Due to the rigors of my job, we’ve been a little behind here on the Walrus File, but I don’t want that to continue. So… some thoughts.
-Early Obama cabinet appointments/rumors have been extremely interesting. Eric Holder would be the first African-American Attorney General. Hillary Clinton for Secretary of State? Or maybe John Kerry? Will Gates stay on at Defense (which I think would be a bad idea, but I was never a big fan of the “bipartisanship” craze.)? Tom Daschle, the former Senate Minority Leader from South Dakota, appears to be in line for Secretary of Health and Human Services. And today comes word that the top choice for Secretary of Homeland Security is the current Governor of Arizona, Janet Napolitano. Many have criticized this group as too full of “Clintonistas” and not symbolic enough of the whole “Change” meme. There’s still plenty of time left for that, but I tend to agree at least from a trend-watching point of view.
-Pirates are the new terrorists, which is pretty funny from a certain point of view. First an arms shipment from the Ukraine, and now a Saudi oil tanker with a cargo worth at least a hundred million dollars, have been making front page headlines after pirate hijackings off the lawless coast of Somalia. Pirates are on the verge of becoming the New Missing White Women in our news media. And really, can you blame CNN for spending so much time on the pirate story when everything else is just sort of dank. The Columbus Dispatch’s front page headline today was about “A Cornucopia of Gloom.” I think the copy editors were getting bored. Meanwhile, al-Qaeda is releasing bizarre videos where they talk about how Obama and Colin Powell are “house negroes”. I guess it’s still the 1920s in the mountains of Pakistan. Also, we learn al-Qaeda are big fans of Malcolm X. Who knew?
-Forget gay marriage, bailouts appear to be the real slippery slope. Give one to AIG, now everybody and his brother wants one. Some may need them… others I’m not so sure about. How to choose?
-On the plus side, Thanksgiving is coming up. Our local Giant Eagle is well stocked with giant forty dollar turkeys. Is anyone out there headed home for the holiday? And if so, where are you going, and how are you getting there?
-It’s Ohio State/Michigan week! The greatest rivalry on the gorram planet, if we do say so ourselves. The Buckeyes are the massive favorites, but they always say that you can throw out the records when these teams play. I had the opportunity this week to meet Art Schlichter, the last OSU QB to start the big game as a freshman. He’s an interesting guy. This Saturday Terrelle Pryor will be the next. The game will be here in Columbus, and will result in widespread insanity no matter the outcome.
-COTA (the Central Ohio Transit Authority, aka the local bus system I ride everywhere) is moving its offices downtown. According to the “Dispatch”, there will be no easy available parking for employees, which is on purpose. The director says that he now wants all employees, including himself, to ride the bus to work. I’m sure that’s going over well.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Thursday, November 20, 2008
Tuesday, October 14, 2008
Best... Day... Ever
Yes, the Dow Jones average had its largest single-day point gain yesterday, with news of a “new bailout” that involves the government directly investing in various troubled banks. The Bush administration announced the plan yesterday, which involves $250 billion on top of the $700 billion already funneled to financial firms, as well as additional guarantees of bank transactions from the FDIC. Bush himself argued that the move is “essential so that the free market can continue to function,” though grumbling from some conservative allies suggested that the government might essentially be destroying the free market in order to save it. The markets gained back about a third of what they lost last week.
Of course, the untold story if you read US newspapers and websites is that the markets weren’t necessarily reacting to something the US government did… the markets these days are global, and the huge groundswell was already building through the day around the world. It began because European leaders agreed on their own bank protection plan, which the US plan basically copied. The Europeans had no compunctions on what they were doing, calling this a “re-nationalization.” The big winner appeared to be French President Nicolas Sarkozy, who managed to get the various interested parties to stop yelling at each other long enough to broker a deal.
The European leaders emphasized that “no bank will be allowed to fail,” and vaguely implied criticisms that the expensive US bailout was both late-arriving and ineffective. The French Financial Minister basically said that she would never have let Lehman Brothers fail on her watch. If you take a look at the history of the past couple decades, European nations have a varied history with nationalized banks, ranging from the catastrophe that was France’s governmental involvement with Credit Lyonnais to the unqualified success of the Swedish nationalization of its financial industry. However, this is different from those past experiences because it involves every EU nation rather than individual nations acting on their own. It seems to be what many economists were calling for all along and has certainly had the success in drawing a market reaction that the initial reveal of the so-called “Paulson Plan” did not.
One interesting aspect of this crisis may be the continued emergence of the EU as a modern superpower. Many in the United States still think of ourselves as the world’s only superpower, but that’s certainly not the case in an economic sense, and that may be the most important one. The EU and China have made massive strides in recent years, to the point where the EU economy may be smaller but better managed, and the Chinese economy is large enough for that nation to start running foreign policy based on monetary aide. I asked a week or so ago what the big change that comes out of the current financial crisis will be, and it may end up being American recognition of the EU as a collective power on the world stage.
Of course, the untold story if you read US newspapers and websites is that the markets weren’t necessarily reacting to something the US government did… the markets these days are global, and the huge groundswell was already building through the day around the world. It began because European leaders agreed on their own bank protection plan, which the US plan basically copied. The Europeans had no compunctions on what they were doing, calling this a “re-nationalization.” The big winner appeared to be French President Nicolas Sarkozy, who managed to get the various interested parties to stop yelling at each other long enough to broker a deal.
The European leaders emphasized that “no bank will be allowed to fail,” and vaguely implied criticisms that the expensive US bailout was both late-arriving and ineffective. The French Financial Minister basically said that she would never have let Lehman Brothers fail on her watch. If you take a look at the history of the past couple decades, European nations have a varied history with nationalized banks, ranging from the catastrophe that was France’s governmental involvement with Credit Lyonnais to the unqualified success of the Swedish nationalization of its financial industry. However, this is different from those past experiences because it involves every EU nation rather than individual nations acting on their own. It seems to be what many economists were calling for all along and has certainly had the success in drawing a market reaction that the initial reveal of the so-called “Paulson Plan” did not.
One interesting aspect of this crisis may be the continued emergence of the EU as a modern superpower. Many in the United States still think of ourselves as the world’s only superpower, but that’s certainly not the case in an economic sense, and that may be the most important one. The EU and China have made massive strides in recent years, to the point where the EU economy may be smaller but better managed, and the Chinese economy is large enough for that nation to start running foreign policy based on monetary aide. I asked a week or so ago what the big change that comes out of the current financial crisis will be, and it may end up being American recognition of the EU as a collective power on the world stage.
Friday, October 10, 2008
Bits: Shark Jesus Edition
Pic courtesy of the-amazing.com-According to NewScientist, Turkish creationist Adnan Oktar is offering $7.5 trillion dollars to anyone who can produce an intermediate-form fossil proving evolution. Um, haven't we already found those? I mean, the creationists have an argument ready against them, but we've already found, you know, fishes with legs. No sources have said where he would get that much money. Oktar recently sold 10,000 copies of a book denying evolution, and successfully campaigned to have Richard Dawkins' website banned in Turkey.
-San Francisco TV station KTVU reports that they're going to put a net under the Golden Gate bridge to prevent suicides. I'm trying to picture the thought process here... "You mean I can't jump off the Golden Gate? I'll have to use a less famous bridge, or maybe take a lot of pills? I dunno, maybe I'll just go on living then..."
-Shark Jesus! Scientists at an aquarium in Richmond, Virginia have reported that a female blacktip shark conceived without any male input... a virgin birth. The fetus was discovered during a necropsy on the mother shark after it had died of "complications." It contains no genetic material from a male. This is apparently not the first time this has happened, as there is much discussion in the linked article about "parthenogenesis," which apparently does not mean what Willow Rosenberg led me to believe it meant.
-In other news, the world economy continues its drain spiral. The Finance ministers from the G7 nations are meeting in Washington DC. Will they come up with a solution? Is the devil on the doorstep wearing galoshes?
-Alternative artist Banksy has opened an art installation in New York City that is a sort of insane magic pet store. I cannot make this stuff up. Make sure to watch the video with the dancing chicken nuggets, and the college-age girl wondering "Are they real?"
-Surprise! Not only does Life on Mars not suck, it got decent ratings last night. But not quite as decent as CBS' anti-science procedural (and yet another foreign remake) Eleventh Hour. "It's like that scary Fringe show, but safe and boring for old people!" I think that's actually their advertising campaign.
-Free TV on the Internet: Wednesday's episode of Bones, in my opinion the best procedural on TV, was about a murder in a tight-knit religious community on Chesapeake Bay. This brings out inherent conflicts among the characters, with Brennan getting lines like "You are all united by your shared superstition" and "Do these people believe in DNA?" Oh, yeah, it's called "The He in the She." Watch it here.
Meet the New Nobility
The Nobel prizes, perhaps the greatest honors given out by mankind, have been announced, and there are some surprises and some interesting stories. Here’s who’s getting them this year:
Physics: Yoichiro Nambu (b. Tokyo, currently at the Fermi Institute in Chicago), for the discovery of the mechanism of spontaneous broken symmetry in subatomic physics. Also, Makoto Kobayashi & Toshihide Maskawa (KEK in Kyoto), for the discovery of the origin of the broken symmetry which predicts the existence of at least three families of quarks in nature. The Irish news service RTE reported that “They laid the theoretical foundations for modern understanding of how the laws of physics differ for matter and anti-matter.”
Medicine: The prize went to three researchers crediting with discovering important viruses, this allowing for their effective treatment. The honorees are Harald zur Hausen (German Cancer Research Centre, Heidelberg) for his discovery of human papilloma viruses causing cervical cancer, and Francoise Barre-Sinoussi & Luc Montaignier (Institut Pasteur, Paris) for their discovery of human immunodeficiency virus. Definitely deserved all around.
Chemistry: Three Americans: Osamu Shimomura (born in Japan), Martin Chalfie, & Roger Tsien, received the prize for the discovery and development of the green fluorescent protein, GFP. Remember those pictures of the glowing cats? Yeah, that was these guys. I want a glowing cat. It was reportedly discovered in jellyfish, then researchers discovered they could use it as a study marker.
Literature: I personally think the literature branch is completely out of touch with reality. I’m not usually nationalist, but the head of the committee said the other day that there’s “nothing of value” coming out of America right now. Uh-huh. The prize this year went to a French writer I’ve never heard of, Jean Marie Le-Clezio, "author of new departures, poetic adventure and sensual ecstasy, explorer of a humanity beyond and below the reigning civilization."
Peace: Probably the most prestigious prize goes this year to the former President of Finland, Martti Ahtisaari. He has apparently been a peace moderator everywhere from Kosovo to Indonesia’s Aceh Province, though I had never heard of his laudable efforts before now. Most Americans have only heard of the current Finnish president, a woman who Conan O’Brien supported because he thought she looked like him. Um…
The Economics prize will be announced Monday. Of course, the Nobel prizes were started by Alfred Nobel, the inventor of dynamite. He decided that his invention was too violent and decided to do something positive with his fortune in his will. In addition to the prestige, winners get oodles of cash. The prizes are awarded in Stockholm, except for Peace, which is awarded separately in Oslo, for whatever reason.
Physics: Yoichiro Nambu (b. Tokyo, currently at the Fermi Institute in Chicago), for the discovery of the mechanism of spontaneous broken symmetry in subatomic physics. Also, Makoto Kobayashi & Toshihide Maskawa (KEK in Kyoto), for the discovery of the origin of the broken symmetry which predicts the existence of at least three families of quarks in nature. The Irish news service RTE reported that “They laid the theoretical foundations for modern understanding of how the laws of physics differ for matter and anti-matter.”
Medicine: The prize went to three researchers crediting with discovering important viruses, this allowing for their effective treatment. The honorees are Harald zur Hausen (German Cancer Research Centre, Heidelberg) for his discovery of human papilloma viruses causing cervical cancer, and Francoise Barre-Sinoussi & Luc Montaignier (Institut Pasteur, Paris) for their discovery of human immunodeficiency virus. Definitely deserved all around.
Chemistry: Three Americans: Osamu Shimomura (born in Japan), Martin Chalfie, & Roger Tsien, received the prize for the discovery and development of the green fluorescent protein, GFP. Remember those pictures of the glowing cats? Yeah, that was these guys. I want a glowing cat. It was reportedly discovered in jellyfish, then researchers discovered they could use it as a study marker.
Literature: I personally think the literature branch is completely out of touch with reality. I’m not usually nationalist, but the head of the committee said the other day that there’s “nothing of value” coming out of America right now. Uh-huh. The prize this year went to a French writer I’ve never heard of, Jean Marie Le-Clezio, "author of new departures, poetic adventure and sensual ecstasy, explorer of a humanity beyond and below the reigning civilization."
Peace: Probably the most prestigious prize goes this year to the former President of Finland, Martti Ahtisaari. He has apparently been a peace moderator everywhere from Kosovo to Indonesia’s Aceh Province, though I had never heard of his laudable efforts before now. Most Americans have only heard of the current Finnish president, a woman who Conan O’Brien supported because he thought she looked like him. Um…
The Economics prize will be announced Monday. Of course, the Nobel prizes were started by Alfred Nobel, the inventor of dynamite. He decided that his invention was too violent and decided to do something positive with his fortune in his will. In addition to the prestige, winners get oodles of cash. The prizes are awarded in Stockholm, except for Peace, which is awarded separately in Oslo, for whatever reason.
Wednesday, October 8, 2008
MemeWatch: The Second Great Depression
Wherever we are in the world, the economy is obviously in rough shape. In America, polls of likely voters have 60% saying the economy is the most important issue when it comes to deciding who to vote for. In the 1992 election (where the private motto of Bill Clinton's victorious campaign was famously "It's the economy, stupid"), that number never rose above the low forties. With all that attention, the media is sitting up and taking notice. Everyone suddenly wants to hear what previously-boring people like Ben Bernanke and Warren Buffett think of the crisis. And the one question that always seems to be asked is: "Are we on the verge of another Great Depression?"
As I've talked about in previous posts, no matter how bad the current crisis gets, it will be very different from what we call the "Great Depression." Banks failed left and right, and since this was pre-FDIC, the money in those banks effectively ceased to exist. A third of America's wealth disappeared essentially overnight, which led to hardships not just here but across what was at that time a fledgling global economy. It's estimated that about 25% of the country was out of work. And the thing is, though there are specific benchmarks for a "recession," there aren't for a "Depression." It's simply defined as a "very severe recession."
I have very little feel for how it was viewed elsewhere, but the Depression is still seen as an extremely important period of American history. Many of our greatest literary classics date from this time. It changed the face of the country, permanently putting a fork in the rural society in favor of the urban and leading to a sustained phase of western migration. It was the depression, not motion pictures, that really made Los Angeles what it is today. Old institutions collapsed and new ones sprung up. Medicare, Social Security, and the SEC were all direct results of the Depression. The legacy of the Depression was the defining issue in this country, in one way or another, for decades (in my opinion this was followed by the Vietnam-era cultural split, of which this election may serve as the death knell).
So you see that the question of whether that time is back isn't picked out of thin air. Mostly those in power have been reticent to say we're heading towards "another Great Depression." More common is the idea that what we're experiencing is the worst crisis since the Great Depression, which is probably safer. That language has been used (independently, but the whole idea of memes is that it's not really independently) by both President Bush and Sen. Obama, Bush in a prime-time televised address to the nation. But what does that mean?
For the everyday citizen, the best way to look at this (since, as I said, we're not about to lose our savings like they did in 1929) is in terms of unemployment, and how hard it is to get a loan. We're not close to that 25% figure yet, but it's not as far away as we might believe. The official unemployment rate here in Ohio is currently 7.4%. But that doesn't mean that 93% of the population has a job. The unemployment rate only takes into account those who are physically able and currently looking for work. It also doesn't take into account the "underemployed." A year ago, I was making minimum wage working 8 hours a week. I would not have been considered unemployed, though you obviously can't make a living long term doing that. So estimates indicate that the "real" unemployment in this state is much closer to 15%. It's also becoming extremely difficult to get a loan. One example: auto sales (where most customers need loans) are down as much as 75% in the Cleveland area.
So here's the thing: the question isn't out of line, but I'm not sure it's helpful to our understanding of this issue. This is Earth 2.0, and conditions are so different from 1929 that it's comparing apples and oranges. Could you end up reasonably saying this is "as bad as" the Great Depression? Maybe, though it would just be your opinion. But one way I think the two may compare is in their far-reaching effects. What will be the Social Security-like structural change in our country that comes out of this crisis? That will be how its legacy is measured in the end.
As I've talked about in previous posts, no matter how bad the current crisis gets, it will be very different from what we call the "Great Depression." Banks failed left and right, and since this was pre-FDIC, the money in those banks effectively ceased to exist. A third of America's wealth disappeared essentially overnight, which led to hardships not just here but across what was at that time a fledgling global economy. It's estimated that about 25% of the country was out of work. And the thing is, though there are specific benchmarks for a "recession," there aren't for a "Depression." It's simply defined as a "very severe recession."
I have very little feel for how it was viewed elsewhere, but the Depression is still seen as an extremely important period of American history. Many of our greatest literary classics date from this time. It changed the face of the country, permanently putting a fork in the rural society in favor of the urban and leading to a sustained phase of western migration. It was the depression, not motion pictures, that really made Los Angeles what it is today. Old institutions collapsed and new ones sprung up. Medicare, Social Security, and the SEC were all direct results of the Depression. The legacy of the Depression was the defining issue in this country, in one way or another, for decades (in my opinion this was followed by the Vietnam-era cultural split, of which this election may serve as the death knell).
So you see that the question of whether that time is back isn't picked out of thin air. Mostly those in power have been reticent to say we're heading towards "another Great Depression." More common is the idea that what we're experiencing is the worst crisis since the Great Depression, which is probably safer. That language has been used (independently, but the whole idea of memes is that it's not really independently) by both President Bush and Sen. Obama, Bush in a prime-time televised address to the nation. But what does that mean?
For the everyday citizen, the best way to look at this (since, as I said, we're not about to lose our savings like they did in 1929) is in terms of unemployment, and how hard it is to get a loan. We're not close to that 25% figure yet, but it's not as far away as we might believe. The official unemployment rate here in Ohio is currently 7.4%. But that doesn't mean that 93% of the population has a job. The unemployment rate only takes into account those who are physically able and currently looking for work. It also doesn't take into account the "underemployed." A year ago, I was making minimum wage working 8 hours a week. I would not have been considered unemployed, though you obviously can't make a living long term doing that. So estimates indicate that the "real" unemployment in this state is much closer to 15%. It's also becoming extremely difficult to get a loan. One example: auto sales (where most customers need loans) are down as much as 75% in the Cleveland area.
So here's the thing: the question isn't out of line, but I'm not sure it's helpful to our understanding of this issue. This is Earth 2.0, and conditions are so different from 1929 that it's comparing apples and oranges. Could you end up reasonably saying this is "as bad as" the Great Depression? Maybe, though it would just be your opinion. But one way I think the two may compare is in their far-reaching effects. What will be the Social Security-like structural change in our country that comes out of this crisis? That will be how its legacy is measured in the end.
Monday, October 6, 2008
Bits: Everything Sucks Edition
-The bailout approved by Congress last week appears to have done little in the short term to stop the current worldwide financial spiral, though expecting it to have done so may have been unreasonable. Stock markets around the world went sharply downhill Monday. In the US, the Dow Jones dropped below 10000 for the first time in years. In Iceland, the currency was down 7% and the economy appears to be on the verge of collapse. The Frankfurt markets hit the skids after the German government had to perform its own bailout of real estate firms. Russian stock indexes lost over 15% of their value. And so on.
-Here you can find an easy step-by-step process to construct your own "Egg of Time." "Look into its time vortex, and see all that was, and all that will be." Yes.
-Time has a list of words the dictionary is trying to get rid of to make room for 2,000 new words. I am a word geek, and had not heard of any of these.
-New polls from various sources have shown Sen. Barack Obama up in pretty much every swing state, including Minnesota, Michigan, Ohio, Pennsylvania, Virginia, Florida, and New Mexico. However, it's still a month until the election, and we have discussed the accuracy of polls on here before.
-Meanwhile, Cracked.com has come up with a list of 5 presidential elections that were dumber than this one (somehow). It's actually a really good read. I particularly like the caption under the pic of John Quincy Adams: "I'll kill your wife. I don't even care."
-In response to what it says is widespread piracy, Warner Bros. is trying a new tack in Korea... it's going to start releasing its movies online before they hit DVD. How that will help, I'm not totally sure, but it makes sense in other ways.
-The Tampa Bay Rays are in baseball's final four. Hell has told us that it will take more than this for it to freeze over. Hell is just stubborn that way. In other sports news, the Ferocious Walruses fantasy football team remains undefeated. Because I know you've been hanging on every play.
Friday, October 3, 2008
Breaking News: Bailout Passes on Second Try
The US House of Representatives passed the "bailout" of our nation's financial institutions earlier today, by a comfortable margin of 261-171. The bill gained substantial support among both Republicans and Democrats. I guess Republicans weren't as insulted by the package of "sweeteners" as I would have been in their shoes.
The bill was then rushed to the desk of President Bush, who signed it this afternoon. The largest group that switched its votes from no to yes were probably members of the Congressional Black Caucus (all Democrats), who were reassured by recent pledges from Sen. Barack Obama that, if elected, he would support legislation that would assist homeowners who are currently facing foreclosure. Republican Sen. John McCain was also credited with helping to secure votes on his side of the aisle, especially among the delegation from his home state of Arizona.
The vote was far from unanimous, however, and opponents voiced dire concerns. Rep. Marcy Kaptur (D-OH) told us to "Pray for our Republic," while a better known Ohio Rep., Dennis Kucinich, delivered an impassioned speech highlighting the case of a 90 year old Akron resident who shot herself yesterday after authorities attempted to enforce the foreclosure of her home.
It is too early to tell what the final effect of the legislation will be, but here's hoping our government did the right thing here. It'd sure be more convenient than them being wrong. Treasury Secretary Henry Paulson said he would move swiftly to begin the distribution of the funds.
The bill was then rushed to the desk of President Bush, who signed it this afternoon. The largest group that switched its votes from no to yes were probably members of the Congressional Black Caucus (all Democrats), who were reassured by recent pledges from Sen. Barack Obama that, if elected, he would support legislation that would assist homeowners who are currently facing foreclosure. Republican Sen. John McCain was also credited with helping to secure votes on his side of the aisle, especially among the delegation from his home state of Arizona.
The vote was far from unanimous, however, and opponents voiced dire concerns. Rep. Marcy Kaptur (D-OH) told us to "Pray for our Republic," while a better known Ohio Rep., Dennis Kucinich, delivered an impassioned speech highlighting the case of a 90 year old Akron resident who shot herself yesterday after authorities attempted to enforce the foreclosure of her home.
It is too early to tell what the final effect of the legislation will be, but here's hoping our government did the right thing here. It'd sure be more convenient than them being wrong. Treasury Secretary Henry Paulson said he would move swiftly to begin the distribution of the funds.
Thursday, October 2, 2008
Irish Pockets Are Deep
If you thought we had it bad here in the US with the money possibly being given to shore up our own financial system, check out what the government of Ireland just did. That nation has guaranteed 400 Billion euros worth of assets in six of the nation's largest banks. To put that in perspective, that is several times Ireland's GNP.
Now, to be fair, this is not quite the same thing as is being proposed in America. For one thing, it's not actual money at this point. Irish Prime Minister Brian Cowen said "I have not given any money to any bank." This essentially seems to me to be the Irish creating their own emergency version of the Federal Deposit Insurance Commission (FDIC), in case one or more of the banks ends up failing. Ireland, by the way, is already officially in a recession, though the fact that we're not here in the USA points to the problems one gets when one starts using semantics that were made up a century ago.
Still, considering how much money this involves, it strikes me that basically the Irish financial system will be still be very messed up if a major bank fails, just in a different way. Yes, the depositors at the bank will get to keep their savings, but the Irish public will then be left with a heckuva bill. And what if it's more than one?
This brings me to a point I have been wanting to make about the situation here in the States. One of the reasons I have trouble buying this idea that we're on the verge of "another Great Depression" is because of the FDIC, which was made in response to the last Great Depression. What happened in 1929 was that, when the banks failed, people who had their money in those banks lost everything they had. Now, if a bank fails, as happened this week with Washington Mutual, the depositors don't lose their money because it's backed up (up to $100,000 per account) by the FDIC.
So even if banks start failing left and right, it won't hit the average Oklahoman the way it did in the Great Depression because they won't suddenly have "zero dollars," as Mastecard might say. The way it will affect everyone comes in terms of a lack of credit available, which may in turn lead to job losses. However, this is a definite step down in terms of degree.
As for Ireland, good luck with all that. The move has actually caused some controversy already within the EU. The French Finance Minister has said other member states should have had advance notice. After all, if you're going to do something with huge amounts of a currency, it's going to affect everyone who uses said currency. The European Union Competition Commissioner (I wonder what the equivalent USA job title would be?) basically said the same thing. In the meantime, President Sarkozy of France invited EU members to Paris this weekend for talks on the continuing world financial crisis.
Now, to be fair, this is not quite the same thing as is being proposed in America. For one thing, it's not actual money at this point. Irish Prime Minister Brian Cowen said "I have not given any money to any bank." This essentially seems to me to be the Irish creating their own emergency version of the Federal Deposit Insurance Commission (FDIC), in case one or more of the banks ends up failing. Ireland, by the way, is already officially in a recession, though the fact that we're not here in the USA points to the problems one gets when one starts using semantics that were made up a century ago.
Still, considering how much money this involves, it strikes me that basically the Irish financial system will be still be very messed up if a major bank fails, just in a different way. Yes, the depositors at the bank will get to keep their savings, but the Irish public will then be left with a heckuva bill. And what if it's more than one?
This brings me to a point I have been wanting to make about the situation here in the States. One of the reasons I have trouble buying this idea that we're on the verge of "another Great Depression" is because of the FDIC, which was made in response to the last Great Depression. What happened in 1929 was that, when the banks failed, people who had their money in those banks lost everything they had. Now, if a bank fails, as happened this week with Washington Mutual, the depositors don't lose their money because it's backed up (up to $100,000 per account) by the FDIC.
So even if banks start failing left and right, it won't hit the average Oklahoman the way it did in the Great Depression because they won't suddenly have "zero dollars," as Mastecard might say. The way it will affect everyone comes in terms of a lack of credit available, which may in turn lead to job losses. However, this is a definite step down in terms of degree.
As for Ireland, good luck with all that. The move has actually caused some controversy already within the EU. The French Finance Minister has said other member states should have had advance notice. After all, if you're going to do something with huge amounts of a currency, it's going to affect everyone who uses said currency. The European Union Competition Commissioner (I wonder what the equivalent USA job title would be?) basically said the same thing. In the meantime, President Sarkozy of France invited EU members to Paris this weekend for talks on the continuing world financial crisis.
Updates: As the Bailout Turns
-The Senate voted for a version of the bailout today, 74 to 25. Both Barack Obama and John McCain voted in favor of the bill. The current version is very similar to the one the House rejected earlier this week, except for "sweeteners" (and yes, that's apparently the official term) that were added, especially tax cuts. Said cuts are apparently intended to lure Republicans. If I was a Republican, I would feel insulted by that. "They'll vote for anything with tax cuts, it doesn't matter how much they hate the rest of it." And of course, that makes it even less likely that we actually have the $700 Billion dollars to use for this.
-Scientists now say the AIDS virus jumped to people as early as 1884, much earlier than previously thought. I'm not sure what the implications of that are, but it's interesting stuff.
-Sarah Silverman, Leonardo DiCaprio, and Jonah Hill are among an all-star cast that doesn't want you to vote. That reverse psychology won't work on me! http://www.collegehumor.com/video:1832128
-The Baseball playoffs are underway here in the States. Early victories for the Phillies, Dodgers, and Red Sox.
-Comic books too... booky for you? Ever thought "this is great, but I wish it was more computerized?" Comic book stories animated through machinima, now on the intertubes. http://www.youtube.com/view_play_list?p=DF54DE54A3BAA597
-Real life blind people have apparently decided that the upcoming film "Blindness" is offensive in its depiction of blind people. Shocking!
-Scientists now say the AIDS virus jumped to people as early as 1884, much earlier than previously thought. I'm not sure what the implications of that are, but it's interesting stuff.
-Sarah Silverman, Leonardo DiCaprio, and Jonah Hill are among an all-star cast that doesn't want you to vote. That reverse psychology won't work on me! http://www.collegehumor.com/video:1832128
-The Baseball playoffs are underway here in the States. Early victories for the Phillies, Dodgers, and Red Sox.
-Comic books too... booky for you? Ever thought "this is great, but I wish it was more computerized?" Comic book stories animated through machinima, now on the intertubes. http://www.youtube.com/view_play_list?p=DF54DE54A3BAA597
-Real life blind people have apparently decided that the upcoming film "Blindness" is offensive in its depiction of blind people. Shocking!
Wednesday, October 1, 2008
Welcome to the Internet, US House of Representatives
According to CNN.com, The release of the proposed bailout plan online resulted in its site being overwhelmed with traffic, followed by literally millions of e-mails being sent to addresses on the house.gov website. With internet use more and more ubiquitous in this country, governement servers weren't quite prepared on an issue where everyone had an opinion. "Digital traffic cops" have since been installed to manage traffic and only let a certain people on the site at a time.
Now, when specific pages begin to reach their limits, citizens receive a message asking them to "try back later." There was apparently very little drop in web traffic today, even with the Rosh Hashanah holiday. Jeff Ventura, who appears to be the chief resident IT guy, said that this was a much higher level of traffic than after 9/11 Commission report was publicly released online, which was the previous high he had seen. As for the number of e-mails, he said, "We know it's in the millions, but we haven't counted yet, because when you're about to get hit by a tidal wave, you don't count the drops of water in the wave." Kay.
As more and more US citizens begin to live more and more of their lives online, the government has, sensibly, tried to do as much of its business online as possible. It's cheaper, and people don't have to be mobile to deal with it. However, for that system to work, the government has to run its online operations effectively. In my capacity working for the Ohio state government, I have often run into cases where people ran into technological snags while trying to take care of essentials. Now the government can't be responsible for people's home systems (which I'm sure is the actual problem much of the time), but it has to at least be able to anticipate demand in certain situations or else this is only the tip of the iceberg.
The bailout issue is a specific issue that has brought up the strongest electorate opinions since the start of the Iraq War. It's certainly the first time since then that I have seen widespread street protests around the country. It's strange to think how much things have changed since that time. The internet 2.0 has really hit the mainstream in the interim. While many sites have been around since 2002, it is in the time since then that we have seen the rise of MySpace, Facebook, Twitter, etc., as well as perhaps an even greater phenomenon: the point where the internet became a pretty much essential part of life.
I have seen several local newspaper stories recently concerning how libraries are rushing to add internet capacity to keep up with demand, as those without their own connections still have some things they have to do online. I head to the library about once a week. My local branch has at least thirty computers available with internet access, and when I go there in the 5pm hour, all or nearly all of the computers are in use.
So, the upshot is, when we now come to an issue everybody's got an opinion on, and feels personally affected by, the e-mails being sent to our government officials are going to number in the millions rather than thousands. Not only do the servers have to be beefed up, but my heart goes out to the person whose job it is to read all of them.
In other news, I have CNN on in the background, and they've actually sent somebody to the one tiny town in Alaska where you can see Russia from your house.
Now, when specific pages begin to reach their limits, citizens receive a message asking them to "try back later." There was apparently very little drop in web traffic today, even with the Rosh Hashanah holiday. Jeff Ventura, who appears to be the chief resident IT guy, said that this was a much higher level of traffic than after 9/11 Commission report was publicly released online, which was the previous high he had seen. As for the number of e-mails, he said, "We know it's in the millions, but we haven't counted yet, because when you're about to get hit by a tidal wave, you don't count the drops of water in the wave." Kay.
As more and more US citizens begin to live more and more of their lives online, the government has, sensibly, tried to do as much of its business online as possible. It's cheaper, and people don't have to be mobile to deal with it. However, for that system to work, the government has to run its online operations effectively. In my capacity working for the Ohio state government, I have often run into cases where people ran into technological snags while trying to take care of essentials. Now the government can't be responsible for people's home systems (which I'm sure is the actual problem much of the time), but it has to at least be able to anticipate demand in certain situations or else this is only the tip of the iceberg.
The bailout issue is a specific issue that has brought up the strongest electorate opinions since the start of the Iraq War. It's certainly the first time since then that I have seen widespread street protests around the country. It's strange to think how much things have changed since that time. The internet 2.0 has really hit the mainstream in the interim. While many sites have been around since 2002, it is in the time since then that we have seen the rise of MySpace, Facebook, Twitter, etc., as well as perhaps an even greater phenomenon: the point where the internet became a pretty much essential part of life.
I have seen several local newspaper stories recently concerning how libraries are rushing to add internet capacity to keep up with demand, as those without their own connections still have some things they have to do online. I head to the library about once a week. My local branch has at least thirty computers available with internet access, and when I go there in the 5pm hour, all or nearly all of the computers are in use.
So, the upshot is, when we now come to an issue everybody's got an opinion on, and feels personally affected by, the e-mails being sent to our government officials are going to number in the millions rather than thousands. Not only do the servers have to be beefed up, but my heart goes out to the person whose job it is to read all of them.
In other news, I have CNN on in the background, and they've actually sent somebody to the one tiny town in Alaska where you can see Russia from your house.
Monday, September 29, 2008
Breaking News: Bailout Voted Down
In one of the most dramatic floor votes in a long time, the US House of Representatives today rejected the proposed emergency bailout of financial institutions, and not by only one or two votes, either. The final tally was 205 for, 228 against, with Democrats supporting the measure 140-95 and Republicans rejecting it 65-133. This despite the urging of leadership of both parties, as well as the President and most national financial leaders, for passage. On news of the vote, the Dow Jones average fell over 700 points, a one-day record.
Many representatives seem to have felt that the measure, which would use approximately $700 billion to buy "bad debts" from financial firms, was so unpopular in their districts that a "yes" vote would amount to political suicide. Others felt that it represented too large of a government intervention in the free market. Even those who supported the bill were often see as "holding their nose" while voting for it, with House Minority Leader Rep. John Boehner calling it a "mud sandwich" while explaining why it was necessary. (what does that even mean?) Democrats immediately blamed the Republican leadership for failing to get their rank and file in line, while Republicans blamed Speaker Nancy Pelosi for turning off some of their members with a "partisan speech" just prior to the vote.
It's unclear where we go from here. Wall Street will probably continue its toilet spiral. The measure will probably come back up for a vote at some point this week, but it's unclear what sort of changes they'll have to make to get this past the House.
As I have said here before, I'm not an economist. But I take it as a good sign when individual members of Congress at least attempt to think for themselves and represent their districts rather than just doing what they're told. Were they right in this case? I guess we'll see.
More details here: http://www.nytimes.com/2008/09/30/business/30bailout.html?pagewanted=2&_r=1&hp
Many representatives seem to have felt that the measure, which would use approximately $700 billion to buy "bad debts" from financial firms, was so unpopular in their districts that a "yes" vote would amount to political suicide. Others felt that it represented too large of a government intervention in the free market. Even those who supported the bill were often see as "holding their nose" while voting for it, with House Minority Leader Rep. John Boehner calling it a "mud sandwich" while explaining why it was necessary. (what does that even mean?) Democrats immediately blamed the Republican leadership for failing to get their rank and file in line, while Republicans blamed Speaker Nancy Pelosi for turning off some of their members with a "partisan speech" just prior to the vote.
It's unclear where we go from here. Wall Street will probably continue its toilet spiral. The measure will probably come back up for a vote at some point this week, but it's unclear what sort of changes they'll have to make to get this past the House.
As I have said here before, I'm not an economist. But I take it as a good sign when individual members of Congress at least attempt to think for themselves and represent their districts rather than just doing what they're told. Were they right in this case? I guess we'll see.
More details here: http://www.nytimes.com/2008/09/30/business/30bailout.html?pagewanted=2&_r=1&hp
Sunday, September 28, 2008
Breaking News: We Have a Deal
In an update on some of our previous discussions here, the US Congress seems to have negotiated a deal for a Wall St. bailout that at least a majority can live with.
CNNMoney discusses the provisions of the deal here: http://money.cnn.com/2008/09/28/news/economy/Sunday_talks_bailout/index.htm?cnn=yes
Basically, the deal is based on the original $700 billion package proposed by Treasury Secretary Paulson. The Democratic add-ons (the most discussed of which have been additional Congressional oversight of the money and caps on CEO pay for those companies receiving the money) seem to be included, as well. The Republican "revolt" in the House was placated at least somewhat with a provision involving mortgage insurance (which was pretty much that group's alternate plan), but Paulson has (not in so many words, but these people never say anything in so many words) that he doesn't think that will help and doesn't want to use that option.
In the end, we have a somewhat more sensible version of the plan we started with a week or so ago. This is the plan sparking public public protests around the country, roundly accused of favoring "Wall St. over Main St." Polls this week have showed that Americans are pretty much split... one third favor the plan, one third are opposed, and one third are undecided. No one will ever accuse me of being an economist, but I personally do not yet understand how this will actually solve the root problem. I hope it will, though, since otherwise this is an awful waste.
CNNMoney discusses the provisions of the deal here: http://money.cnn.com/2008/09/28/news/economy/Sunday_talks_bailout/index.htm?cnn=yes
Basically, the deal is based on the original $700 billion package proposed by Treasury Secretary Paulson. The Democratic add-ons (the most discussed of which have been additional Congressional oversight of the money and caps on CEO pay for those companies receiving the money) seem to be included, as well. The Republican "revolt" in the House was placated at least somewhat with a provision involving mortgage insurance (which was pretty much that group's alternate plan), but Paulson has (not in so many words, but these people never say anything in so many words) that he doesn't think that will help and doesn't want to use that option.
In the end, we have a somewhat more sensible version of the plan we started with a week or so ago. This is the plan sparking public public protests around the country, roundly accused of favoring "Wall St. over Main St." Polls this week have showed that Americans are pretty much split... one third favor the plan, one third are opposed, and one third are undecided. No one will ever accuse me of being an economist, but I personally do not yet understand how this will actually solve the root problem. I hope it will, though, since otherwise this is an awful waste.
Friday, September 26, 2008
That Economic Summit? It "devolved into a shouting match"
Yahoo!News has become the closest thing the internet has to a New York Times, or at least what the Times used to be. How weird is that? They're actually better than, say, USA Today, at any rate.
So, to keep y'all updated on the current situation, I give you this, which is one of the more entertaining straight news articles you'll ever read: http://news.yahoo.com/s/ap/20080926/ap_on_bi_ge/financial_meltdown
I thought political meetings only went like this on West Wing.
Update: Yahoo's doing that thing they do where they're updating on the same topic, so it's important but slightly less entertaining. I encourage you to seek out accounts of the meetings last night. It's pretty awesome.
Update 2: Best (and most understandable) explanation of aforementioned crisis I have yet seen: http://money.cnn.com/2008/09/26/news/economy/bailout_impact/index.htm?cnn=yes
So, to keep y'all updated on the current situation, I give you this, which is one of the more entertaining straight news articles you'll ever read: http://news.yahoo.com/s/ap/20080926/ap_on_bi_ge/financial_meltdown
I thought political meetings only went like this on West Wing.
Update: Yahoo's doing that thing they do where they're updating on the same topic, so it's important but slightly less entertaining. I encourage you to seek out accounts of the meetings last night. It's pretty awesome.
Update 2: Best (and most understandable) explanation of aforementioned crisis I have yet seen: http://money.cnn.com/2008/09/26/news/economy/bailout_impact/index.htm?cnn=yes
Thursday, September 25, 2008
The US Financial Crisis: It's Only Money
I wanted to write a thoughtful post about the current US “Financial Crisis.” It’s all the news wants to talk about these days. I found I didn’t quite have the understanding I wanted, and so I tried to do some research. This just made me feel like an idiot. You want to know the real reason no one in charge of anything did anything to stop what’s going on right now? It’s because those in the industry have filled the air with so much double talk and nonsensical weirdness that it’s impossible even for someone like me (who, not to brag, is a member of MENSA, and thus am not used to being completely befuddled by technical jibber-jabber) to make any sense of it.
The gist? All this appears to come from the “subprime mortgage market.” People took on way more debt than they could ever pay off in order to own their own home, because we’re supposed to have “an ownership society.” I think that may originally be Bush’s phrase. These people of course defaulted on their loans quite a bit of the time. Why they were given the credit in the first place, no one seems to be able to explain. Many of these homes were foreclosed. Other mortgages were picked up by finance firms, who through some strange bit of chicanery seemed to think they were worth something. No one can explain this part to me, either. Part of the reason they could do this was government deregulation that the Republicans have been pushing for years.
Now these firms are failing. Big insurance firms like AIG are failing too. The upshot is we’re theoretically on the verge of a spiral where it will become harder and harder to get credit, people will lose their homes, the stock market will plunge, and those whose retirements are based in the stock market will lose their money…
So the White House has decided that the solution is to use $700 Billion (along with a strange package of demands involving lack of oversight that, again, don’t make sense) that we don’t actually have to buy the “bad debt” that the financial firms apparently thought was worth something as a “bail out.” The obvious problem with this, besides the price tag, is the fact that all it does is perpetuate the status quo, which is how we got here…
I don’t want to give this topic more space than I think it deserves, because honestly I think it’s being overblown. A few times recently people have looked at me strange when I used the phrase “It’s only money.” I have trouble getting worked up over financial matters. In any case, this isn’t why I made this blog. But it feels like Bush wants to railroad us into something, like Iraq all over again, that makes no sense. I feel like I’m using that phrase a lot. At the very least, I need somebody to sit down and explain this to me, slowly, in words that have set definitions, before I agree to it. Congressmen say their offices are getting deluged with calls, and those calls are 90 to 1 against.
I can tell you one thing. The way to “prevent a financial panic” is not to go on television and tell us the sky is falling, the way the President did last night. One more thing that makes no sense.
The gist? All this appears to come from the “subprime mortgage market.” People took on way more debt than they could ever pay off in order to own their own home, because we’re supposed to have “an ownership society.” I think that may originally be Bush’s phrase. These people of course defaulted on their loans quite a bit of the time. Why they were given the credit in the first place, no one seems to be able to explain. Many of these homes were foreclosed. Other mortgages were picked up by finance firms, who through some strange bit of chicanery seemed to think they were worth something. No one can explain this part to me, either. Part of the reason they could do this was government deregulation that the Republicans have been pushing for years.
Now these firms are failing. Big insurance firms like AIG are failing too. The upshot is we’re theoretically on the verge of a spiral where it will become harder and harder to get credit, people will lose their homes, the stock market will plunge, and those whose retirements are based in the stock market will lose their money…
So the White House has decided that the solution is to use $700 Billion (along with a strange package of demands involving lack of oversight that, again, don’t make sense) that we don’t actually have to buy the “bad debt” that the financial firms apparently thought was worth something as a “bail out.” The obvious problem with this, besides the price tag, is the fact that all it does is perpetuate the status quo, which is how we got here…
I don’t want to give this topic more space than I think it deserves, because honestly I think it’s being overblown. A few times recently people have looked at me strange when I used the phrase “It’s only money.” I have trouble getting worked up over financial matters. In any case, this isn’t why I made this blog. But it feels like Bush wants to railroad us into something, like Iraq all over again, that makes no sense. I feel like I’m using that phrase a lot. At the very least, I need somebody to sit down and explain this to me, slowly, in words that have set definitions, before I agree to it. Congressmen say their offices are getting deluged with calls, and those calls are 90 to 1 against.
I can tell you one thing. The way to “prevent a financial panic” is not to go on television and tell us the sky is falling, the way the President did last night. One more thing that makes no sense.
Wednesday, September 24, 2008
John McCain Throws a Hail Mary
So, we find out John McCain is desperate. I didn't make this blog to be a political polemic, that wasn't really the point. But really, this is pretty much unheard of. Today he announced that he is suspending his campaign for President until the economic crisis is resolved. He wants to cancel the Presidential debate on Friday unless the proposed "bailout plan" (which I was originally planning on posting about) is passed, an eventuality that's looking increasingly unlikely (despite the White House's claims that it would be "unthinkable") since Congress has developed an inconvenient ability the past few days to think for itself. Obama's response?: "I think that one of the president's jobs will be to focus on more than one thing at once."
I don't really have a sense of what public reaction to this is going to be. The Debate Commission (theoretically unbiased, though notorious for excluding even vaguely-viable third-party candidates) says Friday's debate in Oxford, Mississippi (and why there, exactly?) will go on as scheduled. The McCain camp says it will not show up. President Bush went on TV a few minutes ago to say our "entire economy is at risk" because of this Wall Street business (the causes of that, as I mentioned, are probably another post). The proposed bailout (which both campaigns said tonight in a joint statement is "flawed") involves the Treasury Department and the only quasi-governmental Federal Reserve 700 Billion taxpayer dollars to such companies as AIG, Goldman Sachs, etc. in order to keep them remotely solvent. Some members of Congress (seemingly on both sides of the aisle) have balked at this for a variety of reasons, ranging from free-marketers who say government intervention in the economy is how we got into this mess (who are sort of right... if you look at it in a skewed way) to populists who believe that this would only "reward bad behavior" for overpaid CEOs, who would suffer no punishment for their gross mismanagement. And most prominently, $700 Billion is quite simply money we don't have when we're already grossly in debt.
I will try and post further updates on this situation as it develops. I personally believe this is McCain trying to manufacture what's known as an "October surprise" out of thin air, or thick air, anyway. The latest polls, for what they are, show Obama with a big lead in some key states and surprisingly pretty much tied in a few others that Republicans win most of the time, not to mention a lead nationally that is nearing double digit percentage points. In a third millenium election, that's a massive blowout. And the polls don't even take into account much of one of Obama's most solid voting blocks, voters under 26, because they only poll those with landlines. (i.e. if you only have a cell phone, presidential polls act like you don't exist).
McCain knows this. He's trying to change the game. I don't know if it'll work or not. It's probably worth a shot on his part, at any rate. Bush & Co. are trying the same fear-mongering tactics they used in the run-up to Iraq. Again, I'm not sure if it'll work... and the only reason I can even see for them to want to is because they're in deep with the Wall Street CEOs... but surely they're not that corrupt, are they? Oh, wait...
p.s. Not all our readers are (hopefully) American, so I thought I should explain the title... a Hail Mary's a play in American Football (the most complex strategy-based sport in the world, for my money, which is why I love it). More on THAT here: http://en.wikipedia.org/wiki/Hail_Mary_pass
I don't really have a sense of what public reaction to this is going to be. The Debate Commission (theoretically unbiased, though notorious for excluding even vaguely-viable third-party candidates) says Friday's debate in Oxford, Mississippi (and why there, exactly?) will go on as scheduled. The McCain camp says it will not show up. President Bush went on TV a few minutes ago to say our "entire economy is at risk" because of this Wall Street business (the causes of that, as I mentioned, are probably another post). The proposed bailout (which both campaigns said tonight in a joint statement is "flawed") involves the Treasury Department and the only quasi-governmental Federal Reserve 700 Billion taxpayer dollars to such companies as AIG, Goldman Sachs, etc. in order to keep them remotely solvent. Some members of Congress (seemingly on both sides of the aisle) have balked at this for a variety of reasons, ranging from free-marketers who say government intervention in the economy is how we got into this mess (who are sort of right... if you look at it in a skewed way) to populists who believe that this would only "reward bad behavior" for overpaid CEOs, who would suffer no punishment for their gross mismanagement. And most prominently, $700 Billion is quite simply money we don't have when we're already grossly in debt.
I will try and post further updates on this situation as it develops. I personally believe this is McCain trying to manufacture what's known as an "October surprise" out of thin air, or thick air, anyway. The latest polls, for what they are, show Obama with a big lead in some key states and surprisingly pretty much tied in a few others that Republicans win most of the time, not to mention a lead nationally that is nearing double digit percentage points. In a third millenium election, that's a massive blowout. And the polls don't even take into account much of one of Obama's most solid voting blocks, voters under 26, because they only poll those with landlines. (i.e. if you only have a cell phone, presidential polls act like you don't exist).
McCain knows this. He's trying to change the game. I don't know if it'll work or not. It's probably worth a shot on his part, at any rate. Bush & Co. are trying the same fear-mongering tactics they used in the run-up to Iraq. Again, I'm not sure if it'll work... and the only reason I can even see for them to want to is because they're in deep with the Wall Street CEOs... but surely they're not that corrupt, are they? Oh, wait...
p.s. Not all our readers are (hopefully) American, so I thought I should explain the title... a Hail Mary's a play in American Football (the most complex strategy-based sport in the world, for my money, which is why I love it). More on THAT here: http://en.wikipedia.org/wiki/Hail_Mary_pass
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