Archive for the ‘money’ category

Hit ‘Em Again Senator! Harder!

July 16, 2013

via TPM, this glorious evisceration of CNBC hacks by none other than my senior senator,* the Hon. Elizabeth Warren, (Fighting Democrat-MA)

Moah of this, please.

*True fact that may amuse no one but me.  John Kerry served in the US Senate from 1985 to 2013. Until August 25, 2009 — more than 24 years — he was the junior senator to Teddy Kennedy.  Elizabeth Warren began her term as Massachusetts’ junior US Senator on January 3, 2013.  On February 1, she became senior senator.

Bald Faced Theft

January 13, 2013

Fallows latest is a post titled “The Two Sentences That Should Be Part of All Discussion of the Debt Ceiling,”

Victor_Dubreuil_-_Barrels_on_Money,_c._1897_oil_on_canvas

In it, he writes:

 

1) Raising the debt ceiling does not authorize one single penny in additional public spending.

2) For Congress to “decide whether” to raise the debt ceiling, for programs and tax rates it has already voted into law, makes exactly as much sense as it would for a family to “decide whether” to pay a credit-card bill for goods it has already bought.
Ayup.
Image:  Victor Debruil, Barrels of Money, c. 1897

To Moscow With Love

November 2, 2012

Mitt Romney, interview with Wolf Blitzer, March 26, 2012:

I’m saying in terms of a geopolitical opponent, the nation that lines up with the world’s worst actors, of course the greatest threat that the world faces is a nuclear Iran, and nuclear North Korea is already troubling enough, but when these terrible actors pursue their course in the world and we go to the United Nations looking for ways to stop them, when [Syrian President] Assad, for instance, is murdering his own people, we go to the United Nations and who is it that always stands up for the world’s worst actors? It is always Russia, typically with China alongside, and so in terms of a geopolitical foe, a nation that’s on the Security Council, that has the heft of the Security Council, and is of course a massive security power — Russia is the geopolitical foe.”

Mitt Romney, Republican National Convention acceptance speech, August 30, 2012:

President Obama … He abandoned our friends in Poland by walking away from our missile defense commitments, but is eager to give Russia’s President Putin the flexibility he desires, after the election. Under my administration, our friends will see more loyalty, and Mr. Putin will see a little less flexibility and more backbone.

Mitt Romney, final presidential campaign debate, October 22, 2012:

“I’ll respond to a couple of things that you mentioned. First of all, Russia I indicated is a geopolitical foe. Not … Excuse me. It’s a geopolitical foe, and I said in the same — in the same paragraph I said, and Iran is the greatest national security threat we face. Russia does continue to battle us in the U.N. time and time again. I have clear eyes on this. I’m not going to wear rose-colored glasses when it comes to Russia, or Mr. Putin. And I’m certainly not going to say to him, I’ll give you more flexibility after the election.

Matt Romney, as reported by Peter Baker in The New York Times, today, November 2, 2012:

…While in Moscow, Mr. Romney told a Russian known to be able to deliver messages to Mr. Putin that despite the campaign rhetoric, his father wants good relations if he becomes president, according to a person informed about the conversation.

The rest of this post, I think, writes itself.

 

Images:  M. Minard, Chart depicting the change in size of Napoleon’s army during the Russian campaign of 1812-13, 1869

Caravaggio, Christ Expels the Money Changers from the Temple, 1610.

Megan McArdle, Lawyer, Ethicist, Historian.

April 27, 2010

She’s not even trying anymore. (And thankfully that means I don’t need to haul out my 5,000 word howitzer to shoot this bit of ephemera down.)

Here’s Ms. McArdle  on the Goldman hearings — uncut, not cherry-picked:

Now Levin is grilling a Goldman employee as to why they continued to sell a deal that the head of the division had described as “a shitty deal”.  The banker is trying to explain that he’s a salesman, not a fiduciary, with little success.  What I want to know is–didn’t these guys learn a damn thing from the show trials of the last decade?  These are the kinds of things that should never, ever be committed to any form that can be subpoena’d by a committee.

So the key issues in this incident in our public life  are  (a) that Goldman too fully documented its business practices (that’s the legal eagle McArdle at work); (b) that the key wrong here is being called to account for those business practices, not any acts by the witness or his employer (here’s McArdle’s keenly honed sense of right and wrong firing); and (c) that the injustice of asking for justification for said business practices, and the implication that these might have been less than savory, is of the same rank odor as these.  (And here we see the fine McArdle understanding of the lessons of the past in all its glory.)

Update: Per Downpuppy’s comments below — yes, McArdle qualifies the phrase “show trial” with “of the last decade,” meaning, I guess, something to do with Enron or the like.  But the

This is, of course, standard operating procedure for the Big Lie right.  In case you hadn’t noticed, there is a systematic rhetorical trope of delegitimizing the acts of the Obama administration and the current Democratic Party -led Congress in particular, and the idea of government action in general.  To McArdle, the notion that any Congress should interrogate the “free” market is a travesty; and though McArdle masks some of her partisanship under a veneer of the faux libertarian’s “pox on both their houses” rhetoric, she and her many fellow travelers frame the acts of this particular administration as being distinctively odious, specially intrusive and in violation of ideas of liberty to a degree unprecedented in American politics.

Nonsense of course — see, e.g. Hendrik Hertzberg’s depressingly mild rebuke of that similarly glib and much more overtly genial partisan propaganda monger/would-be public intellectual, David Brooks.

And really — even for the relentlessly sloppy and supericial McArdle, this is a terribly weak effort.  Questioning by a Senator with full advice of counsel and a few billion dollars behind you is of the same order as one of Stalin’s court cases, from which the only exit could be a bullet to the brain?  The moral midgetry required to make the comparison is breath taking –  and illustrative.

Update: Per Downpuppy’s comments below — yes, McArdle qualifies the phrase “show trial” with “of the last decade,” meaning, I guess, something to do with Enron or the like.

But the point I’m trying to get across here, expressed perhaps a little too elliptically above, is that the use of an term like “show trial,” even qualified, is of a piece with a broader rhetorical move on the seditious right to conflate, say, a mild, originally conservative-supported health care reform with a vast government overreach of a scale Stalin or Hitler would recognize.  There is a kind of dual outrage inflation/sense or judgment dulling that comes with  the use of words like statism, or over reach, or socialism or fascism — or show trials, with all the 20th century baggage that such an epithet evokes.

In this context, besides being incoherent (what does she have in mind as a show trial of  2001-2010 decade?  I really got nuthin, unless she truly does believe that Ken Lay and Andy Fastow are martyrs on the altar of Ms.Rand) McArdle’s attempt to qualify her use of the loaded “show trial” is merely a fig leaf, really a tell:  that she has to modify her rhetoric here strongly suggest that she knows just how noxious it really is.

Image:  Édouard Manet, The Execution of Emperor Maximilian, 1867

Quote for the Day: Financial Crisis/Warren Buffet Edition

October 17, 2008

From today’s NYT op-ed by the Sage of Omaha:

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

I get the restaurant line.  But actually visualizing the thought when I consider all the places my money has been?  Not such a pretty picture

Can Anyone Tell Me What John McCain Is Saying Here?

September 18, 2008

Further to the thought in this post:

There are plenty of folks taking note of John McCain’s scramble to come up with a rhetorical response to the ongoing adventures on Wall Street — see this for a good rundown on the difficulty Straight Talk John has in remembering what it is he actually believes on a minute-by-minute basis.

But the attention being paid to the implausibility of Commerce Committee Chairman and deregulation stalwart suddenly turning into the Scourge of the Robber Barons is missing another element of the story that in governance terms is more serious.  That is — I think there is a growing consensus that the McCain campaign has a deeply conflicted relationship with the truth (i.e. the candidate lies a lot, as does his Veep selection, as does his campaign as a whole).

But what is only just starting to get noticed is that McCain does not appear to think very well — certainly not on his feet, and maybe not under any circumstances.  And by this I mean he has a hard time assimilating information, analyzing it accurately, and coming to conclusions that he can then express in a clear and coherent fashion.

Now the links above mostly lead to stories about McCain’s difficulties with the location, leadership, and ally-status of Spain — the gaffe du jour.

But as the financial markets continue to play their lethal version of musical chairs, and as McCain hones his populist lines, I thought it would be useful to look at what he had to say when first confronted with the fact that the worldview of his economic stump speech had moved so far into fantasy land that not even the 2008 GOP could maintain the fiction.

Recall that on Monday morning, McCain famously repeated his standard line that whatever turmoil there might be in the markets, “the fundamentals of our economy are strong.”

With even the White House declining to endorse that view (and ever more Federal action putting ever more tax dollars at risk in the still-uncertain-of-success rescue efforts), it became quickly clear to the candidate and his brain trust (an interesting phrase, don’t you think…) that Sen. McCain had to get back out there, and fast.

So out he duly went, a few hours later, to a town meeting in Florida.  There he made another statement, acknowledging that the fundamentals of the economy were at risk — and much other verbiage, which is where my real concern comes in.

I’ve now listened to the clip of John McCain trying to communicate his views and intentions about this imperiled economy four or five times now, and it’s not that I disagree with what he is saying.

It’s that I cannot make sense of his statement.  It’s astonishingly incoherent, so much so that I transcribed it for all to read.

I’ll post the transcript below in two versions:  one that matches the way it was delivered, just a single almost breathless block of words; and another in a somewhat easier to read and more charitable form, paragraphs and emphases broken up in my guess as to how McCain’s staff might have circulated a text.  I’ll comment a bit, and then post the Youtube for all to judge for themselves.

But my basic question remains:  can this man actually perform the mental operations  required of a president on the time scales that the office of President imposed on its incumbents?

So here goes:

And this is a unique and diverse state and it’s a wonderful state and it’s what America is all about.  And I want to say again I know Americans are hurting now and the fundamentals of our economy are at risk.  They’re at risk.  The great workers, the great innovators because of the greed of Wall Street and the greed and, and the abuse that has taken place which has put our very economy at risk.  Our economy is at risk today.  Have no doubt how serious this problem is.  And we Americans will get through it.  But we have got to reform, we’ve got to reform the way the government does business.  I want to promise you that my whole life I have reached across the aisle, and I’ve worked with Democrats, and I know how to do that and we must do that, because we have got to fix this economy which the fundamentals are at great risk right now.  And those are the American workers and these are the American workers who deserve far better than what they have gotten recently, and I want to promise you that it’s my highest priority:  we’ve got to get our economy going again. We’ve got to create jobs and keep this nation safe.

And again:

And this is a unique and diverse state and it’s a wonderful state and it’s what America is all about.  And I want to say again I know Americans are hurting now and the fundamentals of our economy are at risk.  They’re at risk. The great workers, the great innovators because of the greed of Wall Street and the greed and, and the abuse that has taken place which has put our very economy at risk.

Our economy is at risk today. Have no doubt how serious this problem is.  And we Americans will get through it.

But we have got to reform, we’ve got to reform the way the government does business.  I want to promise you that my whole life I have reached across the aisle, and I’ve worked with Democrats, and I know how to do that and we must do that, because we have got to fix this economy which the fundamentals are at great risk right now.

And those are the American workers and these are the American workers who deserve far better than what they have gotten recently, and I want to promise you that it’s my highest priority:  we’ve got to get our economy going again. We’ve got to create jobs and keep this nation safe.

Hello?  Anyone home?

It is possible to parse this and come up with a somewhat sympathetic reading:  McCain knows there’s a problem; knows that government action is required; and he is willing to work across the aisle for solutions.

But read it — or, given that no spoken remarks have the same quality transcribed as they do uttered, look at the clip below — and tell me that this is the likeliest interpretation.

What you see is a man grasping for some complete thought, and missing.  Listen to each sentence and fragment; try to follow the bouncing ball, and see the connection from one idea to the next.  I can’t.  It’s just: “situation bad; workers good; greed bad; situation bad; things must change; I can change; I promise change;…..”

In the end, this may just be another case of eastern elitist intellectual snobbery.

But the premise of my real fear here is that words uttered are a mirror of the mind behind them — never more so than when someone is under pressure to compose and speak an important thought whilst naked on the island:  no teleprompter, no prepared speech, just what you think at that moment.

If I’m right, then John McCain is an even worse potential President than I had thought (and that’s going some).

Update: It does occur to me that we have already tried a President with difficulties in this direction.  Doesn’t seem to have worked out so well.

But come to your own conclusion.  Here’s McCain’s clip, and as a lagniappe, a much longer video, an (almost)* complete speech from Obama delivered a day later touching on the same issues.

McCain first:

And now Obama:

*The clip I choose cuts off the boilerplate with which Obama begins many speeches — thanks to the local politicians and organizers and so on.  There are other versions easily to be found on Youtube if you want to catch that preamble.

I don’t know nuthin’ ’bout economics, but…: NPR/Henri Poincaré/Mortgage follies edition

February 25, 2008

Innumeracy is a problem I have and will come back to a lot here. But as I listen to more and more popular presentations of technical subjects, I still get astonished by the intersection of two structural problems in the media.

That is: many reporters — not so high a proportion of self-described science writers, though still plenty there — have trouble with even the most elementary uses of quantitative approaches to their stories because they just don’t think in numbers at all. That’s the negative way of framing the problem; journalists have a lack that inhibits their capacity to do good work in an ever-more technically imbued world.

Then there’s the affirmative problem. Reporters establish stories by anecdote, by individual bits of data, single episodes. They’re called stories for a reason: the goal is to perform one of the most powerful acts of communication humans have figured out, to convey information that compels belief because its hearer can place themselves right into the narrative.

That’s why, to edge closer to the real subject of this post, so much of the reporting on the mortgage crisis (fiasco) centers on some family that’s about to lose a house, and spend little time, on the meaning of the big numbers, like the implications of a repricing of US housing on a large scale.  The point is that not only do many journalists not know a set of ideas that could help them figure out such things;  what they do know leads them away from the kind of approach to their work that more mathematical sophistication would provoke.

But there’s a wonderful passage that bears on this from the great French mathematician Henri Poincaré in a collection of essays that greatly influenced the young Albert Einstein:

We can not know all facts, and it is necessary to chose those which are worthy of being known.

Choose? Worthy? Surely Poincaré is not going prematurely po-mo on us here?

Not really. The notion embedded in his deliberately provocative turn of phrase is that facts need form, some apparatus that can incorporate a given datum into a richer story — one with a meaning larger than that of a single incident. That apparatus is quantitative.

(BTW — I use the word “quantitative” rather than mathematical, because for a great deal of human experience, the math needed to make sense of what’s going on is not that complicated.  It’s often a matter of counting, sorting, and extracting relationships within the formal limits of what you learn by the end of high school.  I have posted on a couple of such examples from great scientists — Freeman Dyson, for one, and J.B.S. Haldane for another.  There are lots more — perhaps readers could be persuaded to post examples of what they think are elegant, simple insights a bit of math can give us ?)

All of this  into mind while I listened to NPR this morning.

This is the story that got me going — a short (1 minute, 10 seconds) reporter-voiced account of what seemed to the Morning Edition team to be something strange: Even though the Fed is cutting interest rates, mortgage rates went up sharply last week. That ain’t how its supposed to be, according to the reporter, Adam Davidson, because when the Fed lowers its rates, other rates are supposed to drop.

The reason Davidson gave for what he saw as weird is not all wrong: he said that lenders are newly afraid of inflation, and hence want to charge a higher price for money that is going to be paid back over time.

But look at the unexamined assumption: that the Fed can control rates in general. That’s not true.

What’s missing here? An understanding of the real importance of time.

The Fed mostly exerts its influence on interest rates through the shortest of short-term instruments, the overnight federal funds rate — which is just the price banks pay for extremely brief loans required to keep their minimum reserves up to snuff.

But real people borrow money for houses on long time scales, most famously through 30 year mortgages. The enormous difference between the types and uncertainties of risk between those two scales of time serve at least partially to decouple the two rates — see the data to be retrieved here for a survey view of this.

So it is true that fear of inflation could keep push term rates up, whether or not the Fed was playing around with short term rates. But so could lots of other things.

Perhaps that the value of US real estate is unclear in a falling market, and thus lenders demand a risk premium before they lend against such difficult-to-value assets. Perhaps the overall credit worthiness rating of American real estate borrowers has dropped in the aggregate.  Perhaps lenders fear that the secondary market for mortgages is going to get a bit less liquid.  Lots of factors play into long term interest rates that have nothing to do with the reasons the Fed makes its interest rate decisions.

In other words: and the NPR story was either meaningless or misleading. And it failed because the reporter glossed over or did not fully understand what the mortgage rate summarizes as a single number — all the complex calculations of risk and profit that underpin the decision of whether or not to make a loan.

What I would have loved to hear instead of a “this fact is strange” report would be that story: how do interest rates express quantitatively our ideas about the future.  It’s still a good, fully human story:  Those numbers tells us a tale about what we think we know about what’s coming down the pike — and how much in dollars and cents we fear changes in our perception of what we don’t know.

Image: Rembrandt van Rijn, “The Money Changer,” 1627. Source: Wikimedia Commons.

Science Budget — heads up.

February 2, 2008

The Bush Administration officially presents its FY 2009 budget request to Congress on Monday (February 4). Some details are out already, but the science budget has stayed mostly under wraps. (The NY Times reports that the request for the NIH amounts to level funding — a cut in real terms — at the same 29.5 billion dollar figure the agency received last year.)

The NSF is holding its annual wake budget workshop/open house on Monday, with the numbers coming at 3:30 p.m. Other agencies to look for include the Office of Science within DOE, NIST, NOAA and several others in Commerce, USGS, and any others that readers can reasonably come up with. As I can cobble together a more or less complete picture, I’ll post what I get. Feel free to throw me stuff as you find it.

A couple of things, though. The President’s budget request is a marker at best, fantasy at worst. As any President’s term and power wanes, the annual budget message to Congress becomes yet more fantastic.

George Bush, with less than a year to go and approval ratings dropping into the undetectable territory may find spending priorities continuing-resolutioned to death — especially for those programs that don’t have the words “Iraq” or “war” in them.

Hence this release from the American Institute of Physics, reporting on a speech given last Wednesday by DOE Undersecretary for Science Raymond Orbach. Orbach promised good news for the physical sciences — a request to substantially boost funding over that enacted for last year. However, as Orbach pointed out — there is a huge gap between what was sought and what came out in the final funding bills.

The realist in me says that will continue: as long as funding for the Iraq war continues to widen its lead as the second most expensive conflict in our history (the bill passed that for the Vietnam war last year, and it now trails only World War II) funding for such “luxuries” as basic science research and especially the education of scientists will end up on the cutting room floor when the final bills are done.

As Orbach pointed out, the number of Ph.D researchers, graduate students and others that his office could support dropped by 4,300 in the final 2008 budget as passed.

This is bad news. Bad for science in this country, and bad for the country itself, for all the usual reasons. The big-picture calls for a Science Debate (which I support) and the parsing of candidate statements about this science/tech/health related issues (to which I plead guilty) are all fine, necessary even.

But the much more mundane process of following individual budget lines through committees is going to have a lot more to do with what happens to American science right now, over the months beginning in the fiscal year that starts next October. Keep eyes and ears open, in other words.

Update: I was just emailing to a blogger friend, and the obvious occurred to me: it could be valuable if bloggers within different disciplines made a point of looking at what the budget request comes to for their fields especially if they can offer up some context over what has happened through the budget cycles of recent Bush requests.

That would provide a baseline to readerships that care about the outcome. To the extent that money flows to vocal constituencies, this would give a starting place for concerned folks who want to talk to the Congress folks and their staffs on whom the devilish details depend. Just a thought…

Images: Peter F. Rothermel “Old Senate Debate 1850″ 1855.

Woman feeding a furnace with money during the German hyperinflation, 1923, “© AdsD der Friedrich-Ebert-Stiftung” with permission granted for use with the credit listed above.

Source for both: Wikipedia Commons.

Friday (Isaac) Newton blogging: Q: How did Newton get rich? (A: He mastered a mundane form of alchemy.)

February 1, 2008

Three hundred and eight years ago this Sunday, Feb. 3, Isaac Newton finally got his hands on the one sure way to multiply gold.

This time Newton had got his hands on the real thing — not the phantom he had pursued so deeply in his alchemical researches. It’s true that seven years before he had convinced himself that he had discovered the Philosopher’s stone. With it he believed, he had found the secret that allow the adept to begin with a stock of gold and then, as he wrote in his last alchemical manifesto, “you may multiply [it] to infinity.”

He believed — and held on to that faith for a few weeks, before recognizing his error, and then (perhaps coincidentally) falling into the deep depression that has led Newton historians to call 1693 his black year.

That experience more or less cured Newton of alchemy — not that he abandoned what he saw as its animating idea, but he did give up trying to turn its concepts into a practical experimental program. (He did in fact perform a few more laboratory experiments in the mid 1690s, but with nothing approaching the intensity of his pre 1693 research).

But the failure of his alchemical ambition did not end his deep involvement with the gold in it’s vulgar, day to day manifestation. In 1696, Newton left his academic job in Cambridge to begin life as an officer of the Royal Mint. And then, on February 3, 1700, he managed to make his way into the top job, taking the post of Master and Worker of the His Majesty’s Mint.

There he had formal responsibility for the production of all England’s coin. As of 1700, the official coinage was silver, with gold guineas and half guineas serving as convenient high denomination tokens that could be exchanged for “real” silver money. (How big a chunk of change was a guinea? About one week’s wages for a skilled London craftsman.)

Over the next decade and a half, Newton would preside over the death of the English silver currency; by the late teens, gold became the de-facto standard — a shift driven in part by a mis-pricing of the value of a golden guinea as measured in the value silver could command on an increasingly globalized market for precious metals. (The full legal switch to the gold standard came only in 1844, with the passage of the Bank Charter Act.)

The switch from silver to gold did not bother Newton. In fact, though he was as scrupulously honest as any man — more so than most in that patronage and corruption ridden age — he personally gained from any event that brought more metal into the Mint and spat more coins out. In his first post at the Mint, he received only a stipend — a generous one, to be sure: 500 pounds a year by 1699 — but not a foundational fortune, not an inheritance.

At the same time, it’s important to note that he worked for his money, more than any prior holders of his Mint offices for the previous century at least.He did the paperwork, made himself an expert assayer, kept exceptionally accurate accounts (shortly after coming to the Mint, he fought the Treasury over a discrepancy of two pence. Two pence! He was, in fact, one of England’s first real civil servants — along with his friend, the philosopher John Locke, who earned his keep at the same time as one of the founding eight commissioners of the Board of Trade.

This was, in other words, another side of the revolution in science — the very first steps (a lot of the one-forward, two-back variety) towards instituting an ideal of disinterested expertise in government.

That took a while — some might say that we are still waiting

Civil service — bureaucracy, if you will — was still in its infancy in England when Newton became Master of the Mint, however, and there were definitely some bugs left in the system. The job was one of the great surviving feudal privileges left for powerful patrons to deliver to loyal supporters. He got both a substantial stipend — and a percentage of every pound of silver or gold minted into coins. Now you were talking real money, an income that handily topped four figures in the busier years.

When Newton died in 1727, with almost three decades of his cut from the Mint’s prodution in hand, he left an estate — excluding the land inherited from his mother — worth 30,000 pounds. That’s between four and five million pounds in contemporary currency. Newton died rich…

…And thus was proved the proposition that the surest way to make a pile of money is to make it yourself.

Q.E.D. — with this qualification: don’t try this at home, kids.

(This last is a long distance tease for my book-in-progress — which will have a lot more to say about Newton and some of the more questionable ways English men and women tried to make money back in the day. My telling of that story is due out on Houghton’s Winter 08-9 list.)

Images: Sir Godfrey Kneller, “Isaac Newton,” 1702 and “Coining Press used by the Royal Mint,” 1818. Source: Wikipedia Commons.


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