Archive for the 'Critical Thinking' Category

Dave Barry on 2009

December 29, 2009

I enjoyed this 2009 recap from Dave Barry.  I found the recap of the first half of the year better.  Perhaps insanity becomes more clear a few months removed.

From January:

The No. 1 item on the agenda is fixing the economy, so the new administration immediately sets about the daunting task of trying to nominate somebody — anybody — to a high-level government post who actually remembered to pay his or her taxes. Among those who forgot this pesky chore is Obama’s nominee for Treasury secretary, Timothy Geithner, who sheepishly admits that he failed to pay $35,000 in federal self-employment taxes. He says that the error was a result of his using TurboTax, which he also blames for his involvement in an eight-state spree of bank robberies. He is confirmed after the Obama administration explains that it inherited the U.S. Tax Code from the Bush administration.

I really this passage about January and February:

In entertainment news, an unemployed California mother of six uses in-vitro fertilization to give birth to eight more children, an achievement that immediately catapults her to a celebrity status equivalent to that of a minor Kardashian sister. But even this joyous event is not enough to cheer up a nation worried about the worsening economy, which becomes so bad in . . .

FEBRUARY

. . . that Congress passes, without reading it, and without actually finishing writing it, a stimulus package totaling $787 billion. The money is immediately turned over to American taxpayers so they can use it to stimulate the economy.

No! What a crazy idea THAT would be! The money is to be doled out over the next decade or so by members of Congress on projects deemed vital by members of Congress, such as constructing buildings that will be named after members of Congress. This will stimulate the economy by creating millions of jobs, according to estimates provided by the Congressional Estimating Office’s Magical Estimating 8-Ball.

Another from February:

The stock market hits its lowest level since 1997; this is hailed as a great investment opportunity by all the financial wizards who failed to let us know last year that the market was going to tank.

From March:

. . . an angry nation learns that the giant insurance company AIG, which received $170 billion in taxpayer bailouts and posted a $61 billion loss, is paying executive bonuses totaling hundreds of millions of dollars. This news shocks and outrages President Obama and members of Congress, who happen to be the very people who passed the legislation that authorized both the bailouts and the bonuses, but of course they did that during a crisis and thus had no time to find out what the hell they were voting for.

Fun stuff.

Barry drills home the Geithner absurdity and “inherited from the Bush administration” excuse throughout.

As I read it, it occurred to me that while Barry is a good humorist, the funniest stuff in his recap didn’t need much help looking remarkably stupid.  And we accept that.

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Sarah Palin Sensationalism

December 27, 2009

She must be a person people love to hate.  When I post about her, the traffic on my site goes up.  My last post about her generated about 10 times more views than any of the other posts in one day.

That makes me curious.  What is it about her that people love to hate?  Further, why do people beat on her so much? 

Consider, for instance, the fact that she wore expensive clothes provided by McCain’s campaign during the campaign.  That’s presented as if there’s a tinge of scandal.  It seems to grate people the wrong way.  Yet, I don’t recall any mention of who provides the other candidates’ campaign clothes or how much those clothes cost.

I do remember a story after Obama took office about the tailor who makes his suits and the designers that make Michelle’s clothes.  The tailor sounded very exclusive and I’m sure his suits aren’t cheap as did the designers for Michelle’s clothes. 

Yet, reporters don’t ask how much Obama’s or Michelle’s clothes costs or who pays.  Rather than a scandalous angle, the clothes story was presented as a human interest story.   

Personally, I could care less about anyone’s clothes, but the fact that there was such dramitcally different treatments in the media about the same story says a lot to me.  It should to you as well.

Don’t celebrities where free clothes?  Why isn’t that a scandal?  Do they need free clothes?  Can’t they afford their own?  Nope, it’s just a scandal when there isn’t much else to scandalize about someone we dislike.   When we can’t find something, we sensationalize.

I’ve heard more about Sarah Palin’s campaign clothes than Obama’s ties to ACORN.

I’ve heard more about the fact the Palin didn’t tell us which magazines and newspapers she regularly reads (do we know which Obama, Biden or McCain read?) than Obama bailing out Wall Street billionaires.

I’ve heard more about Tina Fey’s – as Sarah Palin and often attributed to Palin – comment that she can see Russia from her front porch than Obama following the path set by Bush in his last term rather than bringing the “change” people voted for.

Steve Forbes on the Crisis

December 23, 2009

In his December 10, 2009 Fact and Comment column, In-Credit-Able, in Forbes Magazine, Steve Forbes clearly communicated several points worth capturing.  Here’s on on the mortgage crisis:

Government-sponsored enterprises Fannie Mae ( FNM news people ) and Freddie Mac ( FRE news people), with their implicit government guarantees, were able to totally dominate the mortgage market. They could borrow cheaply and leverage up on a scale no private company could. When they went bingeing on subprime mortgages, they ended up twisting and then destroying the housing market. The private sector was quite capable of generating players that could have performed Fannie’s and Freddie’s roles. And because they wouldn’t have had Uncle Sam’s moral-hazard safety net, they would have been infinitely more cautious, even with the Fed creating floods of liquidity and the credit rating agencies forgetting their raison d’être. Yet Congress is determined to keep these beasts alive and under government sway. Washington is also taking over the student loan market.

This is not a well understood point.  Having the implicit guarantee of the government short-circuited the prudence that would take place in a free market.  All the bright bulbs that condemn free markets for causing the crisis, don’t seem very bright to me because they not only miss the true cause of the crisis, but they blame the very thing that could have prevented it.  Removing prudence from a free market through a government action will always end badly.

Here’s some clear thinking from Steve on health care:

The prospective government de facto takeover of health care will extend Washington’s reach into the credit markets. Health insurers will be reduced to federal vassals by being forced to offer policies at prices and terms dictated by Washington. As a reward they will have first call on the credit markets, with the same sort of implicit guarantees that once so benefited Fannie and Freddie.

It’s easy to forget, businesses like insurance companies are in business to make a profit for their shareholders.  If they don’t make a profit, there’s nothing forcing them to stay in business.

Excellent Video Series on Keynes and Hayek

December 20, 2009

This makes the second link I’ve made to PBS Newshour in the past week.  The link will take you to a series of five video segments with economists Lord Skidelsky and Russ Roberts hosted by the Lehrer.  They discuss Keynes, markets, the financial crisis and a host of other topics and, as my previous link to an interview with George Shultz, is hosted by Paul Solman.

In one of the videos, Solman describes himself as a “dispassionate reporter.”  From what I’ve seen of his work so far, I agree.  Journalism needs more like him.  After watching over an hour of his interviews now, I can’t tell if his personal beliefs lean one way or the other.  What’s more, he seems to understand the subject and is interested in getting the real story out, rather than a stylized version of the story meant to fit a predetermined narrative.  Nor does he practice “gotcha” journalism.

One quote from Russ Roberts that I will take with me is, “Capitalism is a profit and loss system.  The profits encourage risk taking.  The losses encourage prudence.”

I highly recommend watching the video series if you are the least bit interested in economics or gaining a better understanding of the the true causes of the financial crisis.

Silver Tongue on Climategate

December 17, 2009

A new contributor to this site, Lane Meyer, directed me to the excellent December 9, 2009 podcast of the Dennis Miller Radio Show, where Miller interviewed Christopher Monckton, Chief Policy Adviser at the Science and Public Policy Institute.

Unfortunately, I can’t find a link for you to be able to replay the interview directly from the web, but the podcast is available for free on iTunes.  Search for Dennis Miller and look for the Christopher Monckton Interview podcast released on 12/9/2009.

I wish I could do the podcast justice, Monckton absolutely shredded believers in global warming.  Monckton has been challenging Al Gore to a public debate on global warming for two and half years.  Miller gave Gore props for not accepting the invitation.  There is no doubt in my mind (and I bet in Al Gore’s) that Monckton would make Gore look silly, which would put a major crimp into Gore’s livelihood.

If you’ve ever had a hint of doubt about global warming, and suspected that those in the know may be blowing smoke, you need to listen to this podcast.  It’s refreshing.  As Miller put it, listening to Monckton is “cathartic.”

More on why I think it’s cathartic later.

“Seven Presidents Have Failed…”

December 14, 2009

On 60 Minutes last night, Barack Obama claimed that seven presidents have tried and failed to reform health care.  Follow-up questions I would have asked:

1.  Didn’t President Bush sign the Medicare Prescription Drug, Improvement and Modernization Act in 2003?

2. Wasn’t part of that act a provision to add pretax health savings accounts for working people so that people can control more of their health expenditures?

3. If you were to analyze this major health legislation, what parts would you say are having a positive impact and which negative?

4. Do you think the parts that expanded government’s role in health care are positive or negative and why?

5.  Do you think the HSA’s are having a positive or negative impact and why?

6.  If I were Steve Kroft and I had just implied that the 2,000 page health care reform bill was a monstrosity and the President changed the subject by essentially saying, “seven Presidents have failed, but we’re close,” I might have asked, “Is this monstrosity better than failing to pass something?”

I understand there are a couple of dynamics at play.  You can’t upset the President too much or he won’t come on your show and you won’t get ratings.  Also, there is still a halo of infallibility with this guy, so journalists are having a hard time coming to grips with the fact that he is a human after all, and maybe, just maybe, it’s a bit much to expect someone to go from junior senator to legendary world leader in a year’s time.

Tick, tick, tick

December 14, 2009

In an interview on 60 Minutes this evening, Obama blamed Wall Street bankers for the nation’s financial troubles.  If I remember correctly, the question was asked if banks are repaying TARP funds so they could pay their CEOs big bonuses.  To that, Obama said that he thinks that’s a motivation and that Wall Street still doesn’t get it that everyone is mad at them for causing the financial mess (paraphrased from memory).

What’s sad is that many American accept this explanation and we never hold government accountable for their role in the mess.

A true leader would own up to it.  Wall Street certainly played a role in the financial crisis, but they by no means acted alone.  This is where journalism needs to DO IT’S JOB!

Here are some great questions I would have loved to ask President Obama at that point:

1.  Do you think the government or government agencies had any role in the financial crisis or did Wall Street act alone?

2. Do you believe the Federal Reserve should have acted quicker to remove excess money supply after it seemed that the economy got back on track after 9/11?

3. You don’t believe that government put pressure on banks to make credit easier (i.e. lend to people they would normally consider high credit risks) in order to push this idea of expanding home ownership?

4. Didn’t the government provide implicit guarantees to subprime lending, again to expand home ownership, through Fannie Mae and Freddie Mac?

5. Wasn’t Fannie and Freddie one of the largest, if not largest, provider of these bad loans?  And weren’t they acting under direction from Congress?

6.  Weren’t regulations proposed in 2004 that would have reduced the risk of the housing crisis by making it tougher to get loans, but those regulations were rejected by Congress because they would have interfered with the goal of expanding home ownership?

6.  In order for us to better trust your leadership, shouldn’t we expect you to be honest about government’s role in the financial mess?  Rather, you seem to pretend that government has not blame and we should continue to blindly trust the government as you want to expand regulatory power even further.

7. Please tell me, how are the new financial regulatory powers that your administration is proposing different from those in 2004?  Why didn’t the current regulations not work to prevent the crisis?  Did anyone in government not even recognize that a crisis was about to happen?  If not, how can we trust those in government to recognize the next crisis?

8. What do you think about the people who borrowed well beyond their means?  Shouldn’t they have acted more prudently?  Shouldn’t we expect our citizens, who are provided thirteen years of education with a total valued at $150,000, to make responsible financial choices?  Shouldn’t we expect them to be able to read and understand a loan document and do their homework about the realities and responsibilities that come with home ownership?

9. What personal finance advice would you give Americans?

10.  Some say that people were motivated to borrow beyond their means because they felt that home prices were appreciating so rapidly that they could always sell the house and make a nice profit.  In other words, they were borrowing on future hopes rather than their realistic income.  Don’t you think that the government’s finances are reflecting that same behavior?  We are borrowing beyond our means with the hope that the economy will grow strong and pay for it.  Haven’t we learned our lesson here?  Don’t we know how this story is likely to end?

The Open Mind Test

December 14, 2009

For the last few years, some believers of global warming have characterized global warming skeptics as having closed minds.   With the recent climategate, it’ll be interesting to see how open minded those same people are about conflicting information.

Jobs Summit

December 5, 2009

This is a good recording of a broadcast on a Minnesota National Public Radio program with economists Russ Roberts and Josh Bivens discussing the jobs summit.  The economists get going about 10 minutes into the recording.

Josh represents what I disdain.  He comes across as confident, smart and completely disconnected from the you and I.  He’s an intellectual elite.  I’ve personally seen his type wreck companies and then rationalize why it wasn’t their fault.  His types also created the financial crisis.  I believe his types evolved from what was once known as a snake oil salesman.  He’s playing a con.  I’m not sure if he really even cares if he’s right or wrong.  His main motivation is to be seen as the smartest guy in the room.

Folks like Russ, on the other hand, we should listen to more.  He says, “I want you to be skeptical, even of me.”  He connects with the callers on the phone and understands what’s going on in their lives.  He says we shouldn’t trust economists, especially those with a great deal of data and models supposedly backing them up.

Get Around It

December 4, 2009

In this column, Larry Elder writes about NPR’s treatment of the climategate story.  I enjoyed the column.  I especially enjoyed these two sentences:

One crosses the line from scientist to advocate when, if faced with conflicting or unexpected data, the scientist tries to get around it rather than to understand it. If data causes a re-examination of previously held assumptions, so be it.

Very well said.  We all need someone to keep us honest, even scientists.  Groupthink is a feedback problem that hides the truth.  The problems that led up to the deadly explosion of the space shuttle Challenger in 1986 was a result of groupthink among NASA scientists and engineers.   Hmmm…