Category: borrowed content

Bailout Analysis

Most of what’s passing for “explanation” or “analysis” of the financial crisis is about as valuable as a mortgage-backed security, but this article by John Leonhardt in the Times is a really good overview of the crisis, the solution, and the context for both. A few choice bits:

… All told, the Federal Reserve has pumped $800 billion into the financial system, Ben Bernanke, its chairman, estimated on Tuesday. That figure doesn’t include the untold sum that the Fed now plans to spend buying short-term debt so that companies can continue to pay for their daily operations. And it doesn’t include any of the money the Treasury Department is laying out, like the $700 billion bailout fund or the $200 billion that could be spent propping up Fannie Mae and Freddie Mac.

After 14 months of crisis, the federal government — meaning you and me — has put serious money on the line. As a point of comparison, the entire annual federal budget is about $3 trillion.

Even before the crisis, the Bush administration was set to bequeath a $550 billion deficit to its successor. Now, a better estimate appears to be $750 billion — or 5 percent of gross domestic product. The only years since the 1960s that the deficit has been nearly so large were the early 1990s (almost 4.5 percent of G.D.P.) and the mid-1980s (with a peak of 6 percent in 1983).

… Obviously, next year’s deficit is a problem. And if you assume the credit crisis isn’t about to lift — which seems smart at this point — the ultimate cost of the bailouts could conceivably go higher. Whatever the final figure, it should still be put in some context.

Despite everything, the biggest fiscal problem remains, far and away, health care. Based on the rate that medical spending has been rising, the Congressional Budget Office forecasts that Medicare and Medicaid will take up 10 percent of G.D.P. within two decades, up from about 4 percent now. In today’s terms, that would be the equivalent of adding at least $900 billion to the deficit every single year, in perpetuity. It makes the cost of the bailouts look like a rounding error.

Little Post about Jack & Diane

For whatever ’80s-cosmic reason, I have heard John Cougar Mellencamp’s “Jack and Diane” twice in the last week. Good god, what a fantastic song. From the metallish guitar riff that dissolves into those stark chords to the miniaturist verses, it’s a perfect few minutes of song. I remember thinking, in my 20s, having heard this song my whole life, that the aphoristic line at its heart was painfully true: “Oh yeah/Life goes on/Long after the thrill/Of living is gone.” Now I think it’s irredeemably, adolescently maudlin – and still more than slightly true.

Overdistance Rollerski, or, Thinking Snow

This morning, the female fraction of the family attended a friend’s birthday party, giving me the opportunity  to do an “overdistance” rollerski workout – going longer, in terms of both time and distance, than a normal workout, with the aim of really taxing the body and forcing it to work harder than it does in regular distance or interval workouts.

Judging by the all-day throbbing in my shoulders, back, and upper legs, it worked.* More importantly, both the weather and the scenery were fabulous. After making my way through a crowd of surly road-users

Honkies
Honkies

I was out among the endless brown and green fields broken only by a few strands of trees or farmsteads…

Northeast of Northfield
Northeast of Northfield
East of Northfield
East of Northfield

Not a bad way to spend a couple hours.

* Final totals for the session:

  • 29.77 kilometers (18.50 miles) skied
  • 2:03:52 total ski time
  • 139 beats per minute average heartrate, with a maximum HR of 162
  • 1440 calories burned
  • Three energy gels and 56 oz of energy drink consumed
  • One gel packet dropped but later recovered
  • Four bike riders and one runner encountered
  • Zero crashes committed

Another Post on the Alaska Governor

Katha Pollitt, opining brilliantly about the Palindrome.

There is just no way Sarah Palin is equipped to be vice president, much less president. She doesn’t know enough; she lacks the necessary grasp of, and curiosity about, our complex world; her political philosophy could fit on a bumper sticker: Us versus Them. The lack of stamps in her recently acquired passport has been much noted (yes, I know, Bill Kristol, Lincoln was not a big traveler, either); it isn’t even clear she’s well acquainted with the Lower 48.

(Link and pun stolen from Michael Bérubé.)

One More Post on the Governor of Alaska

Via an excellent piece by Rebecca Traister in Salon,

Shaking our heads and wringing our hands in sympathy with Sarah Palin is a disservice to every woman who has ever been unfairly dismissed based on her gender, because this is an utterly fair dismissal, based on an utter lack of ability and readiness.

I came across this even more excellent blog post by the journalist Ta-Nehisi Coates, explaining how and why it could be that McCain’s decision to pick Palin was, in fact, cruel and sexist:

Which brings me to the sexism of John McCain. He knew full well what Sarah Palin was going to face if he nominated her. He knew that reporters would go through her past, that they’d quizz her on the present, that she would need to be ready, and he shunted concern aside, and tossed her to the wolves. Think on that for a mement. For one last run at the White House, he risked a future star of the party he claims to call home. How do you do that?

Poetry Buyouts

Brilliant satire from Charles Bernstein in Harper’s:

Poetry Bailout Will Restore Confidence of Readers
Chairman Lehman, Secretary Polito, distinguished poets and readers—I regret having to interrupt the celebrations tonight with an important announcement. As you know, the glut of illiquid, insolvent, and troubled poems is clogging the literary arteries of the West. These debt-ridden poems threaten to infect other areas of the literary sector and ultimately to topple our culture industry.

Charles Bernstein’s most recent collection of poetry is Girly Man. His poem “Pompeii” appeared in the August issue of Harper’s Magazine; his essay “Wet verse at The New Yorker” appeared in the November 1989 issue._

Cultural leaders have come together to announce a massive poetry buyout: leveraged and unsecured poems, poetry derivatives, delinquent poems, and subprime poems will be removed from circulation in the biggest poetry bailout since the Victorian era. We believe the plan is a comprehensive approach to relieving the stresses on our literary institutions and markets.

The only trouble I can foresee is the effect on the Northfield economy of the inflow of federal funds to our local poets, like this guy or this guy.

Cashtastophe

Historically unprecedented things are happened so frequently nowadays, they almost pass unnoticed:

Government Seizes WaMu and Sells Some Assets
Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history. Washington Mutual, with $307 billion in assets, is by far the biggest bank failure in history, eclipsing the 1984 failure of Continental Illinois National Bank and Trust in Chicago, an event that presaged the savings and loan crisis. IndyMac, which was seized by regulators in July, was one-tenth the size of WaMu.

Lehman Files Largest Bankruptcy in U.S. History
Lehman Brothers, a major Wall Street investment bank, filed for Chapter 11 bankruptcy protection early Monday after efforts to find a buyer broke down Sunday. Potential buyers walked away after the U.S. Government signaled it would not commit taxpayers money to shoring up the firm. In its bankruptcy filing, Lehman lists debts of $613 billion.

Rescue must weigh safety vs. freedom
1792 bailout amounted to 8 percent of the nation’s $220 million gross domestic product at the time, records show. During the Great Depression, the Home Owners’ Loan Corp. was the major program designed to ease the housing crisis, but the $200 million allotment was only 0.3 percent of the nation’s economy that year. Funds laid out to address the savings and loan crisis of the 1980s and 1990s ultimately reached $125 billion, or about 2.3 percent of the economy in 1989, the year the Resolution Trust Corp. was created. Today, the $700 billion taxpayer investment in fixing the housing crisis would amount to 5 percent of gross domestic product this year.

For what it’s worth, it appears – based on my (superficial) reading I’ve done in the last two days – that during the Great Depression, the U.S. government did not rescue a single bank, or other financial institution. Not one.

News Ealand

For the last week and a half, I’ve been working on a big proposal for a faculty study trip to New Zealand. In addressing the gazillion matters required by the feds for these kinds of proposals (for instance: the international airport code for Rarotonga, Cook Islands, is RAR), I’ve learned at least these seven interesting things about New Zealand:

1. The country’s native Maori people – and many white New Zealanders – use the name “Aotearoa” (“land of the long white cloud”) for the country.

2. New Zealand is about as far from Australia as Los Angeles is from Minneapolis.

3. New Zealand actually is a sort of empire, exerting some measure of political and economic influence over other South Pacific states like the Cook Islands, Niue and Tokelau.

4. These Pacific islands are hollowed-out countries, with the majority of their populations living not on the home islands, but in New Zealand. For instance, the Cook Islands have an on-island population of about 20,000, while 58,000 people who identify themselves as Cook Islanders live in New Zealand.

5. The country’s rugby team, the All Blacks, has been competing internationally since at least 1905, two years before the country became an “independent dominion” of Great Britain and 42 years before full independence. If an American national baseball team had been competing for 101%  as long as the country had existed, the team would have started playing in 1771.

6. Riffing on the “All Blacks” name, the New Zealand national basketball team is the “Tall Blacks.”

7. The All Blacks’ pregame “haka” dance is the very definition of intimidating, and has a fascinating history, too:

Genius!

I love reading the annual announcement of the MacArthur Foundation “genius grants.” This year’s crop is science-heavy, unlike some previous years when (as I recall) more humanists made the cut.

But this year, I actually have a (verrrrry) weak personal connection with one of the awardees: in June 2006, I sat about three feet from Miguel Zenón at the Village Vanguard jazz club in New York, and enjoyed his incredible sax playing. After the show, I literally bumped into him as I came out of the men’s room. I said, “Nice playing!” and he said, “Thanks.” Who’s the genius, huh?

Gut-Level Math

A truly fascinating article in the Times‘ science section the other day described how researchers are beginning to identify the genetic or neurological underpinnings of mathematical capacity – the instinctual ability to compare two quantities, for instance:

Humans use two distinct number systems, one learned and one intuitive. Computation, such as taking a square root, is an abstract process that is uniquely human. But the nonverbal process of approximating numbers is a system we share with infants and many other animals.

Well worth reading on its own, the article also links to an interesting online game which asks the player to briefly view a screen of blue and yellow dots, then state whether there were more yellow or blue dots. The average is about 75%. Fun and challenging, the game also might surprise you with evidence of an innate ability (or lack of ability) to recognize quantities.

Sarah Palin: Not Like Me

My Northfield blogging colleague Mnmom (who not only writes a great blog, but has perfect the hilarious tag) just posted an excellent list of reasons why Sarah Palin is NOT like me. Click through for the full list.

I don’t force teenagers to get married
I don’t parade my kids around for political gain
I don’t believe the Iraq war is a mission from God
I actually think the separation of church and state is a PRETTY GOOD IDEA! To quote Mrs. Palin “If it was good enough for the Founding Fathers, it’s good enough for me!”
I know the Founding Fathers did NOT write the Pledge of Alligiance and they sure as hell did enter the phrase “under God”.