Immigration

The blogosphere is alive with talk about the new Arizona law. Megan (with a libertarian argument against the law), Ezra, James Fallows, Paul Krugman yesterday, etc. This issue is going to go away. The lesson we learned last time is that the populace is not going to allow any law that gives a path to citizenship to someone who is here illegally. "Undocumented immigrants?" Sorry fellow liberals, I think this is misleading. They are undocumented because they are illegally here. Here Krugman makes the point that if we want a safety net, we cannot afford to include the whole world. My favorite comment was by a commenter on Fallows blog who points out that the French have a national ID card (as well as Communist China). Do conservatives really want to be like the French?

But just because a number of people who favor the law are racist, it does not mean that there are not good conservative arguments. That is a form of ad hominem argument, one which Leonard Pitts made the other day in the op-ed section. Krugman also engages in superficial type-casting at the end of his piece.

In a similar vein, NBC news last night reported on a new $90,000 prostrate treatment and said it raised ethical problems because not everyone could afford it. A good friend pointed out when I was thinking about health care reform that no one was talking about the big issue: what basic level of health care should be provided to everyone? Money does not grow on trees.

Addendum: I should add that I am not making a comment about this particular law. I have not thought about it sufficiently. Megan makes some very good points about whether everyone would welcome the probable intrusions by police. Others say that what matters is how it is enforced. These seem right. Another question is whether there is a better way. And I don't really understand what people in Arizona experience as a result of illegal immigration. I am just saying that it is unlikely that we will get a national immigration law. There is too much diviseness on the issue. And frankly, I don't think immigration is all that important as a national issue or global issue.

Another addendum: I read somewhere in the Times that conservatives do not favor a national ID card, which partly shows how little I know about "conservative thought." What then? The army on the border? Sounds pretty expensive to me.

Naked Capitalism

I want to give a huge shout out to Yves Smith's blog Naked Capitalism and also to her book Econned. The book is slow reading but it seems essential to me to understand what was going on on Wall Street. Here is a particularly good article on Goldman. The comments are also interesting. And here is a very good article on Goldy by Steve Randy Waldman at Interfluidity.

There are some great books coming out now about the financial crisis and Washington is even getting excited. It is too bad that more people don't really understand this stuff (including said politicians). But I am cheered by the fact that Michael Lewis' The Big Short is now the number one nonfiction bestseller. Jonah Lehrer has a piece today at The Frontal Cortex about psychopathic behavior. The Goldy boys looked like the type to me.

Mainstream media

Are you tired of the simple-minded arguments between the right and the left about mainstream media? The media is liberal. All mainstream media is owned by large corporate interests and so they feed us the capitalist lies that support their infinite greed for profits. Here is a very good article that gets into the very complex reality of the issue. People want to make money and they want to watch interesting stuff. Media content is not so easily analyzed.

Risk Models

It has been quite apparent to me that the ways used by Wall Street to model risk are seriously deficient. John Cassidy states the conclusions from his intended talk tonight on Rational Irrationality. The first person who discussed this stuff and totally blew me away was Nassim Taleb in The Black Swan and Fooled by Randomness (first published in 2004!). Yves Smith has an excellent discussion in Chapter 3 of Econned. Wall Street execs say well, it is a useful tool. This is total bullshit because it doesn't take into account fat tails. If you don't know what that means and care, do some reading. It is about statistics, so some mathematician can correct me if I am wrong.

I do not believe that with all the quants that big firms had employed they did not know this. However, you have to take into account that Black and Scholes who received Nobel Prizes (as my conservative friends point out, so did Barack Obama--I love the guy but Nobel Prize no way) based a hedge fund on these concepts (Long Term Capital Management) which blew up in 1998 and had to be rescued by the Fed. I imagine they ended up very rich despite losing all their clients' money.

I greatly enjoyed see the Goldman boys squirm today. These Wall Street guys make me sick. They were totally disingenuous. Great political theatre.

OCD

Obsessive-compulsive disorder. My wife, who has great insight into human behavior, likes to say I have some OCD going on. I looked it up in the DSM and I don't think so. But maybe I just have OCD with poor insight. I don't see the compulsive part at all, but you be the judge. We are often Strangers to Ourselves (the title of a great book by Timothy Wilson, which was the inspiration for Malcolm Gladwell's Blink, the latter of which I believe was legitimately criticized by Robert Burton in On Being Certain)....(I wish I could remember what that criticism was; this getting old stuff is not for perfectionists.)

Now, OCD personality disorder is another matter. "Shows perfectionism that interferes with task completion." Although I wrote several 50-60 page papers in grad school, I never finished my dissertation. My advisor kept telling me I didn't have to write a publishable book but I didn't really get it. Then I chose a topic that nobody could have written a coherent exposition of, Critical Legal Studies, because the movement itself was incoherent. Oh well. I didn't really want to be a teacher anyway and what else can you do with a philosophy degree?

Maybe that explains getting obsessed with the financial crisis and reading a gob of books and articles on it. Oh yeh, I did that with health care reform, too. Before that it was reading history. At one point, it was my work. Luckily, I didn't really want to be a lawyer, either, so I chose to specialize in one area which had interesting stuff about medicine--disability law. But the good thing about being OCD is that I tried to read everything and figure out everything about it. That is what a real education does. I know many lawyers who never try to figure things out. But they can fool a lot of innocent clients. Kind of reminds me of time-share salesmen.

Golf is another example. I played as a kid and then didn't take it up until age 43. Immediately got obsessed and improved greatly for a period of time before I actually started getting worse (golf is amazing that way). Or skiing. I didn't ski until I was almost 30 but then within a year ended up moving to Utah working in a ski resort and skiing every day. Despite having new skis and boots, I didn't ski at all this year.

Maybe I'll figure this out some day but I gotta go wash my hands.

don't worry, Be Happy

I am done blogging on banking until the political theatre is over. However, you may have reacted to my previous post by wondering how the economics profession gets blamed for anything? The answer is the same as the failure of all social sciences during the positivist phase; they tried to be a natural science. In Econ's case, they got seduced by math. Psychology, which was my original interest in college, until I learned it was about training rats, got sucked into behaviorism. In both cases, it involves leaving out important parts of what they are studying.

Here is a wonderfully pithy review mocking tbe arrogance of Reason in positivist thinking. Glad I gave up analytic philosophy but then I was mediocre at it, although Quine had me seduced for awhile. The real world is way more interesting. This also reflects what bugs me about Richard Dawkins' view on religion. My dear atheist friends: the lesson is to be agnostic. Not only will it better reflect your epistemic position in the world but you will be able to get along with the wonderful theists who actually think, and who make the world a better place.

Here is Jeremy Grantham's newsletter. Pretty wonky but some important insights. To surf the bubble and jump off before it bursts, and then never invest in equities again.

And finally, here is a fun review of a book on Ayn Rand, who also seduced me in my youth. If only Alan Greenspan was more reflective we would all be a lot better off today.

9/18

I vividly remember watching the tv all day September 18, 2008. I had it tuned to CNBC, which I usually can't stand because they are lapdogs of Wall Street. Not to mention composed of obnoxious blowhards. But I was watching the financial sector go bankrupt. It was a combination of horror and curiosity, something like I felt on 9/11/01. We were leaving for Spain in a couple days and every night during the trip I was compelled to turn on CNN International to see what was going on.

As Yves Smith explains in enormous detail in Econned and continues to explain on her blog Naked Capitalism, it was "the greatest theft from the public purse in history." This came at the end of more than 30 years of manipulation of the rules of the game for the financiers, including extensive deregulation greased by a simple-minded philosophy. Not only had the banksters accomplished regulatory capture and capture of all the branches of government (including the law), they accomplished cognitive capture of the population, with the help of the economics profession.

The bill that will pass this weak will be a 1300 page watered-down piece of nothing. We better get used to it. As Yves says, "this campaign has been far too consistent and calculated to brand it with the traditional label, "spin."...Only when we the public are able to call the underlying realities by their proper names--extortion, capture, looting, propaganda--can we begin to root them out."

It is what it is. Have a nice week.