I don't know who the guy behind Surveillance blog is. I don't know why he stopped blogging at the end of last month. But I do know that this is a damn fine post on the land mine treaty for which the press has beatified Princess Di.
This article points out that having an OS monoculture is a very big security hole. But don't look so smug, Anti-Microsofties; the Unix kernel is every bit as much of a threat as the Windows one -- perhaps more, because of the nature of the data stored on Unix machines. Can anyone say Sendmail?
Interesting article on the arms race between Senator Hollings' spyware brigade and their nemeses. It's mostly an interview with the owner of an ad-stop company, so there's a self-serving element to the comments; he dismisses concerns about the ways in which his software may cost other companies money with the assertion that they'll just have to find a different revenue model, that's all. But nonetheless interesting.
If you're not reading Treasaigh, you should be. It's written by an American ex-pat in Argentina, and just reading through it provides a devastating portrait of the slow-motion implosion of an economy:
Banking and Foreign Exchange Trading will be suspended Monday as the government seeks the mechanism to halt the leakage of funds from the foundering banking system.
When the run on the banks began in December Cavallo froze all banking accounts... This was supposed to be an emergency measure until the system could be stabilized.
Enter President Number 4 and his economic team... They decided to float the peso and convert all dollar denominated accounts into pesos, creating huge paper losses for many savers. (Paper losses because in theory the peso could reattain parity with the dollar...) To stop people from removing their pesos and buying dollars the banking freeze (or "corralito") was extended. Savers, unwilling to see their life's savings errode even more, went to court. The court has found in favor of the savers and has ordered the banks to release the money to their rightful owners. As a result the cash of the lack of confidence in this administration and in government in general the money, instead of being put to use buying goods and services, is being converted to dollars. The effect of this will be a higher dollar, higher import prices, and higher priced domestic goods. In other words "Inflation", "Erosion of Purchasing Power", "Poverty", "Higher Unemployment", "Social Unrest"... take it to any length you want, the possibility exists - including a civil war.
The government has been looking for the mechanism that will entice savers to leave their money in the system voluntarily, so far unsuccessfully. The latest offering is the Plan Bonex. The details of the plan are not yet available but compulsory conversion of savings to Bonex is possible.
This economic team still has not found the path... and there appears to be conflict between the Economic Minister and the President. Stay tuned for more developments...
There was a lot of talk about how bad the dollar peg was -- well, as it turns out, devaluation is worse. They've destroyed their banking system. Utterly. Eventually the banks have to reopen, and when they do, the money will leave. All of it. And it will be a long, long time before Argentines trust their money to banks, or indeed their own currency, again.
I quote an astoundingly good summary from the Captain's comments:
On Argentina and the IMF. The appropriate precedent for the current Argentine situation is the German hyperinflation of 1920-23. That inflation was also caused by uncontrolled governmental deficits, although on a scale vaster than the Argentine situation. It was ended after the destruction of the German banking system by the expedient creation of a new banking system by Helmut Schlacht, secured theoretically on land and plant assets. Schlacht's principal method of ensuring currency stability was to control carefully the total supply of rentenmarks available. In 1925, the rentenmark was replaced by a new reichsmark backed by gold.
Before an Argentine rentenmark replacement can occur, the IMF is insisting on a government budgetary balance, according to this WaPo article, as without constraint of the government printing presses the supply of currency is unabated, despite the ongoing shrinkage of the money supply occurring with Duhalde's last bonds for cash deal for depositors. As this is essentially a forced loan, also called thievery in time, the implosion of the banking system and a concurrent collapse of the velocity of commerce will continue unabated. When people realise that their savings are gone and the sole determinant of the supply of money is the government printing presses covering the governmental deficit, then hyperinflation will result. This is another good article on German hyperinflationary expectations related to the supply of money during 1921-3. It also has links to the Hungarian hyperinflation of 1945-6 and refers to the French Revolution's hyperinflation. Notably, all of these historical examples occurred during periods of dramatic political upheaval. This makes the long term stability of the Argentine Republic very doubtful.
I'm not sure what can be done. The people simply don't trust the government not to inflate the currency. With good reason. But hyperinflation has an extremely nasty aspect: it creates feedback loops that make the problem worse.
Right now, the government has not yet started running the printing presses. Yet the perception of the people in Argentina is that they will. So prices are already rising:
Today I hit the streets with a full tank of gas and 60 cents (2 pesos) in my pocket. The fact that my tank was full was due to the fact that it is a gasoline car which are not favored where I live because gasoline used to cost 3 time more than diesel. That has changed... diesel prices have doubled (gasoline prices have risen by about 20%) and for the past week it has been impossible to find. My first stop - an automatic teller. After trying the three that were close to my home and finding them all empty I headed for the closest town (about 10 miles away). After 3 more tries I finally found one that let me have 60 dollars (200 pesos) and then informed me that that was my daily quota.
The government continues to release statistics indicating that inflation has risen by 3%... 4%... a trip down the grocery store aisles tells a different story. Everything has risen in price. Most items by around 35 percent, others by much more. Of course salaries have remained the same. I was just asked to prepare a proposal for several software projects. The going price... 21 pesos (6.50 US) per hour of programming. (... I wonder if McDonald's needs any burger flippers...)
When the prices rise, the government has to print more money to cover its payments, especially in Argentina, where tax compliance is -- er -- moderate, and government payrolls are large.
Which brings me to another issue. The Wall Street Journal, among others, is proposing dollarization of the economy, formal or informal.
Well, informal won't work. For one thing, there's not enough currency; Argentina was in fact largely dollarized, but those dollars were held in bank accounts, not currency. They've now been forcibly converted to pesos, which is what all the fuss is about.
Besides which, the government would still continue to pay its workers in pesos. In Argentina, government owns many of the large industries, all of whose workers would be paid in pesos instead of dollars. Splitting the economy that way would be disastrous. Just one example: state-owned electric utilities. Paying workers in worthless pesos. Workers won't show up for work. Government losing tax revenues to the underground, dollar, economy can't pay the workers in anything but pesos. Lights go off. Hello, disaster.
Formal won't work either: the government can't keep on a budget. And it will always be to Brazil's interest to devalue and "beggar-thy-neighbor".
Argentina has come to the end of the road of most popular revolutions. Don't get me wrong -- I'm no fan of the oligarchic state that preceded Peron. But the landowners had some idea of how to run a functioning economic system. Peron didn't; he raised expectations that could not be met, and squandered the capital he obtained on useless public-works boondoggles to please the people who kept him in power, even as it assured their further poverty. And all the successive revolutions in Argentina have foundered on the same rock: that the public, and therefore the politicians they elect or the tyrants they tolerate, are unwilling to make hard choices. And inevitably end up with harder ones in consequence.
I look to my city, with its $4 billion deficit, and those who scream about every single program that is touched. Not schools, not sanitation, not arts funding, not eldercare, not parks. . . we can't touch spending. Never, ever, can we touch spending. Raise taxes 'til they bleed, they cry; but don't touch my sacred programs!
Well, Bloomberg won't raise taxes (Thank God!) -- not because he's an Evil Republican, but because it would cripple the city. First of all, the city just took a $75 Billion or so hit to its economy, and it's hard as hell to lure businesses back already. Upping taxes on their firms -- or their executives -- won't help. Second of all, after ten years of painstakingly luring people back to the city, boom! people are afraid to live here. Rental prices have fallen by what looks, to my non-scientific eye, to be about 1/3. Upping taxes will give those people one more reason to stay out. Third of all, New York City already has the highest local tax burden in the country; it's not as if we're undertaxed. And fourth of all, raising taxes would scare the bejeesus out of the bondholders and could precipitate another financial crisis like the 73-74 bankruptcy.
But that understanding is not broad. For every one person I've heard make even one of these points, I've heard many more screaming that the Mayor was going after [insert program here] beause he's mean. When asked what we should cut instead, they evince a blank stare, followed by the statement that they're sure there are other things that could be cut instead of [pet program]. Or we could -- let's all say it together -- raise taxes on the rich. Who will presumably stay quiet in their mansions, rather than, say, moving to Westchester.
Argentina is New York, squared. Can't cut this, this, or this. . . about the only thing you can cut, it turns out, is the flower service in the presidential offices, and even that's tough because it turns out that the woman who provides them is some official's neice. Raising taxes would be a nice gesture but it wouldn't, for example, produce any extra revenue. They can't inflate their way out of the trouble because no one will touch the money they print, and the inflation creates more problems than it solves. And they can't get help from the IMF, because the IMF won't do anything until they balance their budget. Paul Krugman has issued some very convincing arguments against this IMF provision in the case of Asia, where profligate spending wasn't the problem -- but in Argentina's case it is the problem, and it's pretty clear that unless there are some tough provisions, any money sent will be pissed away.
In short, any economically feasible program is political suicide, and vice versa.
I remember a joke a friend from Argentina told me. I'll update the names for today, but the sentiment is still very current:
Putin, Bush, and Duhalde are sitting together in the garden during the breaks at one of those world summits. Suddenly Poof! God pops out of the shrubbery and says, "These are difficult times. And in order to give you some guidance in this difficult era, I will permit each of you to ask one question."
Putin says "Lord, my country has many problems. We are militarily and ecconomically a shadow of our former greatness. How long until Russia regains its footing?"
God says, "Ten years".
Putin starts to cry. "My country is unstable. Who knows if I will live long enough to see Mother Russia restored to glory?"
Bush says, "Lord, we are facing a time of unprecedented trouble. How long until America has overcome her domestic problems and defeated terrorism?"
God says, "20 years."
Bush starts to cry. "In 20 years, I'll be out of office. By the time America is at peace, I'll have been forgotten."
Duhalde says, "Lord, my country has many, many problems. How long, oh Lord, until Argentina has political stability and economic prosperity?"
The ever-brilliant Jonathan Rauch, meanwhile, pens the simplest explanation for why the Palestinians continue terror: it works. Meanwhile, Brink Lindsay explores proposed long-term strategies for Israel. The Jane Galt conclusion: It's a big goddamn mess, folks.
Eugene Volokh has this post on the root causes of school shootings. It's (of course) well thought out, but there are a couple of things that might bear further examination:
It's true that if teenagers couldn't get their hands on guns, it would be harder for them (though not impossible) to do such massive damage. I don't think that it's possible to stop someone who is bent on planning mass murder and suicide from getting guns, especially in a nation where there are 200-250 million guns. But it's true that if somehow this miracle could be worked, the problem of mass school shootings would diminish (though other problems might increase). Still, the availability of guns doesn't tell us why we've had mass school shootings in recent years, but not in the years before.
An acquaintance who should know informs me that the backup plan for the Columbine shooters was to blow up the school during assembly -- and that the evidence is that there's a high probability that they would have pulled it off. Killing everyone, instead of the tragic few who died. But I can't vouch for this.
I know of only one conjecture that is even slightly plausibly, and I stress that it is only a conjecture: What changed since the time of the first school shooting is that there's been a lot of media coverage of school shootings. Teenagers keenly resent their own insignificance; when they see someone being in the news -- even for committing an atrocity -- some of them begin to envy this person's fame. And some tiny fraction of those may even decide, against all reason, self-preservation, and decency to take the same path. The first mass school shooting was an essentially random event, but the media coverage that it triggered dramatically increased the probability of subsequent events of the same variety.
I am certainly not arguing that the media should be barred from covering school shootings. I am not even sure that as an ethical matter, the media should moderate their coverage.
But I think that if we're looking for a causal explanation for the advent of mass school shootings, the one that so far best fits the evidence -- the only one that shows a correlation, which is surely not sufficient for showing causation but is largely necessary to show it -- is this one.
I think that this is a huge factor. And while I too do not think that we should try to legislate coverage, I think that there is one thing that usefully could be done, without degrading the quality of coverage (IMHO) in the least: a voluntary media ban on reporting their names. Would it stop the killings? I have no idea. But I don't see how it could hurt -- and it ought to stop cold any little pipsqueak who thinks he'll go down in history in a blaze of glory.
I love the big construction machines. They put me in mind of dinosaurs.
In the early days it was the grapples, crawling over the pile to pick up fistfuls of steel in their enormous claws and deposit it on the trucks, like a prehistoric monster uprooting a tree and waving it around for effect.
Then there were the cranes, just towering over everything, graceful, elegant, enormous.
Now there are the cherry pickers, which are funny because the driver steers from the basket, suspended in the air behind the machine as it lumbers forward. And the excavators, clawing out enormous piles of dirt from the ground as they prepare it for new construction. The front loaders, carrying loads hither and thither. And any number of smaller machines, forklifts and bobcats and such. Like little baby dinosaurs, they manage to be cute even though they're a LOT bigger than I am. (And even though their operators would kill me if they heard me refer to them as "cute").
This site has to be one of the largest assemblages of working construction machines ever in this country -- like a mechanical Jurassic Park. And though now that it is hollowed out it looks, in scale, much as the pyramids must have done, down to the little city we've built for the workers (though ours is made of tents and trailers rather than mud huts, and we have (mostly) indoor plumbing). But the difference is that Pharoah had to use overseers with whips to grind his monument out of the muscles of the workers, killing many of them in the process. So far this job hasn't had a single fatality that I know of, an the men are paid upwards of $25 an hour, plus benefits, to do labor that's a lot easier, and less dangerous, than their peasant forbears. The raw muscle power that took all those lives has been replaced with machines that turn a day's labor into a minute's work, by one man comfortably ensconced in the cab of his mighty machine.
Which brings me to another question: I get a hell of a lot of email from anti-war, anti-"warblogger" folks who don't like my ideas. The ones that are respectful, I answer privately. The ones that aren't, I junk or make fun of. But there's a common thread on which I wish to comment, which is that almost none of them can write.
Now, I want to say that I don't think that this is because far-leftists can't write -- God knows, the creative writing programs are stuffed with enough of them to disprove that theory. But the ones who can don't, at least to me. The ones who write to me display literary skills ranging from average to breathtakingly bad. Letters display the kind of orthographical and punctuational errors that one is supposed to have left behind by the tenth grade. I am not talking about people who use awkward phrasings, or make the occasional typo; Lord knows I'm on no high moral ground there (and don't think I don't know that I am about to get a stream of emails about every typographical error I make in this piece). I'm talking about paragraphs that have no logical beginning and no ending, but start and stop abruptly and at random, like third world trains. Continuous misspellings of common words that make me go back over and over again to re-read, until I figure out that they have substituted "to" for "too", "its" for "it's", "there" for "their", etc, and thereby inadvertently rendered the sentence almost, but not quite, totally incomprehensible. People who string together sentences with commas for pages at a time, until one begins to fear that their word processor is out of periods and the letter may never stop. People who apparently believe that a semi-colon is to the colon as semi-formal is to formal clothing. People who were apparently not familiarized with the subject-object convention of sentence construction in their formative years and pepper me with a stream of jolting sentence fragments. People who use the wrong word because it sounds something like the right one: tenative for tenacious, palpitate for vascillate, etc. And then there are the people whose essays are technically correct but so dull in their construction that they read like a third-grade essay on "What I did over summer vacation": Adjective-noun-verb. Noun-adjective-adverb. Adjective-noun-verb. It's enough to make one pound the keyboard screaming "don't they have any clauses where you come from?"
I won't even start on the people who think that the sarcastic "Did so! You're a big fat idiot!" verbal play of the high-school debate team is every bit as compelling in a political letter from a 52-year old computer programmer as it was when they triumphantly refuted "Resolved: The Cafeteria Will Serve Lima Beans and Lamb Patties Mondays, Wednesdays, and Fridays". Because most of my letter writers aren't like that. They're nice people. Serious people. Well-intentioned. But functionally semi-literate.
I don't mean to suggest that the right has some sort of God-given literary talent; there are any number of atrocious conservative, libertarian, and "warblogger" writers. But the anti-war left doesn't seem to have any answer to the near-omniscient topical mastery of a Steven Den Beste, the witty imagery of a James Lileks, the sharp financial insight of Mindles H. Dreck, or the individual talents any of another dozen bloggers I could name. These people can write. And the letters I get from conservatives, even when they're excoriating me (believe it or not, I get more than my share) are invariably well-spelled and rely on logic, not name-calling or "dead babies trump reason" type arguments.
So why can't the kids on the anti-war side, by and large, write?
Well, a compelling possibility is that I'm just not seeing them. Maybe I'm stuck in my little libertarian-right ghetto and I'm not getting the good stuff, just the trolling nutbags. So come on, talented heirs of Marx and Gandhi! Send me your stuff! I want to know where I'm going wrong.
I think that's part of it. But I think another part of it is that we've abandonned educating our children in favor of nurturing their delicate little psyches. Because I've had this argument a couple of times, and the semi-literate conservatives are always sheepish, a little ashamed, of their lack of writing talent. The left-wingers, on the other hand, are proud of it. "It's just a bunch of stupid rules! The important thing is the ideas, and people understand what I say just fine."
Wrong on both counts.
For one thing, rules are not stupid just because they are arbitrary. It does not matter, in some metaphysical sense, whether we drive on the right or the left side of the road; but it matters very much that we all do one or the other, because frankly, I can't afford any more car insurance than I already have. The rules of grammar are of course, somewhat arbitrary, but they are not therefore stupid; they are required for us to communicate with each other. If I say "Therefore house to the up pick go I keys" it matters not that this arrangement may be perfectly intelligible in Yoruba (I have no idea whether it is or not; it's an example); it violates the word-order rules upon which we have agreed in speaking English, and which allow us to sacrifice other complicated grammatical rules necessary to mark words in languages where word order is less rigid than in English. Surprise! The rules of English grammar, by and large, are there because they avoid ambiguity or redundancy. We gloss over these in spoken English because context and body language allow us to convey much of what poor sentence construction does not; moreover, it's real time, so if we build a sentence poorly the first time, and are not understood, we can correct the error. Writing is one shot; if your sentence isn't clear, the reader won't understand what you are saying. You must therefore take much more care to write clear, non-redundant, but unambiguous English -- and that means good grammar. You may think, for example, that the prohibition against splitting infinitives is an example of the power of petty tyrants, but in fact it exists for the very good reason that "to" is not only the infinitive marker in English, but also a preposition, and therefore improper placement can be very confusing.
Poorly constructed sentences, like poor spelling, take away the focus from the ideas and put it on the poor writing. Flawless prose is indeed "all about the ideas"; bad prose is all about the paragraph I had to read four times before I figured out what the writer was trying to say -- and the eight paragraphs I didn't read because I didn't want to bother wading through any more mistakes.
Anti-war people are certainly not the only people prone to this type of thinking. But politically, they are the most likely to embrace it. Witness "whole language" reading.
But enough of political carping -- let's all come together on the bipartisan goal of building a better, more grammatical future for our children. Turn off your spellchecker! Break out the OED! Strunk and White for everyone! Together, we can brave new future into the boldy go!
A correspondant, angered by my treatment of Krugman (which has since disappeared -- conspiracy or Blogger woes? You decide) has sent me the following missives, which I combined into one, angry rant.
A further stroll through your site (which I only discovered yesterday) reveals that:
(1) Your attack on his Enron payment -- like all of Andrew Sullivan's endless hysterics on the subject -- ignores the ludicrously obvious central point: Krugman has been slashing away at Enron since January 2000 -- far earlier than any other writer I know of -- so, if it was an attempted bribe, it didn't work very well (to say nothing of the fact that he revealed it immediately).
He's channeling another blog. I've never said that Krugman was ethically suspect for taking Enron money; I've said that he's hypocritical for saying that he can take money and remain untainted, but Republican politicians (and only, apparently Republican politicians) can't.
(2) Like every other conservative/libertarian blogger I've seen, you never do lay a finger (or even try to do so) on his central objection to Bush: that his tax cut is outrageously imbalanced toward the rich.
That would be because I don't care.
Any tax cut of any sort will favor the "rich" (if you define the rich as the top quintile or quartile of income) because 83% of the taxes in this country are paid by the top 25% of earners.
How can this be, I hear you cry. I pay a hell of a lot of taxes!
Well, first of all, there's the matter of leverage -- 10% off Warren Buffet's earnings is a hell of a lot more than 10% off mine. But that definitely isn't the whole story, because that top 20% doesn't bring home anything close to 83% of the income. (I don't have a very good web connection right now, or I'd look up the exact stats).
Second of all, if you're not in the top 20%, most of your taxes aren't taxes -- they're FICA. Which is not a tax, technically. It's a "contribution", even though if you don't make your contribution they come with guns and take you to jail, which makes it feel less like what I do in church when my grandmother's watching and more like, oh, a tax.
Nonetheless, we maintain the fiction that it is a contribution, and not a tax, and thus is not structured the same way as the income tax. In particular, it's highly regressive, which is to say that the poor pay more than the rich, because everyone pays 12% of their income up to $65,000 or so, and then no one pays anything on income over that. Which is obviously a better deal if you make $100K than if you make $20K.
This progressivity is not, as some might have you believe, the work of demon Republicans intent on giving working stiffs the short end of the stick. In fact, it's the tool of progressives, like Krugman, who are determined to keep the social security system largely structured as it is: a state obligation to take care of the old. In order to sell it, they maintain the fiction that it is not a pay-as-you-go system in which those currently retired soak those who currently aren't for as much as possible, but rather a pension, to which they have paid in and are therefore entitled. It is this feeling that they paid and are now owed that makes it so near-impossible to reform the system. So the reason that the social security tax is regressive is that benefits are regressive, capping out at a much lower percentage of salary for top earners than those at the bottom; making the "contribution" progressive while leaving the benefits stacked in favor of low-wage earners would destroy the fiction that it is a pension, and not a Ponzi, scheme.
The point being that while we all think we pay taxes, social security and medicare contributions can't be touched. Nor can the administration cut your state income tax. Leaving very little for them to hand back to you unless you're one of those "rich" people.
While I am in favor of a progressive income tax, I am not in favor of an income tax as progressive as ours is. Leaving aside Social Security, almost no one in America pays any federal taxes. Yet they vote for benefits. While I have no problem with the idea that Warren Buffett should pay a larger percentage of his income to the public treasury than someone flipping burgers at Happy Burger, I think the burger flipper should pay something. Otherwise the temptation to go shopping at someone else's expense is too great. And I think that we can all agree, whatever our political persuasion, that politicians like to hand out goodies to their constituents whether or not those are in the broader public interest. If you make it so that the constituents don't experience the direct pain of paying for those goodies, the system spins out of control.
So there, I've addressed it: I think it's stupid and irrelevant. And I definitely don't think it was Krugman's core point; his core point in the column you cite is that Bush is causing the social security crisis by handing out unreasonable tax cuts; this is demonstrably untrue. As I showed. The rich part is thrown in for emotional effect.
Regarding your Feb. 2 attack on him: refresh my memory. Exactly how ARE more 70-ton artillery pieces and three new kinds of fighter plane useful against a terrorist organization that consists of tiny individual cells scattered worldwide, since we already have the capability to obliterate any Third World government that actively shelters al-Qaida (or declares war on us in any other way)? Do we bomb Hamburg or Islamabad? And as for your crack about Krugman's "friends the Democratic senators futher larding up [the defense budget] with pork for their homestate constituencies": is it really necessary to point out to an adult that Republican senators are even fonder of homestate military pork than the Democrats?
Do you have any numbers to back that up, or are you relying on the word association between "Republican" and "Defense"? I think if you check the budget you'll find that the boondoggles in this one mostly go to Democratic Senators. Not because Democrats are evil, but because they're in charge. Senators of all stripes like handing out pet projects to their constituencies; that is, to some extent, what they are elected for. If the Republicans were in control, they'd be doing the same thing. That's why I'm a libertarian.
As for the artillery, etc, you're fighting the last war. If all we're going to do is make sure you can't crash a plane into the World Trade Center again -- well, I'm here. Osama already took care of that. We might as well build wooden forts to keep out the Injuns -- at least they'd be pretty.
The artillery, etc. is for the next war, which is striking some fear into the hearts of states who sponsor terrorism. Who are a lot more vulnerable to artillery than airport security.
As for your April 24 comments: if you doubt that DeLay revealed himself in that speech to be a theocratic nut, take a look at the Houston Chronicle's editorial. And anyone who doubts that John Ashcroft is an ultraright extremist has the problem of explaining his famous interview with Southern Partisan Magazine.
In which he lauded the Confederacy. Not slavery, not racism. The fact that you associate the Confederacy with those things doesn't mean he does. And using his name as a sort of shorthand for "fascist" is the sort of intellectually sloppy thinking that comes from being insufficiently exposed to both sides of the political landscape.
As for DeLay, the article you quote cites what seems to be a pretty standard "decline of Western morals" speech. The writer certainly hates him, but he doesn't offer any juicy quotes, so I can't tell what he said. Which makes me suspect the answer is, "not much".
On one point we do agree, though: I too dislike intellectually dishonest smartasses.
That's not a very nice thing to say about Kruggie.
Now, I could say that having graduated from high school, I try not to end my missives with thinly disguised name-calling that convinces no one of anything except the belief that whoever offered it is an unimaginative lackwit incapable of adult conversation.
The recent Tahoe-Sierra decision states, in the sentence starting on the bottom of the second page continuing on the third.
"A permandent deprivation of all use is a taking of the parcel as a whole, but a temporary restriction causing a diminuition in value is not, for the property will recover value when the prohibition is lifted."
We're talking about a "temporary" restriction that lasted either 32 months (accoring to the majority) or 6 years (according to at least one of the dissents).
The shooting coincided with a debate in the German parliament Friday on tightening gun control legislation.
Germany already has strict laws governing the right to a gun, but experts say the country is awash with illegal weapons smuggled into the country from eastern Europe and the Balkans.
Those wishing to get hold of a hunting rifle must undergo checks which can last a year, while those wanting a gun for sport must be a member of a club and obtain a license from the police.
I'm willing to be we'll be seeing editorials on how this calls for stricter gun control -- if I can find a sucker to take the other side of that bet, that is.
I'm afraid posts are a little bit thin on the ground; as you can see, I'm having a bit of trouble with my computer. But the post you're looking for is here. And if you like what you see, please do come back.
Patrick Ruffini asks how come I'm not giving stock tips.
Well, first of all, that's not quite my area of expertise. (If I can be said to have an area of expertise.)
Secod of all, I'm Chicago-trained, so I subscribe to the notion that you can't beat the market in the long run.
Empirically, this is true. The stock market is so well traded that arbitrage opportunities vanish almost as soon as they appear; professional money managers who spend all their time researching companies, according to studies, earn back just about what it cost them, in economic terms, to find the information that allowed them to invest better. I'm not going to spend all my time researching the market, and I don't think I'm smarter than the people running the mutual funds that underperform the market. So I buy low-fee index funds (there are more sophisticated products that do the same thing with a superior return, but they take more money than I have to buy in). Of course there are problems with this approach; for one thing, when a stock joins an index like the S&P it's price jumps about 5-10%, so the assets are overpriced. But I would find this argument more compelling if all the active stock-pickers who pointed this out to me hadn't underperformed their indexes in both the boom and the bust.
And third of all, financial advice is serious and personal. I could say broad, true things: don't put all your money in equity; don't expect more than 3-5% annual real returns; don't invest more than 10% in the sector you work in, much less your company, even though it's "What you know" (you're not Peter Lynch, and he diversifies like hell); don't hold high-interest debt in order to buy securities of any sort unless their real yield is higher than your debt (it's not, in almost any case); don't base your investment decisions on what everyone else is doing; don't think you're a genius because you correctly picked on stock that did well. Monkeys throwing darts at the Wall Street Journal could hit one high-flyer.
In other words, act sensible and don't expect to get rich on the stock market. Allocate your assets between different securities and different industries. Don't put all your eggs in one basket.
But this isn't helpful, because you already know this, and you're ignoring it. You're plunging your net worth into things, hoping they'll go up and you can get rich and retire. You're holding credit card debt while you put money into a Roth IRA. You're not putting a sensible 40% into equity, even though retirement's only 20 years away, because bond returns are too low; you're putting it all into equity, and planning to switch into Munis when you're seventy. At least, if you're anything like the rest of America, that's what you're doing. So I'd be talking to myself.
If you don't know how to allocate assets, do a discounted cash flow, or estimate pre- and post- tax costs for a variety of time periods, get yourself a good financial planner. A good financial planner is one that doesn't sell you anything. He takes a fixed fee and tells you what to do with your money, spanks you gently for not saving enough, and helps you plan realistically for retirement. He helps you decide what sorts of investments, in what kinds of accounts, will maximize your post-tax income. And you pay for this advice, up front and through the nose.
A bad financial planner is cheap. He works for a firm that sells financial products, and therefore tries to foist on you whatever insurance/mutual fund/equity/debt product they have too much of. You will regret saving money this way when you are eating cat food because the Muni of the Month Fund tanked on you.
A good financial planner is recommended by someone you know well, someone prudent. Someone who is probably a little sheepish about how boring their retirement plan is.
But I won't give specific advice because first, it's not me, and second, the law of averages says that even if I'm brilliant, I'll be wrong a lot of the time and someone will lose money. So I'll stick to the tired-but-true platitudes that put everyone to sleep. You'll follow this advice -- or not. But at least you won't sue me for telling you to buy Yahoo at 200.
I have been witness to many a fine theological debate about the existance of hell, and I have always wondered why they were wasting their time on such a pointless question. Obviously, there is a hell, only those who staff it have added an "p desk" on the end to make it sound more professional.
So my computer at work hasn't functioned for two weeks. More specifically, we have had a series of problems with the internet connection. First, the internet software refused to acknowlege the modem that came with my computer.
I uninstalled and reinstalled the software
I uninstalled and reinstalled the modem drivers.
I tested the phone line.
I changed the phone cord.
I uninstalled the internet software, uninstalled the drivers, removed the card, cycled the CPU, reinstalled the card, and reinstalled the software.
I bought a new, external modem, and connected it to the serial port.
Nothing worked.
This process is called troubleshooting, wherein you test the easiest and most obvious solutions, and therefrom proceed, using the information gleaned from earlier steps, to the more complicated and unobvious ones.
I called the makers of the new modem, on the off chance I'd bought a dud. Nope -- the modem worked.
I called the people at AT&T, who lead me through an exhaustive series of tests, at the end of which we'd determined:
1) I could use dial-up networking to connect to the access point 2) I could not get any IP service from this point. No pinging, etc. 3) I could not then disconnect from the service. 4) Once I had made this non-functional dial-up networking connection, dial-up networking would not, in the future, recognize the modem as functional until I had gone into the modem setup, removed it, and added it back.
[At this point, I want to head off any pre-emptive strikes from the friends and strangers who are, even now, tabbing over to their email software to compose a missive the primary message of which is "Get a real operating system". I am sitting in a trailer, not at home, not in a nice corporate environment where I have ample time and resources to fix things. Where, pray tell, am I going to download the drivers to fix my Linux internet connection, given that I have the only internet connection on the site? More importantly, I'm not in charge of purchasing. While I am second to none in my loathing for Windows ME, this is what the Fates have handed me, and like all tragic heroes, I am powerless to move against them.]
Having determined all this, we reached a consensus that most probably my Windows ME installation was FUBAR, and needed to be redone. A consensus with which the chirpy chick at the computer maker's tech support wholeheartedly agreed; she arranged to send me three CD's that would format my hard drive, reinstall all the OEM software, and leave it as pristinely functional as the day it was purchased. This re-tooling is what I spent my day doing.
And the #@%! thing still doesn't work.
Now I can get an internet connection for five minutes or so (time varies). After which, I lose my connection. Can't ping, nothing. Disconnecting and reconnecting produces -- you guessed it -- the same hardware error I got before. But this time, if I reboot, I can re-establish a connection (this was not true before). Every single time, the same thing: connect, lose connection, reboot, connect, etc.
So I apply my troubleshooting skills.
Is it the internet software? Almost certainly not -- the software's been replaced. The modem is a USR Sportster, the most common kind, and though it's one of them newfangled V.92 thangs, it's common enough that AT&T would have logged a known error by now, or at least an alert. If it is some strange interaction (most unlikely -- there's the dial-up netowrking layer in between, which USR has certainly tested as it will be the primary use of their product) then AT&T is going to have to do some coding. It's complicated and non-obvious; leave it for now.
Could it be the modem? Even more unlikely. Resetting the modem and trying to reconnect doesn't work. If the modem were the problem, either resetting would work -- or rebooting wouldn't. There is no variance in the success and failure of the various stages of the abovementioned cycle, now repeated about 30 times for effect. While it's vaguely conceivable that Windows ME has a bug that causes it to irreparably crash Dial-Up Networking whenever it loses contact with a non-functioning modem, this would almost certainly be a widely known error.
Could it be the motherboard? The most likely solution (or the serial port, which is attached to the motherboard, so what's the difference?). I know -- why would it crash two separate modems? No idea. But given the prevalance of the problem across two modems, a reformatted hard drive, and numerous software reinstallations, the only place left to look is a central failure.
But don't try to explain that to the folks who made my computer.
I spoke with a charming young boy from Canada, who, like most such people, has no idea what the hell he's doing. He has been given a book full of procedures to try, based on teh general nature of the problem. The minute he gets a vague clue about what happens inside that box he spends his time talking about, he will either be promoted, or leave. Until then, he venerates the Book with the same textual rigidity as the most devout Orthodox Jew. He spent five minutes trying to get me to walk through the modem testing procedures with me before I managed to knock it into his head that:
1) The modem had been tested 2) The software was not only new, but the ISP connection was pre-installed and thus unlikely to be the source of the problem 3) The phone line was working fine.
He put me on hold to talk to his "colleague".
For those uninitiated in the Way of the Help Desk, that "colleague" isn't a colleague, it's his boss. Or a former help-desk "engineer" who can tell a NIC from a knick-nack and has thus been put somewhere safe, where the users can't get to him. After five minutes or so, my Canadian returned to tell me that he was pretty sure it was the modem.
I pointed out that if it were the modem, it wouldn't fix itself every time I rebooted -- or it would fix itself when I turned it off and on.
He put me on hold to talk to his "colleague".
I rebooted the machine for the 31st time to see if it would perform the same trick. It did.
He returned with the opinion that it was the phone line.
Now, given the intermittent nature of the problem, this was perhaps a natural guess, if you hadn't talked directly to the person who knew what was going on, rather than the nineteen-year old who didn't. I told him, as gently as possible, that it wasn't the phone line.
He argued.
I layed out, with impeccable logic, all the reasons it wasn't the phone line:
1) I just moved trailers. The problem occurred in both trailers. Also, the people who isntalled the phone line tested it.
2) The problem isn't intermittent; it's calibrated exactly to the boot cycle. Which does not affect the phone lines.
3) The phone line works.
4) The problem does not vary with the phone line -- there are two modems in our trailer, and neither works.
Did they test it for Data he asked, after another trip to the "colleague". I'm in Manhattan, not Saskatchewan. Asking someone two feet from the trunk if they tested the line for data is like asking if they tested it for French
He was puzzled. We had a brief seminar on the causes of line failure: interference, pinching or clipping, physical degradation, or cables sub-standard for data transmission. None of which is an issue when you are using a brand new phone line sitting smack on top of the entire, newly refurbished fiber-optic infrastructure for the World Trade Center/World Financial Center area, and you're the only damn person using the line.
I told him I wanted a technician.
He -- I know, I'm repeating myself -- put me on hold for another "colleague" session.
He came back and said "I know you don't want to hear this, but I really think it's the line."
Now, the geeks who have been following this will know how overwhelming was my urge to say, "I know you don't want to hear this, but I really think you're an idiot. Let me talk to the $%@# escalation engineer."
But I am a lady. All I said was, "Could I please speak with your colleague? Maybe we can straighten this out."
ANother hold session.
"No."
"But we're not getting anywhere. I think that if we can just talk. . . "
"Callers can't talk with the Level 3 people".
Sounds like a cult, doesn't it? And believe me, I spent my next two hold sessions awash with pleasure at the idea of the spaceship coming to pick up the faceless moron who insisted that my problems were in the phone line. Certainly, the structure was cultish. Ordinary people cannot talk with the God of the Computer. Only through the priest, Help Desk Tech Level One, can you communicate with His Holiness. Ordinary mortals would be blinded by His radiance and struck dumb by the mellifluous harmonies of His voice. On this Rockhead I build My church.
What gets me is that I know exactly what the little rat bastard was doing. He didn't want to talk to me because he'd have to stop cruising for naked pictures of Anna Kournikova and pay attention. So he tells this kid, who has absorbed nothing so far except blind obedience to the sacred precept that We Must Not Deviate From The Book, some stupid thing to get me off the line in the hopes that by the time I call back, he'll be off his shift. In order to do this, he has to make it someone else's problem. Having had the modem, the AT&T software, and the cables convincingly refuted, he fell back on the one thing I couldn't test myself: the goddamn phone line. I argued. I begged. Dammit, I almost wept. But no dice. I am not allowed to call back until I get Verizon to check the line they checked three days ago when they installed it. At which point, presumably, some other rat bastard will have some other reason why I'm not his problem. And the kid will go on thinking that the best way to deal with technology problems is not to figure out what's wrong, but to pass it off to someone else. So that when he has Ascended to Level 3, he too will be able to deliver cryptic non-solutions to his ignorant acolytes.
There's a rumor afoot that I'm mentioned in Mark Steyn's column today, which is unfortunately not on the web yet. I am waiting with bated breath to find out if I have been indeed honored by the Great White Hope from the Great White North.
More from the department of bad data: Movie Physics. A sample:
Although 9 mm sub machine guns such as the Uzi (which fires 600 rounds per minute) are popular in movies, everyone knows that real action heroes prefer .45 cal Mac 10's. These fire more powerful bullets at rates of 1000 rounds (in other words bullets) per minute. They have a 30-round magazine ( the long black thing that stores the bullets) and are by any measure a deadly weapon.
Movies are filled with scenes of good guys and bad guys blazing away for minutes at a time. Of course, no one is overly concerned with reloading or lack of ammunition, but then that's been true since the days of singing cowboys such as Roy Rogers who smiled a lot and engaged in friendly gunplay between musical numbers. So why would we bother to mention what is common knowledge? We can't help but be impressed by the weight of the matter.
First, let us point out that the 30-round magazine in a Mac 10 will be expended in a mere 1.8 seconds of sustained fire! If our shooter blazes away steadily for a total of only 3 minutes, his or her Mac 10 will spit out around 3000 chunks of lead at roughly 15 grams a piece. This amounts to 45 kilograms or a little less than 100 pounds of lead. And that doesn't account for the weight of the 3000 cartridge cases or 100 empty magazines scattered on the ground. Yes, 9 mm sub machine guns with slower firing rates would reduce weight problems, but it seems that real action heroes use Mac 10's, preferably one in each hand. We can't help asking where the side kicks are with wheel barrows to carry the ammo.
The ever-brilliant Sophismata is busy ripping apart silly media graphs to get at the useful data. Be sure to read through to the shocking conclusion about power-plant emissions, then read his next post to find out further secrets of our polluting ways. Meanwhile, those who like me fondly remember Little House on the Prairie books can read about the possible causes for the demise of those memorable swarms of locusts she wrote about -- a cloud of grasshoppers that stretched for 1,800 miles.
I MET a traveller from an antique land Who said:—Two vast and trunkless legs of stone Stand in the desert. Near them on the sand, Half sunk, a shatter'd visage lies, whose frown And wrinkled lip and sneer of cold command Tell that its sculptor well those passions read Which yet survive, stamp'd on these lifeless things, The hand that mock'd them and the heart that fed. And on the pedestal these words appear: "My name is Ozymandias, king of kings: Look on my works, ye mighty, and despair!" Nothing beside remains: round the decay Of that colossal wreck, boundless and bare, The lone and level sands stretch far away.
I have no idea what's wrong with my permalinks. It's blogger, not my template, so I can't even fix them. But anyone who's looking to permalink me -- tuck a /?/ between the janegalt.net part and the rest, it should work. We apologize for the inconvenience.
Seems you can't see the letter my dear Papa wrote to Barrons, so here it is (at least the part they excerpted)
When you evaluate the future of Social Security and the magnitude of the Social Security crisis ("Creating Complacency," Editorial Commentary, April 1, and "A Nobel Plan to Fix Social Security," Economic Beat, January 1), consider the size of the work force. The real question for the United States may not be the reduced Social Security contributions of the much smaller size of the workforce cohort behind them. It will more probably be the challenge of finding the workforce to tend the retired Baby Boomers and the workforce to carry on the work that the Baby Boomers are leaving.
There is a Social Security crisis only if the nation cannot maintain the jobs that now contribute to the FICA pool and cannot increase the numbers of people who tend to the needs of the retired population. Current levels of legal immigration cannot satisfy these projected needs. The nation would have to reject the strong pressures that will come to substitute immigrants for those domestic labor supply deficiencies. We already look to legal immigration to meet the needs that we have in many high-tech and health-care areas. Why won't we try to expand legal immigration to meet our needs in other service areas that will have employment gaps emerging as Baby Boomers retire?
So I've been sitting on the WTC site for seven months now, and it occurred to me today that it no longer looks like a grave. And though I know that there is, as the book says, a time to kill, and a time to heal; a time to break down, and a time to build up, it still makes me sad that it now looks like nothing more than the largest construction site in the world.
Every so often those of us who came in that first week play a game of "Do you remember?"
Do you remember how you had to drive through six or seven checkpoints, manned by soldiers with real guns, to get to the site?
. . . how it looked that first week, that unimaginably high tower of smoking rubble looming up between the buildings every time you turned a corner? How awful it was to look at it for the first time? And even more awful was the fact that it didn't look real -- we'd already seen too many movies that looked just like this to believe it in our hearts.
. . . how we worked 16, 18, 20 hours a day, every day? (I had two other jobs that I had to keep up while I worked at the site. Everyone else just stayed there trying to get control of things.) We felt terribly guilty when we finally went home.
. . . how we couldn't spend any money for weeks, even if we wanted to? The best restaurants in New York, the Red Cross, and several dozen movie stars were lined up six deep to feed us.
. . . how the cops demanded photo badges every time they stopped us, only we didn't have any such thing, so we ended up making them by hand with stuff we bought from Staples?
. . . how long it took to straighten out the pay records of the swarms of men who showed up and worked, some of them three or four days without sleep, before we lost hope?
. . . how the men were fine as long as they were working, but as soon as they left work they'd want to get drunk to forget -- and they wouldn't forget; they'd end up drunk and sobbing hysterically on the floor of the bar. Which wasn't embarassing because everyone else was crying too.
. . . how the machine operators would warn us not to look down as we crossed the site because of what we might see.
. . . how we had our own private little park off the river where we could spend fifteen minutes eating lunch, because no one was allowed south of Houston street. How silent the streets were, away from the site.
. . . how we merrily ignored the traffic rules (there wasn't any traffic!), zipping up one-way streets the wrong way and driving our little gators all over Manhattan. And kept getting stopped on our way home for forgetting that you couldn't just look both ways and motor on through the red light.
. . . how the National Guard was camped in Battery Park. With, I believe, a tank. And a lot of very nice, very young people from the Midwest. It breaks your heart to think of them trying to storm some beach somewhere.
. . . how our hearts stopped when we heard about the Anthrax letters. . . how sure we were that we would be the first ones exposed.
. . . how wrong it seemed when they really started clearing away the wreckage. It just seemed too soon to take away the husks of the buildings and the debris -- as if we were forgetting what had happened there.
For weeks after it happened I didn't even believe it -- not really. I worked in that building for years, on and off, and just a week before I'd been to the observation deck for the first time with some visiting relatives. Two weeks before, my then-boyfriend and I had met in the Cortland Street station, bought a cake at the coffee shop/bakery near 1 WTC, and gone to a friend's house in Battery Park City for cocktails and dinner. I could see every inch of the plaza -- the J. Crew where I bought my favorite plaid skirt; the escalator I used to take to Building Seven to visit one of our clients; the Citibank where I once spent almost an hour getting rid of some con-artist who must have thought I was fresh off the boat from hicktown; the Sephora where I first tried my favorite perfume -- oh, just everything. If you didn't know the building, you don't know what I'm talking about; if you did, you too can probably walk those stores with me in your mind, picking up some little thing on the way to your train, or windowshopping to kill a little time before drinks at Moran's or Tall Ships or Windows on the World. You can see the open space where the little carts were, especially the one that made those ridiculously good salads -- right next to the escalator to the PATH train, which rode to a client every day during the height of the Asian meltdown. And that stops my heart, because right now my trailer is right next to the place where that escalator used to be, and it's a couple of walls and a deep hole in the ground. Right outside my window is the cofferdam they're building so they can repair it.
For weeks I walked around the site trying to appreciate it. I wanted, as in the movies, a single moment when it all came crashing over me and I finally understood in my heart all that had been lost. I never got it. I had many, many moments when I cried -- the worst was when I saw those thousands "Missing" flyers papering Union Square, and every single flyer had a picture of a victim on one of the happiest days of their lives, looking radiant and expectant and utterly unable to imagine the kind of tragedy that had ended their lives. The oddest was when I was riding on the subway one night, and I was tired, and after Fulton Street the conductor said "Next Stop, Chambers Street" and I wondered, for a split second, why he wasn't stopping at the World Trade Center -- and realized for the first time that nothing would ever, ever be the same again.
So I still haven't comprehended it, in the sense of the word that means to develop full understanding. But I keep having these moments, like when I realize that I am sitting in a trailer, in a hole that contains nothing but the absence of two buildings, and that entirely unfamiliar objects in my line of sight are in fact the skeleton of a place that I did not particularly love when it was still around, but which was part of the fabric of my every day.
And if I am saddened by the loss of a couple of tons of steel and concrete, I know that I cannot imagine the continuing grief of the families of the victims.
The cleanup is almost done. There's one pile of debris left on the south side of the site; the rest of the workers have turned from removing to rebuilding. The subway and the PATH trains will be reinstalled (better than the original, if you listen to the workers), and new buildings will go up, and we'll move on. But, morbid as it might seem, I hope that we'll keep reminding each other what it was like in those first days. Partly because we owe it to the dead, and partly because we owe it to the living. But also because those of us who were alive on September 11, 2001 joined the generations of history who saw their world destroyed in a single hour, and I wouldn't like us to forget how much changed in that little span of time.
UPDATE: A reader sends this picture. I can't think of any better memorial.
Okay, guys, little lesson in international manners. It's fine when you boo the other team for trying to get in the way of your team's overwhelmingly well-deserved victory. It's very, very rude when you boo the other team's national anthem. I don't care if the other countries do it -- you're not living in another country, you're living in this one, and as long as you do I'll expect you to keep a civil tongue in your head. We are raising you to be decent human beings, not British football fans.
You've heard my views on Social Security -- now listen to my Dad's (it's a letter to the editor -- first one on the page. I think you should be able to read it without a subscription). His ideas are interesting -- and it's a side of the issue that's rarely examined by the media.
I'm sorry that I can't link to this, because it's extremely interesting -- a piece on the Wall Street Journal editorial page (subscription only -- go get one; it's a great investment) which suggests that China's growth in the last decade looked more like 3.6% than 7.6%. In other words, the slumbering giant which was widely prophesied to shove us off our throne as the world's largest economy was growing slower than we were.
The culprit? A combination of fudging at the provincial level, more fudging at the central government, and crude technical analysis. Or so the Op-Ed writer alleges, since the real problem is that we still don't know what the hell their GDP is. The writer, a professor of Economics, bases his estimate on several key indicators, pointing out that China's stagnant consumption, rising unemployment, moribund rural economy, and vast overcapacity are not consistent with the patterns observed in the other Asian tigers. The problem is, of course, that none of the other Asian tigers started with the same level of massive Communist-style production, so it's hard to know whether that pattern should apply. If unemployment was previously kept to zero by forcing everyone to keep a job even if they didn't want it, it should rise, even in a madly growing economy, as frictional unemployment is allowed to grow to its natural rate. And so on. (That's an example, by the way, not to be taken as an actual condition of the Chinese economy, about which I know no more than any other reasonably attentive reader of the WSJ).
Anyway, this is a very interesting development, and all should watch closely to see what other numbers come out to confirm or refute this hypothesis. Economics aside, the balance of power in the world over the next half-century will be very much affected by it.
Leave it to the French to take to the streets in protest against -- themselves. At least the plurality of themselves who voted for Le Pen.
Many people are spendfing a lot of time today telling us that the Le Pen vote doesn't mean anything, or is "just a fluke". They're completely missing the point, which is that it's hilarious.
Of course he's not going to actually get elected -- as far as I could tell, his entire potential voter base was the 16% that launched him into the runoff. If he had a shot at running the country, then maybe it wouldn't be funny. (Or maybe it would be funnier. Since I don't think he'd have much of a shot of enacting the psychotic part of his agenda). But given that we can be pretty sure that Chirac will win -- well, breathes there a man with heart so dead that he could view that picture of all those shocked and hurt French voters that graced the front page of the morning papers without laughing until his morning coffee spurted out his nose?
So Matt Welch and Ken Layne are really going to do it. Blogland's finest. . . I'm so proud. And you know, guys, if you need a New York correspondant, I'm here. I mean, right here. In New York. Which is very far from LA, and thus exotic. Like me. An exotic, New York foreign correspondant. And I have my own computer.
The Nash Equilibrium and the Coase Theorem: Two Great Tastes that Taste Great Together
A reader sends in this request for clarification on two important concepts: the Nash Equilibrium, and the Coase Theorem, authored by, respectively, John Nash and Ronald Coase, and who says you don’t go into academia to become famous?
I think I must have missed your explanation of comparative advantage, but I think I followed your explanation of CAFE. Now, here's another challenge for you. What is the relationship between Nash equilibrium and the Coase Theorem? I ask because I have been told that Nash equilibrium concerns situations that wind up being stable because any change makes at least some people worse off, and the Coase Theorem concerns situations where property gets used in some particular way (the use of the property is stable, in other words), no matter who initially owns it--because otherwise at least some people are worse off. I figure that even if there is not much connection, when you show why I might actually come to some understanding of both of those concepts. Thanks. And I liked your comments on "Jurismania."
And since you asked no nicely, and flattered me outrageously, I shall attempt to answer.
The Nash Equilibrium actually demonstrates how certain situations arrive at equilibrium at the point where neither party can make themselves better off given what the other party is already doing. This can be illustrated by taking a very simple case. Say there are two executives of a firm - call it Ronin Enterprises - who have some bad information they don’t want investors to know about. If they can get to the end of the quarter without investors finding out, they think they’ll be fine.
Now let’s suppose that these executives - call them Ken and Jeff - have large chunks of stock in the company. If either of them sells this large chunk of stock, it will trigger an investigation into the financials of the company. Once investors find out about the financial problems, the stock will be worthless. Creditors will descend. Congress will convene an investigation. General havoc will ensue, possibly including a Larry King special. No one wants that.
However, if they can hold out to the end of the quarter, they think that the situation will reverse itself and they can both cash out for a tidy sum.
So if one of them sells now and the other doesn’t, whoever sells will make a lot of money, while the other person is wiped out along with a once-proud firm. If both of them sell, they’ll both be wiped out. And if neither of them sells now, they both make money. We can chart the various possible outcomes like this (numbers are purely arbitrary and not meant to hold any relation to actual values of such stock as may have been held by any pair of executives named Ken and Jeff):
As you can see, if they both sell, it's a disaster. The best thing for all concerned -- the outcome that maximizes overall value -- is for both of them to hold their stock until the analysts go back to sleep.
But that's not what's going to happen.
Let's look at why. Let's say they both start out committed to not selling. In that case, they each get a return of 100 on their stock. 100 what? I hear you say. Millions of dollars, coupons good for one large soda with any purchase of a Superburger and Cross-cut Spicy Fries at Burger Boy -- it doesn't really matter 100 what. It's a model.
Anyway, so there they are, each grimly determined to sit on their stock and take their 100 when the time comes.
But then one of them notices that if he sells now, he could clear 200 soda coupons instead of 100. The little devil sitting on his shoulder says "Go ahead -- it's a dog-eat-dog world out there. You've got to look out for #1."
Perhaps at first he's committed to staying the course. But pretty soon all he can think about is those extra hundred sodas he could be drinking. His every waking moment is dominated by feverish images of all that sugary goodness pouring down some drain somewhere instead of into his throat.
And then the little devil speaks up. "Hey, Jeff," it says. "What if Ken sells?"
Jeff thinks about that. If Ken sells, he doesn't just lose those 100 extra sodas -- he loses the hundred he's already got. In fact, he's going to owe his investors an extra 300 sodas. He'll be working at Burger Boy for years to pay them all off. And they won't even let him work the Fry-O-Lator until he's been there for six months.
'Nuff said. Jeff sells like ice cream in August.
Now let's look at Ken's position. Maybe he was honorably determined to hold his stock until the deadline; maybe he was planning to do unto Jeff as Jeff just did unto him, only Jeff was a little quicker off the mark. Doesn't matter, because no matter what his intentions were, Ken is now looking at a long stretch down at Burger Boy making sodas for Jeff.
Now remember, while it might be better for him to pull them back to the position where both aren't selling, he can't do that -- only Jeff can choose whether or not Jeff sells. And given that Jeff is selling, there's only one thing that Ken can do to improve his position.
Ken sells too.
Now they're both down at Burger Boy getting fitted for paper hats. Ken's term before he pays off his debt is slightly shortened, at the expense of an equally long term for Jeff. Notice that this is the outcome that minimizes value; the total value of this outcome to the two participants is -500, versus -100 if one sells and one doesn't, and +200 if they both hold on.
It's also what's known as the Nash Equilibrium. It is the only outcome where neither participant can better their position by changing what he himself is already doing, given what the other participant is already doing.
Now let's travel six months forward in time, when Ken and Jeff are settling down to their new home at the Winnemaka State Correctional Facility. Unaware of the lingering resentments stemming from their stock market contretemps, the warden makes them roommates. And as they are unpacking, Jeff tries to leaven the dark mood in the cell by pulling out his portable turntable and playing one of his classic big band records.
Well, if there's anything that Ken hates more than double-crossing, back-stabbing business partners, it's big band music. The sound of clarinet music, frankly, makes him break out in hives. And there on the other side of the cell is Jeff, unpacking a couple of cubic feet of Ella Fitzgerald, Benny Goodman, and Duke Ellington. Let's just say that things are a little tense as the first bars of "Sing! Sing! Sing!" float through the reinforced-concrete halls of Cell Block C.
Now say that Ken, upon demanding to see the warden, finds that Jeff has a perfect right to listen to his big band records between the hours of 8 am and 8 pm, according to prison rules. Stone walls may not a prison make, but Jeff is allowed to transport Ken to his own personal vision of hell for 12 hours a day, and there is nothing he can do about it.
Or can he? Let us imagine that Ken's wife, in whom all of his non-stock wealth was vested, has lavishly funded his account at the prison commissary to the tune of $1000. It occurs to Ken, being the smooth-wheeler dealer that he is, that, much as it galls him to do so, he could pay Jeff not to play his music.
Now, we're told time and time again that such things as music are priceless, but this is not true, as you will find out very quickly if you attempt to take some from Tower Records without paying. If you'll follow the simple excercise below, you'll find that sooner or later, we can put a price on just about anything.
Think of something you hate, something you'd never, ever do, like -- eating a bug. Would you do it if I paid you a dollar? No, you say? Never? How about if I paid you a billion dollars? $1,000,0000,000 in the bank just for eating one, harmless little bug. A billion dollars could buy a lot of therapy. Now open up and let batman fly into the cave. . .
Most things, even silence, can be bought -- if the price is high enough.
So let's imagine that Jeff, although devoted to swing, is also devoted to Mars bars, his supply of which is inadequate due to a stingy wife. He realizes, privately, that for as little as $600 he would be willing to give up his swing records and content himself with the sound of roasted peanuts wrapped in luscious caramel and creamy milk chocolate crunchiing between his teeth.
Ken, on the other hand, just quit smoking and went on the Atkins diet. He'd be more than willing to fork over his entire commissary account for the privilege of not listening to one more rendition of "Chattanooga Choo-Choo".
What's the solution? Obviously Ken pays Jeff some sum between $600 and $1000 -- how much is a matter of negotiation between the two of them -- and the cell echoes with golden silence.
But what if Jeff didn't have the right to listen to his music? What if rather than saying that all inmates could listen to music from 8-8, the warden had said that they could do so only if they got their cellmate's permission? Suddenly Ken has all the power. What would the outcome be?
The outcome would be the same -- silence. Jeff isn't willing to pay Ken enough to be allowed to listen to Ella and Benny.
That's the heart of the Coase Theorem: regardless of who has the rights, common areas will end up being put to the highest-valued use.
Suddenly you're a little confused. What do you mean by highest valued? Jeff values his use of the common space to listen to music at $599 (the most, we assume, that he would be willing to pay to hear his music, given that he will sell his right to do so for $600), while Ken values his use, not listening to music at $1000. Silence wins because in the marketplace of the cell, with these two consumers, it has a higher value ($1000) than music ($599). And where there is a market for rights, the highest valued allocation of those rights wins.
Another way to look at it is to think of the right to pollute (in the broadest possible sense) as an asset. It doesn't matter who initially owns the asset; it will end up with the person who values it the most.
That's the beauty of the Coase Theorem. Think of any situation with conflicting rights: the environment, noise pollution, the right not to see leather pants on those who don't have the kind of body that makes leather pants attractive. It doesn't matter whether the polluter (chemical, noise, or visual) has the right to pollute, or you have the right not to be polluted; the outcome will be the same, because whoever values their outcome more will invariably win. It's a revolutionary idea.
It's also simplistic, as all revolutionary ideas are. For one thing, it assumes that there are no transaction costs, which is to say the costs, monetary and non-monetary, associated with doing a transaction on top of the fee exchanged. Let's take a form of negative externality with which we're all familiar: spam. I find spam so annoying that I would probably be willing to pay some amount of money to be left alone. But in order to do that I would have to find all the spammers and pay each of them to leave me alone, which might push my costs, in time and money, much higher than I would be willing to pay just to be free of daily exhortations to lose weight, grow hair, or sample the brand-new webcams of Barely Legal Teenage Girls.
It also assumes perfect enforcement. I might pay all those spammers just to find that they've moved their servers to Taiwan, changed their names by one letter, and resumed their torrent of unwanted invitations.
And it assumes that you're allowed to make a market. Much as I dislike the kid next door dealing crack in the yard, I might be willing to live with it for a percentage of the take. But the cops take a dim view of this sort of thing. And the EPA won't let me take money to let International Paper dump dioxins in my percentage of the water table.
Nor does it cope with the justice of the allocation of rights -- should I have to pay not to have some old fogey blasting "Rum and Coca Cola" into my ears at all hours? And conversely, shouldn't I be able to enjoy a little music now and again? Coase only tells us how things will be allocated; not, in some metaphysical way, how they should. That's worrysome, if you're the type of person who seeks metaphysical justice from the law.
Nonetheless, the Coase Theorem has changed the way economists view property rights and externalities sufficiently for them to give him a Nobel Prize for it. And well deserved, if you want my opinion, which I'm pretty sure nobody does.
So that is the Nash Equilibrium and the Coase Theorem. And to answer your question, gentle reader, there's really not much relationship between them, except that they're both named after Nobel Laureates, and they're both really cool. And, of course, that hopefully you now understand both of them.
Well, now we have the Nunberg study. And I sense that I'm about to wade back into the hot water.
Edward Boyd has disputed the numbers that Nunberg generated, which purport to demonstrate that the media is actually biased against liberals. (Nunberg -- isn't that a great name? It generates images of clean, bare streets filled with hurrying figures in black, the air rent with the sound of clacking rosary beads. I bet he got a lot of flack when he was in grammar school. I'm in sympathy -- Reagan Argle-Bargle isn't the worst thing I've been called, by a long shot. But I digress.)
Myself, I don't doubt his numbers. It's his methodology I'm worried about. I don't know much about linguistics methods, so maybe I'm out on a limb here, but to this non-professional-statistician, it doesn't seem very useful.
Initially, Nunberg took 10 pols -- 5 from the left and 5 from the right -- and looked to see how often the lefties were labeled conservative while the righties were labeled liberal. (Oops -- that would be an interesting study, but the data might be a little weird. Scratch that and reverse it.):
On the liberal side were Senators Barbara Boxer, Paul Wellstone, Tom Harkin, and Ted Kennedy, and Representative Barney Frank, all with lifetime Americans for Democratic Action (ADA) ratings greater than 90 percent. On the conservative side were Senators Trent Lott and Jesse Helms, Attorney General John Ashcroft, and Representatives Dick Armey and Tom DeLay, all with lifetime ADA averages less than 15 percent. Then I looked to see how often each of those names occurred within seven words of "liberal" or "conservative," whichever was appropriate, a test that picks out ascriptions of political views with better than 85 percent accuracy.
This has a few problems. Nunberg identifies one of them:
It could be, of course, that the figures for people like Lott, DeLay, and Armey were skewed by the fact that they have leadership titles that might take the place of partisan labels in many stories. But the pattern is the same for other legislators. Substitute Richard Shelby or Strom Thurmond in the conservative group and the score for the group goes up a bit; substitute Jeff Sessions or Mitch McConnell and it goes down. Ditto the liberals -- inserting Ron Dellums would raise their score, inserting Nancy Pelosi would lower it
That's not a little error to introduce. By my count, four out of five of those Republicans have such titles, while Jesse Helms was until quite recently the chair of an important committee, the citing of which could easily push a conservative label out of reach of the search engine, especially since it was usually as a committee chair that Jesse Helms said something -- er -- quotable. So at least 80% of the Republican sample is prone to errors created by "Trent Lott, the Republican Senate Majority Leader who is well-known for his extreme conservative views". Obviously, the Dems could be prone to the same problem, except that they aren't the leadership, and the only one with a powerful committee chair is Ted Kennedy, who, as they say, needs no introduction.
Which means that by my (admittedly off-the-cuff) reading, 80-100% of the Republicans are prone to undersampling for this reason, vs. 0% of the Dems. Switching one member of those samples won't correct the discrepancy -- it would take at least two on each side. An easier way to control for the effect would be to extend the range to 12 words or some such, but Nunberg didn't do it -- possibly it would put too much of a strain on the search engine, or the feature isn't available. I don't have access to those 'spensive premium services since I graduated. Would it make a difference? I have no idea -- the only way to find out is to do the search.
More worrying is that he uses 10 people in 10 papers. It's too small a sample. It uses only one word (in his rebuttal of Boyd he extended the search a little, but it's still 2 or 3 words. Go read the papers and see if you can't find more labels than that in the first 10 minutes.). If you want to get good data this way, you have to cast a wide net -- otherwise it's too probable that you missed something.
Then there's the stuff that's -- well -- biased. Like what he says about interest groups:
Goldberg's other number involves one of those specious comparisons that critics of liberal media bias are prone to. In this case, he points out that "the Los Angeles Times ran only 98 stories about the Concerned Women for America and identified the group as conservative 28 times. But The LA Times ran more than 1,000 stories on the National Organization for Women and labeled NOW liberal only seven times."
But that's meretricious, in every sense of the term. Concerned Women of America is a self-identified conservative Christian group (it opposes, among other things, abortion, homosexual adoption, hate-crime legislation, the AmeriCorps volunteer program, and the teaching of "ill-conceived Darwinian theory" in the schools). Whereas NOW makes a point of rejecting explicitly partisan labels -- the appropriate description of the group is "feminist." To insist on labeling it as liberal would be to assume that to be pro-choice makes you by definition a liberal, by which criterion Goldberg ought to be equally indignant that the press doesn't use the "liberal" label for Christine Todd Whitman or Tom Ridge.
Ummm. . . I realize that Nunberg is writing for the American Prospect. But does he really think that the reason that conservatives call NOW liberal is that the organization is [insert whatever term you use to refer to those in favor of abortion rights; I can't take any more emails on the subject]? As opposed to the fact that they call for quasi-socialist economic reforms, for example? Or make strident public demands about how their membership should vote (when I was a member, we were of course free to choose our own path -- as long as that path was not Republican). So CWA is obviously conservative because "it opposes, among other things, abortion, homosexual adoption, hate-crime legislation, the AmeriCorps volunteer program, and the teaching of "ill-conceived Darwinian theory" in the schools". NOW is in favor of all those things --doesn't that make them liberal? Does NOW buy fundraising mailing lists off the Republican party or the National Review? You know the answer -- of course not, because NOW is liberal. Which is fine. But c'mon -- arguing about this only plays to those who think that Joe Lieberman's a conservative.
All of the examples are like this. He takes one position held by the group that isn't part of the DNC platform, such as the Sierra Club's flirtation with ZPG. He compares think-tanks like CATO, which are at odds with probably half or more of the RNC platform, and compares them to quasi-marxists like the Center for Justice in order to generate disproportionate labeling of the lefties, rather than comparing them with the social conservatives who are far more likely to draw the media's ire. Then there's one part that just confuses me:
Goldberg has made a speciality of risible comparisons like this one -- in Bias , he complains that the media routinely label Rush Limbaugh as a conservative talk show host, but don't label Rosie O'Donnell as a liberal TV talk show host. I mean, Rosie O'Donnell?? A serious critic would have chosen an example better suited to making the point -- comparing Limbaugh to someone like Michael Kinsley or James Carville, say.
I have no idea what the problem with Rosie O'Donnell is. I think they're quite comparable. They've both got large audiences, both of them run talk shows, both of them are pretty politically extreme (although O'Donnell's liberalism is a suburban, rich-person, polite kind of redistributionism), and I can't stand either one of them, at least in their incarnation as talk-show hosts. Neither Kinsely nore Carville, as far as I am aware, has a talk show. But I don't watch a lot of TV, and I don't own a radio.
Anyway, this is just carping -- except that saying that groups like the Sierra Club and NOW aren't liberal, and therefore there's no point in investigating any differential treatment, allows a fine bit of data mining. To wit, he leaves out of the sample all the groups where journalists get the data they put in the articles. How those groups get labeled is very important to how readers perceive that data. If we're told that "an environmental group" gave us one study, and "a right-wing activist" gave us the other study, it affects how we weigh the data. I have no idea whether Nunberg is not investigating more pols and interest groups in his sample because he suspects that his results wouldn't be to his liking, or because he can't afford it in time or money, or because it would be a pain in the tuchus. Whatever the reason, we've been given a small sample of pols hand-selected by Nunberg, on which is tested a limited number of variables, and we're told -- presto! -- there's no media bias.
Now, as I said when I was talking about the Horowitz Poll, I don't know whether there's media bias, or bias in the Academy. I suspect -- but I don't have data. So I don't know.
And after reading Nunberg's article, I still don't.
Certainly, it’s too soon to say whether substantial numbers of American Jews will go Republican in 2004, and begin funneling more of their considerable campaign contributions toward GOP coffers. However, a poll commissioned by a Jewish Republican support group in December showed Bush’s rating among Jews at 80 percent-four times what he received in the 2000 ballot - because of his backing for Israel and handling of the war on terrorism.
It’s not just the Palestinians and Osama bin Laden who are driving Jews to the right, however. Rising anti-Semitism - as evidenced by last year’s United Nations conference in Durban, vicious diatribes in official media across the Muslim world, and recent events in France and elsewhere in Europe - have heightened Jewish fears that the hatred they thought was behind them may not be.
Sept. 11 pushed them to the right as well, as it did many other Americans who now back Attorney General John Ashcroft’s attempts to root out potential terrorists, even if it means compromising cherished civil liberties. The biological imperative to survive runs far deeper than learned liberal democratic values.
This puts the Dems in an interesting position.
In the 2000 election they lost some of their most radical members to Nader, without whom they would have won; but they also gained a large number of voters who were, to judge from their rhetoric, hysterical about the potential ravages of a Bush presidency. Those voters, young and not particularly ideological, associated Bush I with bad times, Bill Clinton with good.
Well, Bush hasn't outlawed abortion or pushed minorities into camps, and those marginal voters no longer believe he's going to. Which is an enormous problem for the Democrats, because those disaffected voters, who would probably still vote for Bush, won't bother going to the polls.
Meanwhile, if they woo the Jewish vote, they lose the far lefties they need to make up the losses described above, and break the centrist tie in their favor. If they don't, they lose their second-most reliable constituency. And their first most reliable constituency isn't particularly fond of Israel either. While most of the rest of their constituency does favor Israel, albeit not as much as the Jewish voters.
In other words, the uneasy coalition is about to shatter.
The GOP has it easy in one sense -- there's a very high correlation between the views of most of its membership. The leadership only has three groups to worry about: liberal/mod republicans from the suburban set, libertarians, and social conservatives. The Dems, on the other hand, have dozens. And it looks as if the war may fracture it. Whatever position they take, they lose enough of their constituency, either to indifference or to the other side, to make it very, very hard to win this fall.
I think they'll go hard after Israel. It's good domestic politics; although it's going to mean low turnout from a couple of key groups, that's better than the more certain demise of trying to campaign against the war. But in order to do that they're going to have to shut up about cutting defense spending, which has proven wildly unpopular every time Daschle ventures that way. Which means they're back to being the party of big spending, as Daschle et al. will find it impossible to attack Bush on the domestic front without offering to raise either taxes or the deficit. Unattractive choices all around. They've got to be thinking -- where's Bill Clinton when you need him?
So I've been thinking about Venezuela's failed coup, though admittedly not very hard. And it strikes me that those who are trying to hang this one on the Bush administration aren't looking too closely at their own logic.
Now, I was a little surprised to see people on what I think of as my side of the political spectrum cheering a military coup, though as it was explained to me, they didn't support it because Chavez was a leftist, but because Chavez had indicated that he wasn't going to do any kind of democratic responding to the will of the people -- he was el Presidente, and they could kiss his proto-communist derriere. I will not comment on the correctness of this position, because I have insufficient data. But in general, Live from the WTC's editorial position on military coups is firmly against.
On the other hand, when what I generally think of as the other side of the political spectrum starts trying to hang this one on Bush, I equally suspect that politics are getting in the way of core values. Now, looking at what the Bush administration is being accused of, it is not of fomenting the coup; it's of green-lighting it. But what was the alternative? It's not like Chavez didn't know it was coming; it's just that the political breakdown made him powerless to act. So we coldn't even help the current government by informing Chavez of the danger. The only thing we could have done was sent military support. Which, of course, is precisely what the people who are screaming about the Bush government's aggressive foreign policy are against, at least when the elected government supports us. So I guess we're only supposed to intervene when it will hurt our interests. Now that's a winning foreign policy.
Bank of Nova Scotia said Friday Argentina's central bank has suspended the operations of its Scotiabank Quilmes unit following the central bank's decision not to provide additional liquidity to the unit. Scotiabank Quilmes said in a written statement late Thursday it "lamented" the central bank's decision. In a news release Friday, Bank of Nova Scotia said, "The severe economic conditions and liquidity problems in the Argentine banking system and the inability of Scotiabank Quilmes to secure additional liquidity from the central bank have resulted in this announcement." The bank said it will provide support to the government "to help ensure this situation is dealt with properly, including maximizing returns to creditors and depositors, and safeguarding the interests of employees." The bank said it is fully provisioned in terms of exposure to Quilmes and therefore expects this latest move "will have no material financial impact." Argentina's central bank wants Scotiabank Quilmes to present a recapitalization plan by May 18. The central bank also said that, while most of Scotiabank Quilmes' operations will be suspended, clients can continue to use their credit cards and deposit and withdraw their monthly paychecks or their pension payments.
So Argentina is suspending the Bank of Nova Scotia for refusing to keep pouring money down the hole of Argentina's capital regime. I'm pretty sure that the Bank of Nova Scotia isn't heartbroken over this turn of events; I think it likely that other foreign banks will follow, causing a wave of bank failures that could touch off a bank run and drive the rest of Argentina's capital markets into further ruin. Which is why the government is currently trying to prevent people from withdrawing their money by fiat, which works by freezing Argentina's capital system in place -- which is to say that it works only until something changes, or the political pressure to let people at their money becomes too great, which is to say that it doesn't work for very long.
So Argentina has essentially destroyed their capital markets. The way they chose to devalue put most of the initial pain on the banks, by making them convert their loans and deposits at an artificially unfavorable exchange rate, and making up the capital deficits with special government bonds that are worth about as much as -- well, as other Argentinian government bonds, which is to say nothing. This spared the government the temporary political pain of telling the nation that everyone's savings were suddenly worth quite a bit less, but it guaranteed that the banking system and capital markets would bleed to death. The banks are undercapitalized, and no one in their right minds would pour any more money into the system -- except for the government, which doesn't have any more money to give. FDR got the capital to reconstruct our banking system with hog-wild government borrowing and raising taxes on the wealthy. Argentina can't borrow any money because no one's crazy enough to lend it any; and its tax rates are already very high, and raising them further would just do worse things to the economy. Plus no one in Argentina pays their taxes anyway, so why bother? In other words, the government is between the proverbial rock and the hard place. A very hard place.
Don't get me wrong; I don't think I would have done any better. The situation was politically impossible; any solution that would have worked economically would have caused the government to fall. But the result now is that their capital markets may not return for a decade or more. The collapse of the world economy and the internet bubble at the same time has left little taste in American banks for the speculative risk assessments that allowed such lavish capital influx into Latin America during the 1970's through the 1990's. With Argentina and Venezuela puncturing the illusion that Latin America had finally goten religion on the stable democracy thing, the banks will not soon forgive either country their excesses.
So who can help? The IMF? I'm not clear on what the IMF could actually do -- the banking system is only surviving now on the capital influx from foreign banks that is about to stop. The usually prescribed solution is fiscal austerity combined with slowly reinflating the money supply while restoring the salvageable banks to solvency. But the capital contraction, ironically, is combined with partly-expectation driven inflation, so inflating the money supply won't help things. Now usually inflation helps bad banking problems, because it keeps the borrowers solvent by eroding the value of their loans so that they can meet their payments. Except that the inflationary expectations in Argentina are of hyperinflation, which makes depositors want to withdraw their money and stick it into something more valuable. Like, say, changing it into singles and using it to economize on Kleenex. When the depositors withdraw their money, the banks fail, and all hell breaks loose. The IMF doesn't have enough money to stop a bank run that's cause by hyperinflationary expectations, rather than panic.
Normal bank runs are caused when people start to fear, rationally or not, that the bank won't have enough money to pay them off, so they run to get their money out while they can. If the bank has access to sufficient short term capital, it can pay off all the depositors who show up, which proves to the other depositors on the eighteen-block line that there's enough money there, so they get bored and go home. Meanwhile, after a few days the people who do take their money out realize that it makes an uncomfortable lump in the mattress, so they dig it out and take it back to the bank. Then the bank pays off its short term lender and everyone's happy.
A bank run caused by hyperinflationary prospects, on the other hand, is a product of the perfectly rational decision to transfer your savings into hard assets or other currencies in order to avoid having them eroded by inflation. In this case, the depositors will draw out as much as you pump in and the banks will still fail.
And any fiscal austerity program will run the same risk of riots that gave rise to the original stupid devaluation plan.
So I don't know what can be done. I don't think anyone does, because I have yet to see a single coherent plan for fixing Argentina, except for the WSJ's wacky, but beautifully simple, plan to dollarize the economy.
But at least Paul Krugman has something to write about besides the Bush Administraion.
The interim CEO of Enron is resigning "for the good of the company"
McMahon, 41, said he decided his resignation was necessary to help ensure Enron's successful reorganization into a mover of electricity and natural gas.
"I strongly believe that the best course for the Enron estate, its creditors and its employees is to use our core pipeline and electricity assets to create a new company apart from the litigation and diversions of bankruptcy," McMahon said.
"For that effort to have every chance of success, it became clear that outside leadership is required."
Now, which seems more likely: that McMahon thinks that the company and the shareholders will be better off if the CEO suddenly resigns in teh middle of a reorganization without a replacement in sight; or McMahon is running for the hills in the hope that people will forget that he was ever associated with this disaster? You decide.
