The Peoples' DOS Attack*

Amazing. Honestly, I never expected this bailout issue to garner so much opposition. I'm guessing some people oppose it because they regard it as theft by capitalists, and others oppose it because they regard it as oppression by government. Either way, we have been making ourselves heard.

Just the highlights from this CNN.com page suffice:

* Web sites of the House of Representatives are overwhelmed with e-mails
* Administrators implement the "digital version of a traffic cop" to handle the overload
* "This is unprecedented," says a House spokesman
* Overload began Sunday as legislators said bailout agreement was posted online

Good job speaking out, America!

* This refers to a Denial Of Service attack. My point is not to praise this practice, but rather the volume of our activism.

Clear Thoughts On The Bailout Issue

I have to pass on this excellent link from Gus Van Horn, in turn via Dismuke, because clear thinking deserves as much exposure as possible.

I've been scratching my head wondering why there has been so little objective analysis of the recent financial upheaval, and it's refreshing to actually find some information, rather than the usual attempts to simply push fascism upon us in a panic.

At the other end of the spectrum, there are gems like this opinion piece in the New York Times. Do you know what is wrong with this piece? No evidence. There is not one single substantive, causal, objective explanation in the entire piece. It is simply a series of assertions strung together, editorial cotton candy, with flavor and no substance. There is no explanation whatsoever about how freedom has led to our problems, because it hasn't, and it can't. It is not possible for human judgment to lead to economic recession.

It is possible, on the other hand, for coercion to lead to recession, because coercion prevents people from seeking value, which in turn prevents people from creating value to fulfill the demand. When you turn against the mind, what do you get? You get ignorance and failure, both of which are flying high right now.

Ayn Rand Center Financial Crisis Page

Go, Ayn Rand Center!

Here's a nice new web page on the current financial crisis from the Ayn Rand Center, the new Washington presence of the Ayn Rand Institute. We need a little sanity to counteract the panic-mongering on Wall Street and in our capitol.

Blah Blah Price Blah Growth Etc

The subtitle of this post is: What Economists Say to Laymen... What They Hear.

I got this "informative" paragraph in an email from the Federal Reserve after my comments against the bailout:

The shortcomings and weaknesses of our financial markets and regulatory system must be addressed if we are to avoid a repetition of what has transpired in our financial markets over the past year. The Federal Reserve supports the Treasury's proposal to buy illiquid assets from financial institutions. Purchasing impaired assets will create liquidity and promote price discovery in the markets for these assets, while reducing investor uncertainty about the current value and prospects of financial institutions. More generally, removing these assets from institutions' balance sheets will help to restore confidence in our financial markets and enable banks and other institutions to raise capital and to expand credit to support economic growth.

I think it's more revealing in what it does not say. It does not address the morality of nationalization of assets. It does not address the morality of using funds taken by force from a captive populace (taxes). It does not address the objective value of any of the assets (it focuses on the subjective impressions of investors). It does not focus on how the real losses will be absorbed.

I had to look up "price discovery" (it refers to market's discovery of/arrival at prices through the action of supply and demand).

So, the fake demand created by the government buyout will get the market moving again, because us suckers would be left holding the bag. Who will eventually buy these assets and for what price, or what will happen to them otherwise, is not revealed.

This seems a lot like the original Iraq war "strategy" to me.

As far as investor uncertainty goes, I doubt anyone is uncertain at this point. It seems they are quite certain the damage is already done, as reflected in the recent tumbling stock markets.

Doesn't the value of the bad loans have to essentially be written off (whether or not We the People buy them)? In other words, that value did not really exist, and the market needs to adjust back down to a level that more realistically reflects the total value our economy. This would seem to be no more than the original overvalued GDP minus the overvaluation, and also minus whatever other negative impacts there are.

Toward A National Cereal Policy

(A bit of satire:)

My fellow Americans, the time has come for the people to push back against the rudderless, greed-ridden market forces that dominate the American breakfast food industry. The time has come for a national breakfast cereal policy.

For too long, we have labored under the control of an industry that panders to our basest needs and tastes, rather than trying to elevate them. Big Cereal has simply provided whatever shape or color or taste of cereal the public wanted, regardless of its impact on this fragile world we live in. Cereal box appearance is highly inconsistent, and is printed in jarring, garish colors in order to fool an unsuspecting public into buying cereal that may not be in their best interest to buy. Cereal is supplied in many box sizes and at different prices, making comparison difficult or impossible. All of this confuses the buying public, and as a result, some of us don't eat cereal at all.

The breakfast food industry is far too important to be left in the hands of Big Cereal and others whose only concern is the selfish quest for more and more profit, rather than our future. What will happen when we run out of grain? Breakfast is the first meal of the day, and is therefore the most important. Without a good start, the budding minds of our school children will operate at less than peak efficiency, leaving them behind in this increasingly competitive global market. Without a proper breakfast, our military is more vulnerable to attack from hostile forces. This has become a matter of national security.

My plan would include the following initiatives:

• Encourage the production of domestic crops, to reduce our dependence on foreign grains.
• Encourage the development of alternative grains, before the legacy grain market is depleted.
• Tax incentives for legacy grain conservation.
• Federal money for education on such things as the correct amount of milk to use when eating cereal, how to avoid wasting cereal, and other topics that are proper part of a forward-looking breakfast cereal policy.
• Cereals which are grain-guzzlers must be more strictly regulated, if not eliminated altogether.

The issue of breakfast food is far too important to be left to the selfish business interests and the anarchy of unbridled capitalism. Please support my drive for a national breakfast cereal policy. Thank you.

(P.S. - This is not a low-carb post)

Fall Colors

Here's a pic from this weekend in Centennial Cone Park, CO. This park is in the foothills about halfway between Denver and the first truly high peaks.

Fall colors are starting to show up, mostly in cooler areas. Due to the varying elevations and different plant and flower species, the rollout of color will continue right up to the point when snow covers it. I've even seen green deciduous plants growing underneath the snow. I found that a bit surprising.

Excellent Pro-Choice Position Paper

Johnny-come-lately here just got around to reading this document published by the Coalition for Secular Government and I have to say it is first-rate. It is aimed specifically at Colorado ballot initiative for Amendment 48, but the arguments are applicable to the topic of pro-choice in general. They are rational, strong, and detailed. Great stuff.

Bush? No, He Doesn't

Well, I'm glad I finally got an answer to the question that's been burning in my mind: "Does George Bush understand the economy?". The answer is: No! Now that I've solved that mystery, I can move on to other pressing matters.

This quote is just amazing:

"I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention," he said. But "these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence."

Well no, the markets have not been functioning properly, but not in the way he thinks. However, the recession actually is proper functioning, it's the market realizing bad investments have been made, and we're not going to spend money supporting dumb managers. It's the market realizing we really shouldn't have made all those loans. It's the market realizing people really can't afford all those homes. So yes, it is functioning, perfectly I might add. The market is a lot more clear-headed than he is.

By referring to the "market" as an autonomous being with a mind of its own, which is not following our wishes, he does not need to address the fact that the market is really only a sum of individual investors' judgments, and what he objects to is our minds. George Bush is anti-thought.

Which brings me to my recommended solution: we'd be better off if he'd stick to his area of expertise and just pray for the economy.

Marlin Perkins I Am Not

However, I did get some wild animal footage today.

I ran across a black bear as I rounded a bend in the Shadow Canyon trail near Boulder (almost literally, since I was running at the time). It was on all fours facing squarely in my direction. Luckly, it was a long, gradual turn and the bear was about 100 feet away, so I simply backed away out of sight and let it mosey on its way. It was trying to descend into the ravine to forage for berries, and to ravage a poor apple tree that was trampled from previous raids.


Here is the video I shot after I was out of the way:


It reminds me a bit of Sasquatch footage: "I'm telling you, that black blob is a bear!".

The experience vindicates my usual practice of clapping and making noise on parts of trails that have poor visibility, because these animals are out there. And I think I will avoid that section of trail when the apples are ripe.

UPDATE: Wait, I forgot, I could just wear an Ursus Mark VI. I wonder if there's a lightweight trail running model?

Heraclitus for President!

Any time I see "Obama for Change" bumper stickers while sitting at a red light, I think about Heraclitus.

Since every candidate since the beginning of elections has used the notion of change to try to pry incumbents out of office, you might think we would have arrived at the ideal state of being already, and change would no longer be necessary. The appeal to change represents the same thing now as it did back then: it's a way to avoid talking about what is, and what it will become. After all, what politician is going to be honest enough to say it like this:

I am for taking a big stick, hitting you over the head with it until your money falls out, and using that money to pay other peoples' bills. I'm going to prevent you from doing lots of things you can do voluntarily with others, I'm going to make it hard for you to buy gas for your car, I will punish innovation and success, cause the economy to stagnate, drive doctors out of the profession and make medical care hard to obtain.

Etc. Etc.

OK, I'm ready to vote for that inspiring platform, hold me back.

The Rewards of Management Failure

Just when I was happy to see our government was ready to let ill-managed businesses fail, I see this. Sigh.

I knew it was too good to be true. What do you want to bet the markets go up tomorrow morning? It will only postpone the inevitable downward correction when the reality sinks in that supporting bad business is bad business. But that will happen later, when nobody is watching except a few financial analysts, and won't make the news.

The title of the article is "Why the Government Won't Let AIG Fail". News flash: it has failed. Accept it and move on, don't spread the damage. There is only one thing worse than the world's largest insurer failing, and that is keeping it alive to wreak more destruction.

Lying doesn't work. The only thing that will instill economic confidence is knowledge of, and confidence in, the truth, and avoiding the consequences of stupidity does not fall into that category. Every government intervention in the economy is -- by definition -- an attack on people's better judgement. Investors know AIG has failed. Management knows AIG has failed. They have rendered their verdict, yet the obfuscating, evasive hand of government sweeps in to override those judgements and "save" AIG from swift Street justice.

What will happen is that money will be surreptitiously channeled from businesses that did not fail, by lowering lending standards to save AIG, and we will own a crappy company. The consequences of having a failure AND also punishing those who did not fail will always be greater that those of the initial failure.

Am I missing something?

UPDATE: Markets are reacting fairly realistically: @ around 10 AM the Dow is down 150 points. Also edited out a paragraph pending more factual verificaton of causes of AIG's troubles.

Palisade Red Truck IPA

This beer is from Palisade Brewing Company in Palisade, CO. The area has a microclimate along the Colorado River that is good for fruit orchards and wineries among other things, so among its exports are Palisade peaches and wine. The vineyards have tasting rooms and some of the wines are quite good. As are the biking/hiking/running trails. And there are several brew pubs in the valley.

I was optimistic about this beer as I was pouring it, since it had sort of a deep cider color and you couldn't see through it easily, which I like. I always feel a bit disappointed when I can see through a beer (sorry, pilsners).

It has a nice hop aroma in the glass. I've had this beer on tap at the brewery, and amazingly it does not seem to lose much of it by being bottled.

It also has a nice maltiness that balances the hops. The taste leans a bit more towards the malt, like a Victory Hopdevil, rather than towards the hops, like a Golden City Evolution IPA. I'd say an Oskar Blues Dale's Pale Ale is in between. I've noticed several Colorado IPAs tend to emphasize hops, which I like, but it's interesting to have it the other way too. Either way, both components are present and substantial in this beer.

This was a very nice beer, especially in a bottle!

What We Have Not Done

I wonder what today would be like had America learned from its 9/11 experience, and taken the actions necessary to defuse the threat of Islamic Fundamentalism. Let me see...

• We would not be waging war in Iraq... yet.
• We would have defeated the Taliban in Afghanistan but also insisted on writing the new constitution (sans Interstate Commerce Clause and sans religion).
• We probably would have had to replace the government of Iran and write their constitution too.
• We would have stopped selling arms to Saudi Arabia.
• We would treat authority figures -- secular and religious -- who make violent requests of their obedient followers just like we treat gangsters ordering a hit.
• We would tell the Saudi government that they will cease to support Wahhabism or we will come for them.
• We would end support of Pakistan until they quit pussyfooting around in Waziristan, and if they don’t do the job, we will.

There's probably more, but that's a good start. This sounds rather violent, but that is what war sounds like.

If we have indeed had war declared war on us (I think we have), and if war has been declared on terrorism (as it should be), well, let's fight what actually causes it, and that's not some dirty dude with a Koran in a cave somewhere (or in a warlord's compound in the aforementioned province). It is the organized, well-funded governments that enable terrorists. Without places to hide, without the training camps, without the flow of cash and the safe haven, support for the cause would diminish significantly.

However, we should have started this campaign in 1979, and because we got a late start, we have some catching up to do.

Just as important as the military strategy, however, is the fact that we have to be right and know it. We have to be sure of our moral right to take these actions and sure that our way of life is worth preserving, and medieval servitude is not. We also have to act justly; we have to apply freedom to all aspects of our national policy, not just talk about it, and not inflict unjust, statist policy on other nations via their governments, as we often have. In other words, we need to pick the right principles and apply them consistently; something we have not done.

All Your Fannie Are Belong To Us

I just found out that I'm a proud owner of Freddie Mac and Fannie Mae! Woo-hoo! I'm think maybe I want to install an indoor pool, and a bar in every room. Who do I talk to about that?

Actually, I'd rather be an owner of a hard-nosed bank that wouldn't lend to risky borrowers, but those seem to be in short supply.

Markets rallied on the news. If they really understood the principles behind the takeover, markets would have plummeted. Yes, government ownership means some financial security in the short term (i.e. because I'm paying for it), but that's like saying citizens of the USSR had security. It ignores the long-term/big picture, which is that the bad consequences are manifold and overwhelming.

The most significant matter is that this action represents an unquestioning continuation of the policy of self-inflicted blindness. It involves an adamant refusal to accept the fact that not everyone can afford a home, and the best course of action in the current situation is for everyone to man up and face the consequences, rather than to prolong the fantasy that lowering lending standards and forgiving bad decisions are good ideas. It represents a capitulation to blindness and injustice.

I actually saw Senator Chris Dodd on TV still talking about making sure everyone can own a home (!). Trying to facilitate that right now amounts to standing in the smoldering half-ruins of a house while playing with matches and gasoline. A quote:

"The Administration's failure to prevent bad lending practices has caused unprecedented hardship in the form of record foreclosures and market turmoil."

Does he mean the existence of Fannie Mae and Freddie Mac? Does he mean the government's dogged promotion of lending to risky borrowers? Or bailing out banks when they do stupid things? To blame the Bush Administration for the problems is spineless political nonsense. The problem is the fact that these institutions exist in the first place. They are institutions explicitly dedicated to taking ill-advised risk and avoiding its consequences. What did you expect was going to happen? This is like an excerpt from Atlas Shrugged.

We are backing these institutions dedicated to making loans to risky borrowers. As a result, useful capital is sidelined in this corral of iniquity, to be doled out in less profitable loans, thus reducing the net ability of society (in the sense of a group of individuals) to create wealth. It will encourage building of homes that should not be built, resulting in the housing market going out on yet another limb, waiting for it to crack under the weight. And advocates of these policies will continue to flatter and woo those who mistakenly think they can afford a home when they cannot, promoting financial irresponsibility and bad judgment.

What we should be doing instead is finding ways to implement a just solution that recognizes the reality of the failures and allows nature to take its course. A solution that does not propagate the error by passing the buck or encouraging the belief that such risky loans are viable. People need to learn to either save, or rent.

Until that happens, we do indeed belong to them.

On Energy Independence

I've had enough of the talk of energy independence. It's un-American in many ways. It's impractical, and can only be implemented by immoral means. And, I would say it's against our nature.

In a recent speech McCain mentioned approvingly how running mate Palin has "tackled tough problems like energy independence and corruption". Energy independence has become quite the buzz phrase, hasn't it? I really should quit fretting over the hypocrisy of a party claiming to be advocates of economic prosperity advocating things like this, but it needs analysis, if only to point out one set of facts: dependence means trade, and trade requires freedom, and means prosperity.

I really don't think we are quite to the point where we are surrounded by mortal enemies and need to batten down the hatches. That's wartime talk.

Historically trade has opened up relations with other countries and facilitated exploration (the anti-Columbus crowd need not apply). In order to function properly, it requires freedom. In order to continue, it requires peace (the wealth-begets-war crowd need not apply).

For example, take China. I realize that China has issues. Right during the Olympics they wanted to sentence elderly protestors to labor camp, for goodness sake! However, any chance of opening up that country politically can only occur if people are happy, modernized and prosperous. For us, trade with China means dependence on them. Are we to produce all the goods we consume within our own borders? Ridiculous. There are better ways to protest China than violating the rights of Chinese merchants and the Americans trying to do business with them -- such as speaking out against it, instead of having our president attend the Olympic ceremonies.

Regarding oil, the issue is the same: trade is good for everyone, and trying to shy away from it will help nobody. Trade is a victory of the mind over brute force; it is reason determining what it wants and devising ways to create it, or providing value in exchange for it. It is our nature to create, and only natural that we should want what others have created. This is what we would give up for "independence"; we would give up seeking values outside our borders, which means to unnecessarily limit our creative capacity and our capacity to achieve values. Are we to be stunted and cowed like that? Any policy that either forcibly prevents such trade, or uses state powers to "encourage" limiting trade to within our borders, is against our nature as thinking beings, and is wrong.

Far from aiding our security, withdrawing from global trade will only make us less prosperous and more likely to become involved in a conflict. We won't have the ties, we won't have the infrastructure of freedom facilitating trade, and we will be more ready for war because supply lines will have become internalized. Ironically, the actual effect will be to make war more difficult, since we will be less prosperous and therefore less capable of meeting war's material demands.

All in all, it's a very bad idea.