Thursday, October 30, 2008

Goin' Rogue on the Daily Show

For anybody who didn't see this last night, it had me in stitches:

Sunday, October 26, 2008

Headline Innuendo-"Deep Boat"


Apparently one of our state's competitive grants for filmmaking has gone to a porn producer and the people are loving it. The State featured an article today entitled "Polls Find Deep Support for Drilling". I didn't bother to read the article, but from the headline, it's clear that "Drilling" is going to be a hit at the, wherever pornos are shown publicly place.

But on a more serious note, aren't we deluding ourselves a bit here people? I mean there's only about 20 billion barrels of oil out there. We use 20 million barrels every day. By my calculation, that keeps us burning that sweet sweet crude for only about another 3 years or so. Then we're right back where we started. Oh, and did I mention that it's going to take anywhere from 6 to 12 years to get the stuff on the market. Oh yeah, and it turns out that hurricanes come through a lot of those areas pretty regularly. Remember what Katrina and Rita did to gas prices? Oh yeah, and for those of you prone to hug a tree every now and then, it turns out that offshore drilling carries with it a significant risk of dumping a bunch of that black gold into the ocean and killing a whole bunch of animals, some of which we like to eat. Ooh, ooh, and I almost forgot to mention that pursuing this false solution is going to delay market forces that are driving innovation in new technologies to reduce our dependence on oil.

In sum, it seems like the whole offshore drilling debate is not much more than a red herring. My vote is to increase research spending on the stuff that can get us out of this mess permanently before we end up driving our cars like Fred Flintstone.

Everybody's Doing It...It Makes You Feel Good


Former Bush administration mouthpiece, Scott McClellan, seen here looking uncomfortable next to MC Karl Rove, has endorsed Barack Obama for President. Read the story here.

Friday, October 24, 2008

Quote of the Day


Alan Greenspan on why our economy is tanking:
I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.

Oops.

So does that mean that Greenspan's mistake was trusting in one of the most basic tenets of capitalist theory? Talk amongst yourselves.

Wednesday, October 22, 2008

From Wall Street to the Corner of Main and Gervais


So it turns out that reduced consumer spending means that we're going to have to cut about $500 million from the state budget this year. Apparently our state government receives about a third of its revenue each year from the sales tax. Oops. At least our legislature is cutting its budget instead of just running a deficit. That's refreshing.

Leaky Pipes and Our Growing Water Problem


Unless you have been living under a river rock for the past couple of years, you've noticed that we've been in a severe drought. Anyone who enjoys spending time on any of our numerous lakes and rivers can provide anecdotal evidence of the decline of water levels over the past few years. One of the most stark reminders for me of this phenomenon is the floating dock at the landing on the Congaree at the end of Rosewood Drive here in Columbia. The pilings to which the dock is attached tower over my head as I pull my kayak to the end of the boat dock, reminding me of the potential torrent the Congaree can become. Then, as I paddle into the middle of the river and get out of my boat I find I'm only standing ankle-deep in water. It's depressing.

However, despite my own selfish concerns for the river levels, there are also real concerns for Columbia and cities across the Southeast. Today American Rivers, a conservation group whose website can be found here, released a report outlining possible solutions for our drought-based water supply problems. The report, which can be found here, outlines 9 basic conservation measures that can save Columbia up to 27 million gallons of water per day. Those conservations measures are: (1) fixing leaky pipes (which account for up to 14% of our total yearly water use); (2) retrofitting buildings with new appliances (which account for about 20% of our total yearly water use); (3) smart landscaping (we use about 30% of our drinking-quality water watering lawns each year); (4) increasing the cost of water (we are capitalists after all, despite what Hank Paulson tells you); (5) metering all water users instead of allowing shared-use buildings to charge a flat fee for water usage; (6) increasing public understanding of our water challenges; (7) returning more of our saved water to rivers (they liken it to a water "savings account"); (8) involve water users in decisions about water policy (localized democracy...scary to the elites); and (9) build smarter in the future.

Sounds like a good plan, especially considering that a healthy supply of water is absolutely necessary to preserve any shred of our current way of life. My prediction, though, is that we'll build more dams and pray for rain. See, I'm beginning to realize that human nature tends to be reactionary. No matter how much we understand a problem, we are not apt to fix it until we feel the consequences. This is a sad truth, mainly because we have very smart people spending their time coming up with reports like this one and a whole bunch of people who will promptly ignore them. This complacency is endemic to our representative, republican form of government. We give more power than we have to to people and trust them to make these decisions for us. The problem is that we groan when those people actually ask for our money to implement the solutions and god forbid they start telling us to do things like fix our pipes or buy a new dishwasher.

For too long America has tried to have it both ways. We entrust our government to strangers and resist them when they do their jobs. In turn, they give up trying and just try to find other ways out of the problem. We end up with a massive national debt and a weak economy, then we turn to them to fix it. This is why I think the single greatest recommendation made by American Rivers is to involve the end consumers in the process of formulating water policy. This will cause people to become better educated through a public debate, they will see the consequences of the decisions before those consequences arise, and the people can have their solutions they way the people want them to be.

Direct democracy is not an easy thing to pull off. We are busy people and often perceive that we have little time to govern ourselves. But if we want to remain a free society, we must begin to democratize parts of our lives that we once entrusted to representatives.

Sunday, October 19, 2008

Colin Powell Endorses Barack Obama

The quintessential American moderate has spoken. The video is worth a look. Sorry I can't get the embed to work right, so here's the link.

Update. Let's see if this works:

Wednesday, October 15, 2008

The Gambler's Fallacy and Economic Collapse


I have play a lot of poker in my day...a whole lot. I used to sit around and watch the World Series of Poker on ESPN when I didn't have a game going. I marveled at the skill of the poker pros, the ones who made it time and time again to the final table. They carried an enormous amount of respect from the growing number of amateurs who found their way into the tournament. The commentators would profile the pros, tell us why they were so good at the game. Some of them were mathematical geniuses, they told us. They could figure the odds of winning at the drop of a hat. Some of them had an uncanny ability to see into the thoughts of their opponent, reading the twitch of an eye, or betting patterns, or some ephemeral glow about them that told the pro exactly what that person was holding.

I too once suffered from the hubris of believing myself to be a good player. I approached the table with an air of confidence, pushed more and more money into the pot until I came out ahead. But over time I learned something about poker. Players have varying degrees of skill that allow them to gain certain advantages, but ultimately, to win you have to have the cards.

Let's shift gears for a moment. The gambler's fallacy is the false belief that as a certain result occurs more and more over time, the gambler believes that the probability of that event happening again rises. The classic example is the coin flip. If I flip a coin 20 times and it comes up heads twenty times then, if I fall prey to the gambler's fallacy, I begin to believe that the probability that the coin will land on heads again is greater than 50%. The problem is that no matter if I flip a coin every minute until the day I die and it always lands on heads, the probability of it landing on heads never rises above 50%. However, my confidence that it will land on heads goes up each time, causing me to believe more and more that the coin is destined to land on heads no matter what.

It's the same thing with derivatives. The contracts were structured in such a way as to allow for such a small probability that their inherent risks would manifest themselves that the people engaging in these agreements began to fall prey to the gambler's fallacy. The problem with derivatives is the same problem with any investment: greater risk = greater (possible) reward. Thus, the companies entering into derivative contracts made enormous profits from them and managed to avoid the risk factors. But then home prices began to decline and the risk reared its ugly head.

We can only hope that our government learns that if it looks like a security, and quacks like a security, then it needs to be regulated like a security. There is a reason that the SEC was formed in the 1930s. There is a reason that we still abide by the Securities Act of 1933 and 1934. We learned a lot about the pitfalls of unconstrained finance in those years. Let's not forget those lessons.

Wednesday, October 08, 2008

I Put a Spell on You...And Other Headlines


This week in unbelievable headlines comes the most unbelievable of all: Voodoo Priestess from Blythewood Hired to Kill? Oh man, you've got to read that story if you haven't already. I don't want to spoil it for you, but let's just say when you write a check to a voodoo priestess for putting a spell on your political opponent, make sure it doesn't bounce.

In other news, it turns out our state revenues are going to be about $550 million short of the 2008-2009 budget. I guess for all those people who wanted small government and never voted, congratulations, you win.

Howard Rich, in his attempts to become the next king of South Carolina, has sent threatening letters to notable SC Democrats, including former DNC chairman and USC professor Don Fowler, stating that their contributions to "a wide variety of leftist organizations" are being monitored. Rich also grew a pair of fangs and sprouted bat wings over the weekend.

The Boogie Man Cometh


"Boogie Man: The Lee Atwater Story" is about to open in theaters around the country. It is still playing at the Nickelodeon through October 14. For those of you who have not heard about the movie, it chronicles the rise and fall of S.C. native Lee Atwater. Atwater made his name as a win-at-all-costs campaign manager for George H.W. Bush and later as the chairman of the RNC.

The film follows Atwater from his early days in South Carolina through his death in 1991. Throughout the film, Atwater comes across as a lovable, yet sinister figure. Atwater was eulogized by James Baker as Machiavellian "in the best sense of the word." The film portrays Atwater as someone who was fiendishly adept at manipulating others, including the press, and who would stop at nothing to gain victory for his candidate.

For anyone who plans to vote on November 4, this movie is a must see. The ugly underbelly of election politics is juxtaposed with the dying plea of one of its most successful and ruthless purveyors that the slimy tactics must stop. It really makes you think, as a voter and a human being, about the process that elections have become. It makes you wonder how we allow our politicians to get away with being liars and thieves, with shirking any moral or ethical responsibility or dodging accountability through scapegoating others.

Atwater was a villain- there is no doubt about that. However the film has a way of humanizing the villain so that we can see ourselves in him. We can see our potential for evil, we can see our glaring imperfections, we can see how pathetic a life lived like Atwater's looks in the end.

Friday, October 03, 2008

You've Got to Know When to Hold 'em


There's a great article at Slate.com (here) that describes those all-too-complicated derivatives in terms we can all understand: gambling, baby, yeah! Turns out somebody smarter than me looked at what the banks were doing, figured out a mathematical probability of the investment banks making money versus total financial meltdown and came to the conclusion that what the Wall Street folks were doing was essentially a game of double-or-nothing. See, it turns out that, statistically, higher risk means a chance of higher reward, whereas lower risk leads to lower rewards. What the Wall Street folks were doing was concentrating risk in a way that makes it highly unlikely that their bets would fail, but, in the event that they did fail, well, armageddon. I don't really have much to add to the article, so I just suggest you read it and discuss.

Wednesday, October 01, 2008

Bailout Alternative Offered


Many of us are skeptical about the wisdom of the proposed $700 billion bailout. Turns out a few House Democrats share the sentiment. Enter Rep. Peter DeFazio (D-Oregon) and his No BAILOUTS (Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security) Bill.
Aside: Is it just me, or is anybody else sick of the cheesy, strained acronyms that are forced onto just about every piece of legislation that comes out of Congress these days? Hey Congress, I've got your acronym: The DYJASWTCUWAA Act (DO YOUR JOBS AND STOP WASTING TIME COMING UP WITH ASININE ACRONYMS)

I won't bore you all with the details, which can be found here, but let's just say the price tag doesn't involve a 7 and 9 zeros. DeFazio's bill calls for increased oversight through the SEC (hey, at least he's not proposing yet another federal agency with yet another asinine acronym for a name), a popular increase in the FDIC insurance limit from $100,000 to $250,000, and a "Net Worth Certificate Program" (and, in the spirit of this post, those are hereinafter referred to as NWCP's). The NWCP basically allows the FDIC to make loans to banks in exchange for a promissory note. A similar program was initiated in 1982 with much success.

Here's what I like about DeFazio's plan: (1) it doesn't just throw a whole pile of money at a big problem and hope that makes it better; (2) it attempts to establish oversight in the trading of securities, no matter what they're called; and (3) it doesn't bail out irresponsible companies that probably need to go by the wayside in order for our economy to truly recover.

This bill's definitely not as sexy as its $700 billion counterpart, but it's worth a look. More importantly, people are using their brains to find creative solutions to this problem instead of taking yet another Bush power grab and pretending it's going to save the nation from financial ruin. Our economy is screwed because there are fundamental problems with the way we've been doing business for quite sometime. Throwing a whole bunch of money at it is only a bandaid. The time has come to address the fundamental problems with our economy such as the fact that "service economy" really means that we don't produce anything and simply pass money between ourselves, continually putting a bigger number on it, when it really retains the same value.

Adding Insult to Insult

So the Senate has proposed its own version of a bailout bill, aimed at garnering more Republican support. My immediate reaction was that the new bill would include the erection of a golden statue of Ronald Reagan standing between the World Trade Center Towers waving an American flag that constantly plays a loop of Toby Keith's "Angry American (Courtesy of The Red White and Blue)". Turns out I was wrong, but that would totally be a bad ass statue. By the way, reader(s), I hereby commission artistic renderings of such a statue. These can be sent via email to thebluesouth@gmail.com. I'll post the winning submission on the site.

However, it turns out the Senate, in their infinite wisdom, has decided to attract Republicans with the old faithful of Republican support-garnering devices- tax cuts. That's right, our Senate decided to make a $700 billion economic rescue package (that's $700 billion dollars coming from the government) more appealing by reducing the amount of money the government can collect.

AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!

Please fire these people. Please, voters, fire these people.