Archive for February, 2009

Brother, can you spare some wisdom?

I have come to believe that the whole world is an enigma, a harmless enigma that is made terrible by our own mad attempt to interpret it as though it had an underlying truth. – Umberto Eco

Where the fuck is my wisdom?

Seriously, wisdom was supposed to part of the deal, the salve that soothes amidst aging’s unceasing, unending parade of insults and torments. I am now well into my 36th year – my hair is thinning, my back is creaking, my sex drive is waning.

Wisdom should be accumulating, dammit.

I should know more about who I am, what I want to do, and why I’m here on this Earth. I should know more about how the world operates, more about love and relationships, more about politics and economics, more about morality and religion, more about culture and art.

I should know more.

And yet I feel at least as uncertain and confused about life as I’ve ever felt.

It’s not like I haven’t tried finding wisdom. I’m always searching for it. I am at least wise enough to know that more gray hairs don’t automatically translate into more gray matter. So I listen, I observe, I travel, I read, I muse, I cogitate, I study, I analyze. And yet the answers are as elusive as ever.

(I blog as well, obviously, though that’s a process I’ve come to see as mainly an attempt to convince others you have wisdom. Faking wisdom is of course a mighty poor substitute for having wisdom, but in a world populated mostly by fools, it will at least likely get you through the days.)

It’s scary how little I know and how contradictory my beliefs are. When it comes to religion, I’m an incredibly superstitious agnostic who prays when danger nears. When it comes to love, I’m a romantic who doesn’t quite believe in monogamy. When it comes to politics, I’m a bleeding-heart libertarian who has done nothing to change the world for the better other than exercise a wildly underappreciated right to vote.

Most days, I don’t even know who I am. What makes me happy? What is my purpose? Will having a family fulfill me or stultify me? Am I wasting my days away?

When will the wisdom come?

Sometimes I feel I’m right on the edge of being struck by some tremendous, life-changing insight. It’s hard to explain but I literally can feel wisdom’s presence hovering around me, just outside my grasp, like that of a pleasant, long-forgotten memory which I just can’t quite summon for recall.

My biggest fear is that one day very late in my life, I will finally grasp that elusive wisdom – the clouds will lift, the light bulb will go off, the angels will sing – only to find in the very next moment, before I can even share my hard-earned pearl with anyone, aging will exact its cruelest trick, and I won’t be able to remember what was so wise in the first place.

Nationalize Now …

I am going to try and keep this as short as possible because I’m off on a biz trip tomorrow (expect a lot less blog activity from me for about a week) and have things I need to get done before then.

But I just had to comment on the statement released jointly this afternoon by the Treasury, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS), and the Fed.

In the statement, which discusses the upcoming ‘stress test’ process all large banks will be undergoing starting Wednesday, the government in essence reaffirmed its preference that the banking system remain in private hands, saying in part:

“Because our economy functions better when financial institutions are well managed in the private sector, the strong presumption of the Capital Assistance Program is that banks should remain in private hands.”

For the past several weeks, I have maintained that we need to address our financial crisis in a significant and comprehensive way if we expect the other aspects of our recovery plan, such as our stimulus package, to have any kind of lasting impact.

I have argued that the banking system is so poorly capitalized that we will eventually need to nationalize significant swaths of our banking system, and that I’d rather get there sooner than later before we throw away hundreds of billions of dollars trying to put band-aids on a mortal wound.

I have heard several objections to the idea of nationalizing our banking system over the past several weeks. I will go through them quickly.

1) Do you really expect the government to run a bank effectively?

No, I don’t. And the mandate will have to be for the government to clean up any nationalized institution and get it back into private hands as quickly as possible (though perhaps in a different, less unwieldy form, i.e. turning a conglomerate like BofA into a bunch of smaller institutions based on region or function).

However, it’s not like we’re going to be putting lifelong bureaucrats and politicians in charge of running the day-to-day operations of nationalized institutions. Except for maybe the top tier of management, the vast majority of bank personnel would remain in their current positions, and I assume that respected, qualified individuals who have always worked in finance would make most of the major decisions.

More importantly, I find it deliciously ironic when people pursue this line of argument, because as bad as government will likely be at running banks, how can they possibly do any worse than our vaunted private system, which obviously got us into the current mess in the first place.

2) Nationalizing the banks will throw the system into chaos.

The system is already in chaos. The question is would nationalization cause the kind of systemic collapse that some people argued almost happened when Lehman Bros. was allowed to fail. Opponents fear a situation where all lending would shut down and people would start running to their banks to pull out money, creating a financial panic that we’ve largely avoided so far.

I don’t think this would happen at all. Perhaps the automobile manufacturers can make a rational case that if they were forced to declare bankruptcy, consumers would be much less likely to buy their cars because of concerns about car quality, or warranties being honored. But I think if anything, when it comes to their finances, consumers would feel more confident knowing their money was in the hands of the government. Corporations and other healthier banks I think would also perhaps be more willing to do business with nationalized institutions.

After all, this would be a nationalization, not a bankruptcy where assets would have to be sold immediately and at any price; once the uncertainty of the banks’ survival was removed, the government could take its time in figuring out the best way to handle the toxic asset situation and eventual reprivatization process.

3) Nationalization would call into question the very essence of our capitalist system.

I think this could happen. Confidence in the integrity of the system is a key prerequisite for a healthy, functioning capitalist economy. It’s why large and widespread examples of fraud and abuse, like we’ve seen with Enron and Madoff, create so much long-term damage.

Equity and especially bond holders who see their investments, contracts and covenants basically voided by the federal government would no doubt wonder about the very essence of private markets and private property, and whether they could feel confident that they truly owned any of their other investments.

However, I think we can mitigate these concerns by structuring the process and the language we use to make it clear that any nationalization plan would be both limited in scope and temporary in nature.

Unfortunately, we are facing an emergency situation and extreme measures are sometimes needed at those times. We can deal with the economic philosophizing later.

There are other arguments people have made against nationalization. Some argue that while nationalization may have worked for Sweden and Norway, it will be too expensive here. Others say that if we just tried to value these toxic assets accurately and dropped arcane accounting techniques like mark-to-market, nationalization wouldn’t even be necessary.

I think the critics of nationalization are all swimming in denial. Nationalization won’t be easy and painless. Mistakes will undoubtedly be made throughout the process. Certain investors would obviously lose everything. It’s merely the best of a bunch of bad choices. And whether we like it or not, it’s already happening: We already have basically nationalized Fannie Mae and Freddie Mac and AIG, and could own 40% of Citigroup if a current capital infusion plan being negotiated is implemented.

The question is whether we continue to engage in a form of Chinese water torture by trying to fix the situation in a piecemeal, haphazard manner or finally come to grips with the magnitude of our current crisis by devising a plan that deals with the situation once and for all.

The dagbuzz for 2/22/09: (Slumdog, the Oscars and a Happy Ending I Can Live With)

I usually hate happy endings in movies. They may be fine for movies like Rudy, but for many films, happy endings often ring false and feel like cheap cop-outs. Yet for reasons I explain in the video below, I actually enjoyed the ultra-gooey finale of Slumdog Millionaire.  And I’m totally thrilled that the movie won the Best Picture award at Sunday’s Oscars.

Perhaps because America’s economic story and outlook has become almost as depressing as the childhood of Slumdog protaganist Jamal Malik, it’s somehow fitting that we allowed ourselves to be gloriously deluded by inspiring, well-earned Hollywood ending bullshit.

After all, isn’t that on some level what our faith in Barack Obama is all about – the ability to believe in happy endings despite the overwhelming obstacles in our way and the sheer absurdity of such beliefs.

Other Best Picture nominees this year have displayed some strikingly relevant themes for our time, but no film fits the current zeitgeist better than Slumdog Millionaire.  So I’m thrilled that the movie got its own happy ending by winning the Best Picture award.

Official: Obama plans to slash deficit in half (AP)

Stuffing the Oscar Ballot: The Populist Take on the Odds

Michael Phelps may have been onto something (pun intended) …

I can’t stop stewing over the fact that the South Carolina sheriff decided to investigate Michael Phelps’ notorious bong hit, with an eye toward possible prosecution.

Phelps may be onto something!

Phelps may be onto something!

I know, I know, the sheriff dropped the investigation earlier this week after deciding there wasn’t enough evidence to convict Phelps, who wisely did not admit to smoking the funny weed but merely apologized for using ‘bad judgment.’

But still, the fact that we had even the beginnings of an investigation is an outright travesty. I actually thought it was a joke until I read that the sheriff arrested eight students after his posse stormed the house where the party was held and found trace amounts of marijuana.

All around us, this country seems to be going to hell, and with state unemployment at 9.5%,  South Carolina seems to be going through some particularly dark times. There just has gotta be something more pressing on the South Carolina police force agenda than going after a U.S. Olympic champion who decided to let loose one night and get stoned.

In fact, why is this country still not having a serious discussion about legalizing marijuana?? Even 500 leading economists, including the great Milton Friedman, believe the societal benefits of legalization would far outweigh the costs. Sure, $13 billion in tax revenue and cost savings may not sound like a lot when you’re looking at trillion-dollar deficits, but you gotta start somewhere (and in some states like California, those kind of dollars could actually make a dent).

Marijuana is the easiest argument to make for legalization because few people can argue that it is more dangerous than alcohol or cigarettes. And the successful medical marijuana state initatives have at least paved the way for us to begin a reasonable discussion about the issue.

But frankly, if I had my way I wouldn’t stop with marijuana. I’d legalize all drugs, and then tax the shit out of them. And then I’d move on to prostitution and do the exact same thing.

I’m not about to argue that legalizing drugs and prostitution would limit their occurrence in our society by making them more expensive or perhaps less ‘cool’ among the younger kids. On that front, legalization has had a mixed record in countries where it’s been tried.

However, I don’t think legalization would dramatically raise the levels of occurrence either, or burden our already strained health care system.

And these are areas where the government could actually do some good through taxation and regulation, filling in state revenue gaps (without going into more debt) and helping to combat contaminated drugs in the black market or the spread of STDs and violence in the sex worker industry.

We are wasting so many resources – in our police stations and our courts and our jails – to fight these silly wars which can’t be won, and which are funding terrorist organizations and hostile governments throughout the world.

Laws already exist on the books to guard against drug- or prostitution-related crimes, such as driving under the influence, or forced enslavement. I strongly believe we have the right to do whatever we want to our bodies as long as we are not harming others in the process. That to me is one of the core principles of what it means to be an American.

And could there possibly be a better example of an American hero than Michael Phelps? He brings home the gold and then possibly shows us one way to help solve our economic woes … Awesome!!

The buzz for 2/18/09: Cars and Houses and Chimps, Oh My!

I’m starting to feel the economy is like the chimp gone mad yesterday in Connecticut. You know, the one who ripped off the face of his owner’s friend.

“It’s eating us!! Listen to me, you have to shoot it!!”

Today’s economic damage tally:

$22 billion more for the car companies, 50,000+ expected jobs lost anyway.

$75 billion in mortgage relief for irresponsible homebuyers. (BTW, just got done reading through the details of the mortgage relief plan, and it actually looks fairly sensible on first blush. Bravo!)

Thanks again to Yahoo! buzz:

911 tape captures chimp owner’s horror

GM, Chrysler seek billions more, to cut more jobs (AP)

Image: $75 billion mortgage plan

$75 billion mortgage plan

Image: Recession will be worst since 1930s: Greenspan      (Reuters)

Recession will be worst since 1930s: Greenspan (Reuters)

The Buzz for 2/17/09: (Obama’s New New Deal?)

So Obama signed the American Recovery and Reinvestment Act of 2009 into law in Denver this afternoon. I’ve heard several pundits calling the $787 billion stimulus package the beginning of Obama’s New Deal. In today’s dagbuzz, I discuss why that comparison is foolish, and why we probably couldn’t even afford a new New Deal even if we desperately needed one.

I know Obama isn’t done with today’s bill. Homeowner and banking rescue plans are in the works and coming soon, but everything I’ve heard so far suggests that what the administration is trying to accomplish falls far short of the broad scope and scale of FDR’s New Deal plan.

The reason for our somewhat modest response may be partly that as bad as things are today, they’re not nearly as bad as they were when FDR took office (total shutdown of banking system, 25% unemployment), or maybe partly because of Obama’s more tenuous political situation (FDR got Congress to grant every single one of his ‘First 100 Days’ requests), but I worry that it’s mostly because we couldn’t begin to afford such a series of initiatives without totally jeopardizing the country’s long-term economic health and standing.

Image: Obama poised to sign stimulus into law      (AP)

Obama poised to sign stimulus into law (AP)

The dagBuzz for 2/12/09: (Darwin, Lincoln, and the new MOFT)

Exciting news, daggers (well, it’s at least exciting for Deadman)!! I have bought a snazzy new hi-res Webcam, and the videos should now end up being much, much clearer. However, the bad news is that not only do you now get to see all of Deadman’s defects in full glory, but I kind of liked the way the old dark and grainy images fit the Deadman persona.

All hope is not lost, though, as the new webcam can do some very cool things, some of which could help solve my persona dilemma.

The actual dagBuzz portion of the video today is brief, but please daggers watch the video all the way through to the end so you can see what the camera can do, and let me know what you think. Trust me, you won’t be disappointed, it’s pretty cool stuff – The Logitech 9000 Pro Webcam has been immediately anointed as My One Favorite Thing of the week – and as a bonus, I embarrass myself to the fullest throughout the proceedings.

Here are the Yahoo Buzz! stories:

Op-Ed Contributor: The Origin of Darwin

Obama looks to Lincoln while launching presidency      (AP)

Obama looks to Lincoln while launching presidency (AP)


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