Money!

There is a quote going around these here Internets:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

— Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802), 3rd president of US (1743 – 1826)

Thing is, while Thomas Jefferson did recognize one thing -- that repeated inflation-deflation cycles are a recipe from stripping wealth from the common people (see my note on deflationary spirals below, and how they benefit the wealthy by allowing them to pick up the assets of the common people for cheap) -- he did not understand why they happened, or how. He thought that if he simply disallowed banks from issuing gold notes (bank-issued currency backed by the gold in their vaults), this would suffice to solve the problem.

Like most folks of his era, Thomas Jefferson had no understanding of economics. The then-extant theory of economics was that gold was wealth, and that the purpose of commerce was to amass gold. The prevalent economic theory was mercantilism, which held that the goal of national policy was to amass gold (wealth) in the nation's vaults by exporting a lot and importing little. This theory, BTW, was responsible for the Boston Tea Party -- the goal of British policy was to force their colonies to buy their tea from British India rather than from cheaper Dutch or French sources, in order to prevent British gold from leaving British hands, and the American colonies simply did not get the point.

n any event, Thomas Jefferson was right, but wrong. All private banks create money via the power of fractional reserve lending. Whether private banks issue gold notes or a government-controlled central bank issues gold notes or fiat currency is irrelevant to the fact that fractional reserve lending creates money. The only way to achieve Thomas Jefferson's goal of complete government control over the money supply is either complete government control over all money -- which is not possible, money is, fundamentally, anything which can be used as a medium of exchange, if I can give you 1,000 shares of Cisco stock in exchange for 100 acres of land, this makes Cisco stock money -- or government intervention to inflate or deflate the money supply as various measures show is necessary. Which BTW is why stock market crashes have effects beyond the stock market, but I diverge from my lecture.

The other way to do it is to ban fractional reserve lending. The Muslim world did this, which is why the Muslim world is a fetid backwater, because without bank lending, economic activity slows to the crawl of what is doable with current resources rather than what is doable with the resources created by loaned money. Thomas Jefferson never suggested this, as far as I know. Fractional reserve lending had simply proven too useful over the past 100 years prior to this statement by Jefferson, after it had been invented (or reinvented) by British goldsmiths to make use of the gold on deposit with them. Given that, and given the lack of understanding of then-extant economic theory as to what constituted wealth and money, Jefferson's task was doomed to failure.

So: a) Jefferson did recognize a valid issue (i.e., that repeated inflation-deflation cycles strip wealth from the people -- and we're entering in the deflation part of that, feel good now?), but b) his solution simply will not work even if you do nationalize banks. Money isn't pieces of green toilet paper with pictures of dead people on it. Money is anything that can be traded for anything else of value. Short of a complete totalitarian police state, complete government control of the creation of money simply cannot be done -- a fact that Jefferson, who thought money was gold, would have had no chance of understanding.

-- Badtux the Economics Penguin

The family that's tased together, stays together

Cops arrived on the scene of a shooting to find the victim's family attending the victim, holding pressure on his wounds and otherwise reassuring him that help was on the way. As the victim's older brother held the dressing on the wound and reassured his younger brother, a police officer said "move aside sir, we need to question the victim." The brother, of course, said "Excuse me? My brother don't need questioning, he needs an ambulance!"

So they tased him. And when the victim's mother protested, they tased her. And when the victim's father protested, they tased him. The only reason they didn't tase Granpa and Grandma was that the Grans didn't make it there in time to get tased, they were too busy waving their canes and yelling "you kids get off our lawn!" to shuffle over for their turn getting tased.

Meanwhile, the folks who got tased have been charged with assault for, err, viciously throwing their bodies in front of police tasers. And the kid survived (no thanks to the cops who were more concerned about torturing the kid's family for being concerned about their son's welfare), so hey, all's well that ends well, right?

Ah yes, just another day in Soviet America...

-- Badtux the Sovok Penguin

Who's dissing Wasilla?

Some folks say that being mayor of Wasilla AK, population ~8,000, isn't good preparation for being President of the United States. I beg to differ. Wasilla is the #1 city in America for the most important substance on the planet: Duct tape.

Yes, duct tape. The Wasilla Wal-Mart sells 314 feet of duct tape per person per year for the denizans of Wasilla. And Wasilla's residents know how to use it too, making clothing, sculptures, and other useful items out of the subject.

Duct tape. It's the substance that holds together America! So don't let anybody tell you that being mayor of the duct tape capital of the world is meaningless. Or if they do tell you that, just duct tape their mouth! Alrighty, then!

-- Badtux the Snarky Penguin

Yay!

The ghetto trash in the "affordable housing" apartment below me are moving out! That's the ones who had four people crammed into a one bedroom apartment, who let their kids tear up all the landscaping, where the daughter's thug boyfriends were always hanging around throwing cigarette butts onto the stoop. (I dunno why she always chose thug boyfriends, they always made her cry, but some girls just don't know what's good for them, sigh).

Now to see who takes their place. Unfortunately this (upscale) apartment complex was required by law to reserve a certain percentage of their apartments for "affordable housing", but I can at least hope it's like the first lady who was down there, who was a sweet old lady who never bothered anybody...

-- Badtux the Apartment-dwelling Penguin

The dog ate my homework

Let me get this straight. We got a Republican proposal from a Republican Treasury secretary, presented to the Republicans in Congress by a Republican President, a proposal supported by the Republican Presidential candidate, and the majority of Republicans did not vote for it because... the Democrats made them do it?

Talk about your "the dog ate my homework" excuses!

- Badtux the Astounded Penguin

Bailouts and bank failures oh my

So: Wachovia gone. Banks not lending money but instead stashing it in their vaults -- which, BTW, causes deflation, since you are in effect increasing the reserve ratio (see: Fractional Reserve Banking) and thereby decreasing the amount of money in the system. People having trouble getting loans because of the deflationary pressures. Retirement systems and 401(k) investors that thought they were avoiding risky stocks by buying into bond funds are stuck with "AAA" grade mortgage-backed bonds that are now worthless because nobody will buy them because nobody knows which bonds have "real" mortgages backing them and which bonds are backed by toxic mortgages that will never be paid. 2 trillion dollars of housing wealth disappears out of the economy over the past two years, and the stock market plunges 9% disappearing another $1.2 trillion out of the economy.

Folks, there's enough canaries warblin' and croakin' in this coal mine to make any economist who has studied the time period 1930-1932 shudder in his boots. Deflationary spirals aren't some fiction invented by Keynesian economists. We have hundreds of years of experience with them, albeit the last time we experienced one was in the period 1930-1932. So in all of this, one of the foremost scholars of the Great Depression, Fed chairman Ben Bernanke, proposes a bailout swapping Treasuries for mortgage-backed securities that will hopefully stabilize the money supply before things go to hell in a handbasket in a spiral that won't be stopped short of complete economic collapse, and gets a Republican Treasury Secretary and a Republican President to present it to Congress and... a majority of Republicans vote against it.

Yeppers. A majority of Republicans won't vote for a Republican written solution that their own President and their own Presidential candidate wants them to pass.

Now, granted, there's one hell of a cacophony out there saying "don't pass this law!", from loony lefties who see it as a "bailout of Wall Street" (uhm, my 401(k) isn't "Wall Street", it's my retirement!) to Republicans who want a deflationary spiral to happen because deflationary spirals always transfer the wealth of the nation from the debtor class (you and I) to the creditor class (the wealthy elite). Add in the fact that the Bush Administration has all the credibility of a Liars Club meeting, and far too many people are willing to ignore what most of the reputable economists are telling them because their "gut" tells them different. But the facts on the ground are pretty friggin' scary right now if you look at just how much dough is vanishing out of the economy. Yes, the Fed is printing money like crazy, sending over $600 billion this week to foreign banks for example. But the Fed can't just create money and have that money go to work doing something useful. That money has to get into the economy somehow. Without a functioning banking system that's pretty damned hard.

So much for that. What irritates me is that people who know nothing about economics keep making these grandiose statements about what the "right" thing to do is, when what they generally suggest would be the worst possible thing to do. Folks, housing prices have to come down. They were way out of the affordability range for most families, and the bubble has to be burst all the way back to an affordable price or we can never get the housing economy working right. But most of the solutions offered by loony lefties and tighty righties both are based on keeping housing prices up, when clearly housing prices in the most severely hit parts of the country were way out of line with people's incomes in those areas and thus have to come down if anybody is going to be able to afford homes in those areas with a conventional mortgage. Then there's the Rethugs who want everybody to take their lumps -- banks, investors, everybody -- but the problem there is that you end up with a deflationary spiral and things go to hell in a handbasket for everybody but the top 5% of the nation (Republicans, naturally!). The fact of the matter is that there are no easy ways out of this now. The only way out would be to go back to 1999 and head off the Internet bubble before it got out of hand, or go back to 2002 and head off the housing bubble before it got out of hand. But nobody did that, and so now we're stuck between a rock and a hard place, an unsatisfactory solution and utter disaster. And, sadly, the majority on both left and right seem more eager to have utter disaster than to compromise their oh-so-sensitive sensibilities in order to pursue a solution that is unsatisfactory but the best we can do given the situation... literally putting principle over reality.

Sigh. Gotta go, need to stock up on rice and beans and flour and corn meal and egg and milk powder...

-- Badtux the Discouraged Penguin

Wedding invitation

Come one, come all, for a shotgun wedding between Bristol Palin, 17, of Wasillia AK, and her 18 year old boyfriend Levi Johnston. This will be the classic "Barbecue Wedding" (as vs. the classy "Wal-Mart wedding"), which takes place in the back yard of the Palin home with a dead pig and baked beans and potato salad and a lot of Bud and Bud Lite to get everybody well lubricated. Saves the embarrassment of having to take your shotguns into Wal-Mart to make sure that the groom doesn't take off like Carl Lewis "feets don't let me down!".

The soon-to-be-happy couple is registered at Wal-mart, your #1 choice for all shotgun wedding supplies! Plumbing supplies, kitchen equipment, and power tools suggested. Suggested dress is overalls and a long-sleeve button-up shirt for men, gingham dresses for women. Bring your own lawn chairs and any vittles you'd like to see that ain't on the above list, as well as your own shotgun cleaning supplies and flasks of hard likker. Duct tape not optional. See ya there!

-- Badtux the Snarky Penguin

Below: The wedding party preparations underway.

Book review time...

Little Brother, by Cory Doctorow. This is a YA story about a Homeland Security takeover of San Francisco in the wake of a terrorist attack there. Our hero, a geeky high school student, gets stuffed into a Homeland Security torture chamber and tortured for three days, then released. He decides to get even...

Now, the rest of the story is pretty much the story of how he does that, using his mad l33t geek skills. Which reminds me of why I don't hang out with the cyber-punk types anymore -- they think they can actually make a difference in the world with all their encrypted darknets and such. Furthermore, they think the press would actually print an expose' of Homeland Security running a torture chamber for girls and boys caught up in their net, if only there was enough evidence. And they think the governor of California would actually order the California Highway Patrol to arrest Homeland Security torturers. As if. The Governator would give the torturers a medal.

Reality is, of course, that anybody who dared take on Homeland Security's imposition of a police state would be depicted in the press as a terrorist who deserves everything he got, and most people would harumph and talk about how they needed to be safe. Look at how many people willingly give up their 1st Amendment right to the privacy of their persons in order to board airplanes. Don't dare grumble about it when you're waiting in line to be processed by the inept goons manning the x-ray machines, because your fellow passengers will turn you in as a potential terrorist for daring question giving up your rights in order to feel safe. America doesn't want freedom. America wants Little Brother, a kinder, gentler tyranny that keeps things safe and orderly. And woe to anyone who dares to stand in the way of what America wants...

-- Badtux the Cynical Penguin

Complaint

"Why are you taking my picture instead of petting me? Pet me!"

For today's Caturday picture, I catch The Mighty Fang with his mouth half-open complaining about me taking his picture rather than petting him...

-- Badtux the Cat-owned Penguin

Oooh, and a bonus complaint!

Scottoiler!

Over at Moto-Tux, I install a Scottoiler automatic chain oiler on my Suzuki V-Strom 650 ABS.

-- Badtux the Wrenchin' Penguin

Was there a debate tonight?

Let's face it, these kabuki shows are just ritual, meaningless. McCain supporters watch the debate to validate that yep, Obama is a nigger and nod smugly at their pasty white knight. Obama supporters watch the debate to validate that yep, McCain is a senile old grouchy crank who doesn't know the difference between tactics and strategy and nod smugly at their bright, articulate magic negro candidate. And anybody who hasn't made up their mind... well fuck. Let me put it this way. I don't have a television. So I did what everybody else does in this situation: I went to Costco. And every television inside Costco was showing... what do you think?

A baseball game.

Yep, a baseball game. Same thing that was showing in every sports bar in America. Same thing that was showing on every restaurant big-screen TV in America. In other words, anybody whose mind could be changed by this "debate" wasn't seeing it. Because look, anybody who hasn't already made up their mind isn't going to be staying home and watching a debate on a Friday night. Anybody who hasn't already made up their mind has already shown they don't give a shit, folks. They're out there in Wally World buying more cheap Chinese junk, and if they happen to stop by the electronics section, the televisions are showing... a baseball game. They're out there in restaurants or bars or clubs enjoying their Friday night. Because, see, they just don't give a shit. Otherwise they would have already made up their mind.

So I'm not going to blog about who "won" tonight's debate. I didn't see it. And frankly, I don't care. I already made up my mind about who to vote for, and I can't imagine anything that Obama or McCain would say that could change it. And the same is true for most other folks who saw it. As for the majority of the "undecided"... well, might as well just call them the "don't cares", because they don't care, and they aren't going to care enough to watch anything like this because, well, they don't care. So it goes...

-- Badtux the Cynical Penguin

Why bless their hearts...

Typical McCain voters:

-- Badtux the Unsurprised Penguin

I need a catpile

Too much bad news in the world. Time to pet some furry critters.

-- Badtux the Cat-owned Penguin

Over at Moto-Tux...

I add a tow hitch / bumper to the Silver Demon.

-- Badtux the Wrenchin' Penguin

Letterman Day 2

Bwahahah!

-- Badtux the Appreciative Penguin

And in the polls...

0% of Americans think that the economy is getting better. That's zero Americans. Zey-roh. Nada. Zilch. And 19% give Preznit Bunnypants a favorable rating (who the fuck are those 19%? There isn't that many millionaires in America, who other than a millionaire would like Bush? Sigh, stupidity will never end...).

Is it any wonder that Senator John "Did you know I was a POW?" McCain has suspended his campaign? It must have seemed pretty goddamned futile, when most Americans blame Republicans -- of which he's one, remember -- for this mess. Of course, he didn't really suspend his campaign, but c'mon, this is politics, lying about suspending your campaign is peanuts compared to the usual McCain lies...

-- Badtux the Snarky Penguin

Like, bummer, man?

One thing that has become increasingly clear is that our body politic is sick. Our government is broken, filled with a bunch of political posturing and bullshit and increasingly irrelevant to the point where it can't achieve anything of real consequence anymore even if it's something as simple as preventing a deflationary spiral where they fucking control the printing presses for cryin' out loud. But you know, this isn't accident. This is exactly the way a significant demographic of America wanted it.

The Boomer generation wanted to believe that all these restrictions on what they could do by The Man were, like, just bummer, man. They ought to be free to do whatever they felt like doing, man! So they elected politicians who felt the same way and eliminated all those, like, regulations, that were just like so uncool and stuff 'cause like they were The Man tellin' ya that ya can't do something, and now guess what? H.L. Mencken once said that democracy is the notion that "the common people know what they want, and ought to get it good and hard." What we're seeing now is exactly what a huge demographic of the American public wanted, good and hard, serviced like a mare being serviced by a stallion. I'm irritated that the majority that didn't see the worth of these regulations and such are taking me along for the ride, but so it goes.

In short, when you have an entire generation that believes that The Man is, like, just bummer, man, running the show, an entire generation that believes that reality is, like, bummer, man, and that the solution to reality is to run off into your own hedonistic drug trips and sex and rock'n'roll, then you get a nation where the majority believes government is the problem rather than the solution. And then... (shrug). If you believe government is the problem rather than the solution, is it any wonder that government starts falling apart?

-- Badtux the Bummed Penguin

Wha-moo!

Washington Mutual turns into a pumpkin.

Wamu collapsing is a symptom, not a cause. But since we as a nation seem to be utterly determined to party like it’s 1929, I’m just going to grumble H.L. Mencken’s famous dictum about democracy being the notion that “the common people know what they want, and deserve to get it good and hard” and shuffle back to my iceberg. And to make it even worse, the price of tuna is going up. A penguin can’t even stock up on tasty fishies anymore for his bunker…

-- Badtux the Misanthropic Penguin

A side excursion on money

Now, some of you have been reading my tomes about how the problem is that a bunch of money is about to evaporate out of the economy if we don't do something quickly, and are, like, "what the fuck? What's this money we're talking about? I thought we were talking about mortgage-backed bonds!"

Okay, let's back up then. Open up your wallet. Pull out one of those green pieces of toilet paper with a picture of a dead white guy on it. Let's say you pull out a $5 bill, or about what it takes to buy a couple of cheeseburgers and a coke at Micky D's. Looks pretty, huh? Now: Instead of going to Micky D's and getting a couple of cheeseburgers and a coke, eat the $5 bill instead. Uhm, excuse me, you say? Eat it? Ick!

Now what was the point of this exercise, you ask? Well, my point is that those green pieces of toilet paper with pictures of dead Presidents have no great intrinsic value. Unlike two cheeseburgers and a coke, you can't eat it and get any real nutrition out of it. About the only intrinsic value it has is as toilet paper, and really, that's not very good toilet paper okay? Rather, the reason it has value is because you can trade it for something that *does* have intrinsic value. You can trade it for that cheeseburger and fries, for example.

In short: Money is *anything* that can be traded for something else of value. We tend to differentiate between those forms of money that have intrinsic value (turnips, cheeseburgers, whatever you might want to trade for something else) and those forms of money that have only extrinsic value. But the point is that yes, toilet paper with pictures of dead paper is money. As is toilet paper that says "Mortgage-backed bond" on it, because said toilet paper can be traded for other things that have value. You can sell it to someone else in exchange for cash money, then use that cash money to buy cheeseburgers, for example. That makes it money. Not what you conventionally think of as money, but still money.

Now, let's go back and party like it's 1929. One of the things that baffled me, as a young college student, was the role that the stock market crash of 1929 had in triggering the Great Depression. I mean, c'mon. Here I am, a young penguin who grew up in the piney hill country, been out in the oilfield digging ditches and shit. I had a working man's disdain for those who didn't actually, like, make shit, who just sat behind a desk and pushed a buncha goddamned paper around. What the fuck does a buncha goddamned pasty-ass paper pushers got to do with anything? What's valuable is purple hull peas and turnip greens and oil and gas and land and cars and houses and shit like that, real shit, shit you can put your hands on, right? Well yes. Unless there are legal obligations upon them. Like, say, a loan.

And that is where the value of money comes in. The value of money is how much shit you can buy with it, right? Well, basically, the value of money is the amount of money in the economy divided by how much goods and services are in the economy. So let's say you got a loan to plant some corn. Between the time you took out that loan and the time you harvest your corn, half the money in the economy evaporates out of the economy. Well, then, you can only get half as many dollars as you planned for that corn. You got lots of corn, the folks buying your corn have half as many dollars, you might hold out for more dollars but there just ain't no more dollars out there. So you take half as many dollars in trade for your corn as you expected when you borrowed at the beginning of the year to plant your corn. This is fuckin' financial disaster. Pretty soon the bank comes by and repo's your land and auctions it off to your rich and wealthy neighbor, and you're fucked.

So anyhow, that's what happened in 1929 (or, rather, in 1930, when those loans started coming due). When those stocks were suddenly worth half of what they'd been worth a few hours before, it not only made those stocks worthless. It also made all the derivatives worthless. And they were money too, because they could be traded for money. Remember, if you can trade something for money, it is money. Ain't no difference between a nugget of gold and a stock certificate currently trading for $70 on Wall Street, me boyo... they're both money, albeit they're not U.S. currency, i.e., the funny green toilet paper fiat money issued by the Federal Reserve and backed by the economic output of the United States.

So anyhow, that evaporated money from the economy. And now the farmers can't pay their debts and are getting their farms repossessed. And they're pissed. So what do they do? They tell the politicians, "get farm prices back up again so we can pay off our debts!". And the politicians look around and say, "well, the problem is we got too much corn." No, the problem wasn't too much corn, the problem was that there wasn't as much money in the economy, the U.S. Treasury and Federal Reserve needed to start printing money (i.e., the U.S. Treasury selling U.S. bonds to the Federal Reserve, and the Federal Reserve issuing dollars in exchange for said bonds), which would then be spent in the economy or otherwise used to re-inflate the currency. But did they do this? Noooo! That wouldn't have been "fiscally sound"! You know what those stupid fuckers did? Those stupid fuckers went and started dumping corn into landfills to try to drive up the price of corn!

And you know what? They succeeded. Corn and wheat and other food items got more expensive. The problem is, there still wasn't enough money in the economy and the Fed wasn't gonna print none because that wouldn't be "fiscally sound". So people were spending all their available money to buy food now, which left nothing for buying anything else. So all the factories and shit started closing down. Which meant even more people couldn't afford to buy food. Which is when the food riots started. And things just altogether went to hell, and we only barely avoided our own Mussolini or Hitler, and that's only because FDR proved to be one hell of a scrapper, not like Democrats today, who cringe in terror at the sight of their own shadow like a buncha whipped goddamned puppy dogs. FDR couldn't get the currency re-inflated back to what it used to be. But at least he could end the food riots, get people working again, and start getting things looking sorta normal again. He did this with blatantly socialist programs like the CCC, he did this by imposing high taxes on the rich (who had benefited from all this by buying the assets of ordinary folks for pennies on the dollar at foreclosure auctions and such) to force them to re-distribute some of their wealth back to ordinary folks, and eventually WWII came along and forced the Republicans in Congress to allow FDR to print literally bundles of currency and people's debts got inflated out of existence again and the Great Depression was over.

So anyhow, here's the deal: The root problem in the current crisis isn't mortgages. The root problem is money. As in, preventing fucking boatloads of money from, well, just turning into a goddamned pumpkin when the clock strikes twelve, something which will make a helluva lot of debts other than mortgages absolutely unpayable. If that happens, you better goddamned well have an FDR in the wings to pick up the pieces -- and frankly, ain't neither of the current Presidential candidates fit to lick FDR's boots. Obama is a free market moderate, McCain is just fucking old and doesn't have the flexibility or stamina or willingness to think outside the box. Of the two, Obama might be able to break out of the box, but fuck. Let's just not go there, okay? Okay?!

-- Badtux the Rude Monetary Penguin

They're here!

My latest shipment of books got here -- Neal Stephenson's Anathem, Cory Doctorow's Little Brother, and Neil Gaiman's Fragile Things. So go amuse yourself without my help. Ptthhhtp!

-- Badtux the Busily-readin' Penguin

I fart in your general direction

Who knew? Apparently Monty Python is not much beloved in West Charleston, West Virginia, where Jose' Cruz finds himself possibly the first man in U.S. jurisprudence to be charged with, uhm... farting in the general direction of a police officer.

All I gotta say is that thank god Mr. Cruz didn't sneeze in the general direction of the police officer, or he'd find himself on the dock facing charges of attempted murder, rather than merely assault with a, err, odor?

-- Badtux the Astounded Penguin

Should homeowners get bailed out?

One of the discouraging ideas I've seen floating around the left-wing blogosphere is that a bailout should be aimed at homeowners with toxic mortgages, rather than at investors who bought those toxic mortgages after being defrauded by financial institutions who claimed the toxic mortgages were actually prime good quality mortgages. I got just one thing to say about this: BULLSHIT.

In my opinion, blame is shared equally between the homeowners and the financial institutions that issued the toxic mortgages. Both assumed that housing prices could just keep going up long after housing prices rose beyond what was affordable for most Americans. Both were idiots. In my opinion, bailing out irresponsible home buyers is the *last* thing we should do. They knew they were lying about their income on these "liar loans". They knew going in that they wouldn't be able to afford the mortgage when it reset. But they took on the mortgage anyhow because they bet that housing prices would be high enough when the mortgage reset that they could sell the house and cash out or would be making enough money by then to re-finance to a conventional mortgage. They lost their bet. Oh boo hoo.

Until these people's houses are back on the market for their *real* price (not the bubble price), houses are going to remain unaffordable for people like me who were prudent and did not buy during the bubble. We have to let housing prices drop, and the only way to do that is by marking these assets down to their "real" price by putting them back out on the market after foreclosure for a price that sells them within 90 days. We also have to figure out a way to hit the folks who issued these toxic mortgages, I suggest that after the Feds buy up the fraudulent mortgage-backed securities that they go after the banks and financial institutions that issued these mortgages for the difference between what the banks said these securities were worth and what they're *really* worth and take over any bank that can't make up the difference and sell it off at auction to new owners. The only way to keep this shit from happening again is by making everybody get hurt who was responsible for the bubble -- *including* the idiot homeowners who had the bright idea of signing on the dotted line because "housing prices are only going to go up".

- Badtux the Vicious Penguin

Clay Aiken is gay?

Really? And I'm supposed to care?

-- Badtux the Bored Penguin

Spice Girls add a new member

You are, of course, aware of the Spice Girls, a British "supergroup" of the 1990's. Here is their photo if you forgot: Now, they recently resumed touring again (for what reason I cannot fathom, since nobody cares about that 90's pop anymore). About midway through their tour, they realized that the group was missing something. Something important. They needed a new member to revive public interest in their group. So they auditioned a bunch of women to see if they could add anything to the group, and finally selected on one lucky winner. Here she is, responding to news that she was selected to be the newest Spice Girl:

It's BIBLE SPICE! Yay! It's Bible Spice!

-- Badtux the Mildly Amused Penguin

Whipped dogs

Corporate India is in shock after a mob of sacked workers bludgeoned to death the chief executive who had dismissed them from a factory in a suburb of Delhi.

I can't imagine Americans ever doing this. Americans are too propagandized into believing it's their own fault when they're laid off, and slink off into the sunset with their tails between their legs. Whipped dogs. That's what Americans are. Whipped dogs. They whimper and whine, but that's all they ever do.

-- Badtux the Whimpering Penguin

Sayin' it again...

Regarding the bailouts, sooner or later, the bad paper has to be replaced with good paper (Treasuries). Otherwise they'll continue to poison the entire financial system. Unfortunately due to the realities of fractional reserve banking we can't just evaporate 3 trillion dollars of assets out of the economy without setting up a deflationary spiral similar to 1930-1932. So there will have to be a bail-out. The problem is that the Busheviks just don't seem able to do anything without adding some way to loot the Treasury for the benefit of their cronies, and sent out a poison bill to Congress that basically says, "give us $700B and we'll throw it around anyway we feel like." No Congressional review, no review in the courts, just a blank check to the Bush Administration to just give the dough out any way they please. Even when risking a second Great Depression they can't get rid of that same old crony capitalism instinct to steer money to their cronies.

If you are wondering, I believe the AIG bailout is a very good model for how it has to go down. These institutions get the money -- but the government gets ownership of them and can throw out the bad managers and reform their practices so they don't do this stupid evil s**t again, and then sell off the workable assets and fold the part that's not workable. Any bailout that's going to work long-term is going to have to work like that, else this nonsense is just going to happen again. You can't just throw money at these institutions. You have to take them over and reform them.

Now, a short aside about deflationary spirals and the 1930-1932 scenario. Here's what happens. A bank collapses. Now, let's say that this bank had $200B in assets (it's a regional bank, not one of the biggest ones). This removes $2 TRILLION dollars from the economy if those assets are marked down to $0, because of the marvels of fractional reserve banking (check out the Wikipedia article for that and note that the current Federal Reserve reserve requirement is 10%, which means that $1 in deposits generates $10 in currency in the economy).

Okay, so you have less money in the economy, but the same amount of "stuff". So prices AND wages go down. No big deal, you're making less money but things are cheaper. *BUT* your *debts* have not gone down. You can no longer afford to pay your credit card bills. You default on them, along with 100 million *other* Americans. This causes the collapse of yet *MORE* banks. Which in turn collapses the currency even further so prices and wages go down *again*. Which in turn means that yet *more* debts are unpayable. Wash, repeat, rinse, until all assets in the economy are concentrated in the hands of the 5% of the population that had cash in the bank at the start of this cycle, and the remainder of the population, the percentage that owed money (which is virtually all of us), is utterly destitute.

Now, at that point economic activity has *also* fallen, since economic activity needs cash to lubricate it and a lot of cash has been diverted towards futile attempts to pay unpayable debts rather than buying stuff. Figure that the economy is moving 10% of the goods and services that it formerly moved. Furthermore, food was planted and picked at the older, cheaper value of the food. So the stores are full of food, but nobody can afford to buy it because an orange that costs $1 is now only worth 1c but the store can't sell it to you for 1c and make money because they paid the farmer 50c for it at the beginning of the year (thanks to the futures market). The end result is food riots, crops rotting in the fields, and the real threat of a fascist takeover of the country. Look up Father Coughlan and get back to us -- it was only barely that FDR kept Father Coughlan's cronies from taking over (see: Business Plot) and sending us down the same path that Germany and Italy went down. And that was before twenty-five years of rote recitation of "government is the problem, not the solution" discredited FDR's brand of liberalism in the minds of most Americans -- today, a FDR would not be allowed to be elected (I don't consider Obama to be an FDR, looking at his policy proposals on his web site they appear to be fairly moderate free-enterprise-oriented proposals, not something shockingly socialist like the CCC program that built much of the infrastructure in Death Valley).

In other words, I don't expect the U.S. to go down the path of FDR if we have another Great Depression. I expect a Mussolini, probably some general taking charge to "restore confidence and pride in our government", and the usual stuff that happens when you have a Mussolini in charge. Bad things. Really bad things. You know the drill.

Now, here's the good news. Bernanke over at the Federal Reserve? He is the world's leading expert on the Great Depression and steps that the Federal Reserve could have done to prevent the deflationary spiral that crashed the dollar and crashed the economy. He has been writing papers on this stuff since he was a 22 year old grad student, and has written some of the classics on the subject, such as his 1983 paper "Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression". He knows his s**t. Paulson over at Treasury? He's no Bernanke, but he's no idiot either. He is a pretty good economist in his own right, he is smart enough to both listen to and understand what Bernanke is telling him, and if the politicians in Congress take out the license to loot that his cronies wrote into the proposed bill and instead assigns ownership of the institutions that get the money to a new "Resolution Trust Corporation" to be completely cleaned out and re-formed as honest financial institutions without the crooks who issued the bad paper to begin with, his proposal actually will work -- it'll re-capitalize the banking system, it'll get all that poison paper out of the system, and things will start working right again. So we have good people in charge, and they know what they're doing, and what they're doing will work once the looting provisions are taken out of the proposal. I'm guardedly optimistic, and if you know me, I'm not much of an optimist.

Yes, it's discouraging that to make all this work we have to replace the bad paper with Treasuries or else we deflate the currency, crash all the banks, and end up with a new Great Depression. So it goes. See my signature. The American public thought we could get something for nothing, and voted in politicians who told us we were right. Now we get it, good and hard.

-- Badtux the Monetary Penguin
_________________
"Democracy is the theory that the common people know what they want and deserve to get it good and hard." -- H.L. Mencken

Not feelin' motivated

Not feeling motivated to blog today for some reason. Let's see, highlights of the day: John McCain proposes to put a buncha top money guys in charge of handing the financial system's mess. Uhm, aren't these the same guys who got us into the mess to begin with? Doh! And John McCain proposes to deregulate health care the way that the financial markets were deregulated so that it can perform as well as the financial markets. Uhm, that isn't reassuring, John, I'd really prefer to stay alive, if ya know what I mean! And Congress is doing a lot of political posturing on the bailout plan instead of biting the bullet and doing what has to be done (get all that poison paper out of the system by trading it for treasuries -- *but* with oversight by a Congressionally-appointed committee of which the Treasury Secretary and Fed Chairman are members, *not* by handing a blank check to the Treasury Secretary), and George W. Bush was right for probably the first time in his Presidency when he accused Congress of political posturing and risking serious damage to the economy (gasp -- GWB! Right! Can the four horsemen of the Apocalypse be somewhere near?). Joe Biden once again proved he had foot in mouth disease (I swear, the man can let off occasional great zingers -- anybody remember "noun, verb, 9/11" as his description of Julie Annie -- but man can he stick his foot in his mouth).

So lots of things happening, but none that really motivate me to snark. Ah well. I'll just do an Atrios then. Here, have a cat. -- Badtux the Demotivated Penguin

More left-wing stupidity

Janet Atkinson of the San Jose Down Syndrome Network rips the movie Tropic Thunder for using the word "retard". Nevermind that the movie uses the word "retard" in much the same way that Mark Twain uses the word "nigger" in Huckleberry Finn, i.e., to make fun of the people who use the word. It's "denigrating to the mentally disabled" and thus the movie should be boycotted, or banned, or something. Sorta like these same kinds of asswipes are always trying to get Huckleberry Finn banned because it's "racist" or some such bilge.

And here I was, thinking that the movie was making fun of Tom Hanks. Why does the extreme left-wing make it so difficult for someone to call themselves "liberal" nowdays? It's as if they want liberal ideas to be marginalized and made fun of. Sigh.

-- Badtux the Head-shakin' Penguin

Thirteen cars for seven garages

When you have seven garages for your seven houses like John and Cindy McCain have, the temptation becomes to fill them up with cars. And John and Cindy McCain have done so, filling up their garages with thirteen cars. Folks like you and me, we get by on one car per worker in the family. But we're not out-of-touch plutocrats who wear $300,000 outfits to parties.

The number of cars Obama owns? One. A Ford Escape hybrid. So who's the elitist? Heh.

-- Badtux the Snarky Penguin

More about deflationary spirals

Here's the deal with deflationary spirals. First thing that happens is that a bank collapses for one reason or another. This reduces the amount of currency in the system. Less currency, same amount of goods and services, means prices -- and salaries -- go down. Depressed prices and salaries mean that producers and consumers can no longer pay their debts. This causes more banks to collapse, thereby removing far greater amounts of currency from the economy (thanks to ye olde fractional reserve lending), which in turn furthe reduces prices and salaries. Repeat until done, with no functional banking system and the economy pretty much deflated to 10% of what it once was. The end result of the deflationary spiral is to transfer virtually all real assets in an economy from the debtor class to the creditor class at fire-sale prices. Since the debtor class in our current economy is pretty much *everybody* other than the top few percent, what you end up with is a society that looks an awful lot like a banana republic, with a handful of land-rich mega-plutarchs and hoards of desperate starving peasants.

Even more important is the *political* results of this happening. We already know what happened in Germany and Italy when things hit bottom. It almost happened here too, and the only reason it didn't was because there was still a strain of progressivism extant whose credibility had not yet been completely demolished by Republican chants of "government is the problem, not the solution". That is no longer true here today. Our modern-day Father Coughlans are much more widespread and much more powerful than they were then, not to mention that we don't have a progressive equivalent to FDR (who was a very ruthless man with no compunctions about silencing opponents) today to keep our modern-day Father Coughlans from backing a fascist take-over of the government. When people are desperate, they will cling to anybody who offers hope. When the system has been systematically degraded and its credibility destroyed over the past thirty years by Republican action, the chances that this hope will arise outside the system and end up like Germany/Italy in the 1930's is far greater than I like.

Anyhow, that's why I say that avoiding a deflationary spiral has to be the #1 thing we do here. Yes, the currency was inflated with bogus financial instruments. Yes, this means we're going to have to take the politically risky step of swapping those bogus financial instruments for treasuries in order to prevent deflation from setting in and collapsing the system. But it has to be done or we risk a deflationary spiral and its very unpleasant aftermath. The problem I have is that the administration's proposal appears to be a license to loot, not that it pretty much trades bogus financial instruments for treasuries.

-- Badtux the Economics Penguin

They just can't stop looting...

Okay, folks. Here's the deal. The entire financial system risks collapse if those toxic mortgages aren't taken off their books once and for all. Simply foreclosing on those homes and selling them at auction isn't going to stop the bleeding, if the banks take those losses (basically putting housing prices back at 1998 levels, or roughly a 60% markdown) they are bankrupt. Actually, they're bankrupt right now, they're just holding foreclosed houses off the market so they don't have to make it official (if they have a home on their assets list that they say is worth $600K, but manage to sell it for only the $200K that it's worth today, then they have to actually report the $400K loss they've already incurred).

Okay, so now we propose to take those toxic mortgages off the books. It has to happen, or we risk the 1930-1932 scenario. But these stupid bastards simply can't help themselves. The current proposal is just a friggin' blank check for looting. The Treasury Secretary is authorized to give out money to anybody for any reason as long as he states that it is "mortgage-related". And there is no proposal to take over management and/or ownership of the institutions holding these toxic mortgages in exchange for taking the bad loans off their books, which is the only way to keep them from writing more toxic mortgages. Instead, it's just money thrown at the same bastards who got us into this situation in the first place.

What we need is a new "Resolution Trust Corporation" that takes over the ownership of troubled institutions and runs them on behalf of the taxpayers who are bailing them out. At some point in the future we can then sell these organizations back to private investors and have them open up under new management, but they're basically bankrupt now, the whole lot of them, and we need to make it official, take the bloodbath of writing down all those toxic loans, and take over ownership of the banks and mortgage that wrote these bad loans. Bad for investors? Oh sorry! You shoulda appointed better managers for your money, huh? But the important thing is a) to get the toxic mortgages out of the system, and b) make sure that the people who profited from the toxic mortgages are not in a position to do it again. The solution is not to throw money at the same goddamned looters who make it possible to write those bad mortgages in the first place -- but sad to say, the first instinct of any Bush Administration official is, "how can I loot the government treasury for the benefit of my cronies in private enterprise?". Sigh. Government of the people, by the people, for the people. It'd be a good idea.

-- Badtux the Financial Penguin

A final goodbye to baseball

Final game played in Yankee Stadium today. Like baseball as a whole, Yankee Stadium has fallen prey to that great American disease -- the desire to always be bigger, newer, shinier, more extravagant, more expensive. Yankee Stadium was simply too dowdy, too "dated", too "old" for baseball anymore. So now it's going to get replaced by some sterile McStadium, and the nation as a whole will be poorer for it. So it goes, in a nation which refuses to appreciate history and refuses to learn its lessons...

I was expecting Tbogg to blog about this. I mean, someone who named his daughter after Casey Stengel surely would have something to say. Alas, I forgot that Stengel ended his career managing the Mets, the hated enemies of the Yankees, and thus of course Tbogg wouldn't blog about it. Which is why I have to do so. Sigh!

-- Badtux the Baseball Penguin

Why am I not surprised?

Scratch a tighty-righty, find a pervert. Turns out that Arkansas evangelist Tony Alamo's headquarters just got raided by the FBI as part of a child porn investigation. He accuses... uhm... Catholics... of being behind the raid. Wha? Since when did Catholics run the government of the USA?! What a surprise...

-- Badtux the Snarky Penguin

Electrifying!

Over at MotoTux, I electrify the left side of my V-Strom 650 motorcycle.

No electrons were harmed in the course of this project...

-- Badtux the Electrifying Penguin

Attack! Attack! Attack!

"So when you hear John McCain talk about taking on the good old boy's network in Washington, know that in the McCain campaign, that's called a staff meeting."

Ziiing!

-- Badtux the Appreciative Penguin

A modest suggestion

Since Rachel Bird and Gideon Codding care so much about the sanctity of marriage that they, err, won't get married because they don't like legal terminology used on marriage license applications in the state of California, I have a modest suggestion for them. Given the great respect they have shown for the institution of marriage, such great respect that they'll allow a little "person a" and "person b" to stop them, my suggestion is...

The Elvis Wedding Chapel

That way they avoid all that "person a" and "person b" stuff (since Las Vegas doesn't do that) and give the institution of marriage the respect with which they apparently hold it.

-- Badtux the Snarky Penguin
(Who is proud to be the first user of the [blink] tag since 1998 :-).

A test of the terrier defense system

Warning! Condition red! Terrier attack in progress! Luckily the Department of Home Security is on duty:

-- Badtux the Cat-owned Penguin

Change you can believe in

Let's see, John McCain has 177 lobbyists working for his campaign, of which 83 are lobbyists for the financial services companies in trouble right now. Do you really think he's going to vote for the proper regulation needed to keep the money supply stable and the economy strong, given that he has 83 voices talking into his ear saying "don't do that"? If so, I have some oceanside property in Arizona to sell ya...

-- Badtux the Snarky Penguin

I guess David Duke was busy hangin' in the hood

... because John McCain has turned to Rush Limbaugh of "Barack the Magic Negro" fame to write an editorial that, err, accuses Obama of racism.

I'm sure Rushbo was third string, after George "Macaca" Allen also like David Duke apparently had a burning engagement that he could not cross off his schedule. Remember, Clorox bleach gets the smokestains out of your whites!

-- Badtux the Snarky Penguin

Arr!

It's Talk Like A Pirate Day! Why, shiver me timbers, 'tis one of the most holy days in the Pastafarian calendar...

-- Badtux the Pirate Penguin

Yesterday's bailouts

Rather than comment further on $300B of money just *printed* by the Federal Reserve and flooded onto the financial marketplaces, the proposal that the Federal government take on all the bad mortgage loans, etc., I will instead show a re-creation in lolcat form of a typical Bush Administration official responding to criticisms of flushing all this money down the toilet, starring Mencken playing Treasury Secretary Henry Paulson...

  moar cat pictures

Alrighty, then!

-- Badtux the Snarky Penguin

Comcast: Officially evil.

They've put a 250GB/month limit on their cable Internet service, thereby insuring that the United States will never have high speed Internet-provided video-on-demand services like countries like South Korea have (but then, their high-speed Internet is 10 times faster than what Comcast provides in the first place, for less money, so you get what you pay for err.... wha?!). Of course, for Comcast, that's a feature, not a flaw -- after all, they have their own "Comcast On Demand" product, why would they want to enable their Internet service to compete with themselves? Which just goes to show that allowing the same company to provide both television and Internet service (or both phone and Internet service) is nuts -- there is an inherent conflict of interest there which will forever make AT&T try to filter out Voice over IP on their Internet service, and which will forever make Comcast try to filter out Video-on-demand over IP on their Internet service. Which is why the United States is 15th in the world in high-speed Internet penetration, and why every single one of the nations competing against the United States in the technology sweepstakes has better Internet service than the United States.

So Comcast is evil. Okay. Fine and dandy. But here's the deal: they're *stupid* evil. They give you a broadband limit... then give you no way of knowing you're approaching it! Let me quote for you, exactly, the Comcast web site:

Q: How does Comcast help its customers track their usage so they can avoid exceeding the limit?

There are many online tools customers can download and use to measure their consumption. Customers can find such tools by simply doing a Web search - for example, a search for "bandwidth meter" will provide some options. Customers using multiple PCs should just be aware that they will need to measure and combine their total monthly usage in order to identify the data usage for their entire account.

Uhm... they don't, in other words. They measure your usage, but you're just going to have to fucking guess, they won't help you, they won't provide you with any tools for doing it, they're just gonna wave their hands and say "you're on your own, you stupid motherfucker" and sit back and measure your bandwidth but WILL NOT PUBLISH THAT INFO ON YOUR COMCAST.NET HOME PAGE WHEN YOU LOG IN TO TELL YOU HOW MUCH BANDWIDTH YOU ARE USING!

Furthermore, their advice is, to put it bluntly, not only evil, but evil stupid. I use an Apple Airport Extreme WIFI router. I use my Apple MacBook laptop computer as my main way of communicating with the Internet. My laptop computer goes to work with me every day and comes back with me every day. The network usage counters on my Macbook get reset every time I close the lid and put it to sleep, and besides, sometimes I come over to my desk and the big-screen monitor and plug in to wired connection, sometimes I'm operating wireless. I looked for a setting on my Airport for "how many bytes have passed through the broadband port", and it has *nothing*. In other words, the only way I could follow their "advice" would be to switch to a competitor. Oh wait, that's right, Comcast has a fucking *MONOPOLY* on high speed Internet service in my neighborhood, so I can't do that. I have to take Comcast "service" (a.k.a. what a stallion does to a mare). Some "free market", huh?

Anyhow, this isn't going to particularly affect me. I monitor my web site usage (gee, when I log into my web host's UI it tells me how much network usage my web host has used this month, and my web host has one -- *1* -- full-time employee, so it's not as if Comcast doesn't have the resources to do the same thing, they just don't *want* to), and even when I was slammed by traffic from an Andrew Sullivan drive-by combined with an idiot ripping off the title of one of my songs I used only 30GB of bandwidth for that month. Because I don't use any sort of video-on-demand (because Comcast's lame-ass network is just too fucking *slow* to use Netflix's video-on-demand system, the results stagger like Tipsy McDrunky chewing a pretzel in the Oval Office), it is quite unlikely that I'll ever approach the 250GB limit. It just rankles me that this pathetic "service" not only is 10 times slower than every other technologically advanced nation, but is so incompetent that they can't even put a single fucking number on your comcast.net home page -- even though every lame half-ass ISP run by one guy in their back room in the evenings after their day job is finished manages to do it. Yeah, what "service", Compost. You can fuck off and die as far as I'm concerned, if you did not have your goddamned federally-imposed MONOPOLY in my neighborhood I'd go with a real ISP and tell ya to stick your lame-ass "high speed" ("high" as in "smokes marijuana", maybe, it sure the fuck ain't "high speed" by any world-class definition of the world) Internet up your collective fucking asses.

-- Badtux the Rude Penguin

China, Communism, the Soviet Union

I was talking to someone from the former Soviet Union and he was astonished at the way we deal with our teams in Communist China. Something like that would have never happened under Soviet Communism, he explained. Only vetted Party members were allowed to interact with outsiders then, not mere engineers, unless said engineers were top professionals who had been especially vetted. He asked, who is the ideological monitor from the Communist Party making sure nobody says anything that is ideologically incorrect? I replied, maybe the office manager, she's a real dragon lady, but really, they mostly are non-ideological and self-correct. They're just a bunch of nerds / geeks who love working with computers and want to do a good job, just like any other nerds / geeks I've ever worked with in the end. And besides, China is mostly Communist only in name nowdays, they have embraced what they call "market socialism" with a passion and practice free market economics (but still with major government involvement) big time.

He asked then how do they reconcile Communism and free market economics, surely they are getting twisted into ideological pretzels. I said something about Confucianism and respect for elders, but I'm not quite sure that's it. I do know that I get more automatic respect from my Chinese teams than I get from a typical American team (don't get this wrong, I get a lot of respect from my American peers too, but it is a respect I have to earn the hard way by going in there and kicking rear solving problems for the team and showing them where we're going, there's nothing automatic about it). Anyhow, I think basically my suggestion was that Communism was always just a thin veneer upon Confucianism despite Mao's attempt to make it otherwise, and that most Chinese really don't care what ideology their elders espouse but will follow their elders regardless of ideology. If their elders say they are a Communist nation, fine. If their elders say they practice market socialism, fine. They don't question, they just follow, because what is, is, and what will be, will be.

Somehow, though, that seems rather facile. I do think, however, that China is attempting something similar to Singapore. Singapore is majority-Chinese, and basically ruled as a Confucian dictatorship with free market economics. But most Singaporians are quite happy with that. They view the rule of their ruling family as being enlightened, having taken them from being an impoverished fishing village to one of the great city-states of the world. They are proud of their shiny spotless city. They work hard and are prosperous and have an orderly and peaceful city and it is good, as far as most people in Singapore are concerned. The only question is whether the Chinese gerontocracy is going to be able to pull it off -- China is multiple orders of scale larger than Singapore. We shall see, I guess. We shall see...

-- Badtux the Sociology Penguin

Excuse me?

In comments that have caused a kerfuffle in Spain, McCain seemed to lump Spanish Prime Minister Jose Luis Zapatero in the same category as the anti-American leaders of Venezuela, Bolivia and Cuba.

moar funny pictures

Spain, in case you don't recall, is a NATO ally...

-- Badtux the head-shakin' Penguin

John McCain: Dead man walking?

A medical records transcriptionist suggests that John McCain's cancer diagnosis means he has only a few years to live at best.

My take on this notion: McCain's last major melanoma incident was in 2000. He had a minor incident in 2002. It is now 2008. Reality is that if he made it to six years since the last recurrence of the cancer, he's probably in pretty good shape, most recurrences occur within the first five years. One doctor said that he figures that given no recurrence in 5 years, McCain has about a 10% chance of recurrence within the next 5 years.

My understanding is that lymph node removal was common in 2000 for Class II melanomas because they had not yet determined good ways to detect melanoma cells in lymph nodes at the time and were taking a "better safe than sorry" approach back then. Today they don't do that because of the side effects and because they have better ways to check lymph nodes for escaped melanoma cells. BTW, this is why McCain's face looks puffy on the left side, that's a side effect of the lymph node removal.

I do not believe that John McCain is a healthy man, but melanoma is the least of my worries. I'm more worried about the fact that he has shown far too many "senior moments" these past few months, giving rise to concerns about whether he is in early-stage Alzheimer's. The question of when a President is disabled, when talking about a disease such as Alzheimer's, is one that has never been medically or Constitutionally answered before. Indeed, when the current Constitutional provisions for Presidential succession were created, Alzheimer's wasn't even a recognized disease. To say that setting up the U.S. for a Constitutional crisis is not a good idea in these troubled times is an understatement of vast proportions.

-- Badtux the Healthcare Penguin

Oops!

Yesterday was Constitution Day. And I forgot totally about it. But that's okay, so has everybody else -- especially the Bush Administration, which occasionally comes across some scrap of the Constitution in the White House powder room, says "why did someone leave this ratty old piece of toilet paper here?", and wipes their ass with it before flushing it.

Mencken explicates:

moar funny cat pictures

-- Badtux the Snarky Penguin

Idiots

Boomer: "There's a lot of books talking about how to manage Gen Y/Gen X slackers. That means there's a real problem there."
Me: "There's a lot of books about UFO's too. Does that prove there's UFO's?"

The notion of a Baby Boomer, the original "Me Generation", the generation that elected Ronald Reagan because he promised them more "Me! Me! Me!", talking about how younger people are self-indulgent narcissistic and lazy is just rich. For the record, most Boomers who were in the engineering field are no longer in the engineering field because they were self-indulgent, narcissistic, unwilling to take direction (they view it as a personal insult to their competence), and unwilling to commit the give and take needed to develop consensus in a team environment (it is always their way, or they blow up the project). They view everything as being about them personally. They have no sense of proportion and are unable to compromise. They are unwilling to solicit information from others because they feel that makes them look "weak", they'd rather do things wrong than ask a question. Given that all major engineering designs now are too large to design solo, an unwillingness to work in teams pretty much disqualifies them from modern-day engineering. Or modern-day politics, I might add -- did my description above describe an awful lot about what has happened to Washington politics over the last 18 years as the Boomers took it over?

As for the so-called "slacker" generation, they're happy to work in teams. They've been working in teams since kindergarten and know what it takes. They have a sense of proportion. They don't get their knickers out of whack because their particular pet architectural concept did not get chosen by the rest of the team as the basis of the new product, they know it's just a job, and that the other design might not be as good for some definition of "good" as their design but it's good enough, so they pitch in and make it work. (Most of engineering of complex systems is about "good enough" -- if you try to make a product "perfect", it never gets released, at least not in a timely manner that puts you in the marketplace in a competitive timeframe). They have no problem with asking their elders for suggestions or advice when you ask them to do something, and then they're happy to run with your suggestions in creative ways that result in a better product than you expected. They have exactly the same loyalty to their employer that their employer has toward them -- i.e., none, if someone approaches them with a better offer they'll leave and take it -- but that's just a recognition of reality in the modern workplace, where anybody's job can be outsourced to India or China at any given time so (shrug) gotta take what you can get before that happens. They are "lazy" in that their job is not their life and they're not going to spend 20 hours a day at work if they can avoid it, on the other hand the fact that the job is not their life is also why they have the sense of proportion that allows them to work in teams without blowing the project up. (If you don't know what "blowing the project up" is, it's hard for me to describe it, but I once came into a situation where for two years a particular project important to the company's future was caught up in an endless cycle of criticism, bickering, fault-finding, and accusations. Twelve months after that we had our first prototype of the new product, but I had to "blow up" the team and put it back together again with the proper mentality to get a product out the door to make that happen, starting from scratch with "What do we want to do, and what do we need to do in order to make it happen?" and ruthlessly droning that message over any attempt to fall back into the previous behavior -- and getting rid of people who just didn't "get it").

So what do I make of Boomers who whine about how they can't manage Gen Y types? Well, my first impulse is to hand them a mirror. My second impulse is to tell them that the problem isn't the Gen Y types. The problem is them. They confuse Gen Y types attempting to reach consensus with them as personal insults and argumentation. They view Gen Y types asking for information as whining. Their notion of "criticism" is "That sucks", and then when a Gen Y type attempts to solicit information about what sucks about his design so that he can re-do it correctly, they view it as laziness ("he wants me to do his job for him!") and insubordination ("he refuses to re-do his design correctly!"). The problem is that they're behaving exactly like a Boomer generation politician in Washington D.C., pursuing a politics of egoism that has nothing to do with actually getting a product out the door. The Gen Y types I deal with are team and results oriented. They simply aren't built to put up with bullshit of that type without turning surly and looking for another job. But if you yourself are team and results oriented, they will happily produce some of the best product you've ever seen for you. So for Boomers who whine that Gen Y types are hard to manage -- err, look in the mirror, dude. Because the problem isn't the Gen Y "slacker". The problem is a self-centered egotistical "manager" who sucks.

-- Badtux the Manager Penguin

You know you're a liar if...

Joke Line calls you a liar. Joe Klein. Republican cheerleader. Never met a Republican policy he didn't like. Callin' Grampa McCain a liar. Huh.

-- Badtux the Amazed Penguin

Cross-cultural communications

As some of you know, I regularly communicate with an engineering team in China. It's easy communicating with them about engineering matters, their textbooks and lectures in college were all in English, but when things turn away from work and turn towards pleasure, the communications can get odd. We simply don't understand each others' cultural referents. They're young, Chinese, just out of college, haven't ever been more than 100 miles from the place they were born, and I'm a penguin. See the problem?

But this week I found something in common between both cultures. See, for Autumn Festival they all went on a field trip. They went... fishing.

How big was the fish that our team lead caught? (Holds hands far apart, with thumb and forefinger about 2 inches apart). Yep, by the time they were through excitedly telling me about catching that fish, that fish was bigger than the smallest member of the team!

So remember: Some things are cultural, and some things seem just built into what makes people human. Fish stories, apparently, are the latter :-).

-- Badtux the Easily-amused Penguin

And in today's economics news...

Mencken summarizes this longer overview: Yeppers, down the toilet.

-- Badtux the Snarky Penguin

When truth becomes a challenge

I'm taking about today's Murky News editorial by Todd J. Paglia, "executive director of ForestEthics, a forest and climate advocacy group". He said that the state's forests should not be clear-cut and replaced with mono-culture because, err, it "causes global warming".

Uhm, no. The carbon in those trees is going to stay in the lumber that builds houses and stuff. Unlike what this moron said, the carbon isn't going to get released back into the air, the vast majority of that lumber is *not* going to be used for firewood, it's going to go into homes and businesses. The tree plantations planted in place of the cut trees are going to suck up even more carbon, since they will be growing rapidly as vs. older trees which grow very slowly. So from a global warming perspective, we're talking about something that's good for the environment.

Of course, there's plenty of other arguments to be made against clear-cutting forests. It reduces species diversity, it causes erosion and sedimentation of streams, it harms wildlife, it's just plain ugly. This guy didn't make those arguments, though, because those arguments don't pay his bills, while the global warming argument does. What irritates me is when people just make sh*t up and don't care whether it's true or not, it pays their salary and that's all they care about, not truth. I seem to recall some feller sayin', "the truth shall set you free." I think his initials were "J.C." or somethin' like that. But that feller obviously didn't live in modern-day America or rely on telling lies for his living.

-- Badtux the Irritated Penguin

The high road

This answers the question that the previous negative anti-McCain ad implicitly asked, which is, "okay, so McCain is evil, but why would I want to vote for Obama?" It is an interesting piece of propaganda work because Obama both throws wonkish meat to the Democratic base (all the facts and figures) and does the emotive stroking needed to get the proles. Whether it will actually work... (shrug). We'll see. I'll just point out that H. Ross Perot's ads were much longer and much more wonkish and got far more votes for Perot than anybody expected...

-- Badtux the Propaganda Penguin

AIG taken over by Federal Reserve

In exchange for $85 billion of bridge financing, the Federal Reserve takes over insurer AIG.

Now, the question is, where did that $85 billion come from? Well, ah, err, uhm... ah, the Federal Reserve just printed it. Next question?

Now I hear you asking, isn't this inflationary, just printing money like that? Err... ah... well yes. But then, remember, we just had Lehman Brothers evaporate billions of dollars out of the economy, causing deflation, plus the continuing housing crash evaporating billions of dollars out of the economy, so that's not a bad thing. If you want a bad thing, a deflationary spiral like the one from 1930-1932, now that is a bad thing, bad in so many ways that it depresses me just to think about it. Thus the term "The Great Depression." Sigh.

And oh yeah, let's not forget John McInsane's commentary about all this: "The fundamentals of our economy are strong."

Alrighty, then!

-- Badtux the Monetary Penguin

John McCain's lies become major story

Even the hack Richard Cohen, who was in the bag for McCain for most of the year, is ragging on McCain for running a nasty dirty campaign. CNN, Fox News, and MSNBC also take their potshots at the truth-deprived nature of McCain's recent ads. Is this a rare occurrence of the press calling a lie a lie? Wow. And here I was, thinking that this was a once-in-a-lifetime occurrence and that it had already happened once in my lifetime (in 1974) and thus would never happen again! And even Karl effin' Rove, the maestro of dirty politics, thinks McCain has gone too far. Will wonders never cease...

6PM update: Now we learn that John McCain invented the Blackberry. Err... ah. The Canucks might disagree with that, I think, given that the Blackberry is actually, err, a product of CANADA?! But maybe McInsane thinks Canada is the 51st state. Who knew?

-- Badtux the Snarky Penguin

Reminders on gold and silver

As I've pointed out multiple times in the past, you can't eat gold. The same applies to silver too. Allowing scam artists to trick you into buying gold or silver (gold or silver that you don't actually possess) is just throwing your money down the drain unless you have plans to emigrate elsewhere and are looking for something that can be converted to your new nation's currency. Otherwise you're much better off purchasing real assets -- things that can be used to create stuff that can be traded for food and other goods if everything goes to hell in a handbasket. If you buy a potter's wheel and teach yourself how to throw pottery (and lids for the pottery that can keep out mice and rats!), for example, you have a skill that can be used to create stuff that can be traded for food and other goods in the event of a collapse. Gold and silver... bah. You can't eat it, and nobody will accept gold or silver in exchange for food, so what good is it?

-- Badtux the Economics Penguin

Helping a third world nation

Hipparchia has alerted me to a worthy organization that is helping a third world nation with its health care needs. Hundreds of volunteer doctors, optometrists, and dentists volunteer a weekend every few months to help people in third world nations with their basic health care and dental care needs. The number of people they treat is a drop in the bucket, but it's better than nothing.

The only question is why they have to go to the particular third world nation where 2/3rds of their efforts are focused, given that said third world nation has the resources to provide health care to all its citizens -- but simply refuses to do so. Watch the video for more info:

-- Badtux the Health Care Penguin

"Only" 30 dead from Ike

Yep, that's what the news agencies say. They also say that sixty survivors have been found of the thousands who lived on the Bolivar Peninsula.

Probably 75% of the people who lived on the Bolivar peninsula evacuated. The problem is that entire communities have literally been washed into the ocean. Any bodies washed into the ocean with them, and are no longer around to be found. The bottom-feeders in the Gulf of Mexico are gonna be feasting big time on long pig for the next week or so...

Meanwhile, I notice that the victim-blaming machine has already started rumbling away big-time. So it goes in the United States of Delusion, where we pretend to be a compassionate people -- and then make sure we never have to live up to our rhetoric by blaming the victims and doing nothing compassionate to help them.

-- Badtux the Morbid Penguin

Plunge Protection

As we know from reading the news, there is currently mayhem happening in the marketplace, with the collapse of two major investment banks (Lehman Brothers and Merill Lynch). More on that later. Anyhow, regarding this, Nunya mentions the Plunge Protection Team down below in the big Randian flame-fest, and rather than have it lost amongst all the drivel, I decided to move my response to up here. So I just read her Plunge Protection Team link. My thoughts? I think it's a bunch of conspiratorial crap.

Maybe you weren't around in 1987 when this team was created, but I was. I remember when the market dropped 23% in one day because of a programming bug in computerized trading systems issuing an avalanche of "sell" orders. This wasn't "the wisdom of the market" (as a Randian might put it) at work. This was computerized mayhem. The plunge protection working group works to create policies to prevent further plunges of this sort, plunges which happen because of inherent flaws in the operation of the marketplace rather than because there has been any change in market fundamentals. They rarely meet and generally only in regard to historical events. They have no power to do anything other than suggest solutions, which they have done (for example, if a particular stock plunges more than a certain percentage in a day, the markets now put a hold upon all computerized trading of that stuck to prevent the stock from being driven to the bottom by computerized "sell" orders, this is one innovation that came out of the 1987 stock market crash.

In short, I view this as being a normal and necessary working group, rather than as some dire conspiracy. The only dire conspiracy that the Bush Administration is capable of is delusional thinking and stupidity, neither of which are in shortage anywhere else in America right now...

- Badtux the Economics Penguin

The problem with Ayn Rand

So government regulators become looters, and corrupt capitalists untrammeled by the reins of regulation become mass thieves of the wealth of the nation. That is the state of the nation today, where a tiny powerful elite loot the wealth of the nation for their own benefit using corruption and fraud as their tools. What you are seeing is the one problem of Ayn Rand's vision, which is that she forgot one thing: the nature of power. She thought that removal of checks upon the body public would result in freedom. She thought that removal of government power would result in a better life for all. But invariably what happens in such cases is the end result that you are seeing today -- there are always those who are more powerful than others either because of physically being born as such or because they possess more guns (money, in our current world, being a proxy for guns). In the absence of government (we the people) those who choose to abuse that power will always end up destroying the core idea of capitalism (that is, that people should have the freedom to both produce and enjoy the fruits of their labor) and become looters.

Galt's Gulch, in real life, becomes Mogadishu with everybody out to loot as much as they can loot at the expense of the people who just want to live their lives in peace and freedom. Such is how it is, how it always has been, how it always will be. That is the nature of power, and why unchecked power will almost always become evil. I can count the number of those with power who did not fall to evil on the fingers of one hand, the Attaturks and Lee Kuan Yews of the world are that rare.

So: Now we see what the results of removing checks on power are. Will we decide that power must have checks upon it in order to prevent what we see today? Shall we gather together into an entity called "we the people", otherwise called "government", and make sure that those with power are checked such that they cannot become looters? Or shall we continue to state "government is the problem, not the solution", withdraw government checks upon looters, and continue to cooperate in our submission to those with power? Those are our choices, and refusing to make a choice is itself a choice. I would type more, but American Idle is on, and I must see who gets voted off the show today...

-- Badtux the Power Penguin

Stoned kitties

Man, those cats are fuggin' smashed after they get into the catnip garden...

-- Badtux the Cat-owned Penguin
Who just gave his cats a fresh catnip-impregnated scratching pad and they look an aweful lot like the kitties at the end of this film.

Autumn Festival

It is Autumn Festival in China.

-- Badtux the International Penguin

PS: The moon cakes and tea at our celebration this afternoon were nice, but the moon cakes sure taste weird to someone accustomed to American sweets...

Ike didn't just hit Texas

Ten to fifteen feet of water also slammed into the South Louisiana coast as Ike sideswiped Louisiana on its way to Texas, with flooding in some areas worse than Katrina and Rita.

An interesting article about Terrebonne Parish. Terrebonne Parish is a parish that is literally disappearing -- over the past forty years, most of the parish has gone from being above water, to being below water, thanks to the oil companies dredging canals into the swamps that let salt water in to kill the plants that kept the swamp together, but most importantly because they pumped out all the oil from beneath the parish and then the ground subsiding into the now-empty basin along a slip fault that was previously undetected. The few places still above water are only three or four feet above sea level and are close to flooding even with a normal high tide. But it is also the last holdout of the swamp Cajuns, and the swamp Cajuns have little liking for anybody telling them they can't stay. So they live on their boats, or they raise their houses higher on stilts, and one day they'll all be washed away...

-- Badtux the Louisiana Penguin

TMF would appreciate one of these

TMF has gotten into the habit of having me turn on the water faucet for him when I get home so he can drink out of the faucet. This gadget looks like it'll do the same thing for him. Assuming he doesn't just paddle all the water out of the fountain like this cat is doing...

-- Badtux the Cat-owned Penguin

Baby picture

Here is the Mighty Fang shortly after I got him home in 2001, seven years ago. He was a teenage hooligan back then, but just as pretty...

- Badtux the Cat-owned Penguin

Lose your house, lose your vote

Archy the Blogging Cockroach discusses Michigan Republicans' attempts to disenfranchise those whose homes have been foreclosed, and makes an important point to bear in mind whenever you hear a Republican talk about "election reform":

When conservatives get upset over election problems, they are almost always upset over the idea that someone voted who didn't "deserve" to vote. "Deserve" is one of the most powerful words in the conservative lexicon. They worry that the value of their rights are diminished by undeserving people exercising the same rights. When liberals get upset over election problems, they are almost always upset over the idea that someone was unfairly prevented from voting who was entitled to vote. "Fair" is one of the most powerful words in the liberal lexicon. Being excluded is one of the most unfair things a liberal can imagine. Election reform for conservatives means strict controls to keep the wrong people from voting. Election reform for liberals means making sure no one is prevented from exercising their right to vote.

He explains that for Democrats, rights are granted by the Creator, not by government, and thus taking away the right to vote for any reason is an affront to the entire body public. For Republicans, rights are earned, not granted by the Creator, and anybody exercising unearned rights degrades the value of those rights for people who have earned them.

The founding fathers agreed with the Democrats -- to quote the Declaration of Independence, "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights ..." i.e., that rights come not from government, but from the Creator. That is, rights are inherent in human beings, not something that are granted or taken away by some external force such as government. But don't tell that to a Republican. They'll throw a temper tantrum and then lie and insist that the founding fathers did not think that way, even though we have reams of paper from their letters, tracts, etc. saying otherwise.

-- Badtux the Voting Penguin