't think the following quote from Dana Milbank's Washington Post column needs much commentary.

"I don't care too much for Obama," Maria Norgren, the daughter and granddaughter
of steelworkers, said in the parking lot of the Giant Eagle shopping center here, near the Obama rally.
"I don't even think he's American," added her husband, Edward, who lost his job when the steel mills closed and now mans the counter at the Puff Discount Tobacco and Lottery shop next to the Giant Eagle. 
"His father's from Nigeria, right?" asked Maria, wearing a Pittsburgh Steelers T-shirt.


End of Euphoria
2008-04-22T19:29:00.000-04:00
The enthusiasm surrounding the historic choices for the Democratic nominee is fading quickly.  I love following politics and even I am sick and tired of following the developments of the Democratic primary campaign. A few comments on where we are.

It is not unsurprising the way Clinton is campaigning and I don't have a huge problem with her tactics as after all, this is politics. If she believes her current campaign strategy is the best way to secure the nomination then so be it. It is up to voters and news media to filter out the BS and not get hysterical over ever little comment.

Obama's campaign seems to play the victim too much and has made some minor gaffes that have been turned into the semblance of major gaffes by the media and the Clinton and McCain campaigns.

My big problem is the complete absence of sensible discussion about true issues since the time leading up to Texas and Ohio. I do not include NAFTA as sensible discussion. The issue of trade is credible but the far left liberal talking points both Democratic candidates parodied are not credible. Trade in general is the problem and China most specifically. The trade deficit with Mexico was $74 billion in 2007 with ~40% coming from oil and gas compared to a trade deficit with China of $250 billion with almost nothing coming from oil and gas. Overly dramatizing the negative aspects of NAFTA diverts us from intelligently discussing the bigger structural problems we face. The 6 week gap bewteen OH and PA was the perfect time to delve into the specifics of each candidates platform and ask tough questions. Instead, the media parodied the drivel coming from both campaigns.


Origins
2008-04-22T19:11:00.000-04:00
I've been thinking about starting a blog for a while but had problems coming up with a good name that wasn't already taken. Inspired by the ineptitude of last week's presidential debate hosted by ABC and the NY Times excellent piece "Behind TV Analysts, Pentagon’s Hidden Hand" my new blog is officially off the ground.  I hope to engage readers on issues of politics, business, and anything else that comes to mind.