Where Fun Comes to Die

My problem with the bailout/rescue/fat-cat-spending plan is that I myself hardly have a grasp as to what the end results might be.  So I sit and I listen to the copious commentary – and I recently came upon the Financier himself, the Donald, the Trumpster, on CNN.  I am completely unsure of exactly who I should listen to – if indeed the CNBC or FOX News pundits are adding something worthwhile or whether they are pushing their ratings (as usual).  But the Donald himself stepped up and said it rather plainly (not that I am prone to listening to yet another billionaire espouse protection of the masses).   But he was honest – he has no idea if this plan would work, he has no idea what would work if this doesn’t – and all he can say is that we need to try something.  For me, that was enough – I was sold…

The market jumped over 400 points today – without a plan in place.  One day after taking a complete nose dive into the deep end, into guaranteed Depression levels of concern (if you really listen to the madness on any one of the news outlets)… And yet, the market took a turn in the opposite direction today.  I’m leaning more and more towards the Donald’s viewpoint with every point the Dow gains.

The Executive Branch has no idea what to do – and even denied this was going to happen as late is March of this year.  The administrative cronies are too steeped in Wall Street to even understand the blight of Main Street.  The Legislative Branch has absolutely no idea what to do, and yet still is trying to seem authoritative.  I salute their attempts at non-partisanship – but really, very few of them have much concern beyond the November elections at this point.  The long term reprecussions of their actions are at the forefront…

So who should we listen to?  I’m still at a loss – like the Dow.  But maybe I’ll gain some points tomorrow.

I spent far too much of my valuable time yesterday observing various news pundits weighing in on the defeat of the so-called “bailout bill” that would have turned over $700 billion to the Secretary of the Treasury (never thought that’d be a job I’d envy…).  The thing that struck me the most was the general consensus among the pundits that the failure of the bill was a bad thing.  Or rather, I suppose it wasn’t a general consensus so much as a widespread unquestioned assumption.

Perhaps my favorite part of it all was the horrified screaming about the stock market, OH MY GOD LOOK WHAT HAPPENED TO THE STOCK MARKET, as though it had much of anything to do with the vote.  You’d think they’d been living in Candyland for the better part of the year.  We’re in a RECESSION, folks.  Stock prices fall during a recession.  That’s just an unfortunate barebones truth of economics.  I mean, come on, what, did you expect that passing the bill was going to magically fix the stock market, solve the mortgage crisis, relax the credit crunch, eliminate cyclical unemployment, dissolve our outstanding national debt, bring about world peace, feed hungry children in the third world, eliminate compatibility problems between Apples and PCs, cure AIDS, and reveal the final Cylon??

I listened to these Chicken Littles sobbing about how this is the worst blow to the stock market since the Great Depression — if not even worse!  All of these people, by the way, were gainfully employed, well-dressed, college-educated or better, and almost certainly went home later in the evening to eat a healthy, hearty dinner with their families, who were almost certainly not wearing the same clothing as they wore the night before.  But let’s not let little details like objective prosperity such as the world has never known get in the way of fearing a relative slowdown to the point that we’re willing to slap our kids and grandkids with a tax bill that will effectively prevent THEM from attending graduate school or owning a house in all but the most sparsely populated areas in the country.

Am I glad the Dow closed almost 800 points down?  Of course not.  But am I worried?  About the stock market?  Hells no.  This is Amurrica, boys and girls.  I thought we had nothing to fear but fear itself.  I thought pulling ourselves up by our bootstraps was what we were good at.  What happened to that tiny little band of idealistic roughians that single-handedly defied the greatest military power the world had ever known — and WON???  Have the colonies been brought so low that we’d rather turn over our souls — and our children’s souls, and our grandchildren’s souls — to the government than live with the risk of not buying a new convertible next year?

If the “Republicans” and Democrats (Dems don’t need scare quotes, as at least their desire to have the government control the economy is consistent) are going to pretend that the only way for the economy to recover is to throw good money after bad, then frankly, I’d rather do nothing and let the market correct itself (as it will eventually, someday, need to do anyway).  Yeah, it’ll be a painful process, but better that, better we LEARN from our mistakes, than that we keep making them, over and over and over, until we reach a point that a collapse of the economy really IS a collapse of our Republic.  As things stand right now, the biggest threat to representative democracy… is precisely what the President is asking for.

Oh, and gee.  Would you look at that.  Dow just closed UP almost 500 points from yesterday — the third-largest single-day gain in the Dow’s history.  Funny how the sky is still in place and all.

I don’t really care which way people come out on the bailout.  I know that there is uncertainty, I know that people have different tolerances for risk.  I just hate some of the reasons people give.  My least favorite right now is that we need to punish those greedy, rotten CEOs who are walking away from this mess with millions of dollars.  Wow, crazy.  Twenty million dollars.  I’m so outraged.  What a bad incentive structure.  I can’t believe we would reward people for driving their companies into the ground.  Let’s do whatever we can to punish those nasty beasts.

Do you know who else got paid $20 million?  Eddie Murphy, for the second biggest movie flop of all time, “The Adventures of Pluto Nash,” which lost $93 million dollars.  But it’s not just about the $93 million that the movie studio lost — there are other hidden costs, like all the $8 tickets (2002 prices) sold to poor unsuspecting consumers that couldn’t have known better.  I can’t believe that Eddie Murphy would take advantage of ill-informed consumers like that and run a film into the ground just to make a quick buck!  What an abuse and exploitation of traditional American ideals!  He clearly needs to be punished – maybe sent to prison, or at the very least disgorge all the money.  Movie stars need to know that we will not let predators like Eddie Murphy victimize us any more.  If we let Eddie Murphy off the hook, it will just provide incentives for all other big name stars to make horribly bad movies in the future.  It’s time to make a stand!

L’shana tova! Happy 5769, everybody! It certainly is starting out with a bang, isn’t it?  I feel like I ought to make some connection between the start of the Jewish New Year and the shakeup of the financial system, but it just doesn’t feel right.  To me the High Holy Days are all about tradition and renewal, and that’s pretty much the opposite of what we’ve got these days.  I could probably come up with an elaborate metaphor in which Hagar the forsaken maidservant represents Lehman Brothers and that little bastard Ishmael represents toxic mortgage-backed securities, but my heart is not in it.

Still, somehow I’m in the mood for a Blblical allusion.  Another possibility would be Revelation 18:10.  “Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! for in one hour is thy judgment come.  And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more: The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble, and cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men.  And the fruits that thy soul lusted after are departed from thee, and all things which were dainty and goodly are departed from thee, and thou shalt find them no more at all. The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing, and saying, Alas, alas that great city, that was clothed in fine linen, and purple, and scarlet, and decked with gold, and precious stones, and pearls! For in one hour so great riches is come to nought.”  (as a side note, it’s worth noting how much the state of economic punditry has declined between St. John of Patmos and Jim Cramer)

I think the story of the Tower of Babel best represents our nation’s recent calamities.  Has there ever been such a perfect storm of mutual incomprehension? Almost by definition, nobody has any idea what in the hell is going on.  The administration has blown its credibility to such an extent that onlookers roll their eyes and snort with disbelief when George Bush claims that the sky is blue.  The wizards of Wall Street are claiming that great and terrible calamities will occur if they are not rewarded for their failure (nice work, if you can get it).  And the Democrats, after years of saying that lenders must offer credit to the poor, are now saying that lenders were reckless and predatory for offering credit to the poor.  Fortunately, intense partisan bickering seems to be saving us from the horror of bipartisan reforms.  We’ve reached the point where nobody knows what’s going on, nobody can talk to each other and we’re all in complete disarray.

The next few weeks might bring a new Great Depression, an unprecedented government expansion, both of the above, neither of the above, and even (my personal favorite) a complete Mad Max-style meltdown where we all go out to the desert and live like barbarian punk rock race-car drivers.  It’s bad times to be a shareholder, or a homeowner, or a worker, or someone who cares even a little bit about the government’s long-term solvency, but it’s a darn good time to blog.  Welcome to WhereFunComesToDie.  Let’s see what happens next.

Torture may be bad. It may be inefficient, it may be politically unpopular, it may be morally wrong. Nations having a policy of torture, however – that may be good for both the torturer and the torturee.

Imagine the following hypothetical: you are a spy with valuable state secrets. You get captured. You know you will give up these state secrets, and with very dire consequences (e.g. the injury or death of thousands of people). Would you rather be tricked into divulging these secrets, or tortured? An informal poll suggested that most people would rather be tricked. Why? Because torture is painful and they did not want to endure the pain of torture. Fair enough.

Follow up question: when you return home, would you tell your superiors that you were tricked or tortured? Disclosing state secrets is serious business. Because there is a huge financial incentive to sell state secrets, your home country officials will naturally be suspicious. How can you prove that you disclosed the secrets against your will? Wouldn’t it be just as likely that you sold the secrets and lied about being tricked? If you end up being tortured, on the other hand, you can console yourself with the thought that the more horrible the torture, the more evidence there is that you disclosed the secrets against your will. Torture may be painful, but death by a firing squad could be worse.

Even if a nation is morally opposed to torture, having a policy of torture can actually encourage efficient disclosure. Spies will be reluctant to disclose secrets if it means death for treason. When a nation has a policy of torture, spies can sell secrets, give themselves a black eye and some burn marks, and have a relatively credible lie about being tortured. In a nation that is categorically opposed to torture, spies would not have this option so the cost of disclosure (firing squad) would be greater. Of course, a spy could always defect or otherwise not return to his home country, but as would-be mob informants know, living life as a known rat can be dangerous. In any case, the higher the cost of disclosure, the more spies will fight to keep secrets and the more aggressive the capturing country will need to be to elicit secrets. Giving people the credible excuse of torture decreases the possible costs of disclosure.

Torturees might like the option/excuse of torture so they could reveal state secrets when it suits them. Having torturees freer to divulge secrets is better for the capturing country because they could get more secrets faster. Trickery, torture, why not at least have options? Even if the country does not torture or does not torture frequently, having a policy of torture benefits both the torturer and the torturee.