Wednesday, April 30, 2008

McSame and Hillary Think You're an Idiot

What else would explain their love for a gas tax holiday? To anyone with even a modicum of economic understanding it is an absurd idea. Demand for gasoline is fairly inelastic, and in the short run is quite close to perfectly inelastic. Thus, gas prices will stay right about where they are prior to the tax holiday. So, who does this benefit? Not you! Unless you're a big oil company, who will see their profit margins increased.

Oh, and what about the millions of dollars this will cost the Highway Fund? And the jobs that will be lost due to lack of project funding?

Stupid. Stupid. Stupid.

Thursday, April 24, 2008

Cruel and Unusual

Executions are soon to resume after last week's 7-2 ruling that lethal injection does not violate the 8th Amendment's cruel and unusual punishment clause. However much this ruling may be in line with the framer's notions (after all, we were still dunking witches at the time of the writing of the Bill of Rights), it does not comport with any sane notion of not cruel. The act itself is murder, though sanctioned by the justice system.

But does this state sanctioning remove the moral stain from the act? I would argue that it does not. Not only is this sort of eye for an eye justice barbaric, but it makes us all complicit in the taking of life. For centuries we have accepted that murder is wrong, whether we found the rationale from religious doctrine or from our notions of civilized society. Yet, we have been willing to set our morals aside when it becomes convenient to do so, such as in the cases of war and capital punishment.

Though I am a pacifist, I do grant that war provides an exception to our rules against murder. But I can find no moral support to exclude capital punishment. Not only that, but because this punishment is meted out by the state, which ostensibly acts on our behalf, we are all implicated in these murders.

I fully understand that for many people these criminals are beyond rehabilitation. And that might in fact be true for a good many. I accept that some people are inclined to evil. I do not have an explanation for why or how that happens, but I do feel it to be true. I do not know whether those who do evil are capable of remorse. Perhaps some are, and others are not. Yet, the lack of hope for rehabilitation or remorse is not a reason sufficient to end a life.

Monday, April 21, 2008

Can Our Politics Get Any Dumber?

Marking a new low in American political discourse, all three remaining candidates for President will appear on WWE Monday Night Raw. Oh, does that statement make me an elitist?

Sunday, April 20, 2008

Still Doing a Crappy Job

According to this recent report from the Massachusetts Department of Education and the MA Board of Higher Education, too many public school graduates are requiring remedial courses at the state's universities and colleges. More troubling, though, is the variance in rates by socioeconomic status and race. Over half of African Americans, Hispanics and low income students enrolled in remedial courses in college. In addition, over 60% of students who received SPED services in high school and 50% of LEP students took remedial courses.

While it is not too surprising that SPED and LEP students might need some help in college to catch up, it is an abomination that our public schools have continued to fail our neediest students. The findings in this report make clear that we have two different school systems in Massachusetts- one for the middle and upper classes and another for the poor and minority students.

It ought to be clear to all that we need to devote more resources to our neediest students. Yet, the state's fiscal crisis has forced school districts to cut back on programs or implement fees. Beyond the fees for sports and other extra-curricular activities, many districts charge for kindergarten, full-day kindergarten and pre-kindergarten. This not only undermines our commitment to universal education, but further exacerbates the gap between the educational haves and have nots.

We are, in essence, consigning an entire class of children to the education underclass. And this has effects beyond those felt by these children. Their need for remedial education diverts resources that could be put to more productive use. And, if they cannot catch up, they are more likely to drop out of college and earn less income, which means lower revenues for the state and potentially more criminals. It is not rocket science to figure out that providing a quality education to ALL makes for a stronger society, both economically and structurally.

Yet, we continue to ignore the problems of the underclass, even here in Massachusetts. And for that, we are all to blame.

Sunday, April 13, 2008

IOC Cowardice

Athletes who display a Tibetan flag will face possible expulsion from the Olympics, according to this article. Apparently, athletes must check their free speech rights at the Chinese border. Shame on the IOC for buckling to China and its repressive regime.


I am having a hard time seeing how the following quote from Obama is elitist-

"It's not surprising that they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment."

This is essentially the thesis of Franks' What's the Matter With Kansas and has been a part of mainstream political discussion for several years. I am not sure on what planet stating the obvious is elitist. If anything, Obama's statement is quintessentially populist.

The point is that when people feel economically under siege they will reach out to find someone to blame. Their government has failed them, and the GOP has been very good at distracting these folks to the point where they vote against their economic interests. Instead of holding the GOP accountable for their slavish devotion to the economic interests of the superrich, they instead get into a lather over God, guns and gays. And immigration has only added more fuel to the fire.

Capitalism's Enemies

No, no, no. This is not about those pesky Marxists. It's about the true enemies of capitalism and the free market- big corporations.

Why are they capitalism's greatest foes? Because the have the money and the influence that your average Marxist econ prof does not.  You want examples? Here's just two-
2) Bear Stearns

I am still waiting for someone to explain to me how NAFTA is free trade. Now, unlike some of my more liberal colleagues, my critique of NAFTA comes from (dare I say) the right. NAFTA is not free trade; it is managed trade. And it is managed to maximize profits for large multi-national firms. NAFTA has nothing to do with promoting open and free exchange among Mexico, Canada and the United States. If it was, would it really take thousands of pages of rules?

Ahh.. Bear Stearns.. time to bail out the Masters of the Universe (Tom Wolfe reference). After all, we can not let anyone on Wall St. collapse or suffer. So, the Fed gives out a nice $29 billion "loan" to JP Morgan to acquire Bear Stearns. Yet, hard working Americans who are losing their homes through the subprime crisis get next to nothing from the federal government. Joe and Jane Average are just not important enough to merit a bailout.

There is not any doubt that corporations and their enablers in the GOP (and many Democrats, too) pay nothing more than lip service to free market economics. The only time we hear anything about the glorious free market from these folks is when there is talk of a tax increase or some new regulation. Otherwise they live by the adage that he who was the best lobbyists in DC wins.

Need I shout it from the rooftops? Crony capitalism is NOT free market economics!

Responsible Fiscal Policy

Our worsening economy has led to countless stories about sub-prime mortgages and a sinking financial and banking sector. But the present crisis is affecting municipalities, state governments and authorities as well. Too many government entities have used either variable rate bonds or entered into swaptions (interest rate swaps), resulting in large increases in debt service costs.

There are those who would claim that the risk associated with variable rate debt and interest rate swaps is worth taking because quite often they result in lower debt service costs. And, while that is true, it does not diminish the argument that governments have a stronger fiduciary duty to taxpayers than a corporation has to its shareholders. This unique relationship dictates that conservative management be exercised.

In other words, governments ought to only use fixed rate debt instruments. This provides much needed predictability in public budgeting. Beyond that, fixed rate debt can be refinanced to take advantage of lower rates, when available. Sure, there would be some costs associated with any refinancing. But not only are refinance costs not particularly high, but they are a small price to pay compared to the fiscal distress governments are now facing as variable rates go up, up, up.

On another front, the difficulties that have plagued Ambac and MBIA ought to make issuers of public debt a bit more cautious when using a bond insurer. Ambac  and MBIA, like many other financial institutions exposed themselves to incredible risk with CDOs (collateralized debt obligations). It is hard to know what the solution to this problem is as there are only a limited number of bond insurers, and going to market without insurance would make for enormous debt service costs, or possibly prevent issues, for some smaller governments. Hopefully the monolines will get out of the CDO field, especially those related to real estate, as soon as possible.

Friday, April 4, 2008

A Sad Day in History

Today marks the forty year anniversary of Martin Luther King Jr's assassination. I can not think of anything to say so eloquently as Dr. King himself, the night before he was shot in Memphis-

"Well, I don't know what will happen now. We've got some difficult days ahead. But it doesn't matter with me now. Because I've been to the mountaintop. And I don't mind. Like anybody, I would like to live a long life. Longevity has its place. But I'm not concerned about that now. I just want to do God's will. And He's allowed me to go up to the mountain. And I've looked over. And I've seen the promised land. I may not get there with you. But I want you to know tonight, that we, as a people will get to the promised land. And I'm happy, tonight. I'm not worried about anything. I'm not fearing any man. Mine eyes have seen the glory of the coming of the Lord."

We are still far away from the promised land that Dr. King spoke of, but his memory and words bolster us up in our march to that land. We must continue on.

And Now, For Something Completely Different

I don't know that I've ever done a baker's dozen from the iTunes here. So, here goes nothing...
The Sun in Braids- The Angelic Process
Otogima Horse- 4 Bonjour's Parties
Three Things- Sleeping People
Trying Whining- The French Kicks
Grey Day- Esoteric
Black Carpet Magic- Lilys (this is off the album, Everything Wrong is Imaginary, which to me is one of the best album titles ever)
Good Dancers- Sleepy Jackson
Moosebumps- Dr. Octagon
The Lonely Death of Space Avenger- 13Ghosts
Chromakey Dreamcoat- Boards of Canada
Polaris- Zero 7
Acidropx- Concentrick
You Don't Care About Us- Placebo

Thursday, April 3, 2008

Human- Not the Only Animal on Earth

But we sure act like it. From the depletion of natural resources to the chemicals poisoning our air and water, humankind is doing its darnedest to not only shorten our own lifespans, but to ruin the habitats of other animals. We humans take our exceptionalism to the nth degree, to a point where the survival of any other species of plant or animal is inconsequential. Aside from cataclysmic events such as the Ice Age, man is the only species that has the power to drive another species to extinction.

Whether one believes in some for of a deity or not, it seems clear that our exceptionalism is appropriately viewed as stewardship of the Earth's resources. That we are to be good keepers of the land and oceans, not that we are here to exploit, to the end, our resources. We are meant to coexist with the other animals and plants that inhabit this sphere.

What makes us believe that our needs sit at the top of the hierarchy. Have we abused our rational abilities to the point that we are convinced that our needs are the only ones that matter.

Boycotting the Beijing Olympics

It appears that the United States will not engage in any sort of boycott of this summer's Olympics in Beijing. And that is more than unfortunate. Given the current situation in Tibet and the continuing crackdown on political dissidents in China requires something more robust than a token "tsk-tsk" from the diplomatic community. At the very least the US ought to consider, along with the EU, boycotting the opening ceremonies. To simply look the other way as China continues its oppression in Tibet and elsewhere is to give China the green light for further human rights abuses.