Friday, September 26, 2008

Economic Blogging - The Bailout is about Main St. not Wall St.

Two things: 1) The bailout is necessary 2) the bailout is about main street not Wall St.

Ok, so I stole the second one from Obama, but it makes the point well. This bailout is about the people - normal Americans.

To use an analogy, this financial problem is akin to cholesterol. You never knew you had a problem, until you had a heart attack.

Of course, right now business aren't closing. Wall St. looks flappable, but when is it not? No, the problem is credit, and credit is measured in the long, not the short. Giant financial institutions easily can look a bit evil and completely corrupt... well, that is, until you need to buy a house, a car or send a son or daughter off to college.

Credit is the life blood, and as a rule, institutions don't extend lines of credit when they are weighed down in debt. Unfortunately this is debt that won't be repayed or worse won't be repayed AND are overvalued.

So the bailout price is THE problem... the government can't pay too much because then you reward bad decisions (and the government will have less likelihood in turning a profit on this whole mess), however you also can't pay too little because then the institutions won't be able begin lending again (which is the whole point of this enterprise).

This is not about bailing out Wall St. I read some quote (from a Republican Congressman, no less) who said, "The plan does nothing for those millions of distressed homeowners." Well, he's right, it's not about them either. It's about credit. It's about making sure that when you get fired, and rehired two towns away you can go the bank and get a loan, and the interested buyer of your house can get a loan. It is about making sure that the young business start-up can get a loan so that in ten years they can make the new technological breakthrough that makes Microsoft look like Atari. Credit is the spinach of the US economy.

Every week thousands of jobs need to be created in this country just to keep the unemployment rate stable. Those jobs come from growth in businesses and new businesses. They require credit. We might not see it now, but let a few more of these giant firms fall, continue to let the credit market tighten and begin to watch unemployment soar, watch the dollar plummet (which for exporter is a good thing, but we're in import country, so you do the math), and let the hard times roll.

And if you didn't hear: Yes, Washington Mutual (lovingly, WaMu) was seized yesterday by federal treasury officials. It was the LARGEST FEDERAL SEIZURE IN HISTORY. The story wasn't even the headline for the New York Times today. This financial situation is very serious, and like cholesterol, if not checked, will entail equally as serious consequences.

Thursday, September 18, 2008

Political Blogging - Palin as Politik

The Chicago Tribune ran an op-ed on Biden Obama's VP choice under the title, "Obama Choice: Good Government, Bad Politics."

The news was awash in one statement: Obama was shoring up his foreign policy credentials. The choice signaled an Obama White House that was committed to responsible governance, but it was bad politics. Biden doesn't pick up a state. Biden doesn't motivate a certain voting block. Biden is good government and bad politics.

If there was ever a yin to one's yang, an up to one's down, an antithetical to Obama's thesis of good governance, it was McCain's choice of Sarah Palin. It was in good politics, but bad governance.

Recent polls are showing that the American people across the political spectrum see McCain's choice in such light.

The NewYorkTimes/CBS News Poll was released on September 18. One of the questions read: "Do you think Barack Obama chose Joe Biden as his running mate more because he is well qualified for the job or more because he thinks Joe Biden would help him win the election?

57% believed it was because he was "well qualified", 31% believed he was chosen because he would "help win" the election. The remaining polled thought it was either for both reasons, or had no opinion.

The same question was posed to McCain concerning the choice of Sarah Palin for the VP spot. Only 17% thought she was chosen because she was "well qualified", while 75% believed she was nominated because she would help him win.

Palin is mere politik.

Wednesday, September 17, 2008

Political Blogging - Intrade Helps Quell Fears

The past couple weeks after the Republican National Convention have been filled with premonition and pandemonium. Governor Sarah Palin's meteoric rise to national stardom has left many liberals aghast at the possibility that while 'change' trumps experience, it apparently doesn't trump 'inexperience.'

Overnight the media began reporting that soccer and Wal-mart moms could finally relate to a politician, and found Palin to be "refreshing." This, I believe, highlights the two mutually exclusive myths of the United States. These two myths, which I have written about before, are espoused in individualism and egalitarianism. Palin has captured the nearly impossible middle-ground between the two. Perhaps, I will write more about Palin and the two myths later, but this post is merely to be a politically cathartic read. It is to remind us that voting totals do not elect Presidents; the Electoral College does (which Democrats so painfully learned about in 2000).

Recently, national polls have steadily moved toward a dead heat. Obama and McCain seemed poised toward yet another election that is 'too close to call.'

And yet, I don't think we need to worry. Check out The online predictions market has a new US 2008 presidential election tool. The current political map has Obama winning 273 to McCain's 265.

A slim margin to be sure, but the question is what state does McCain, can McCain, swing? RealClearPolitics currently names 11 swings states. Yet while all these states by RCP definition have polls that are within 4% difference, most these states are already considered “locked” by intrade.

For example: In Pennsylvania Obama garners 47.3% while McCain holds 45.7% support in the polls, with a difference of 1.6% in Obama's favor. Yet, on intrade Pennsylvania is being predicated as going for Obama with 68% certainty.

Also, for example, Florida is nearly a swing state. The average polling numbers to date are McCain 49.4%, Obama 44.4%. Yet intrade predicts McCain will carry the state with 70% certainty.

So what are the real swing states?
Anything that intrade has at 60% or lower.

The red states that intrade has at 60% or below are:

The blue state that intrade has at 60 or below are:
New Hampshire(4)

What does all this mean? There are more and bigger leaning-red swing states. Democrats: rest easy. (There will be canvassing to do soon).

Sunday, September 14, 2008

Hermeneutics: Alice, the "Final" Four and Barth

I am taking a requisite class in Hermeneutics, and I find myself surprisingly happy with the initial readings.

The class has opened with a delightful little read from David Jasper, "A Short Introduction to Hermeneutics". The book is really just a survey of, primarily, biblical hermeneutics, but branches to the issue writ large when appropriate. Jasper makes a persuasive case that hermeneutic shifts are leading indicators of theological shifts throughout Christian history.

During the work he betrays a predisposition to the reformation, and in doing so, he also given short shrift to Aquinas and Scholasticism. This would be my only grievance.

Yet, what was particularly appealing were the poems and excerpts that were craftily plotted throughout the chapters. Below I have recounted a few:

"Then you should say what you mean," the March Hare went on. "I do," Alice hastily replied; "at least - at least I mean what I say - that's the same thing, you know." "Not the same thing a bit!" said the Hatter. "Why you might just as well say that 'I see what I eat' is the same thing as 'I eat what I see!"
-Alice in Wonderland

"The letter shows us what God and our fathers did;
The allegory shows us where out faith is hid;
The moral meaning gives us rules of daily life;
The anagogy shows us where we end our strife." - Nicholas of Lyra

"Both read the Bible day and night,
But thou read'st black where I read white." -William Blake

The last comes from Barth's "Commentary on the Letter to the Romans"
"The Historical-critical Method of Biblical investigation has its rightful place: It is concerned with the preparation of the intelligence - and this can never be superfluous. But, were I driven to choose between it and the venerable doctrine of Inspiration, I should without hesitation adopt the latter, which has a broader, deeper, more important justification. The doctrine of Inspiration is concerned with the labour of apprehending, without which not technical equipment, how ever complete, is of any use whatever."