I dream of living in ... a World Without Dictators! I'm a Libertarian Paternalist in Slovakia - Freedom with Responsibility - 10% of income into your own Pension; Tax Loans for education, health, housing; now supporting Employment Maximizing Companies!

blog posts on immigration at The Truth Laid Bear

Good buy, but good bye Mo'time -- Happy New Year 2009

Image by http://www.wordle.net/.

http://www.wordle.net/gallery/wrdl/417613/Liberty_Dad

I'm now planning on leaving Mo'time, to play with other blogs, and facebook.  Tom Graessle Grey

Howard's done a fine job here, but I always was mostly political / economic, and this community is more personal and friendly oriented.
I just found Wordle, and the samples seemed pretty cool -- better than my own results even.  But that's no surprise.

Democracy in Iraq -- looks like Bush's legacy is going to be biggest increase in freedom from military action since WW II.  Plus the huge problems.

So I expect to more often be on: TheNextRight.com on the TomGrey blog.

But maybe on Townhall, if they fix their blogging software so it's easier to use.
(2006) Liberty Father - a World Without Dictators

Probably not on Xanga, where I was OldTigger before becoming Liberty Dad (or even knowing that Libertarian Paternalism was NOT an oxymoron).

Of course, there also my blogger (blogspot) blogs:

(2006) Liberty Father - Slobodymilovný Otec -- I thought I might try a bi-lingual blog, but it was so much work I switched to just English, and then it was just an alternate to Mo'time.  Better to have just one.

(2005) Weblog ABCs in Slovakia -- when I thought I'd become an expert on blogs and new blog technology.


I wanted to create a blog for Ronald Hilton of Stanford, but he decided not to.  His edited email list is essentially a private, email blog. (2006)
World Association of International Studies.


I wanted to create one for the Hayek Foundation, Hayek in Slovakia -- but they have their own in good Slovak: Nadacia F. A. Hayeka


More likely is to go to WordPres, and YALD - Yet Another Liberty Dad

Posted by: TomGrey at 01/05/09 00:49 | link | comments (7)

It's all about Policing, Stupid -- good guys using force

More Strategy Page on the need for good Police work as part of 'Peacekeeping'.

What peacekeepers are finding out, again and again, is that the first line of defense is not soldiers, but police. Peacekeepers are needed, in the first place, because local policing efforts have failed.

Let's remember that there are bad guys, willing to use force.  They can only be stopped by good guys willing to use force.

That's what gov't is, good guys using force.  Whenever you need good guys to use force, you need gov't.

Wherever you have gov't, you have force.

Posted by: TomGrey at 12/02/08 02:31 | link | comments (1)
democracy, world cop

Too Many Big Banks - downsize Finance

The popping of the housing bubble, after over construction of houses (by about 2 million), has meant a loss of jobs for some 500-600 000 workers (legal), and perhaps twice that among illegals (many going home).

The FINANCE bubble built on top of this also means too many bankers, and too many banks.

We need to help the solvent banks, and quickly let the insolvent banks die. There should probably be some 500 000 fewer bankers before the finance crisis is over.

The Big Banks, like Citi, which were too foolishly risk-seeking to avoid the high-risk derivatives, already have most of the toxic assets. They already are insolvent. There's no need for a new holding area, just let the bankrupt banks go into Chapter 7 (not 11, they're insolvent), and dispose of their assets at 20% of book value or so -- and let the solvent banks take over the good business.

(via Michael Barone)

Posted by: TomGrey at 12/02/08 02:24 | link | comments
economics

Africa should try Tribal Cantons

The depressing news about Africa continues, now from Strategy Page:
The basic problems are corruption, tribalism and raw materials (from oil to diamonds and minerals) that enable warlords to sustain themselves, and their gun toting followers, for years. Somalia and Congo are the worst examples of this sort of thing. Then there's Sudan, where the government actually supports much of the mayhem. Many countries are seemingly peaceful, but are actually ready to slip into anarchy.

Thru the article, there is a feeling that nothing can be done about the tribes.

But I think Switzerland should be more of a model, with tribal cantons as a goal.

Posted by: TomGrey at 12/02/08 02:23 | link | comments
africa

Obama will be my President.

There's a great book called:
The Evolution of Cooperation.

It talks about multiple prisoner's dilemma games, simulated on computer, and strategies to 'win'.

Tit for Tat.
Wins, over time.

Assume the other is honest, you be honest.  After that, copy what the other did.

Nixon was treated somewhat unfairly (the crook).  Carter, not so much.  Reagan, unfairly; but he overcame it.  Bush I, not so much ('read my lips' -- liar).  Clinton, not so unfairly UNTIL his perjury (a federal crime), and then the Rep rage at the unfairness of the media not being as unfair to Clinton as they had been to Reagan (loudly) and Nixon (unspoken, mostly).

Clinton's false statement lies were more clearly untrue than Nixon's.  With Watergate, the Left got to blame Vietnam on the Reps, not the Kennedy/LBJ folks who got into the mess.
Plus, the Dems got to vote for losing S. Vietnam ('74-'75), after Peace in 1973 -- but blame it on Nixon/Ford, and the 'never possible to win' lie.

For anybody who believes in Freedom and Democracy, the S. Viet sell out by the Democratic Party was a violation of American ideals.  But in my 1976 vote for Carter, I wasn't thinking of Killing Fields at all, just how I didn't like pardoning Nixon, and didn't like our Pres. bending over with a football ready to snap.  Nor did I like him stumbling off planes.

Tit for Tat.  Until it stops.
Maybe if Obama does what conservatives want, it would stop -- too bad the anti-bailout (Christian?) wing disagrees with the elite pro-bailout Bush wing. Reps don't know what they want, in economic policy.

We should want a rapid end to deflation, a mild inflation.
Print money, now.
No more bank bailouts, there's too many of them.  The bad ones are the ones asking for gov't cash, probably far less than 20%, tho most of the biggest.
(via Megan)

Posted by: TomGrey at 11/26/08 02:20 | link | comments (1)
politics

All economic models will be broken

Econ blog Worthwhile Canadian Initiative has a great graph of S&P values, 1962-1992; then up thru 2007.

But they couldn't get a nice, two variable model to fit the data.
 
Naturally, a 'more complex' model might be more accurate, but then it loses  its elegance.

All models will fail to predict human financial behavior, not too long after they become reliable enough to be used for 'making money'.

Once a model can be used to make money, thru a behavior change by the model using money maker, more folks will change behavior to make money thru that change, and then the model will break.


Then the same folks write up a complex argument to answer the tough question:
will-deficit-spending-in-fact-be-money financed?

Well, their answer is that it will be.
If this means the Fed / Treasury should be sending out checks of USD to taxpayers, I agree with them.


Wow,  a great graph on Bayesian models!
.
Before looking at the Gelman data/ discussion, I should note my own a priori feeling that no other model building process will be better Bayesian for the intractable problems.

There's also an issue of data abundance, for instance on the risk of house foreclosures.  If the data is by years, the last 30 years isn't so much; by months the same data becomes more, and by day it expands even more.  But the usefulness of day data on house foreclosures is not 365 times greater than annual average year data, maybe not even twice as informative.

Modern data collection techniques, as well as rocket science risk management, might well disguise an intractable problem.

Posted by: TomGrey at 11/26/08 02:19 | link | comments (1)
economics

Too Many Big Banks

I'm sure that there are too many Big Banks, and too many bankers, and the financial industry is facing its own massive downsizing.

Please ask how much paper value has disappeared?
I doubt there will be a consensus, but a good data point is the Lehman windup, at about 20 cents per dollar nominal.  So a derivative market of $100 tr might only be worth $20 tr -- who will eat the lost $80 tr?  All the Big Banks.

THAT paper wealth is gone, and the need for finance sector jobs to slice, dice, sell, insure, rate ... and even analyze and write about the paper wealth.  All gone.
Even if they get 'bailed out' to allow the few top fat cats to stay fat, the finance sector is hosed.

There is a lack of need for finance jobs, just like the lack of need for new house construction.

(via Megan)

Posted by: TomGrey at 11/26/08 00:12 | link | comments
economics

No More Bailouts

Megan McArdle notes: how messy is the 'New Deal' experimentation, and asks if anything will work or if the economy is just hosed?

House construction is hosed for a few years.
Newspapers are hosed thanks to internet.
The prior Financial System is hosed. 

Overpaid American jobs for which there is an import substitution are hosed.
Overpaid service jobs that depend on above overpaid buyers are hosed.

Some $60 tr of fictitious, paper value has disappeared, so there is no need of overpaid Big Bank financial folk to optimize the yields from it.  All top 50 banks or so should be allowed to go belly up.  Especially Citi, Goldman, & Morgan -- any bank with more than $1 tr in unknown value derivatives; and AIG, too.

Smaller banks should be given 1% loans from the Fed equal to the amount of loans they've made to non-financial, non real-estate companies.  The Depression credit crunch was because all the banks stopped lending.  If only small banks now lend, and all big banks die, there is not much real credit crunch.


Print the money to send all US tax filers $5 000, or $10 000, for Christmas.  They'll spend it (good), or save it (good), or pay down debt (including mortgages; good).  No higher tax, no higher interest rate.
With CPI dropping, no fear of inflation. 

Those previously overpaid folk need new, mostly lower paying jobs.  Nobody knows where they will come from.  They will come faster, and more from the market, when consumers have cash to vote with their dollars on what they want more of.

Now would be a good time for the Feds to offer special 'new company' tax relief for companies hiring new employees, or expanding their employees.

Posted by: TomGrey at 11/25/08 17:50 | link | comments (1)
politics, economics

From Typealyzer, a Meyers-Briggs Type Indicator analysis, by computer, of this blog:

The analysis indicates that the author of http://tomgrey.motime.com is of the type:

INTP - The Thinkers

The logical and analytical type. They are especially attuned to difficult creative and intellectual challenges and always look for something more complex to dig into. They are great at finding subtle connections between things and imagine far-reaching implications.

There is a cool picture of the brain with 4 main pairs: NT, NF, ST, SF -- but I recall that SP and SJ were more importantly distinctive for the S sensory-concrete types.

Yes, well sometimes I'm balanced with E, but always extreme NTP.
Prof Bainbridge has three blogs, with three different results.

While his three different results leads him to distrust MBTI, I haven't found any better personality type description that describes me.

Posted by: TomGrey at 11/22/08 23:16 | link | comments
blogs, greys

Gov't Credit/Debit Card - yes

For a fiscal stimulus, the Gov't should offer everybody who filed an income tax form a gov't Credit card.  Starting with a 100% tax rebate of last year's taxes, up to a maximum of $5000. This tax rebate debit would not have to be paid back. However, the maximum debit would be reduced in value monthly, with a promise to rapidly reduce it if the economy begins expanding again.

The Credit Card should offer another $5000 in credit, which would have to be paid back -- but the minimum payment would be $10 plus 10% of income over some minimum (120% of poverty?).  The ARM interest rate would be the Feds Fund rate + 1% =~2% for now.

Let folks pay off other debts as well as buy more stuff from locals.

Posted by: TomGrey at 11/19/08 02:59 | link | comments
economics

GM - first bankrupcty, then help to new owner

GM needs to go thru some kind of bankruptcy to escape the retirees' healthcare and pensions -- yet the gov't bailout of using Medicare & Social Security is already in place.

Great charts at Carpe Diem, based on fine Chrysler data (OK, estimates for other carmakers).

Instead of a bailout, what should be the focus of discussion is the post-bankruptcy business plan for the car factories and the workers.

The gov't should probably offer matching loan dollars to the highest equity bidder for buying the factories, at an ARM starting at current Fed rates (of 1%) plus 1%, or some such.

What I don't know is whether union pension debt comes before or after bond holders in bankruptcy -- I know that equity investors get wiped out.  And they should.

Gov't helping UAW buy GM after a bankruptcy seems excellent -- let the management work for UAW and decide about the workers and management salary levels.  All prior UAW 'benefits' should have been funded by stock grant purchases to the UAW account.

Posted by: TomGrey at 11/19/08 01:14 | link | comments
economics

No more bailout!

What is the problem?  (Remember that from Michael Douglas's rape by Demi Moore in Disclosure?)

The problem in Wall Street is Too Many Big Banks, Too Many bankers.

It's not liquidity.  It's solvency.  The $12 tr in housing value has maybe halved to $6 tr, so $6 tr of fictitious housing wealth has disappeared.

But all the leveraged MBS / CDOs and even Credit Default Swaps, up to $60 tr in notional value, was based on that now-missing $6 tr in housing value.

Even at only 1%, highly efficient, that $60 tr leads to a $600 bil 'fictitious' financial industry.  It's gone.  NOT solvent.

The financial bailout can no more save the finance industry than the auto bailout can save the auto companies.


The Fed should be loaning companies money, and working on a low transaction cost bankruptcy plan for financial companies, especially to avoid long drawn out lawsuits.  Depositors get their cash; shareholders and bond holders get nada, and CEOs get the boot.  Bankruptcy, like Lehman.  For AIG, Fannie Mae, Freddie Mac.  Starting over is easier than cleaning up.
(via Megan at The Atlantic)

Now is the time to offer New Jobs -- at 80% of last year's median income (about $30 k, not the $45 k avg).  Let all Americans have jobs, let the gov't try to find work that is worth that much to do.

Posted by: TomGrey at 11/15/08 23:21 | link | comments
economics

Bankruptcy - not bailout

I was for the bailout, at first, in fear of huge banking failure.

But it's not a banking failure, it's a risk management failure.  Which the Big Banks failed, miserably.

Jeffery Miron gets it right, here.

What he doesn't say is this: House price values have moved from $12 tr down to maybe $6 tr, losing about $6 tr.  This is homeowner value loss.

Many of the homes had equity -- the equity is gone.
Many of the homes are now in negative equity.  The buyer of a $300 000 home with that much mortgage now has a $240 000 home.  He should probably walk away.  Meaning the bank owner has lost.

The house values were leveraged up, thru Mortgage Backed Securities and derivatives on these MBS instruments, into a $60 tr industry generating fat fees for the bankers who didn't quite understand what they were doing.

Let them fail, and the gov't should prepare a pick up the pieces plan, after they ALL go belly up.
Maybe an industry wide financial incompetence bill, so that the lawsuits and lawyers don't eat up most of what cash there is.

Jeffery ends: "The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer."

The Fed should make loans to businesses directly.  And set up a new, NON-Fannie Mae to buy good mortgages.

Posted by: TomGrey at 11/15/08 03:13 | link | comments
politics, economics

Sorry to Spam you - Social Minders

Ouch.  Perhaps a bit silly of me, but I got an invite from one I trusted to SocialMinders.

But it seems more of a Spam site, so I won't be using it. 
I'm more sad, and not at all glad. 
Others are mad.
('cause dey been very, very bad.)
See:
http://www.whatsnextblog.com/archives/2008/11/beware_socialminder_is_a_scam_and_i_fell_for_it.asp

Sorry.

Posted by: TomGrey at 11/15/08 03:01 | link | comments
blogs

Obama -- blacks will be FREE! to vote Republican

Wiki has a note on Southern Strategy.

To discuss the Southern Strategy, post-1964 Civil Rights Act , yet refuse to discuss ex-Dem. Gov. George Wallace seems ahistorical.

Nixon won a close election over Humphrey in 1968 because Wallace took away the racist southern Dem voters.

I don't doubt that many racist pre-68 Dems left, voted Wallace in 68, then Nixon in 72 (huge landslide victory).  But what policies of the Reps are racist?  Opposition to Affirmative Action, which could more accurately be called Affirmative Racism?  (Or Affirmative Sexism, for women.)

At the end of the weak Wiki article, they note culture, today:
Today, appeals to conservative values name cultural issues such as gay marriage, abortion, and religion.

Much anti-Palin, anti-Rep talk is actually anti-Christian.  Yet almost all elected Dems profess religious beliefs (tho maybe atheists believe the Dems aren't too serious about them.)

Fabius Maximus says:
The GOP’s time as the dominant party are over for the foreseeable future (not that we can see far into the future, these days).
Gay marriage? - NO.  Gun rights? - an individual's, not to be taken away.
Tax Cuts? - Yes
Religion? God bless America? America a Great Country? - yes, yes, yes.

What Barack most often promised was a fairly Conservative agenda.  When it appears, as seems likely, that he's as honest about the above policies as 'Read my lips' lying Bush 41, some other leaders promising conservative policies will be elected.  Probably Rep.

It might even be that, thanks to Obama, blacks will be able to vote Republican to support their interests other then increased Affirmative Action welfare dependency.

Posted by: TomGrey at 11/07/08 03:55 | link | comments
politics, democracy

Congratulations to my elected President, Barack Obama

After an extraordinarily long and unexpected campaign, Barack Obama is the newly elected President of the United States of America.

He said in an early speech that "there is no liberal or conservative America, there is only a United America".

I don't believe this has been true.  I doubt that he meant it then, nor means it now, but I hope so.

I hope he will change.

I hope America will change, for the better, for more individual responsibility, while also

He is now my elected President, he will be my President. 

I'll pray that he does God's will, and that God guides us to be on God's side.

 

Posted by: TomGrey at 11/05/08 09:23 | link | comments
democracy

The new President is a N*** (bong)

what did he say?

He said the New President is near!

No dad-gumit, the New President is a N*** (bong)

(Blazing Saddles, 1973)

---

In 1973, the N* word moved from insult into joke, able to be made fun of.  But now it is hate speech--if any white person says it.

It's still OK for blacks to call each other n*.

I'm wondering how this will change.

 

 

Posted by: TomGrey at 11/05/08 09:17 | link | comments
democracy

Hope for the Best, Expect the Worst

I'm not at all convinced Obama will be so bad that he obviously makes things worse -- on economics, especially. I'm fairly certain what policies he'll pursue are less Leftist than his past, but also feel nobody really knows. Because any President wants to be successful in passing a program, and the easiest programs to pass are those the other party wants, Obama will take the easy path. Also, the Dems will certainly want to find cover in ‘bipartisanship’ and get Reps on board. How and when which Reps join with which Dem programs will be very interesting.

Posted by: TomGrey at 11/05/08 09:12 | link | comments
economics, democracy

Too Many Houses

From Fabius Maximus ( Sep 8) :
<t>The core of the housing crisis is overbuilding, which has created an excess supply of housing units (broadly defined). Today there are roughly 4 - 5 million vacant housing units above historical average rates (as a % all units). For example, the Census Department’s Housing Vacancy Survey shows that 2.8% of owner-occupied units (i.e., not rentals) are vacant, almost 2x the historical average of 1.5%.</t>

This is still the core housing problem, which is the core of the Mortgage Backed Security mess, which is the core of financial problems, which is the core of the coming recession.

Later FM adds:

Vacant units in Q2: 12,719 million.
…For Rent: 4,008
…For Sale: 2,169
…Undecided: 6,542
…Awaiting oc: 1,145 (awaiting occupancy, which will in turn vacant another unit)

** There are other types of vacant units, but these are the important ones.

---

Great headline — too much supply of housing certainly means lower prices.

I’d argue that the gov’t needs to encourage MORE home-ownership, to help reduce the unbought units:
accept more Green Card immigrants who have (or can get) $20 000 k as a down payment on a house purchase, offer a new GI-Housing bill to all returning Vets, up to some $40 000 as a gov’t second mortgage loan, 5 years of no interest. (Note that it’s a loan, not a grant, so the long term cost to the gov’t is admin cost and foregone interest; perhaps set the interest at 3% like student loans).
Offer gas-use reduction downpayment loans to folks willing to move closer to their work (at least 5 miles closer).

The gov’t could also buy more homes, and voluntarily relocate slum dwellers willing to leave their slums (perhaps for lower rent for 5 years?) — and then destroy the slum housing. (Altho this might spread crime.)

The point is to get a lot more buyers buying homes. While the excess supply will keep prices low, and reduce any appreciation, the real disaster for the banks is the uncertainty of any value — the bottom hasn’t been reached yet. Investors don’t want to invest until such bottom.

Finally, the ‘house building’ industry will remain in terrible shape until the excess supply is reduced. It would be an excellent time for all local, state, and fed gov’t to be repairing/ building roads and bridges and infrastructure. Not ‘make work’, but previously deferred work. The construction industry needs as much or more help as the banking industry — and repairs need to be done sometime.

Fabius Maximus replies: Some of this misses my point.

“I’d argue that the gov’t needs to encourage MORE home-ownership. … The point is to get a lot more buyers buying homes.”

There is an excess of units over households. What you are referring to is moving renters into owners, which policy is one of the things that got us into this mess. It is however irrelevant to absorption of the excess vacant housing units.

----

Here's the new paradox of low income housing -- even though it was gov't effort to help low income folk afford housing through Fannie Mae guarantees on mortgages, which were then securitized, the best way to reduce the problem now is ... for gov't to help low income folk actually buy houses.  To get vacant houses occupied by owners.

Posted by: TomGrey at 10/21/08 01:54 | link | comments (1)
economics

The Crisis in banking -- too many banks

I am increasingly convinced that the financial industry, like the newspaper industry and even, temporarily, the housing industry, suffers from too much supply.

The Financial crisis is too many houses built with the expectation of being sold for too high a price.
Solution, lower the price.

Gov't policies: incentives to buy houses, penalties for not renting/ selling houses.

I've been spending gobs of time at Fabius Maximus lately.  Like on this thread of reading material:

This was a big week for news and analysis about our financial crisis.  Here are some you may have missed.

1. “Stricter regulation of business sought, Americans say“, LA Times, 15 October 2008 — A survey finds that nearly 70% of Americans in each of a wide range of demographic categories say the lack of controls is responsible for the nation’s economic problems.
2. “Ship Rates Plunge as Credit Freeze Strands Cargo, Demand Slumps“, Bloomberg, 15 October 2008 — A possible “air bubble” in the global trade bloodstream.
3. “From Plan A to Plan G“, Brad Delong (Professor of Economics at Berkeley), Guardian, 16 October 2008 — “The US has tried to stave off depression in half a dozen ways. Will partially nationalising America’s banks do the trick?”
4. “Let’s Get Fiscal”, Paul Krugman, op-edin the NY Times, 17 October 2009 — It’s time for the government to spend lots and lots of money.
5. “We had to burn the village to save it“, posted at the blog London Banker, 17 October 2008 — “There is no free market when the government owns the actors and sets the terms of transactions. There is no village once it has been burned to the ground.”
6. “Amid Pressing Problems, Threat of Deflation Looms“, Wall Street Journal, 28 October 2008 — Suscription only; here is a open copy.

---

To FM: While I prefer the faster re-structuring of Sweden over Japan (thanks for prior links, perhaps you’d like to link to your posts on those experiences more often. I consider them the best guides for ‘best practices’ yet known), even 10-year stagnation in Japan did avoid a depression.

But more posts with a ‘key chart’ might help. (Not Brad DeLong’s interesting S chart; too different and complex from other analysis, even if true, of which I’m not convinced.)

#1 more folks want more regulation — McCain, like Bush, has been lousy at defending the “Market”; Obama’s success at blaming the Free Market, instead of lousy, political based Gov’t. Supported Enterprises, has been very depressing. (Didn’t read)

#2 is really important — the IMF / Fed should be offering direct letters of credit, at a higher than prior cost, to shippers who’ve been successful in the past. Bypass the clogged up banks.

#3 Brad’s A-G plans is perhaps the best summary I’ve seen of the recent past, what decisions were taken, policies tried, and the theory behind them. On recession he states: But the economy fell toward (if not into) recession, and interest rates had already … lost … vigour.
(So Brad isn’t willing to fight the ‘in recession’ or not definition battle, which is the position I’ve had for awhile). Only at plan G does he call for fiscal expansion, as compared to his adoration object…

#4 Nobel prize winning big Bush critic (reason he won?) Krugman. Whom I now agree with that fiscal stimulus is needed — but he’s faster to criticize McCain than to state we should be building nuke power plants, and wind power, and solar power, and do more drilling. He’s also right that mortgages should not be bought at full price — although he fails to state what percentage. (For me, 50%, or the ratio on recent foreclosure auctions in that area. No foreclosures, no gov’t purchases).

#6 was merely another anti-deflation screed, with unconvincing details about the Fed’s new tools to avoid deflation.

#5 Was a cool, implicit don’t give more gas to the Big Brain Financial arsonists who burned down the prior system.

Missing is the idea that up to half of the whole ‘financial industry’ is excess waste — perhaps a lot like the newspaper industry. The real economy doesn’t need that many financial services.

Posted by: TomGrey at 10/21/08 01:38 | link | comments (1)
economics