March 25, 2012

Posted by orrinj at 10:53 AM


The Democrat Who Took on the Unions: Rhode Island's treasurer Gina Raimondo talks about how she persuaded the voting public, labor rank-and-file and a liberal legislature to pass the most far-reaching pension reform in decades. (ALLYSIA FINLEY, 3/23/2012, WSJ)

The former venture capitalist is a Democrat, which means that she believes in government as a force for good. But "a government that doesn't work is in no one's interest," she says. "Budgets that don't balance, public programs that aren't funded, pension funds that are running out of money, schools that aren't funded--How does that help anyone? I don't really care if you're a Republican or Democrat or you want to fight about the size of government. How about a government that just works? Put your tax dollar in and get a return out the other end."

Yes, that would be nice. Unfortunately, public pensions all over the country are gobbling up more and more taxpayer money and producing nothing in return but huge deficits. It's not even certain whether employees in their 20s and 30s will retire with a pension, since many state and municipal pension systems are projected to run dry in the next two to three decades.

That included Rhode Island's system until last year, when Ms. Raimondo drove perhaps the boldest pension reform of the last decade through the state's Democratic-controlled General Assembly. The new law shifts all workers from defined-benefit pensions into hybrid plans, which include a modest annuity and a defined-contribution component. It also increases the retirement age to 67 from 62 for all workers and suspends cost-of-living adjustments for retirees until the pension system, which is only about 50% funded, reaches a more healthy state.

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Posted by orrinj at 10:49 AM


Juliane Koepcke: How I survived a plane crash (Juliane Koepcke, 3/25/12, BBC Magazine)

When we saw lightning around the plane, I was scared. My mother and I held hands but we were unable to speak. Other passengers began to cry and weep and scream.

After about 10 minutes, I saw a very bright light on the outer engine on the left. My mother said very calmly: "That is the end, it's all over." Those were the last words I ever heard from her.

The plane jumped down and went into a nose-dive. It was pitch black and people were screaming, then the deep roaring of the engines filled my head completely.

Suddenly the noise stopped and I was outside the plane. I was in a freefall, strapped to my seat bench and hanging head-over-heels. The whispering of the wind was the only noise I could hear.

I felt completely alone.

I could see the canopy of the jungle spinning towards me. Then I lost consciousness and remember nothing of the impact. Later I learned that the plane had broken into pieces about two miles above the ground.

I woke the next day and looked up into the canopy. The first thought I had was: "I survived an air crash."

I shouted out for my mother in but I only heard the sounds of the jungle. I was completely alone.
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Posted by orrinj at 10:46 AM


You are invited to join my on-line college hoops bracket
group! To accept this invitation and join the group, click
the link below (or cut and paste the link into your
browser's address field). You'll be asked to enter the
group's password before you can join. The group password is
included in this e-mail.

Our Group password is: ericjulia

The good folks at Macmillan are giving us an audio copy of their new thriller, The Inquisitor by Mark Allen Smith, to give away in the contest.  You can hear an excerpt here.

Posted by orrinj at 10:35 AM


As Dems rack up debt, youth should flock to GOP (Jeff Jacoby, 3/25/12, Boston Globe)

'I Don't mean to be flip with this,'' said Mitt Romney during a q-and-a with students at the University of Chicago last week. "But I don't see how a young American can vote for a Democrat.'' He cheerfully apologized to anyone who might find such a comment "offensive,'' but went on to explain why he was in earnest .

The Democratic Party "is focused on providing more and more benefits to my generation, mounting trillion-dollar annual deficits my generation will never pay for,'' Romney said. While Democrats are perpetrating "the greatest inter-generational transfer of wealth in the history of humankind,'' Republicans are "consumed with the idea of getting federal spending down and creating economic growth and opportunity so we can balance our budget and stop putting these debts on you.''

The government's record-breaking debts "are not frightening to people my age, because we'll be gone,'' Romney argued, but "they ought to be frightening to death to people your age!'' He regretted not doing a better job of getting that message across to younger voters. "You guys ought to be out,'' Romney insisted, "working like crazy for me and for people like me: conservatives, who want to keep the cost of government down and give you a brighter future.''

Posted by orrinj at 10:31 AM


A federal budget plan, and reality (LA Times, 3/25/12)

Democrats are already focusing their protests on the big changes Ryan proposes for Medicare, starting in about a decade. But it's not the draconian outline Ryan offered last year, which would have replaced Medicare with insurance subsidies for the elderly that probably wouldn't have kept pace with the rising cost of medical care. The new plan, developed with Sen. Ron Wyden (D-Ore.), would preserve Medicare as an option but have private insurers compete with it for customers.

More problematic are Ryan's proposals to require states to pick up a growing share of the cost of Medicaid, a joint federal-state health insurance program for the poor, and to limit federal spending to about 20% of the economy, which eventually would force painful trade-offs between honoring the increasing obligations to retirees (in the form of Social Security and Medicare benefits) and maintaining other federal programs. 

Are they really arguing against the Ryan budget on the basis of a bipartisan plan that keeps Medicare but offers other choices and the fact that it makes the citizenry prioritize future spending?
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Posted by orrinj at 9:48 AM


"Capitalism Should Not Be Run By Capitalists": Last year, the British journalist Charles Moore caused a stir in conservative circles when he asked: Has the Left been right after all? Now, he sat down with Martin Eiermann to discuss contemporary conservatism, the future of Europe, and the comfort of original sin. (Charles Moore, 20.03.2012, The European)

The European: It seems to me that the crisis extends beyond a strict focus on markets. Religion has traditionally been an anchor for conservatism, but the influence of religion seems to be on the decline. In the context of gay rights or environmental regulation, conservative ideas are increasingly out of step with popular opinion. 

Moore: I think it is true that conservative ideas have to be articulated differently. The state of capitalism has been misrepresented. If you are a true believer in the free market, you are - as Tony Blair put it - on the side of the many, not the few. Adam Smith's argument was that transparency and the rule of law are important for free markets to function properly. Markets should not be controlled by the capitalists because their interests are not the same as the public interests. But here is the real problem: Everyone has gotten rather confused about the balance of liberty and authority. British conservatives are very keen to appeal to the nation-state. But free trade and the European Union have subverted that order. The EU is essentially opposed to the political unit of the nation-state, and conservatives instinctively feel threatened by that. The British government has decided that the Euro will collapse, and it tries to stand in the right spot when it does. The assumption is that Britain will ultimately benefit from a collapse of the Eurozone.

The European: German conservatives tend to be very pro-European. So is this a conservative confusion or a British peculiarity? 

Moore: It's an Anglo-Saxon thing. The whole human rights discourse presents a certain threat to our political liberty because it transfers authority from our own elected representatives to a foreign jurisdiction.

The European: Would you be more in favor of the EU if it had more democratic structures? 
Moore: Yes, in principle, but No in practice. In order to have these structures, you need a demos - shared assumptions about culture and history - that does not exist in Europe. The European Parliament is merely a pretense of democracy. The crisis of the Eurozone is now vindicating a lot of British sentiments about the problems of the European Union. What we said about the EU in the late 1980s has turned out to be right, and for almost the exact reasons that we mentioned. What we have not been able to do is answer questions about the balance between free trade and the independence of the nation-state. Mervyn King said that "the big banks are global in life but national in death." They come home to die, and we have to pay for their funeral. That is a very bad situation and leads us to espouse a vaguely Marxist view of the world: the view that decisions are made at the international level without taking our interests into account. The way the EU is run is essentially an international elite that gives each other jobs and pensions. And when they make a mess of things, they try to run the countries that have been messed up by their policies. For example, the current Greek government has never been elected. That is very alarming. [...]

The European: You earlier invoked Gramsci. Are you an optimist of the heart?

Moore: Yes, because of a Christian belief in original sin. It is a very comforting doctrine. If you know that you are bad, there is a sense that we are all in this together. The people who think that human nature is intrinsically good have to wonder why the world is so bad. But if you embrace your badness, you can review it and improve as a result. Free societies do that, and it is particularly strong in the Anglo-Saxon world. I have always been bothered by the tendency of contemporary European culture to sweep things under the carpet. One thing that European nations don't want to do right now is analyze why they are in this economic mess.

And the reason the Left and Right get reality so wrong, as Mr. Moore mentions, is that the one thinks the State is not Fallen and the other thinks Business is not.

Posted by orrinj at 9:32 AM


Homophobia, football, and the French kiss making headlines (Daniel Jacobius Morgan, 25 March 2012, New Statesman)

A viral video of two French international footballers tenderly kissing in front of a stadium full of fans has entranced the Francophone media. After scoring against Germany in a friendly match, Olivier Giroud is shown grabbing his teammate Mathieu Debuchy's face with both hands and kissing him on the lips. As one blogger breathlessly wrote, "It was fleeting but passionate."

The clip was played repeatedly on French news channels in slow motion and from a variety of different angles, with pundits and fans agitatedly debating whether it was a moment of harmless heteronormative bonding, or something altogether more subversive. Asserting his heterosexuality, Giroud told the media, "We simply brushed [cheeks]. I was just thanking him. I am an affectionate person. There's nothing more to it." Despite the fact that these two men are resolutely straight, the reaction to the clip raises the question of why a moment of apparent homosexuality in the context of a football match raises so many eyebrows.

What would be genuinely shocking is a video of one of them throwing overhand.

Posted by orrinj at 9:07 AM


A Bailout by Another Name (GRETCHEN MORGENSON, 3/24/12, NY Times)

But what the proponents of principal reductions at Fannie and Freddie don't talk about is what a transfer of wealth from taxpayers (again) to large banks such a program would represent. The fact is, principal reductions by Fannie and Freddie are not the panacea that they may seem.

As of last September, only 2.5 percent of Fannie and Freddie mortgages were seriously delinquent, versus 7.2 percent for banks' mortgages. [...]

While some of the same people who helped get us into this housing mess call for Mr. DeMarco's head, it's instructive to see what Fannie and Freddie have done to help troubled homeowners -- and to compare, where you can, the companies' efforts with those of banks.

In the quarter ended last September, Fannie and Freddie were responsible for 36.3 percent of all loan modifications, compared with 19.2 percent by banks. Of the 54,000 loan modifications initiated under the Treasury Department's HAMP program in the September quarter, 44 percent were on Fannie and Freddie mortgages; bank-held loans accounted for a little more than half that share, at 23.6 percent.

The September quarter is by no means an anomaly. Fannie and Freddie have consistently led in loan modifications since the beginning of 2010.

Since the companies were taken over by taxpayers in September 2008, they have provided 1.1 million permanent loan modifications for homeowners. This compares with 950,000 permanent loan modifications under the HAMP program done by banks in a slightly shorter period -- April 2009 to January 2012. These include modifications on loans held by investors, however.

There's more. According to a recent report from the Office of the Comptroller of the Currency, loan modifications by Fannie and Freddie have performed far better than those on privately held mortgages. Since the taxpayers took over the companies, re-default rates have been consistently lower at Fannie and Freddie than among privately held mortgages, the report shows.

This suggests that the types of loan modifications provided by Fannie and Freddie -- reducing borrowers' monthly payments -- are working fairly well. Addressing borrowers' ability to repay loans has been the focus, Mr. DeMarco said. At the same time, these changes in loan terms do not encourage people to default in spite of being able to pay.

"What we're doing with the bulk of underwater borrowers is offering loan mods for principal forbearance, taking a good chunk of underwater principal and setting it aside at a zero rate of interest," Mr. DeMarco said in an interview. "We're getting the borrower into a mortgage they have an ability to repay."

Moreover, most of the borrowers who owe more on their Fannie and Freddie loans than their homes are worth continue to pay their mortgages. The most recent statistics from the companies show that nearly 80 percent of underwater borrowers were current as of June 30 last year. Among those borrowers defined as deeply underwater -- their loan-to-value ratios are currently above 115 percent -- 74 percent were current.

Throughout the crisis and its aftermath, banks have been very good at ensuring that others -- whether taxpayers, Fannie and Freddie, or private investors who hold loans in mortgage securities -- do more to help troubled borrowers than banks have been willing to do themselves. This refusal to share the sacrifice is a major flaw in the recent foreclosure-abuses settlement that regulators have crowed about.

Bailout the home buyers and make the banks eat the costs.

Posted by orrinj at 8:49 AM


Obama Is Humbled by the Market (JIM MCTAGUE, 3/24/12, Barron's)

The irony here is that higher pump prices gradually phased in over, say, 10 years, as opposed to rapidly increased in a few months, might benefit the economy immensely, solving a host of problems from pollution to traffic congestion. Economists from both political parties for years have been urging presidents to adopt a federal gasoline tax significantly higher than the current 18.4 cents a gallon to reduce wasteful consumption. However, presidents including Obama have refused to touch the suggestion with a 10-foot pole because it's considered political suicide to ask voters to accept higher fuel levies.

Harvard University economist Greg Mankiw, currently an advisor to GOP presidential hopeful Mitt Romney, has long been an advocate of a $1-per-gallon gas-tax hike phased in over 10 years (Romney won't countenance the tax). Absent the tax, politicians resort to crazy, Obama-like schemes to achieve the same end of reducing our dependence on foreign oil supplies.

MANKIW PRESCIENTLY STATED during a 2006 interview conducted by CNBC's Larry Kudlow that the alternative to a simple gas tax is "an energy policy that looks like it was created in the Kremlin."

"An alternative in Washington to gas taxes," he said, "is very heavy-handed regulation that's extraordinarily intrusive and not particularly effective. Things like CAFE standards"--the fuel-efficiency rules that auto manufacturers are required to follow--"and biofuel mandates are tremendously regulatory. The gas tax is really the least invasive way of getting toward our energy goals."

In an Oct. 20, 2006, op-ed piece in The Wall Street Journal, Mankiw said higher gasoline taxes would be the least invasive way to reduce pollution and highway congestion. The tax would encourage manufacturers to make fuel-efficient cars and eliminate the need for bureaucratic mandates. Mankiw estimated in his 2006 article that tax revenue would amount to $100 billion a year, which could be used to lower the deficit.

It needs to be much higher that a $1 increase.
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Posted by orrinj at 8:18 AM


Why Won't They Listen?: a review of THE RIGHTEOUS MIND: Why Good People Are Divided by Politics and Religion By Jonathan Haidt (WILLIAM SALETAN, NY Times Book Review)

Haidt seems to delight in mischief. Drawing on ethnography, evolutionary theory and experimental psychology, he sets out to trash the modern faith in reason. In Haidt's retelling, all the fools, foils and villains of intellectual history are recast as heroes. David Hume, the Scottish philosopher who notoriously said reason was fit only to be "the slave of the passions," was largely correct. E. O. Wilson, the ecologist who was branded a fascist for stressing the biological origins of human behavior, has been vindicated by the study of moral emotions. Even Glaucon, the cynic in Plato's "Republic" who told Socrates that people would behave ethically only if they thought they were being watched, was "the guy who got it right."

To the question many people ask about politics -- Why doesn't the other side listen to reason? -- Haidt replies: We were never designed to listen to reason. When you ask people moral questions, time their responses and scan their brains, their answers and brain activation patterns indicate that they reach conclusions quickly and produce reasons later only to justify what they've decided. The funniest and most painful illustrations are Haidt's transcripts of interviews about bizarre scenarios. Is it wrong to have sex with a dead chicken? How about with your sister? Is it O.K. to defecate in a urinal? If your dog dies, why not eat it? Under interrogation, most subjects in psychology experiments agree these things are wrong. But none can explain why.

The problem isn't that people don't reason. They do reason. But their arguments aim to support their conclusions, not yours. Reason doesn't work like a judge or teacher, impartially weighing evidence or guiding us to wisdom. It works more like a lawyer or press secretary, justifying our acts and judgments to others. Haidt shows, for example, how subjects relentlessly marshal arguments for the incest taboo, no matter how thoroughly an interrogator demolishes these arguments.

To explain this persistence, Haidt invokes an evolutionary hypothesis: We compete for social status, and the key advantage in this struggle is the ability to influence others.

A live chicken is a whole 'nother story....

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