Emerging Bubble: Housing, Again

Barney Frank wants to keep that bubble rolling (via WSJ):

Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to "roll the dice" in the name of affordable housing. That didn't turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity -- with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers. You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development.

This, along with the Obama first-time home buyer subsidy, is just another clue that the government wants to solve the housing crash by reinflating the bubble. What they're essentially doing is fluffing up the price of previously existing homes to protect the upper-middle classers (who don't want their property value to go down) at the expense of poorer folk who might be able to afford to buy property if the government would let the market clear.

Picking Winners: Reduce the Culprit, Not the Source

Quoth Klaus Lackner, inventor of the synthetic tree:

If you give me one of those big windmills which have those big areas through which the rotor moves—how much CO2 can I avoid? And if I had an equally sized CO2 collector—how much CO2 can I collect? It turns out the collector is several hundred times better than the windmill.

Assuming that's correct, why is our government not on top of this thing? With regard to energy policy, they are quick to treat the source of CO2 production - fossil fuels - with costly mandates (cap 'n' trade) and arbitrary subsidies (corn ethanol), but apparently they have no interest in treating the real problem - the presence of atmospheric CO2.

Picking Winners: Health Egalitarianism Fail

From Betsy's McCaughfey's WSJ article:

Last September Sen. Barack Obama promised that under his health-care proposal "you'll be able to get the same kind of coverage that members of Congress give themselves." On Monday, President Obama repeated that promise in a speech to the American Medical Association. It's not true.

The president is barnstorming the nation, urging swift approval of legislation that is taking shape in Congress. This legislation -- the Affordable Health Choices Act that's being drafted by Sen. Edward Kennedy's staff and the Health, Education, Labor and Pensions Committee -- will push Americans into stingy insurance plans with tight, HMO-style controls. It specifically exempts members of Congress (along with federal employees; the exemptions are in section 3116).

I would like to hear a principled argument of why government employees are exempt. Are there any good reasons, other than to keep the status quo of privilege?

Unconventional Wisdom: Selective Sin Taxes Unfair

Via Reason, Russ Smith opines on how some products get stigmatized with "sin tax" status while others don't:

Why stop at soda? How about a tax on every calorie-laden coffee drink served at Starbucks and its competitors? After all, a vanilla bean frappuccino with whipped cream is more than 500 calories, a beverage that health researcher Mike Adams calls "dessert in a cup." Throw in a scone or brownie with one of those Starbucks "desserts" and a consumer is approaching, at mid-morning, the daily recommended calorie intake . . . [New sin taxes are always] aimed at the déclassé products, such as soda and fast-food burgers . . . If it's true . . . that "we" would be thinner and richer by laying off sugary drinks, wouldn't the same apply to the more upscale foodstuffs consumed every day? After all, obesity knows no economic boundaries.

Why is government in the business of taxing whole product groups arbitrarily? Incentive-wise, a sin tax only focused on soda does one of two things: (1) makes people most likely to purchase those drinks spend more money (possibly making it a highly regressive tax) or (2) enhances the profits of corporations providing substitution goods which deliver similar benefits. You're essentially picking a winner in an industry. If you really want to tax obesity-creating products, why not tax by calorie?

Incentives Matter: When They Know They Own You

Politico details a rift between gay activists and the White House:

"I will not attend a fundraiser for the National Democratic Party in Washington next week when the current administration is responsible for these kind of actions," Mixner wrote of a motion to dismiss a challenge to the Defense of Marriage Act that drew a parallel between same-sex marriage to incestuous marriage. "How will they ever take us seriously if we keep forking out money while they harm us. For now on, my money is going to battles within the community such as the fight in Maine or the March on Washington! I am so tired of being told by Democratic operatives to 'suck it up' because so many other profound issues are at stake," Mixner wrote.

The problem is, the Democrats know they own the gay demographic, so all they have to be is marginally better on the issue than Republicans. Moreover, they know that for cultural reasons, the threat of defection to the Republican side is almost nil. The only other political option available to these activists is to support a third party -- but as many left-wingers found out after 2000, supporting a third party can lead to electing your worst nightmare. These activists have only one weapon left -- money. Unfortunately for them, the Party is not going to need it.

Unintended Consequences: Policy Boomerang

"Buy American", meet "Buy Chinese." Economy, meet the Great Depression.

Unconventional Wisdom: The Enemy of My Enemy Is Not Always My Friend

Foreign Policy explains the hesitancy of Western governments to fully "back" the Mousavi moment:

It was Mousavi, after all, who was at the center of the Iran hostage crisis and remains complicit in an operation he commended as "the beginning of the second stage of our revolution." And it was Mousavi who was the protégé of Ayatollah Ruhollah Khomeini (chief architect of the Iranian Revolution and founder of theocratic Iran), a former member of Hezbollah's leadership council, sworn enemy of Israel, and a prime minister under whose watch thousands of political prisoners were massacred in 1988. And finally, it was Mousavi who initiated Iran's nuclear program in the 1980s and likely would be intent on carrying through Iran's nuclear ambitions, the foremost issue central to any improvement in relations with the West.

Unconvential Wisdom: On the Myopia of Models

Michael R. Smith writes on the failures of modern forecasting tools:

Given the inadequate performance of these models over the last 5 to 10 years, why do we believe we can make accurate, highly specific forecasts 50 to 100 years in the future? Is it because we are so close to the problem we are blinded to the dangers like the economists who did not see the meltdown coming? Almost no one familiar with meteorology or climate models would disagree that they are more complex than the mortgage valuation or influenza prediction models [which have recently failed to yield correct predictions]. The basic processes of the earth-ocean-atmosphere are incompletely understood and we barely understand many of their interactions. We also know that forecasting the weather beyond five days is dicey at best. Then why are we making 29,000-day weather forecasts?

While this essay is certainly not debunking the science behind climate change theory, it points out that the climate is a very complex system that can be highly unpredictable. There is a difference between forecasting climate changes -- such as trends in temperature over centuries based on past evidence of the chemical constituents of the climate -- and forecasting weather changes -- such as the frequency of heatwaves, hurricanes, and rainfall.

However, since the Global Warming Movement began, media outlets have been reporting on scientific studies that not only make weather predictions for far in the future, but also connect current weather events to "global warming," essentially falling prey to the availability heuristic and confirmation bias. Such reporting, when presented as "scientific truth" rather than as hypothesis, is irresponsible.

Panic of the Moment: There's a Fungus Among Us

Allegedly, a wheat fungus is inevitably going to destroy the world's wheat crops. The LA Times reports:

Crop scientists fear the Ug99 fungus could wipe out more than 80% of worldwide wheat crops as it spreads from eastern Africa. It has already jumped the Red Sea and traveled as far as Iran. Experts say it is poised to enter the breadbasket of northern India and Pakistan, and the wind will inevitably carry it to Russia, China and even North America -- if it doesn't hitch a ride with people first.

The fungus is affectionately called "stem rust," which is not quite as catchy as "swine flu".

Hyperbole Watch: Smoking Out of Both Sides of Your Mouth

Study: Life, Health Insurers Investing Billions in Tobacco Companies. Quote:

"Despite calls upon the insurance industry to get out of the tobacco business by physicians and others, insurers continue to put their profits above people's health," said Wesley Boyd, the study’s lead author and a faculty member of Harvard Medical School. “It’s clear their top priority is making money, not safe-guarding people’s well-being."

Of course, that's not exactly what's happening. This is a simple hedge. Health insurers know that smoking leads to health problems. Health problems lead to more expense for insurers. Smoking leads to more profits for tobacco companies. Therefore, by investing in such companies, the insurers are indirectly hedging their position. If smoking subsides, tobacco companies lose out, but the insurers will save more due to less smoking-related illness*. If smoking increases, tobacco companies make more but insurers lose more, but they gain back those losses through their investment. Seems logical to me.

*Contra: there is an emerging body of literature that suggests smoking actually reduces overall life health costs because it kills you earlier, thus eliminating the cost of elder care and other health problems that increase with age.

Hyperbole Watch: Slumdog Reactionaries Miss the Point

India is apparently not taking Slumdog Millionaire very well:

The Indian public's reaction to the award-winning film Slumdog Millionaire has gone from indifferent to outright hostile. Rioters in the eastern city of Patna attacked theaters showing the film and tore down posters to protest the use of the word "dog" in the title. The protests were organized by social activist Tapeshwar Vishwakarma, who has also filed a lawsuit against actor Anil Kapoor (who played the game show host in the film) and Academy Award-nominated composer A.R. Rahman for violating the rights of slum dwellers by depicting them in a bad light.

As Mia Wallace tells Vincent Vega in Pulp Fiction, she can't promise him that she won't be offended by what he asks her, because her natural reaction could be to be offended, and then she would have broken her promise through no fault of her own. I guess the same could be said of India, which cannot be faulted for an instinctively negative reaction to what they view as a mischaracterization.

But they're totally missing the positives: Slumdog has been extremely successful in the U.S., and if anything, the film's popularity makes it more likely that non-Indian Americans will sympathize with Indians, and the poor of all developing economies. Such sympathies may go far in increasing aid, creating a stronger bond between the two countries, and increasing the general cultural knowledge of Americans who might not otherwise be exposed to the slums of Mumbai.

Critics should take this into consideration before they throw rocks at a theater (or worse). You don't have to see the movie, but you shouldn't squander the good press.

Unconventional Wisdom: Non-Believers are Tarred and Feathered for Having Their Own Carrots and Sticks

Someone who attended the inauguration is reporting that a group of people actually booed when Obama mentioned non-believers as part of a list of religious groups ("Christians, Muslims, Jews, Hindus . . . and [even] non-believers"). It's not surprising at all, considering the amount of god talk at the ceremony, including a speech by Warren, the "Our Father," and even a benediction. If this were a Republican inauguration, people would never stop talking about it as a clear violation of the Separation of Church and State. In fact, if that wasn't an official establishment of religion, I'm not sure what is. But I digress -- hypocrisy is nothing new, so I shouldn't be surprised.

Anyway, The Economist blogs about the poor representation of the "Non-Believer" in our federal government:

A survey from 2001 (discussed here) found 30m Americans claiming "no religion". About 10% of the population (almost certainly more now), yet there has not only never been an unbelieving president. There is one congressman (Pete Stark of California) out of 535 willing to publicly declare his non-belief in God. So, if you're counting, that's 10% of the population with .2% of the power. Compare Mormons (1.7% of the population, 2.6% of Congress) or Jews (1.7% of the population, 8.4% of Congress), according to this. There are even two Buddhists, two Muslims and a Quaker.

I've often lamented the political peer pressure of religion, in which you are basically making yourself unelectable if you express a lack of belief in a god. I have to imagine there are far many more non-believers in Congress who have to publicly lie about their true beliefs, so that's somewhat comforting, but it's a shame that they have to be closeted.

The reason for this unfortunate circumstance, in my opinion, is that the vast majority of religious folks believe that "morality" can only be derived from divine scripture (or some other unprovably-inspired literature), and so a non-believer categorically cannot have a "morality." What's to stop an atheist from ordering a mass-murder, for example, if he doesn't think that he'll receive some sort of punishment from on high?

In contrast, I believe that the moral code of an atheist is often actually stronger than that of a believer. Why? Because most of us don't need supernatural carrots and sticks to be kind and operate in an ethical manner. We have our own carrots and sticks: reason and empathy. Personally, I would be embarrassed to require rules and regulations from someone else in order to know what to do to be a good person, and especially ashamed to need some kind of threat, like Hell, hanging over my head to keep me from doing bad things.

In fact, needing religion for moral instruction implies that, left to your own devices and exempt from metaphysical extortion, you would want to do the wrong things. And without the remaining non-divine deterrents of ostracism or criminal justice, you might actually do the wrong things with impunity.

Maybe Goldman Should Offer Me a Job

. . . because I guess even with no training in finance or energy policy, I can make recommendations better than they can. From The Economist:

WHEN oil was heading up, Goldman Sachs forecasters famously prognosticated that a price of $200 per barrel would be obtained before the sun set on 2008. Not long after the air came out of the oil bubble, Goldman was overshooting madly on the down side. And now? Goldman Sachs analyst Jeff Currie is predicting a "swift and violent" recovery for the black stuff.

If I have any regular readers, they'll take note that I was quick to play turnabout with Goldman's analysis in my post, "Time to Buy Oil". In response to discovering that they moved their target from $200 a barrel to $30 a barrel, I said:

So what does this teach us? My impression is that Goldman makes recommendations based on current momentum, and not accurate forecasting. After all, what is its excuse for not getting it right last spring?

I suggested that, since analysts have just been so horribly wrong about everything over the past year, we might as well take Goldman's jump on the "oil downside" bandwagon as a sign that it was time to make a contrarian play and buy. It seems as though they took my criticism to heart, because instead of following the market, this time, they are actually making an honest-to-goodness prediction! (even if it is mine).

Of course, in the long term, they have to be right. After all, if oil prices remained this depressed for a long period of time, we would have to throw out "peak oil" theory and conclude that oil is not a declining asset. Useful declining assets should not be almost free.

So there are three possibilities: (1) Oil is not declining (maybe the market is pricing in the huge Brazilian find off the coast last year?); (2) Oil is being artificially depressed from forced sales by commodity speculators who need liquidity; or (3) this entire 80% drop in the asset price has been driven by demand destruction caused by the "depression." Common sense says that (1) and (3) are very, very unlikely. If (2) is the truth, then there should be a recovery once the speculators have been purged.

But I don't know if it will be a "swift and violent" recovery. I do know one thing: if I had an oil well in my backyard, I sure as hell wouldn't be selling that black gold now.

All You Need is a Name

OK, I don't have much to say about Caroline Kennedy being Senator that hasn't already been said by thousands of other commentators, but I must get it off my chest:

1. She asked to be appointed Senator. She wasn't nominated by someone else. She's lobbying for it. For herself. If I were Gov. Paterson, the first qualification for filling Sen. Hillary Clinton's senate seat would be that you would have to be reluctant to take it.

2. According to the government and Fourth Estate, it is no longer a legitimate criticism of a famous person that they are not qualified for office by virtue of having no experience or accomplishments. Rather, they are presumed qualified, and can only be damaged by scandal or bad character issues.

3. There's a name for a state in which being a socialite is a qualification for public office: it's called an aristocracy.

4. The NY Times seems to think that Kennedy should be considered because (1) she's vocal and (2) she's around very rich and powerful people all the time. I guess this makes sense, since this is essentially how Hillary Clinton got her spot. But at least she got elected.

The Consequences of Shoe Chucking

Apparently, Muntadar al-Zaidi, the Iraqi journalist who threw his shoes at G. W. Bush during a press conference, is being badly mistreated in jail, according to his brother (broken hand, ribs, face, generally beat up). FP Passport blog is making the case that Dubya ought to pardon the man in order to (1) make sure nothing worse happens to him, making him a martyr to the anti-American cause and (2) as an example of the American treatment of free speech and the press. They refer to what this man did as a "crime of embarrassing" the President.

This makes me wonder: what would happen if a journalist in the United States threw his shoes at the President? I mean, the President is protected 24/7 by trained Secret Service agents, and if you do anything threatening towards him, you can be taken away, detained and questioned. An American shoe-chucker would definitely be arrested. Certainly, he would be out of jail quickly, probably being represented by a starry array of the most talented attorneys in the country.

But let's take a step back: the shoe-chucker is guilty of a crime here. It is criminal assault to throw objects at a person in an attempt to injure them. If you did that to someone on the street, you could be arrested and charged. Of course, he would probably say that his intent was not to injure the President but to embarrass him. To make a statement. That might be the intent, but it is not unlikely that a shoe could cause physical damage. If either of those shoes had landed on Bush's noggin, he could have sustained a concussion, or potentially slipped and fallen and broken his neck.

I think if an American journalist did this, especially in this era of terrorism scares, the Federal government would prosecute him to the full extent of the law.

That's not to say that I don't agree with FP: I think Bush should pardon him as a political act, for the good of the country. But as precedent, I don't know if you want to send a message that it is not a serious crime to throw things at the President. Especially considering the unique security issues that should be considered by the incoming administration.

Time to Buy Oil

Well, since financial experts have been so, so very wrong over the past year about pretty much everything, I think it's safe to start treating every "recommendation" as a signal that the sheep have begun piling on to a new train of thought, and therefore, preparation for a contrarian trade is warranted. So when I read this lede in today's FT:

Goldman slashes oil price forecasts. Oil prices will fall to $30 a barrel in the next three months, Goldman Sachs said on Friday, as it lowered its calendar 2009 forecast for oil prices to $45 a barrel, down from a previous $80 a barrel prediction.

. . . I was reminded that last spring, Goldman also predicted that oil was going to hit $200. So what does this teach us? My impression is that Goldman makes recommendations based on current momentum, and not accurate forecasting. After all, what is its excuse for not getting it right last spring? They would probably say: conditions have changed -- the economy has worsened, the credit crunch and ensuing financial collapsed has so dented the global demand for oil that the price will be depressed for awhile. To which I would respond: The economy was worsening when you thought it was fine; oil demand was decreasing already when you were predicting its increase would be continuous. Objective conditions haven't changed, your perceptions have changed.

It reminds me of this famous Zen koan:

Two monks were arguing about the temple flag waving in the wind.
One said, "The flag moves."
The other said, "The wind moves."
They argued back and forth but could not agree.

Hui-neng, the sixth patriarch, said: "Gentlemen! It is not the flag that moves. It is not the wind that moves. It is your mind that moves."

The two monks were struck with awe.

Something for Thanksgiving

I wanted something to appear under the "November 2008" portion of my blog archive, so this is it. These are the top ten things for which I'm thankful, right now, at this very moment.

10. After spending two weeks in Europe this month, I'm thankful that I live in America. It's not that Europe isn't amazing, becuase it is. But there's something very special about being here -- it's hard to explain, but if I had to summarize it, I'd say this: " There are just so many options."

9. I'm thankful that almost everyone in Europe, even in the backwoods, speaks some English.

8. I'm thankful that I got to see what an American election looks like from Barcelona. Shifting perspectives are very healthy.

7. I'm thankful that the Europeans were happy with the choice a majority of Americans made, because I think they might have taken out their frustrations on me if the other guy had won.

6. I'm thankful that I didn't panic like everyone else during this financial crisis. I simply don't need the money yet, and I'm convinced that the Big Drop was mostly due to forced selling by Big Money, who needed the liquidity to stay in business, and that it was amplified into a downward spiral by panic sellers. I don't care if I rode my assets to the bottom -- at least my losses aren't locked in.

5. That being said, I'm thankful that I'm not approaching "retirement age."

4. I'm thankful that ESPN and the Travel Channel exist, so that I had something to watch when I couldn't stand the disgusting financial news that permeated CNBC.

3. I'm thankful that I have not been exposed to the continuous violence and discord that so many people have to deal with everyday.

2. I'm thankful that a market for entertainment exists, which allows all of us to distract ourselves in our own special way.

1. I'm thankful that I get to spend most of my time with the one person in the world who has a strange enough mind to understand me.

Selling Your Vote

I recently read a comment by "Marcus" on the EconLog:

Why is it OK for politicians to sell their votes (like we saw with Republicans and the bailout) but it's not OK for the rest of us?

This is a really excellent point. It is against the law for me to trade my vote for economic benefit or to trade my vote with someone from a different state. But through the power of horsetrading and pork barrel politics, congressmen trade their votes every day. They say I'll vote for "Bailout X" if you stick in some cash for a new bridge, or I'll vote for "Bailout X" if you vote for "Spending Bill Y." Aren't their votes more important than ours? Shouldn't they be held to a higher standard, since every one of their votes represents millions of us? What's good for the goose . . .

Money From Without

According to a report just released by MapLight.org, congressional campaigns receive much more financing from special interests than they do from their actual constituents. The report shows that 79%  of campaign contributions to members of the House of Representatives came from out-of-district.  These numbers could suggest an efficacy of representation problem.  

I'm not an expert on election finance or First Amendment issues with regard to political speech, but perhaps a solution to this would be to change the law such that candidates would be prohibited from receiving campaign contributions from outside the particular jurisdiction where one is campaigning.  While not ensuring that the congressperson will be representing the interests of his or her constituents, it will at least create an incentive for them to look inward for support rather than to national special interests. On a macro level, this would probably produce more local  pork-barrel spending, but it might also neuter the lobbying mechanisms of Washington which allow money to take over races.  

Hat tip to OpenCongress.

Cancel the Bailout

Apparently, the market prices the downside of not having a bailout much greater than the upside of having a bailout. This doesn't make any sense.

Last Friday, the S&P 500 was at 1213, in anticipation of a bailout. On Monday, the bailout was rejected by the House. The market crashed down to 1106 as a result -- about 9%, and over a trillion dollars lost.

It trended up again to 1166, on the news that the bailout was going to be reworked and sent through the Senate -- cutting the original crash about in half.

Then, yesterday, the market trended lower again to 1114, almost hitting its low again. So today, in anticipation of the House's revote, markets gained back up to about 1150, another 3%.

Then the House passed the bailout, and the market is selling off.

Clearly, the traders out there have no idea what they're doing anymore, and are so driven by panic that they have mispriced the value of a bailout by over a trillion dollars, measured in value to stocks. Corporate bonds are flat, too. It looks like that $700 Billion just got flushed down the drain.

On Earmarks

It has been noted that John McCain's obsession with earmarks is "bizarre," considering such spending only constitutes "18 billion out of a much larger pie [a federal budget of, gulp, $3 trillion]". As a matter of fiscal policy, the argument is correct. Earmarks, otherwise known as pork, just aren't a big part of total government spending.

However, I can understand why earmarks might be an important political issue. For one, $18 billion, on an absolute scale, is pretty big. It's akin to the federal government giving a special interest group one large corporation every year. For example, would we be upset if the federal government gave away Valero, the largest publicly traded oil refining company in the U.S., at approximately $18 billion, to the citizens city of Omaha, Nebraska? Should that be a valid exercise of government spending?

The answer is no, of course. The issue with earmarks is not that they are expensive in relationship to all other government spending, it is that they only benefit certain interest groups, instead of the country as a whole. It is not a matter of fiscal policy, it is a matter of social justice.

Free Rent For the Innocent!

From the Economist's "Democracy in America" blog:

Ben Bernanke and Hank Paulson have proven that they understand the concept of moral hazard. Wherever the government and Fed have stepped in, they've vacated management and erased shareholder wealth. If upcoming bailouts maintain this discipline, it will be the institutions and the functions they perform, rather than the wicked, that the people will have rescued to mutual benefit.

And what about the "innocent taxpayer", who seems to make a cameo appearance in every stump speech? Please. The teeth of the mortgage-backed equity now gobbling government IOUs may be complex financial instruments, but the stomach is a taxpayer who broke a contract. A taxpayer may be innocent of or an accomplice to present evils, but the taxpayer, collectively, is both. This bailout may smell a bit like socialism, but it certainly isn't plunder.

Well, the author is partly correct. The incorrect part? I would be willing to bet that many of the people who have been getting mortgages and not paying them are people who are probably not paying all that much in taxes. These are probably the people who bought houses for the sole purpose of being able to deduct mortgage interest from their taxes. These are people who should have been renting. They are not innocent. I, on the other hand, and many other prudent renters, are innocent. We actually helped the economy by (1) not committing to debt that we couldn't pay, and (2) not seeking ownership and thereby not enhancing the demand (or speculation for continued upward movement of demand) for housing that caused the bubble, and credit crisis, and now, the disaster that is our financial system. And we've paid our taxes dutifully, like good little citizens, and now we're all going to be funding this bailout, while these jerks who had to go and buy a house get off scott free.

I propose that we renters, who did not take part in the reckless, selfish homeowner lovefest, should be rewarded by either not having to pay any more taxes, or getting to live in foreclosed properties for free! They should at least get rid of the mortgage interest deduction in favor of a renter's deduction. I mean, come on, throw us a bone.

Now that would be fair. And of course, that's why it would never happen.

Why the Market is Like Craps

Even though the vast majority of economics and business talking heads support the practice of shorting* as a mechanism of "price discovery," the SEC has gone and banned it, in part because of the bad press it has gotten in these recent financial stock fallouts.

It seems to me that we (the govt, investors) just don't want people betting against stability. It's a legal, fair option that's on the table, like "Don't Pass" on the craps table, but like "Don't Pass," it's usually precluded by etiquette, even if the odds are better in certain situations.

* In my opinion there's nothing nefarious about short selling, in principle, but in practice, I happen to believe short sellers must attempt to create rumors and spread false information to make stocks drop. It's just rational economic behavior. But it's hard to support a practice that thrives on panic. Short selling, to me, is like price gouging -- it's "fair" in the sense that's it's just reflecting supply and demand, but it feels dirty.

Cut Hochuli Some Slack

Ed Hochuli, a longtime referee in the NFL, has been "downgraded" for making a bad call involving a fumble in the epic Chargers-Broncos game last week. Basically, Jay Cutler fumbled, but kind of looked like he was in the process of a tuck (the infamous Tom Brady fumble that got the 2001 Patriots to the Superbowl), and so Hochuli called it an incomplete pass and whistled the play dead. As a result, the Chargers, who picked up the fumble, did not get possession, and the coaches couldn't review the play because it was called dead on the field.

Poor Hochuli has admitted his mistake and apologized profusely for the call, which was amplified becuase it played a big part in the resolution of a very close game in the fourth quarter. And he was given a "bad grade" for it (it might keep him out of the playoffs). But fans and the NFL establishment are taking this too far -- I've heard some of the sports talk shows speculate that the NFL could suspend Hochuli or even fire him.

This is overreaction. Every game I've ever seen involves an awful call like this. Some can be reviewed and corrected, but some can't because of the NFL's dead ball rule. If they just changed the rule, and said that, in loose ball situations, the play isn't dead until some team recovers possession, even if it is whistled dead, then at least they could do a booth review and award possession accordingly. I mean, how difficult would that be to implement? So make the change, NFL, and get off Hochuli's back.

P.S. - Implement review for pass interference and face mask calls, too, while you're at it.

Bide Thy Time

Apparently, from what I've heard, a lot of Democrats are starting to freak out, thinking that this election is already within the grasp of John McCain. I have one piece of advice for all of you out there, who think that this thing is lost:

Shut up, and bide your time.

The problem is, you're pushing uneducated people into the arms of Palin. Every time a journalist snickers, or a blogger, engorged with smugness, makes some comment about how stupid Palin is, you lose another voter. A voter who would have been with you, except is so turned off by your venom and condescension, that she is forced into the other camp. That voter thinks, "gee, she's the governor of Alaska, and they think she's an idiot -- I'm just a regular person working at a dead-end job, trying to make ends meet. They must think I'm a real piece of shit!"

So you have to make a decision. Which do you derive more pleasure from: Winning the White House, or making fun of hicks? Think carefully.

Because if you choose the former, all you have to do is shut up, and wait for Palin to make her own mistakes, and she will. I've heard that Obama is pursuing an attack dog strategy now, at the insistence of Dems that fear the Republicans are making headway. That is absolutely the wrong strategy. What you do is let them get comfortable, and they'll start making mistakes on their own. You don't want to turn them into victims of the media, or political correctness, or of elitism. You want to let them expose themselves.

Good luck.

Man Made

An excerpt from the Gibson-Palin interview:

PALIN: The debate on that even, really has evolved into, OK, here's where we are now: scientists do show us that there are changes in climate. Things are getting warmer. Now what do we do about it. And John McCain and I are gonna be working on what we do about it.

GIBSON: Yes, but isn't it critical as to whether or not it's man-made, because what you do about it depends on whether its man-made?

This is one of the biggest problems I have with the global warming movement. The assertion that we must recognize it is man-made has nothing to do with whether we should do anything about it, or how we should handle it. Man made or not, if it has devastating costs, we should try to limit it, by trying to (1) cool the atmosphere, or (2) anticipate and mitigate the damages.

Despite this, the movement is focused on blame as its primary issue. It's a quasi-religious concept: nature, on its own, can cause us great harm and devastation, and we have to live with it, because it's natural, and therefore intrinsically good; but if we alter nature, and then it causes us harm and devastation, we must do something about it because of our role in causing it. I'm sorry, but that's religion, not science.

This makes no sense -- scientifically, cooling our atmosphere could involve a lot of things (hell, the fact that the sun's inactivity might be granting us a short, shallow ice age soon may help), but none of them should depend on knowing whether something is man-made. We know we've omitted more carbon dioxide into the atmosphere than was previously there, if only because of our population growth, meat industry, and industrial output. That is evident. However, carbon dioxide is only one part in a larger global warming picture, which also involves solar output, water vapor, and other factors. We can't know if global warming wouldn't be happening in our absence -- there is no control group. All we can do is predict what we can, and if global warming is coming, and if it will surely cause great pestilence and suffering, then we should do something about it.

The truth is, our scientific establishment should be constantly trying to fight against nature -- nature is overwhelmingly fickle -- it does not love us! We can get some things from it, and it takes some things from us. It is, as Vonnegut would say, utterly indifferent. We should try to stop tornadoes and earthquakes and volcanoes and global warming and wildfires and tsunamis -- we shouldn't accept anything just because it is natural.

Unfortunately, this religious underpinning is the only thing that keeps me from signing on completely to the Global Warming movement. They tout science and rationality, but they act like evangelists! (Repent, repent, the day of wrath is coming!) In this way, they're like intelligent design advocates: trying to manipulate science's shortcomings to prove their beliefs, including their vision about how man should live.

John McCain's Speech

Best Choice:
Acknowledging that the Republican Party had lost its way.

Worst Choice:
When McCain said:"I’m not running for president because I think I’m blessed with such personal greatness that history has anointed me to save our country in its hour of need." An obvious jab at Obama, it didn't seem to come off well, and worse, it distracted from the reverent mood that he was trying to create by talking about his captivity.

Most Unfortunate Moment:
Surprisingly, it was not when the protesters interrupted the speech. It was not when the audience repeatedly chanted "U-S-A". Rather, it was right after John McCain recited a list of things that everyone could do to serve a cause greater than his or herself. Among those items on the list was "teach an illiterate adult to read." Moments later, the NBC cameraman panned over to an audience member holding a sign, reading "John McCain: Mavrick."

Most Interesting Stat:
References to "change" in their acceptance speeches -- Obama 15, McCain 10.

Most inspired choice:

Playing Heart's "Barracuda" after the speech. As everyone knows by now, "Barracuda" was Sarah Palin's nickname when she played high school basketball. I'm sure the Wilson sisters are on the phone with their lawyers right now.

UPDATE 9/5/08: The Wilson sisters are indeed pissed.