So our financial system is going down the crapper.  I, for one, am not terribly worried, but that’s less a function of how bad I think the economy is going to get and more of the fact that I don’t have much at stake in our financial system because, well, I don’t have much to stake on anything (especially after Sunday night in Tunica).

There are two questions we have to answer now: 1) why is this happening?  and 2) is there anything that can be done to stop it?  As regards number one, I think this is a straight forward consequence of an incredibly loose monetary policy and moral hazard.  Economist and former Secretary of the Treasury Lawrence Summers agrees with the latter and gives some good reasons why it was politically impossible to rope in Freddie Mac or Fannie Mae before it was too late:

What went wrong? The illusion that the companies were doing virtuous work made it impossible to build a political case for serious regulation. When there were social failures the companies always blamed their need to perform for the shareholders. When there were business failures it was always the result of their social obligations. Government budget discipline was not appropriate because it was always emphasized that they were “private companies.” But market discipline was nearly nonexistent given the general perception — now validated — that their debt was government backed. Little wonder with gains privatized and losses socialized that the enterprises have gambled their way into financial catastrophe.

I wonder how general the lesson here might be. My fear is fairly general. Inherent in the multiple objectives urged for creative capitalists is a loss of accountability with respect to performance. The sense that the mission is virtuous is always a great club for beating down skeptics. When institutions have special responsibilities it is necessary that they be supported in competition to the detriment of market efficiency.

It is hard in this world to do well. It is hard to do good. When I hear a claim that an institution is going to do both, I reach for my wallet. You should too.

So what should be done?  My admittedly unorthodox and unpopular answer is let them burn.  Will this cause stocks to tumble?  Yes.  Will it be harder to get a mortgage in the aftermath?  Yes.  Will the investors lose their shirts?  Oh, my word, yes.

But what are the alternatives?  Let the government take on the debt (which is in the trillions, mind you)?  That just puts us right back in the same position we started from: private investors stand to make gains, but whenever there are substantial losses the government compensates them.  In that case, we’ll just repeat this scenario every time there’s a housing bubble.

But if we let them fail, investors and lenders in the future will assess risk more reasonably, and people who can’t afford mortgages won’t be getting them.  As far as today’s investors go, isn’t fairer for them to lose their money than to make the taxpayers foot their bill.  These people are like gambling addicts who swear that they can turn it all around with another thousand; let’s not be their enablers.

I have shamelessly stolen the Summers’ quote from Marginal Revolution.

The New York Times asked readers what the government should do to stimulate the economy.  The way I see it, there are three kinds of answers to this question: more good than bad, more bad than good, and disastrously bad.  If the first few entries are any indication, most of the comments fall into the third category.  For instance, here is number one:

Triple the minimum wage.

That would bring it more in line with increases in efficiency and rates in the late 70s. People make more, they spend more. All the money is just tied up in investments now, like bonds in Fannie and Freddie.

Yes, and if the government printed off 300,000,000 checks for a million dollars we could all be millionaires.  Oh, wait….we already tried that, except in miniature.

Link from Marginal Revolution.

So that was the best All-Star Game I’ve ever seen–even if the National League did lose….for the twelfth straight time.  It turns out that the American League’s secret weapon was the Florida Marlins’ Dan Uggla.  Three errors and an 0 for 3 at the plate including a strikeout and double play with runners on first and third with one out.  Too bad they couldn’t give the MVP award to him instead of that lazy asshole J.D. Drew, who I hate more than any other baseball player active or retired, living or dead.

But the main point I want to make here is that the NL’s loss might have been the best thing that could happen from the perspective of a Cardinals’ fan.  This year, the first concern for any Cardinals’ fan has to be that the Cubs don’t win the World Series and get to celebrate winning it all on the centennial of the last time they did it.  Now, however, the Cubs have next to no shot at winning the World Series because they struggle to win on the road, and they will have to play four games in an AL park.  The Cardinals, on the other hand, may face much longer odds to get to the World Series, but they also are one of three Major League teams with a winning record on the road.  So all in all, I feel pretty good about the All-Star Game, despite my team losing for what seems like the millionth time.

On Wednesday, Congressional Democrats proved that, with a few noble exceptions, they are one giant pussy willing to be constantly fucked by the Republicans.  They did this by approving a FISA bill that allows for illegal wiretapping and retroactive immunity for the telecom companies that helped the government break the law.  Even the much beloved Senator Obama voted for the bill after he said he wouldn’t.  Liberal blogger and lawyer Glenn Greenwald has the best take on that:

The Senators then voted for “cloture” on the underlying FISA bill — the procedure that allows the Senate to overcome any filibusters — and it passed by a vote of 72-26. Obama voted along with all Republicans for cloture. Hillary Clinton voted with 25 other Democrats against cloture (strangely, Clinton originally voted AYE on cloture, and then changed her vote to NAY; I’m trying to find out what explains that).

With cloture approved, the bill itself then proceeded to pass by a vote of 69-28 (roll call vote here), thereby immunizing telecoms and legalizing warrantless eavesdropping. Again, while Obama voted with all Republicans to pass the bill, Sen. Clinton voted against it.

Obama’s vote in favor of cloture, in particular, cemented the complete betrayal of the commitment he made back in October when seeking the Democratic nomination. Back then, Obama’s spokesman — in response to demands for a clear statement of Obama’s views on the spying controversy after he had previously given a vague and noncommittal statement — issued this emphatic vow:

“To be clear: Barack will support a filibuster of any bill that includes retroactive immunity for telecommunications companies.”

But the bill today does include retroactive immunity for telecommunications companies. Nonetheless, Obama voted for cloture on the bill — the exact opposition of supporting a filibuster — and then voted for the bill itself. A more complete abandonment of an unambiguous campaign promise is difficult to imagine. I wrote extensively about Obama’s support for the FISA bill, and what it means, earlier today.

So we’re not even to the Democratic Convention yet, and Obama is going back on campaign promises?  Not a good sign.  Also this isn’t some small matter like refusing public funds for the election.  This is a major blow to the already reeling Fourth Amendment, that bedrock freedom to not be searched without a warrant or probable cause.

Well, there’s no chance I will be voting for Obama now.  I was actually considering it, but this combined with the fact that Jim Webb said that he will not be Obama’s running mate has destroyed any chance of that happening.  Now, I guess it’s Barr, who I’m still not crazy about, or nobody.

Finally, Greenwald points out at the end of his post what I had been thinking the whole time I read it: Democrats are perceived as giant pussies not because they oppose the war or oppose illegal spying, but because they refuse to stand up for any of their supposed principles.

Will Democrats ever learn that the reason they are so easily depicted as “weak” isn’t because they don’t copy the Republican policies on national security enough, but rather, because they do so too much, and thus appear (accurately) to stand for nothing? Of course, many Democrats vote for these policies because they believe in them, not because they are “surrendering.” Still, terms such as “bowing,” “surrendering,” “capitulating,” and “losing” aren’t exactly Verbs of Strength. They’re verbs of extreme weakness — yet, bizarrely, Democrats believe that if they “bow” and “surrender,” then they will avoid appearing “weak.” Somehow, at some point, someone convinced them that the best way to avoid appearing weak is to be as weak as possible.

I think most people in America will at least respect some pretty wild (by today’s standards) political beliefs.  What matters in many cases is that the person claiming those beliefs has to be willing to stand up for them.  If they refuse to do so, people will see them as inneffectual shills, which is how we should view most Congressional Democrats, including Senator Obama.

As seems to happen every eight to ten months, the Iraqi government is asking the United States for a deadline for withdrawal.  Now, given that we transferred sovereignty to the Iraqi government over four years ago, it would seem that the United States is bound to respect this request, but that would be a world where logic applied to the government.  So what is American government’s response?  From CNN:

But in Washington, State Department spokesman Gonzalo Gallegos said U.S. negotiators are “looking at conditions, not calendars.”

“Two things we’ve made very clear from the beginning of the process — the first is that we’re going to deal as sovereign nations working towards an agreement that satisfies both of our needs, and secondly that we’re not going to be discussing individual parts of this [sic] negotiations during the negotiation process itself,”

Perhaps the State Department is unfamiliar with the term “sovereignty”–and if they’re taking their cues from the President, they most certainly are–so I will spell this out for them.  Being sovereign means that an entity has the exclusive right to make and enforce rules in a given area.  Ergo, when the Iraqi government says it wants a deadline, you damn well have to give them one.  That is unless Iraqi sovereignty is just as much of an illusion now as it was in 2004….

Here’s something to make you even more paranoid when you drive: you can be arrested for a DUI even when you’re not intoxicated.  In this particular case, the wife of a DUI attorney in Arizona was serving as the designated driver for her husband and a friend of his, and when she was pulled over, the cops arrested her for DUI.  She was cleared when blood tests revealed her BAC to be 0.0.

Now, this could be an example of the cops trying to get even with a DUI lawyer, but it could be even worse than that.  From the New Phoenix Times:

In this time of anti-DUI zeal, are police so eager to make arrests that everyone on the road at night is presumed to be a drunk driver?

It’s interesting to read the affidavit that Officer Gonzalez wrote that night about Heather Squires, intending to ask the Motor Vehicles Division of ADOT to yank her license. (He never mailed it — possibly because of the blood-test results.)

It describes “bloodshot and watery eyes.”

“Flushed face.”

“Strong odor of an alcoholic beverage emitting from breath.”

All this on a woman who was sober.

Anyone at that scene should have noticed that Heather Squires didn’t smell of alcohol, that her eyes weren’t bloodshot, that her face wasn’t flushed. She wasn’t, after all, drunk.

But that’s not what they wanted to see.

I experienced some of this firsthand when I was several years younger.  I was on Christmas Break from college, and I had to drop a friend off at his house on the way back from a party.  I had not been drinking but that didn’t stop the cop that pulled me over from immediately administering several different sobriety tests and searching my person without my consent.  I received no ticket and when I asked him why he pulled me over he replied that “when you see four teenage males riding through a suburban neighborhood after midnight, any reason’s a good reason.”

Link via the Agitator.

A number of my fellow libertarians are very attracted to the idea of life extension and possible immortality.  (See here for an example.)  I’m all for the idea of extending life for quite some time, and if some people want to try to live forever, I won’t try to stop them.  However, I don’t, and I don’t think they should either.  Here’s why.

First, let’s assume that it is possible to defeat aging and achieve immortality.  Second, let me make it very clear that I love life.  I want to live for many years, even hundreds of years, should that become possible.  But living forever is an entirely different matter.

I don’t pretend to know what happens to people when they die, but the way I figure it there are two options: nothing or something.  Well, if it’s the first, that sucks, but there are certainly worse things.  There’s no more fun, happiness, or love, but neither is there any more pain, sorrow, or hate.  If the latter, then there is an infinity of possibilities.  It’s probably here that I would lose most of the immortality seekers as they are a heavily atheistic crowd, but I don’t see why the lack of a god should preclude an afterlife.  Eternal recurrence, anyone?

Perhaps it is because I am a gambler, but I see this–like most things–in terms of odds.  No afterlife: 5 to 1.  Bad afterlife: 5 to 1.  Good afterlife: 3 to 1.  No need to get into what I classify as “good” and “bad” or how I determined those odds.  The point is, death is just the ultimate gamble, and at a certain point, I don’t think I will have that much to lose, but I will possibly have far more than the world to gain.  To not make that “great leap in the dark” would be foolhardy.

Today, we celebrate the natural right to rebel against our government whenever it attempts to destroy our liberties.  One should celebrate that right with the four B’s: baseball, barbecue, booze, and ballistics.  This is also the third anniversary of this blog, which you should celebrate with these links.

This is for anyone who feels nostalgic about the nineties.

Are shrooms good for you?

Christopher Hitchens gets waterboarded.

David Byrne has turned an entire building into a musical instrument.

This is now beyond contention: the United States government, by its own definition, tortures people.  Not only that, we’re copying our techniques from Mao’s China circa the Korean War.  From the New York Times:

The military trainers who came to Guantánamo Bay in December 2002 based an entire interrogation class on a chart showing the effects of “coercive management techniques” for possible use on prisoners, including “sleep deprivation,” “prolonged constraint,” and “exposure.”

What the trainers did not say, and may not have known, was that their chart had been copied verbatim from a 1957 Air Force study of Chinese Communist techniques used during the Korean War to obtain confessions, many of them false, from American prisoners….

The 1957 article from which the chart was copied was entitled “Communist Attempts to Elicit False Confessions From Air Force Prisoners of War” and written by Albert D. Biderman, a sociologist then working for the Air Force, who died in 2003. Mr. Biderman had interviewed American prisoners returning from North Korea, some of whom had been filmed by their Chinese interrogators confessing to germ warfare and other atrocities….

Mr. Biderman’s 1957 article described “one form of torture” used by the Chinese as forcing American prisoners to stand “for exceedingly long periods,” sometimes in conditions of “extreme cold.” Such passive methods, he wrote, were more common than outright physical violence. Prolonged standing and exposure to cold have both been used by American military and C.I.A. interrogators against terrorist suspects.

The chart also listed other techniques used by the Chinese, including “Semi-Starvation,” “Exploitation of Wounds,” and “Filthy, Infested Surroundings,” and with their effects: “Makes Victim Dependent on Interrogator,” “Weakens Mental and Physical Ability to Resist,” and “Reduces Prisoner to ‘Animal Level’ Concerns.”

This ought to bring an end to the semantic debate between those who believe the government’s interrogation practices are simply “enhanced” and those who believe it is “torture.”  For those who still support such practices, at least have the balls to admit that you are supporting torture.

The other major point here is that this torture probably serves no other purpose than sadism.  Remember, these are techniques that were designed to elicit false confessions.  So they might get good intelligence from time to time, but for the most part, the information obtained through these practices will be worse than worthless because it will direct our limited anti-terrorism resources to dead ends.

Finally, if you’re not frightened that our country has stooped to the level of Mao Zedong–probably the most prolific murderer in human history–then there is something seriously wrong with you.

Over the weekend, I caught Roman Polanski: Wanted and Desired on HBO.  I didn’t know much about Polanski’s trial before watching the documentary, but now two things are very clear: 1) Polanski liked the young girls way too much and 2) the American justice system completely screwed him over.  The film really gives lie to the idea that we have the “rule of law” as opposed to the “rule of men.”  The laws don’t really mean a damn if your judge is an egomaniac who is out to get you.  Sometimes, even being rich and famous isn’t enough to protect you for the state’s wrath.  Highly recommended.