Thursday, July 28, 2011

Clip of the Week

I'm going to be on the road for most of the next few days--first at a golf tournament, then at a(nother) funeral, so my posting may be a little sparse. I'll try my best to get at least one post a day, but no guarantees...

But before I hit the highway, I'll at least put up your Clip of the Week, so that you can have some amusement this afternoon. There were some decent candidates this week, most of them a little different from your typical Clip of the Week contender.

First, we had this ridiculously overwrought hype video, introducing the new Pac-12 Conference (same old Pac-10, with the addition of a Big-12 also-ran in Colorado and a Utah team that's making its first-ever appearance in a major conference... incidentally, I also highly recommend that you read the "Featured Comment" on that Deadspin link--good stuff), we had this blooper-reel play from a soccer game, and we had this very cool time-lapse video with a year's worth of screenshots of the New York Times front page (12,000 screenshots in total--mesmerizing).

But there's really only one contender for Clip of the Week this week, because it's one video that I just can't stop watching. On Tuesday night, the Pittsburgh Pirates (who are unexpectedly in the playoff hunt, which I think contractually requires us to refer to them as the "resurgent Pittsburgh Pirates") played a marathon 19-inning game against the Atlanta Braves.

It was a well-played, entertaining game between two playoff contenders, and on this play, it appeared that a 20th inning was imminent. That was until home plate umpire Jerry Meals decided he'd seen enough, and made the single worst call I've ever seen in a baseball game, ending the game and awarding the win to the Braves. I still can't figure out exactly how he blew this one. Pretty brutal.

Wednesday, July 27, 2011

The culture that is Washington

At the risk of piling on our lovely friends down in Washington, some things are just too terrific not to pass along. Despite my misgivings about the current role of our federal government (and my serious problems with the jokers currently running it), I do happen to have a well-placed mole within the DC establishment--specifically, within the Department of Health and Human Services (HHS).

It is through this mole that I was made aware of a particularly amusing case of Washington hypocrisy--or, at the very least, bitter irony. You see, the good folks down at the HHS are having their annual night out at Nationals Park tonight, complete with a ceremonial first pitch from Assistant Secretary for Health, Dr. Howard Koh.

No big deal, right? Should be a fun night out at the ballpark, and as a former employee of (ok, unpaid intern for) the Washington Nationals, I gladly support anyone who supports the Nats (and my man Ryan Zimmerman).


But, as always in DC, there's more here than meets the eye. You see, down at Nationals Park tonight, it also just happens to be $1 HOT DOG NIGHT!! Yes, the official Department of Health and Human Services night at the ballpark coincides with that great tradition of unhealthy eating, discounted processed meat.

A funny coincidence, to be sure, were it not for the fact that HHS was actually using this fact as a promotional tool to help bring more HHS employees out to the park (actual quote from the marketing e-mail: "Didn't think this event could get any better? Wednesday is $1 HOT DOG NIGHT! Get your tickets today!").

Gooooood times. Well played, HHS. Well played. And thanks to my well-placed mole for the fantastic heads-up. Always glad to know what's really going on in our nation's capital.

This is a joke, right?

I've let my fury over the tough-talking "China is a currency manipulator" theme in Washington die down, in large part because it's been replaced by fury over lying and posturing with regards to the debt ceiling. But just because I've stopped talking about those issues doesn't mean they've gone away. While we're all distracted by the debt ceiling theater, some fairly important developments have been sneaking under the radar (as they always seem to at times like these).

A few months ago, in response to our stubbornly high unemployment rate and the ongoing discussion regarding the role of China in our declining manufacturing industry, President Obama created a "Council on Jobs and Competitiveness", with General Electric CEO and Chairman Jeff Immelt installed as the head of the council. That appointment turned a few heads--including that of Senator Russ Feingold--among those who noted that GE had repeatedly and systematically gone out of its way to avoid paying federal income tax over the previous decade.

Nevertheless, Immelt has continued in his role, and according to him, he has worked tirelessly to keep jobs in America rather than shipping them overseas.
The chairman of President Barack Obama's jobs and competitiveness council said Wednesday there is no magic potion to jobs creation, but the panel is devising pragmatic plans to put people back to work.
General Electric Co. Chairman and CEO Jeffrey Immelt spoke Wednesday with employees and reporters during a visit to his company's gas turbine plant in Greenville, which employs 3,300 people including 1,700 engineers.
Immelt said his four months on the Obama advisory panel has taught him that even his company can be held accountable for where it creates jobs. He said the panel is working on devising a hundred different business plans for every sector of the economy, with practical steps to help create jobs.
Yes, Mr. Immelt has learned a lot--"even his company can be held accountable for where it creates jobs". Indeed. I'm glad to see him recognize that in trying to be part of the solution, he must first accept that he and GE have been a huge part of the problem.

Hopefully that can be a first step toward our nation reclaiming its lost manufacturing... wait a minute, what the fuck?
General Electric Co.’s health care unit, the world’s biggest maker of medical imaging machines, is moving the headquarters of its 115-year-old X-ray business to Beijing.
“A handful’’ of top managers will move to the Chinese capital and there won’t be any job cuts, said Anne LeGrand, general manager of X-ray for GE Healthcare. The headquarters will move from Wisconsin amid a broader plan to invest about $2 billion across China, including opening six “customer innovation’’ and development centers...
The X-ray business, whose financial results aren’t reported separately by GE, will hire 65 new engineers and support staff at a new Chengdu facility, the company said. GE has hired “a large number’’ of engineers who are in training, LeGrand said. GE, based in Fairfield, Conn., also has a global research center in Shanghai.
Sigh... look, it's great and all that "there won't be any job cuts"--at least not right now. But is GE so completely deaf to the message it's sending by doing this? When your CEO is the head of a Presidential council on jobs and competitiveness, moving ANY of your lines of business overseas and hiring new engineers in China instead of in the United States is the height of hypocrisy. Jeff, you JUST SAID that you're learning to be accountable for where you create jobs--apparently you lied. Shocking.

Let it be clear that, in isolation, I don't blame Immelt for moving his division's headquarters to China--it's in all likelihood a smart business decision, as is avoiding taxes when possible*. But to do so while also pretending to care deeply about jobs and American competitiveness--and chairing a council that is charged with doing just that--is just nauseating.

Jeff Immelt should immediately recuse himself from his role as head of the jobs council. If avoiding federal income tax for years wasn't enough, this latest move is just too bold and arrogant to ignore. Way to sneak this one under the radar when other events are dominating the news flow, Jeff... too bad you couldn't sneak it by everyone.

[Economic Times]
[Boston Globe]


* I am on record here saying that the reason we have lost our manufacturing base to China is not "greedy business owners" but "terrible monetary policy that debased our dollar and destroyed the competitiveness of American labor". That and a whole host of other factors that, in sum, have consistently weakened our nation.

Vocab fun

I've been having some fun today playing around over at Test Your Vocab, a site that tests your vocabulary (the words for which you know at least one definition), and then runs some numbers to tell you whether you're above or below average for your given age and intelligence level (as measured by self-reported SAT Verbal score).

According to the test, my vocabulary is above average for my age, but actually below average when you add my SAT score into the equation--maybe I just got lucky back in high school, or maybe I did well on the SAT Verbal because of my command of grammar and logic, rather than gross vocabulary size.

Here's the two main charts that I mentioned, in case you're curious. I think it's interesting to see how quickly our vocabulary grows, and then how significantly it levels off, regardless of your overall intelligence.


The one main caveat that the site's organizers present is that the average test-taker's general intelligence level is much higher than the overall national average--self-reported SAT Verbal scores average about 700 for the test-takers, as opposed to 500 for all SAT takers nationwide (and an estimated 350 average if all Americans were to take the test).

So take these results with a grain of salt, but feel free to test your own vocab against their charts. Maybe you'll even surprise yourself.

Quote of the Week

I'm going to keep my analysis short on this week's Quote of the Week, mostly because I happen to know the principal characters involved. I don't need to take any sides here, because in all honesty I've had my issues with all of these people at one time or another, and in this dispute I can understand and appreciate both sides and can't really declare a winner (are they all losers? Weeeeeell.... nah).

At any rate, at issue is the 2004 meeting between the Winklevoss twins (Cameron and Tyler, "the Winklevi") and then-Harvard President Larry Summers, as made famous in "The Social Network". At a conference last week, Summers was asked whether the colorful Hollywood portrayal of the meeting was accurate or not. He responded in a way that only Larry Summers can.

This week's QUOTE OF THE WEEK

"One of the things you learn as a college president is that if an undergraduate is wearing a tie and jacket on Thursday afternoon at three o'clock, there are two possibilities. One is that they're looking for a job and have an interview; the other is that they are an asshole. This was the latter case."
                                             - Former Harvard President Larry Summers

Just a priceless line, regardless of your feelings on the people involved. For what it's worth, the Winklevi have responded in their typical litigious fashion, writing a 3-page letter to current Harvard President Drew Faust.

In short, this whole episode is just three Harvard a**holes doing what comes naturally--I should know, we can smell our own.

[Huffington Post]

Tuesday, July 26, 2011

China is crazy

China never ceases to amaze and confuse me--despite the fact that I've never been there, and don't plan to go any time soon. The cultural differences between China and the United States are literally too many to list, which leaves me constantly shaking my head. Last week, it was fake Apple Stores in Kunming. This week, it's professional line-standers. Take it away, NPR:
In China, waiting in line sometimes feels like a competitive sport. The overnight queue at the launch of Apple's iPad 2 pales in comparison to the epic waits for certain over-subscribed state-run services.
Earlier this month, people waited four days and three nights to register for low-income housing in the central city of Xian, while admission to a certain Beijing kindergarten in Changping last year required a week-long, round-the-clock queue, for which people set up camp beds along the pavement.
But as with most things, one pragmatic Chinese entrepreneur has found a business opportunity out of adversity.
For the past two years, Li Qicai, 28, has made a career out of waiting in line. What's more, he now outsources the waiting to others. He employs four full-time queuers and a host of freelancers, who, for a cost of about $3 an hour, will do the waiting for you.
"I'm just selling my time for money," says Li. "You don't need any skills, except the ability to suffer. For some jobs, you need to look good. If you want to buy things for rich people, you can't look like a farmer or they'll think you're a scalper."
These are the paotui: literally, the "running legs," or runners. Their job: everything from a 26-hour wait for a limited-edition handbag to something as mundane as making an appointment with a famous doctor.
Paotui companies are springing up across China, fueled by what the Chinese media calls a landuo jingji, or an economy driven by laziness. One factor is China's low labor costs, which are driving China's convenience culture, where even fast-food outlets like McDonald's and neighborhood convenience stores deliver to people's homes.
"An economy driven by laziness"? Why, that sounds positively American!

Awesome. You know, maybe this is the answer to all of our nation's debt and unemployment problems. Since Republicans are apparently entirely unwilling to allow any tax increases on the wealthy, maybe we can just kindly ask our nation's wealthiest to instead hire the poorest of the poor to do menial tasks for them--standing in line, waiting on hold on the phone, sitting in traffic... hey, getting paid just to stand around? It's the American way!

Of course, this time, we'd just be stealing China's idea... but they're making fake Apple Stores, so fair is fair, right? Good talk. Hey, I've got a few extra bucks... anyone wanna go take my car to get inspected? I really don't feel like waiting for that to be done.

[NPR]
(h/t Freakonomics)

Monday, July 25, 2011

This is different from my childhood

Sometimes I wonder if I'm significantly more ignorant of the world around me than I'd like to admit. After having read this article, this is one of those times.
Gov. Paul LePage of Maine happened to be waiting for his flight at Augusta State Airport on a recent Saturday when the weekend crush began.
A turboprop Pilatus PC-12 carrying Melissa Thomas, her daughter, her daughter’s friend and a pile of lacrosse equipment took off for their home in Connecticut, following the girls’ three-week stay at Camp All-Star in nearby Kents Hill, Me. Shortly after, a Cessna Citation Excel arrived, and a mother, a father and their 13-year-old daughter emerged carrying a pink sleeping bag and two large duffel bags, all headed to Camp Vega in Fayette.
“Love it, love it, love it,” Mr. LePage said of the private-plane traffic generated by summer camps. “I wish they’d stay a week while they’re here. This is a big business.”
For decades, parents in the Northeast who sent their children to summer camp faced the same arduous logistics of traveling long distances to remote towns in Maine, New Hampshire and upstate New York to pick up their children or to attend parents’ visiting day.
Now, even as the economy limps along, more of the nation’s wealthier families are cutting out the car ride and chartering planes to fly to summer camps. One private jet broker, Todd Rome of Blue Star Jets, said his summer-camp business had jumped 30 percent over the last year.
This weekend, a popular choice for visiting day at camps, private planes jammed the runways at small rural airports.
Officials at the airport in Augusta said 51 private planes arrived between Thursday and Saturday; on a normal day, they would expect just a few...
Alright, we'll take a break here so that I can say that I had no idea that there were people in the world who honestly took private planes (or put their kids on them) to send them to summer camp. The fact that this business has apparently jumped 30 percent in just the last year serves as yet another reminder of the vicious unevenness of the recent economic "recovery"--our chosen euphemism for the country's most recent failed attempt at supply-side economics.

We'll turn it back over to the source to make the next obvious point:
The popularity of private-plane travel is forcing many high-priced camps, where seven-week sessions can easily cost more than $10,000, to balance the habits of their parents against the ethos of simplicity the camps spend the summer promoting.
Kyle Courtiss, whose family runs Camp Vega in Maine, said that his staff was trained “to be cognizant of stuff like that” and that private planes were “not what this camp is about.”
Some camps said they recognized that the parents who flew in private planes were often strong financial supporters of these camps. Arleen Shepherd, director of Camp Skylemar, in Naples, Me., said that while some of the high-profile parents whose children attend Skylemar might fly privately, some campers had never flown on a plane.
Ah, yes. The flagrant hypocrisy and ironic contrast between private plane travel and the "ethos of simplicity" that summer camp promises to provide... But wait a second... hey Camp Vega (it's pronounced Vee-gah, not Vay-gah as I assumed, and it's an all-girls camp that refers to its campers as Vegans...cute)... really?!? You've got a $10k price tag for a 7-week summer camp, but yet you're "not about stuff like that"?! Please.

Now, I admit to not knowing exactly what my parents spent on my summer camp growing up (I did mostly sports camps rather than stereotypical log-cabin summer camps like Camp Vega), but I seem to recall the average weekly price tag being somewhere in the neighborhood of $200 to $300 (more for some, though I can't imagine that even the most "select" camp cost more than $500 a week, even with boarding included). Camp Vega, though, at $10k for the summer, clocks in just shy of $1500 a week, an absolutely staggering sum (even adjusted for a couple of decades of inflation).


When you slap a price tag like that on your camp, you lose all right to complain about your campers' (or their parents') perceived violation of the camp's mythical "ethos of simplicity". Real simplicity is cheap--honestly, it's free. Feigned simplicity for the purpose of profit, though--that's expensive. Just like private plane travel.

Get over yourselves, Camp Vega. You're as transparent and shallow as the parents who shell out thousands to get rid of their kids for the summer--and a couple thousand more to get rid of them more quickly. You deserve each other.

[NY Times]

Friday, July 22, 2011

Holy crap it's hot

It's well into the triple digits down here, and it's looking like a lot of record highs are going to be falling today up and down the east coast--107 in Baltimore (heat index of 121!), 106 in Newark, NJ, even Portland, ME is threatening the 100-degree mark.

By Charlottesville standards (and today's standards), the 101 or 102 degree temperature (and 114 heat index) that we're dealing with is tame. We'll give the last word for the week to our friends over at AccuWeather.


Well said.

Happy weekend

Hope you all enjoy your weekend, and that you all keep cool--it's sweltering down here in Virginia. I'll leave you with this interesting and entertaining TED video from Kevin Slavin, about the computer algorithms that are taking over our lives, often in ways we don't even appreciate. I think it's well done and very intriguing (and possibly terrifying).




(h/t Paul Kedrosky)

Fake Apple stores? Fake Apple stores.

Many months ago, I wrote a post (and a series of follow-up posts) about the "unintended consequences of globalization", focusing at times on the budding trade war/currency war with China over "unfair" trade practices. While the harsh political rhetoric toward China that dominated the headlines last fall may have subsided (to be replaced by harsh rhetoric surrounding debt ceilings--how quickly we move on), the underlying issues most certainly have not.

One of the issues with globalization that I did not write much about--but that is no less important--is the issue of counterfeiting. CNBC recently aired a long piece on the issue of counterfeit goods, estimating that nearly 7% of all global trade was comprised of counterfeit products. Simply put, when companies outsource their production overseas, they lose a certain amount of oversight and take a significant risk of losing their intellectual property rights--IP may be well protected here in the US, but it's the Wild West over in China.

For evidence of the Wild West, look no further than Kunming, China:
The Western news media is replete with pithy descriptions of the rapid changes taking place in China: China has the world’s fastest growing economy. China is undergoing remarkable and rapid change. This represents a unique moment for a society changing as quickly as China.
You probably read such things in the paper every day – but if you have never been to China, I’m not sure you know quite what this means on a mundane level. As I’ve mentioned elsewhere on this blog, in the 2+ years that RP and I have been in our apartment, much of the area around us has been torn down, rebuilt, or gutted and renovated – in some cases, several times over...
So when we strolled down a street a few blocks from our house a couple weeks ago, I was only sort of surprised to see this new place, one that any American of my generation can probably recognize instantaneously:
It’s an Apple store!
Or is it?
RP and I went inside and poked around. They looked like Apple products. It looked like an Apple store. It had the classic Apple store winding staircase and weird upstairs sitting area. The employees were even wearing those blue t-shirts with the chunky Apple name tags around their necks.
We proceeded to place a bet on whether or not this was a genuine Apple store or just the best ripoff we had ever seen – and to be sporting, I bet that it was real...
You have already guessed the punchline, of course: this was a total Apple store ripoff. A beautiful ripoff – a brilliant one – the best ripoff store we had ever seen (and we see them every day). But some things were just not right: the stairs were poorly made. The walls hadn’t been painted properly.
Apple never writes “Apple Store” on it’s signs – it just puts up the glowing, iconic fruit.
The name tags around the necks of the friendly salespeople didn’t actually have names on them – just an Apple logo and the anonymous designation “Staff”. And of course, Apple’s own website will tell you that they only have a few stores in Beijing and Shanghai, opened only recently; Apple famously opens new stores painstakingly, presumably to assure impeccable standards and lots of customer demand.
Is this store a copy of one of those in Beijing? A copy of a copy in another Chinese city? A copy of a copy of a copy?! While you’re pondering that, bear in mind: this is a near-perfect ripoff of a store selling products that were almost unknown when we first came to China. My white MacBook was likely to draw only blank stares or furrowed brows as I sat gnashing my teeth trying in vain to get a piece of Chinese software to run on it.
Wow. I've heard plenty about counterfeit goods (and, if we're being honest, even purchased some of them on street corners in Manhattan), but this is the first I've heard of an entire counterfeit store. That takes a whole new level of dedication, of research, and most importantly, of boldness. Check out some more of these pictures from the blog:

Crazy stuff.

Of course, like counterfeit goods, some counterfeit stores are better than others. The authors of the piece found several fake Apple Stores in their neighborhood, including this one with a careless typo:

It's hard to imagine that this is what Apple had in mind when it started shipping its production overseas, but this is one of the unseen costs of offshoring jobs (and, of course, yet another unintended consequence of globalization).

No word yet on whether the industrious (and morally relativist) Chinese have begun work on a ripoff of Manhattan's famous 59th Street Apple Store. Stay tuned...

[BirdAbroad]

Thursday, July 21, 2011

Clip of the Week

I don't have a whole lot to choose from this week, especially since I used up my favorite clip from the past few days when I excerpted it for Quote of the Week on Tuesday. I do have a few amusing clips, including this clip of kitten DJs and this incredibly strange (and awesome) cartoon summary of Yao Ming's just-concluded NBA career.

But my main man the Red Cowboy has been slinging a lot of traffic my way recently, so I thought I'd show my appreciation by sending some back his way (or at least giving a well-earned shout out). In this post, the Cowboy shares a video that resulted from the American Express Members Project, about a group of Harvard students who developed an energy-storing soccer ball.



It's a cool video, but an even cooler concept. As we try to solve our global energy crisis and move away from our reliance on petroleum-based solutions (a fight that's been going on for about four decades now), there's been a significant focus on searching for "renewable" sources of energy.

Of course, I've always thought this search presented a somewhat strange phrasing of the problem. According to the law of conservation of energy, energy (like wealth in the stock market) can be neither destroyed nor created--it can only change form or type. Therefore, in theory at least, essentially every source of energy is (or can be) renewable--it's simply a matter of figuring out how to store the energy that is being produced when the other source of energy is consumed. This soccer ball is one example of exactly that, as is the piezoelectric energy technology that is currently being developed.

Now, clearly there are certain types of energy that can't feasibly be captured or renewed, and I'm absolutely not a physicist or someone who pretends to know all there is to know on the topic of renewable energy. But it's cool to see a creative way of storing and re-using the energy that we unconsciously expend every day, and I salute the Harvard students for their creativity.

Taibbi on point again

I've written about America's corporations and their aggressive avoidance of paying U.S. taxes before, and I've certainly excerpted the work of Rolling Stone's Matt Taibbi plenty of times as well. Today, those two items came together in a beautiful way, as Taibbi tore apart a potentially overlooked consequence of the so-called "Gang of Six" debt-reduction plan that's been bandied about this week.

At issue is a proposed "corporate tax holiday", a temporary repeal of a tax on repatriated cash from multinational corporations' overseas operations. Under current rules, multinational corporations are exempt from paying U.S. tax on cash that is held by overseas subsidiaries, but they must pay that tax if they attempt to bring the cash back stateside.

Lobbying efforts, however, have insisted that the corporations' inability to bring that cash home has hampered their ability to begin hiring American workers. Similar reasoning led to Congressional passage of a "one-time" tax holiday back in 2004--reasoning that, as Taibbi points out, turned out to be utter bullshit.
For those who don’t know about it, tax repatriation is one of the all-time long cons and also one of the most supremely evil achievements of the Washington lobbying community, which has perhaps told more shameless lies about this one topic than about any other in modern history – which is saying a lot, considering the many absurd things that are said and done by lobbyists in our nation’s capital.
Here’s how it works: the tax laws say that companies can avoid paying taxes as long as they keep their profits overseas. Whenever that money comes back to the U.S., the companies have to pay taxes on it...
Only there’s a catch. In 2004, the corporate lobby got together and major employers like Cisco and Apple and GE begged congress to give them a “one-time” tax holiday, arguing that they would use the savings to create jobs. Congress, shamefully, relented, and a tax holiday was declared. Now companies paid about 5 percent in taxes, instead of 35-40 percent.
Money streamed back into America. But the companies did not use the savings to create jobs. Instead, they mostly just turned it into executive bonuses and ate the extra cash. [Note: many of them also used the cash to increase dividends, simply returning the tax-free cash to shareholders.] Some of those companies promising waves of new hires have already committed to massive layoffs.
It was bad enough when lobbyists managed to pull this trick off once, in 2004. But in one of the worst-kept secrets in Washington, companies immediately started to systematically “offshore” their profits right after the 2004 holiday with the expectation that somewhere down the road, and probably sooner rather than later, they would get another holiday...
I’m shocked there isn’t more of an uproar about this. Could you imagine what the Tea Party would be saying right now if there was a law on the books that allowed immigrants to indefinitely avoid taxes on income sent back to family members in the old country, in Mexico and Venezuela and India?...
As it is, leading members of the Senate are seriously considering giving the most profitable companies in the world a total tax holiday as a reward for their last seven years of systematic tax avoidance.  Hundreds of billions of potential tax dollars would disappear from the Treasury. And there isn’t a peep from anyone, anywhere, on this issue.
We’re seriously talking about defaulting on our debt, and cutting Medicare and Social Security, so that Google can keep paying its current 2.4 percent effective tax rate and GE, a company that received a $140 billion bailout en route to worldwide 2010 profits of $14 billion, can not only keep paying no taxes at all , but receive a $3.2 billion tax credit from the federal government. And nobody appears to give a shit. What the hell is wrong with people? Have we all lost our minds?
I don't usually excerpt at such great length, but Taibbi is almost always worth it. Indeed, he's dead right. There's any number of reasons behind our current budgetary crisis--a couple of long and expensive wars, unwarranted tax cuts to high-net-worth individuals, Medicare Plan D, demographical shifts that have left us with fewer taxpayers and more tax recipients, and the list goes on--but one of the most overlooked items is the ever-declining share of tax revenue paid by our corporations.

Along those lines, Barry Ritholtz passes along a couple of incredibly insightful charts showing the steady decline in corporate taxes paid over the last several decades:


The argument, of course, is that lower corporate tax rates help stimulate the overall economy, fueling job growth at home as our largest corporations open up their hiring doors. But with unemployment remaining stubbornly high and large-firm CEO pay soaring to record highs, I think it should be fairly clear where, exactly, this lost tax revenue is ultimately ending up. If you don't tax the corporations, it's just giving another tax cut to the richest Americans, plain and simple.

Trickle-down economics is a scam. Continuing to make cuts to middle-class benefits (like Social Security and Medicare) without addressing such a significant core revenue problem as this is fraudulent. If a corporate tax holiday is indeed passed this summer, shame on the "Gang of Six"--they'd be nothing more than common thieves.

[Rolling Stone]
[The Big Picture]

Wednesday, July 20, 2011

This is too perfect

I'm always harping on bad science and the bad journalism that it produces--sometimes I feel like it's all I talk about. This cartoon sums up my feelings beautifully. I absolutely love it.

Dis-honest-tea in America

I love this little promotion being run by the folks over at Honest Tea right now, aiming to find the "Most Honest City in America". In short, the promo people set up unmanned Honest Tea coolers in several American cities, with bottles for sale for $1 each under the honor system. Of course, they set up hidden cameras nearby, so that they could track how many people actually paid the dollar for the teas they took. Then they summarized the results.



As of this morning, the site indicates that the overall rate of honesty is a staggering 94%, with Chicago leading the way at 99% (followed closely behind by Boston, Seattle, and Dallas at 97%) and Los Angeles and New York bringing up the rear at 88% and 86%, respectively (I'm shocked... absolutely shocked to see those two cities bringing up the rear).

The study appears to be ongoing, but in general I'm honestly pleasantly surprised by how honest people have been. Maybe it's because they assume they're being watched (watching some of these people's reactions is priceless), and maybe it's just a happy miracle of the particular street corners (and cities) where they happened to set up their coolers.

Either way, I think that this Honest Tea promotion is a clever bit of marketing, a fascinating social experiment, and just plain fun to watch, even if somewhat limited from a scientific perspective (it's not exactly a perfectly controlled study on human honesty). Good work, Honest Tea.

[Honest Tea]  
(h/t Freakonomics)

Tuesday, July 19, 2011

Quote of the Week

This week's Quote of the Week comes from the brilliant Australian satirists John Clarke and Bryan Dawe, whose mock interviews are always worth a watch. Their take on the European sovereign debt crisis made the rounds last year (and it's every bit as pertinent and funny today), and now they've got another good one on Greece.

This week's QUOTE OF THE WEEK

Put it this way, if [Greece] were a private company, there'd be a fire there on Saturday about 4 o'clock in the morning.
                            -John Clarke, on Greek insolvency

Relying on the altruism of baby boomers

My parents were very good parents. I always appreciated their selflessness in raising me and my brother--from making difficult career choices at various points in their lives to rearranging finances to ensure that my brother and I could both enjoy the best possible college education--and I hope that I can emulate them as a parent in that regard.

Of course, now that I'm approaching my fourth decade on this planet--with my own job, house, and family to worry about--I'd assumed that my days of relying on my parents' kindness and selflessness had, for the most part, come to an end.

Not so fast, says Ali Alichi of the International Monetary Fund.
As the number of older voters relative to younger ones increases around the globe, the creditworthiness of borrowing countries could decline—resulting in less external lending and more sovereign debt defaults...
Studies have shown that a country's willingness to repay is as important as whether it has the resources to repay. This willingness deteriorates as voters age because they have a shorter period to benefit from their country's access to international capital markets and become more likely to opt for default on current debt. Moreover, older voters generally benefit more from public resources—such as pension and health care benefits—which could shrink if debt is repaid. If the old are a majority, they might force default, even if it is not optimal for the country as a whole. Lenders will take this into account and reduce new lending to an aging country.
There is some empirical support for the notion that aging increases the probability of default on sovereign debt, but more work is needed to draw strong conclusions. Alichi (2008) uses a panel of about 75 countries that have had at least one episode of sovereign default during 1975–2003 and shows that, on average, younger countries (those with a higher percentage of people ages 15 to 59 years) are less likely to default.
Now if the old are altruistic and care about their children as much as themselves, they will not vote for default with its negative consequences for future generations. But Altonji, Hayashi, and Kotlikoff (1997) have shown that altruism does not hold at the overall level in the United States—although there are few studies of this sort for most other countries.
As Alichi acknowledges, the empirical data is not ironclad, but the preliminary findings make intuitive sense. It's already clear that demographics--in short, how many taxpayers there are to subsidize each retired "tax-taker"--play an enormous role in determining whether a nation is financially solvent or not. But the potential impact of voting and politics--especially when we consider that voter turnout among the elderly is historically higher than among other age groups--adds a new wrinkle to the discussion.

None of this, unfortunately, is particularly good news for the country as a whole. Those of us who plan to be here for a while may find ourselves increasingly relying on the self-sacrificing altruism of the baby boomers--and questioning whether the independence (financial or otherwise) that so many in our generation have felt is our birthright is, in fact, an illusion.

[IMF]
(h/t Barry Ritholtz)

Friday, July 15, 2011

Your tax dollars at work

A few weeks back, I wrote about the gradually failing business that is the US Postal Service. Of course, I'm fairly certain that at some point in the near future, we as taxpayers will be asked to bail out this dinosaur, presumably in the name of saving jobs (seeing as an absolutely ridiculous 80% of USPS expenses go toward salary and benefits).

For when that day comes, I think it's useful to bear in mind what, exactly, we'd be bailing out. Courtesy of a close friend comes this amazing tracking information on a package sent from New York City... to New York City.


Note how many times that package has been sorted (4 so far), and how far it's gotten (like, nowhere) in the full business week that has passed since it was sent. At this rate, who in their right mind would even bother sending something via USPS?

Recall that this package was sent WITHIN THE SAME CITY. At this rate, you could hire a bum off the street, pay him a couple bucks, and have the package delivered to your doorstep several days sooner than via USPS. In fact, I'll tell you what, USPS--next time I have a package sent to me, just give me a call when the package gets to your sorting facility. I'll come over and pick it up, and you can fire all the people who do the sorting and delivering for you. We'll save everyone a whole lot of time and money.

The problem, of course, is that the more people who shun USPS in favor of UPS or FedEx or DHL or carrier pigeon or my newly-patented bum-off-the-street method, the more money USPS loses, the more likely it becomes that we'll all be asked to use our tax money to bail USPS out. So we can't win. Either we subsidize this kind of idiocy now by continuing to use USPS... or we subsidize it later in a more indirect fashion. Yay "capitalism".

I love this

There's a great post on the Freakonomics blog about tax holidays (specifically in Texas), and I'm just gonna go ahead and post it in its entirety (it's short).
The 13-year-old grandson and his 11-year-old sister are discussing the Texas tax holiday—for one weekend in August there will be no sales tax on school-related items. The grandson says stores will cut prices to compete for customers.  The granddaughter, already an inveterate shopper, says no: With the tax holiday there will be so many customers that the stores will be able raise prices.
While prices won’t rise compared to the previous weekend, the granddaughter seems to understand that an inelastic demand means the incidence of (gain from) the tax cut will be on the sellers—the customers are unlikely to get much of a bargain. A subtle, Texas-style subsidy to business; but one that even an 11-year-old can see through!
Good stuff, and congrats to the little girl for appreciating the intricacies of government policy at such a young age. I dare say she's earned the right to vote more than many adults in this country. Next time on "Are you smarter than a 5th grader?", we'll take a look at alcohol licensing idiocy in Minnesota. Stay tuned...

[Freakonomics]

Thursday, July 14, 2011

Clip of the Week

Well, I was all set to post this clip up here for Clip of the Week (that kid kills it, and I'm glad to see that the younger generation still appreciates MJ's pre-crazy greatness), but somebody stole it, so... let's see what else we've got.

We had this incredible U-17 soccer game (wait around for the last goal, it's worth it), this guy surfing the world's longest wave, and I also considered saluting the final launch of NASA's 30-year-old space shuttle program, since I'm a sentimental guy (and I'm also hoping that my 30th birthday will draw half the attention of the space shuttle program's, with a little less of the finality).

But while all of those were worthy competitors, once in a while I watch something that just absolutely baffles me. This is one of those times. Watch this video and you'll see a 3D printer perfectly replicate a working wrench... by printing it. I'm still not sure I fully appreciate exactly what's going on here. Just watch.



Crazy.

The unseen costs of foreclosure

While I continue to try to avoid talking about the debt ceiling talks and the developing Rupert Murdoch sh*tshow--neither of which I can discuss rationally without getting physically upset--I came across some interesting notes on our nation's foreclosure situation (which I've discussed briefly before here, here, and here) courtesy of NPR.
When you are the nation's largest owner of foreclosed homes, even little things can get expensive fast. Such is the case for mortgage giant Fannie Mae, which as of March 31 had a mind-boggling 153,000 foreclosed homes on its books.
One example — mowing the lawn. Two men swoop in on a foreclosed town house in Lanham, Md., quickly mowing and edging the small front yard. Fannie Mae owns this home, so it's paying for the lawn crew to come every two weeks or so to keep up the curb appeal.
But it's not just this lawn. There are tens of thousands more. Fannie Mae officials won't say how many lawns it's paying to maintain, so we've done some back-of-the-envelope calculations of our own:
Say only half of the homes have lawns, a conservative estimate, that's still more than 75,000 lawns.
153,000/2 [number of lawns]
x 6 (a six-month grass-clipping season)
x 2 (mowing twice a month)
x $40 (a reasonable guess at how much it costs to mow a lawn)
= $36.7 million
Again, this is very rough estimate, but that's a whole lot of money to spend on lawn care.
Yes, it is. And then there's the costs that aren't necessarily "out-of-pocket" costs like basic curb-appeal maintenance, but will certainly cost Fannie Mae (and other owners of foreclosed properties) money in the long run.
As huge numbers of foreclosed homes continue to work their way through the real estate pipeline, another problem is blossoming — mold.
In most homes, as residents go in and out and the seasons change, natural ventilation sucks moisture up to the attic and out through the roof. It's called the "stack effect." And in many parts of the country, it's driven by air conditioning in the summer and heat in the winter.
But no one is going in or out of most foreclosed homes — regardless of climate — and the effects can be devastating.
In some states, it's estimated that more than half of foreclosed homes have mold and mildew issues. Realtors across the country say they're seeing the problem in everything from bungalows to mansions.
Yikes. Even in a small home, remediation of mold and mildew problems can cost thousands of dollars, if not making the home completely un-sellable.

Many banks and bank-like institutions (like Fannie Mae) are making what they think is a "prudent" investment decision, holding onto foreclosed properties at their distressed prices in hopes of a real estate turnaround that will enable them to avoid realizing major losses. But the longer that turnaround takes to happen (and frankly, it may never happen), the more of these sorts of costs those institutions will start to incur. And that, perversely, can turn a modest loss into a somewhat devastating loss.

It always costs money to hold property, and it doesn't seem like the holders of foreclosed properties are fully prepared to take on those costs. That could be a big problem for them in the long run, and could end up costing them much more than just simple investment depreciation.

[NPR]
[NPR]

Wednesday, July 13, 2011

A note on taxes

This chart, courtesy of Paul Kedrosky, may be nothing more than a sidenote in the agonizing political theater that is the debt ceiling talks, but I think it's an interesting data point nonetheless.


Just something to keep in mind, I guess...

Tuesday, July 12, 2011

Quote of the Week

This one will raise your eyebrows.

It seems like a long time ago that Osama bin Laden was captured and killed, doesn't it? So much has changed in the world since then--the Boston Red Sox have surged from a disappointing 12-15 record then to an American League-best 55-35 now; the Boston Bruins have won the Stanley Cup; and the NFL lockout is... still going on. None of those things have anything to do with Osama or global politics, of course--I just didn't really have much else to say. Where was I again?

Oh... right. Quote of the Week. In the 10 weeks since bin Laden's death, a number of details have come out about the mission that led to his capture--from heroic dogs to a behind-the-scenes look at Seal Team Six training programs. But this one jumped out at me as a particularly eye-opening example of just how far we apparently went to find and capture Osama. Without further ado...

This week's QUOTE OF THE WEEK

The CIA reportedly staged an elaborate fake vaccination program in Pakistan as part of its quest to pinpoint the location of Osama Bin Laden in the weeks before Navy SEALs killed the al-Qaida leader... The plan, according to the report, was to use the staged Hepatitis B vaccination program in the town to obtain DNA from one of Bin Laden’s children to provide evidence that the family was nearby. (The samples were to be compared to DNA obtained from Bin Laden’s sister, who died in Boston last year.)
                           - Josh Voorhees, Slate journalist

Wow. Interestingly enough, the Pakistani doctor who helped organize the vaccination ploy has been arrested by Pakistani officials for cooperating with the CIA--a fact that should speak volumes about the state of our relationship with Pakistan.

Of course, for all the conspiracy theorists out there who think the government is out to get them and that the CIA is reading their e-mails, this type of story will probably lend some credence to their craziness. At times, it's both amazing and frightening the lengths that the government will go to in pursuit of what they think is right. And if anyone in the CIA happens to be reading this, hey guys, great job! Keep up the good work! You're the best!

[Slate]


Monday, July 11, 2011

On blind spots

With the words "debt ceiling" seemingly set to dominate the conversation in the typically slow summer news cycle, now seems like a prudent time to (again) point out the significant blind spots that many of us have when it comes to our relationship with our own government.

What I'm presenting today is by no means "new", merely topical. For now, I'll turn things over to Catherine Rampell of the New York Times' Economix blog.
In a smart column... Bruce Bartlett looks at why it will be so hard for politicians to cut government spending: because so many Americans who say they support cutting government programs don’t realize just how much they benefit from them.
Remember, for example, when a town hall attendee famously told his congressman to “keep your government hands off my Medicare”? Apparently that bewilderingly blinkered sentiment is hardly unique.
Mr. Bartlett produces the following chart, from a recent paper by the Cornell political scientist Suzanne Mettler, showing how many recipients of government benefits somehow don’t believe they’ve  received any benefits:
Yikes. Granted, some of these numbers are probably inflated by respondents' differing definitions of what does and does not qualify as a "government social program", but these are still astronomical numbers.

To fully appreciate the importance of these blind spots, I think it's useful to attempt to put these numbers into context. Using just the final line item, "Food Stamps"--which I think is a fairly clear and unambiguous example of a "government social program"--we see that 25.4% of food stamp (pardon me, SNAP) recipients do not consider themselves to have benefited from a government program. This is certain to impact the way they view national issues in federal (especially Presidential) elections, especially when debt and deficits are as large a story as they have currently become.

Recall next that in several states, food stamp usage covers close to (or more than) 20% of the total population (nationwide, food stamp usage rates are at 14%). If a full 25% of people in these states do not think that they benefit from our "big government", that leaves us with 5% of that state's population--easily a big enough group to decide just about any Presidential election*--believing something that is patently false.

* Perhaps unsurprisingly, I actually tested this statement by looking at each individual state's food stamp usage rates. If we take each state's usage rate, multiply it by 25.4% to get the percentage of "blind spot" voters, and then compare that to the popular vote spread from the 2008 Presidential election (that is, by how much--in percent--the state's winning candidate defeated the losing candidate), we can get an idea of how many states' elections could conceivably have been turned by that group of voters. 

As it turns out, 5 states--Missouri, North Carolina, Indiana, Florida, and Montana--have "blind spot" voting contingents that are theoretically large enough to have overwhelmed the margin of victory during the 2008 election. Those 5 states account for 67 electoral votes--not enough to change the overall outcome of the landslide 2008 election, but easily enough to have turned the razor-thin 2000 and 2004 elections. It's not exactly a "likely" scenario--in order to be an election-turner, all of these "blind spot" voters would have to be voting the same way--but it's certainly possible. 

And this study of mine is just considering food stamps, the item on the chart with the lowest "confusion" rate--if I'd done the same calculations with respect to, say, student loans, I can assure you that almost every state would show up as "up for grabs" under these criteria. 

Given the results of my admittedly unscientific study, I think it's certainly safe to ask whether or not these "blind spot" voters are, in fact, our nation's elusive "swing voters".

Alright, that little unanticipated long-winded aside pretty much summed it up. I don't think we as Americans can really address (or expect our politicians to address) our nation's fiscal situation until we properly reconcile our own relationship with government and government programs. If we're not willing to reconsider what we expect our government to do for us, then there's absolutely no way we'll ever be able to balance our budget--or that we'll elect those who can. Budget balancing, ultimately, begins and ends with us. 

[NY Times]

Friday, July 8, 2011

Following up on an old rant

It's been a while since I've ranted about FIFA, hasn't it? Actually, no, it really hasn't been. But it seems like it has, and it certainly hasn't been for lack of material. When it comes to providing fodder for bitter bloggers like me, FIFA is second to none. Go ahead boys, show us what you've got today.
Having decided to play the tournament in the middle of summer in a country where temperatures regularly exceed 40C [104 F], Fifa have been wrestling with the problem of how the world's best players are going to cope with the conditions.
Air conditioned, indoor stadiums will help, but even that might not be enough to keep them at a safe temperature according to Michael Beavon, a director of Arup Associates, the company responsible for developing the zero-carbon solar technology intended to cool them.
As a result, one proposal being considered by Fifa is to play the 90 minute games over three 30-minute periods if the temperature inside the stadiums exceeds 30c [86 F] because of the potential health risks involved.
"There is a moderate risk of heat injury to the players between 24C-29C [75-84 F] but if you go above that you have high and extreme risk of injury, " said Beavon, who was speaking to delegates at the Qatar Infrastructure Conference in London.
"The one thing Fifa do say, although it is for guidance, is if it's 32C [90 F] they will stop a match and play three 30-minute thirds rather than two 45-minute halves."
Look, I'm already on record with my thoughts on choosing a nation such as Qatar to host your sport's biggest event. It's tone-deaf in almost every imaginable regard, and the choice has already offended (among others) environmentalists, gays, and the entire nation of Israel (and, likely by extension, the entire global Jewish community).

But it's one thing to be politically offensive. It's quite another to CHANGE THE RULES OF YOUR GAME in order to cover up your ridiculous (and corrupt) decisions. There's not a lot of hard and fast rules when it comes to choosing a World Cup host nation--yes, there are guidelines as to what a World Cup stadium should look like, but obviously those too were relaxed in order to award Qatar, a nation with zero Cup-ready venues, with the Cup.

But one would think that if there was to be even one rule, that rule would be "make sure that soccer can be played in this country". On that most basic of requirements, it's clear that Qatar has failed. This should pretty much be the end of the conversation, and yet here we are. Well played, FIFA. I can't wait for 2022. Save us, robot clouds!

[Telegraph]

Friends don't let friends drink and... shop?

This one comes out of the "too weird not to report" camp...
Inebriated passers-by are falling in love with playful pooches frolicking in the window of a West Village pet store, and the problem has become so bad the owner has banned them from taking the pets home.
"I feel like they always come in drunk," said Fernanda Moritz, the manager of Le Petite Puppy at 18 Christopher St. which has implemented a policy against letting customers buy — or even hold — animals if they've been drinking.
The shop is surrounded by bars, and Moritz said many of her would-be customers stop in after happy hour around 6 p.m.
"They come from there and say 'let's stop by to see the puppies,'" said Moritz.
Amazingly the store, which has supplied puppies to celebrities including Sarah Jessica Parker and Hugh Jackman, isn't the only one in the neighborhood forced to implement the ban.
Christopher Street's Citipups also forbids intoxicated customers from purchasing puppies.
Yup, that sounds like the Village to me... I mean, I guess there are worse things you can do when you've been drinking, but this definitely falls in the category of "bad decisions".

I've had some bad hangovers in my life, but I can only imagine they'd have been that much worse if I'd been awoken by a barking dog at 5 in the morning. Seriously, people, don't drink and puppy-shop. Nobody benefits.

[DNAinfo.com]

Thursday, July 7, 2011

Clip of the Week

Man, it's Thursday again? Already? But I thought I just posted Clip of the Week... man, long weekends screw me up.

Alright, whatever, here's a clip from the Women's World Cup, which is now on to the quarterfinal stage over in Germany. I've been watching, because it's on every day at noon, and it's good background noise while I'm eating lunch. Obviously not watching? The referees, who somehow missed this blatant handball.



It may not be quite as inexplicable as Koman Coulibaly's randomly disallowed goal last summer (actually, it's just as inexplicable if not worse, but nobody's really paying attention so who cares?), but it's pretty brutal.

Wednesday, July 6, 2011

A new twist on creative destruction

I've written about creative destruction here plenty of times before, usually in the realm of consumer products (Blockbuster, Sony Walkman, the music industry, Borders, Harry & David). Today, I've got a different twist on the matter, one that's oddly reminiscent of this post of mine from last year on the increasing urbanization of America.

In that post, I wondered whether we as a society were prepared to let our cities fail ("We must be willing to let dying businesses fail (hello, Blockbuster and the Walkman), and so too must we let dying cities fail."). Today, I wonder whether a city must occasionally die, so that it can be reborn.
Recent census figures show that Detroit’s overall population shrank by 25 percent in the last 10 years. But another figure tells a different and more intriguing story: During the same time period, downtown Detroit experienced a 59 percent increase in the number of college-educated residents under the age of 35, nearly 30 percent more than two-thirds of the nation’s 51 largest cities.
These days the word “movement” is often heard to describe the influx of socially aware hipsters and artists now roaming the streets of Detroit. Not unlike Berlin, which was revitalized in the 1990s by young artists migrating there for the cheap studio space, Detroit may have this new generation of what city leaders are calling “creatives” to thank if it comes through its transition from a one-industry.
With these new residents have come the trappings of a thriving youth culture: trendy bars and restaurants that have brought pedestrians back to once-empty streets. Places like the Grand Trunk pub, Raw Cafe, Le Petit Zinc and Avalon Bakery mingle with shops with names like City Bird, Sole Sisters and the Bureau of Urban Living.
Those familiar with past neighborhoods-of-the-moment recognize the mood. “It feels like TriBeCa back in the early days, before double strollers, sidewalk cafes and Whole Foods,” said Amy Moore, 50, a film producer working on three Detroit projects. “There is a buzz here that is real, and the kids drip with talent and commitment, and aren’t spoiled.”
Veeeeery interesting. Could it be that for Detroit to survive, the answer lies not in saving the Big Three auto manufacturers who have been at the city's economic core for decades, but in fact in letting them die, so that a new industry, a new employment base, a new culture can thrive?

Much of the discussion surrounding the auto bailout concerned "saving" Detroit, a pursuit that realistically failed, anyway. With or without the auto bailout, it was clear that Detroit's multi-decade reliance on one major industry was becoming untenable. Now, with plummeting real estate prices making the city an intriguing choice for young professionals, the crash of the Big Three might be exactly what Detroit needs to get back on its feet.

Ironic, no? Of course, that then begs the question... why did we bother saving GM and Chrysler in the first place?

[New York Times]

Tuesday, July 5, 2011

Quote of the Week

Alright, we're easing back into things here after the holiday weekend, so let's just jump right to Quote of the Week, shall we?

This week's QUOTE OF THE WEEK

"Police say a motorcyclist participating in a protest ride against helmet laws in upstate New York died after he flipped over the bike's handlebars and hit his head on the pavement... State troopers tell The Post-Standard of Syracuse that 55-year-old Philip A. Contos of Parish, N.Y., was driving a 1983 Harley Davidson with a group of bikers who were protesting helmet laws by not wearing helmets."
                         - Associated Press report

Man, I'm not sure if that's horribly ironic or perfectly appropriate. Condolences go out to Mr. Contos' family, of course... in part for the tragic loss of a loved one, but in part because they most likely also carry whatever defective gene led to his horrible, horrible decision.

Clearly, this incident is a natural front-runner for the Darwin Awards.

[Yahoo!]

Friday, July 1, 2011

Happy Fourth

I'll be off doing my thing for the 4th, and I assume you all will be, too... so I leave you, as I don't do nearly often enough, with my best wishes from The Simpsons.

Blame the lenders (again)

Barry Ritholtz has an interesting piece regarding the noticeable differences between the public response to the housing-led financial crisis of 2007-2008 and that to the current (and developing) sovereign debt crisis in Greece and elsewhere. He writes (pardon the "colorful" language, he's got strong feelings on the matter):
I’ve noticed something intriguing about the debate regarding the Greek default/restructuring/bailout: There is a familiar odor to the “Blame the profligate Greeks” meme now circulating. It is little more than a brilliant marketing ploy. This distraction ignores the simple reality that lending to insolvent people, institutions and countries is first and foremost the fault of the lenders.
Let us start first with the Greeks, who lied their way into the EU (with the help of Goldman Sach’s financial engineers). The ridiculous pay and vacation structure, the absurdly generous pension plan, the excessive spending by Athens. They are a nation that can honestly be described as tax scofflaws. Yes, Greece is a mess.
Which begs the question: WHO THE FUCK WOULD LEND A DIME TO THESE PEOPLE?
None of these factors were well-hidden. Everything about Greece is well known to any casual visitor, from its Welfare state to its deficits. Even the shenanigans Greece went through to join the Union European were not unknown. Rather than confront their obvious lack of qualifications, the EU turned a blind eye to it, in order to form their more perfect union.
He raises a good point, and it's interesting how different our responses have been. In the housing crisis, there were some who blamed the borrowers (i.e. homeowners) for irresponsibly using debt to live beyond their means, but the vast majority felt that the real story of the crisis was one of overly greedy and predatory bankers taking advantage of borrowers, originating loans that were destined to fail. This "blame the lenders" dynamic ultimately became the "winning" narrative in the aftermath of the crisis, hence the incredible vitriol directed at banks today.

In today's budding crisis, though, that's far from the case. Instead, we direct our ire primarily at the irresponsible borrowers, blaming the nations in question (rather than the enabling lenders) for their predicament. Instead of blaming China for consistently purchasing our national debt time and time again over the past few decades, we blame our own government for its irresponsibility (which is probably fair, just noticeably different from how we viewed the housing crisis).


After watching the strange theater of the forced "austerity measures" in Greece this week, I tried to imagine the proper analogy in the housing crisis. What if, instead of foreclosing on a home, banks and mortgage companies came to an individual's house and demanded that they cancel their phone service, cut down on their food intake, and sell their cars in the name of "austerity" and improving the chance that they repaid their mortgage? That sounds completely ridiculous, right? And yet, that's exactly what we're seeing here.

Ultimately, I think that the differing responses to otherwise similar stories derives from our pre-existing notions of who is the more sympathetic party, rather than the facts of the matter. In the housing crisis, it was far easier (and incredibly satisfying) to blame the big, evil banking institutions than it would have been to accept the blame ourselves, as homeowners.

In the sovereign debt case, it is far easier to blame one or two basket-case governments (especially when it is so fashionable right now to blame governments--in this case, THEY are the big, evil corporation relative to the smaller banks) than it would be to place the blame on the lenders, who span everyone from the European Central Bank to nearly every American who places money in a money market fund.

It's hard to trust ourselves when we try to analyze complex situations like these, simply because our reactions are so utterly inconsistent with regard to the actual facts of the case. We all approach situations in life with inherent, trained biases, and it's exceptionally difficult to get past these and assess problems at face value. However, if we are ever to get to the heart of any matter, it's an essential exercise.

[The Big Picture]