Friday, December 31, 2010

Happy New Year!

FLG usually posts from Old School photo of the ball in Times Square. This year he thought he'd change it up and post a picture he took a few blocks from Times Square a few years ago. FLG has never seen so many cops in one place at one time before or since.  This didn't even get half of them.  They were lined up along most of the block


Anyway, Happy New Year!

Wednesday, December 29, 2010

FLG Is So Happy He Is

Here:


Rather than here.

Just sayin'.

Saturday, December 25, 2010

Merry Christmas!


The FLGs will be opening presents, eating Panettone French Toast, and then heading out of town. Merry Christmas!

Thursday, December 23, 2010

Dear Georgetown:

You need to start a fund-raising campaign immediately to build a series of massive fucking slides.



Sincerely,
FLG

Snow Soccer

FLG watched the second half of the Lille versus Saint-Etienne match.

Why? Because it was on.

However, he couldn't get over the juxtaposition of snow on the sidelines and seeing the players' and coaches' breath while they were paying in uniforms with shorts.

Quote of the day II

Bruce Schneier:
Privacy has to be viewed in the context of relative power. For example, the government has a lot more power than the people. So privacy for the government increases their power and increases the power imbalance between government and the people; it decreases liberty. Forced openness in government -- open government laws, Freedom of Information Act filings, the recording of police officers and other government officials, WikiLeaks -- reduces the power imbalance between government and the people, and increases liberty.

Privacy for the people increases their power. It also increases liberty, because it reduces the power imbalance between government and the people. Forced openness in the people -- NSA monitoring of everyone's phone calls and e-mails, the DOJ monitoring everyone's credit card transactions, surveillance cameras -- decreases liberty.

Quote of the day

Megan McArdle:
I struggle daily to live up to Brad [DeLong]'s well-known standards of accuracy, fairness, and integrity; I'm sorry that I clearly failed in this instance.

Wednesday, December 22, 2010

Nobody Likes Clowns

FLG will take the opportunity provided by Prof. Mondo's recent post to reiterate his deeply- and long-held theory that nobody like clowns. Everybody thinks everybody else does, but they don't. Clowns are creepy.

Although, FLG will make an exception for the clownish Cirque du Soleil performance of Ne Me Quitte Pas. That's quality work there.

Fact Versus Meaning

Andrew Gelman points out that 4 in 10 Americans believe in the Young Earth Creationism. He explains it thusly:
One way to think of this is that, for the overwhelming majority of people, a personal belief in young-earth creationism (or whatever you want to call it) is costless. Or, to put it another way, the discomfort involved in holding a belief that contradicts everything you were taught in school is greater than the discomfort involved in holding a belief that seems to contradict your religious values (keeping in mind that, even among those who report attending church seldom or never, a quarter of these people agree that "God created humans in their present form about 10,000 years ago").

This is something that people often overlook. There's fact and then there's meaning. Whether human beings were created by a process that began millions of years ago or by God's hand 10,000 as a fact isn't terribly relevant or meaningful to people's lives. The numbers are so huge it doesn't really matter.

Think of it this way. 99.9999% of the planet could live a perfectly fulfilling life believing the Sun revolves around the Earth. The fact of what revolves around what just isn't all that meaningful to the lives we lead.

FLG thinks Gelman was trying to articulate some of that, but he's operating "under the completely unsupported belief that it's better for people to believe truths than falsehoods." FLG has a slightly different take. It's about what is meaningful to people's lives, FLG'll call that Truth, as well as a function of whether soemthing is factually true, FLG'll call that truth. For many empiricists, there is no Truth, only truth. To the extent that Truth exists, it is only because truth has been elevated by empiricists. For empiricists, small-t truth means a lot to them. Consequently, truth becomes Truth.

This isn't the case for a great many people.

None of that makes any sense, does it?

Quote of the day

WaPo:
In the minority, Pelosi will be freed from the ceremonial duties of being speaker and crafting a governing agenda.

Oh, yes. Of course. Being Speaker of the United States House of Representatives is such a drag. Those tired, poor, huddled speakers must constantly yearn to breathe free. Now, unburdened by ceremony and having to, you know, govern FLG is sure she will be much, much happier. Well, if she's not, at least FLG knows he will be.

American Education And Response Memos

Phoebe linked somewhat offhandedly to this article in The Economist about the oversupply of PhDs. One passage stuck out for FLG:
The organisations that pay for research have realised that many PhDs find it tough to transfer their skills into the job market. Writing lab reports, giving academic presentations and conducting six-month literature reviews can be surprisingly unhelpful in a world where technical knowledge has to be assimilated quickly and presented simply to a wide audience. Some universities are now offering their PhD students training in soft skills such as communication and teamwork that may be useful in the labour market. In Britain a four-year NewRoutePhD claims to develop just such skills in graduates.

Last year, when FLG was taking that political economy of international finance course, one of his classmates was an Italian guy who worked for the World Bank. He was finishing up one of the MA programs in the government department. FLG forgets which one.

Anyway, before class, FLG and this guy would talk. At some point, he mentioned he'd done his undergraduate work at Bocconi. He seemed surprised that FLG had heard of it. In any case, FLG asked what differences he'd noticed between his previous education and at Georgetown.

"Response memos," the guy said. "Everything is theoretical over in Italy. You're tested on your mastery of the minutiae of this or that theory. You write long papers on them and have oral exams where the professors delve into every nook and cranny trying to figure out any little thing you might not know. Whether it's applicable beyond those walls isn't important."

"Here, in these professional masters programs, it's more about response memos. You comprehend the theory and then apply it quickly. There are things to be said for both approaches, but the ability to synthesize large amounts of information and produce a 2-3 page memo has been tremendous for me at work. And I think will continue to help throughout my career. It's probably something you can do in your sleep, but they don't teach that in Italy."

Tuesday, December 21, 2010

FLG's Christmas Fantasies

When FLG was little he so wanted to build a snow fort like Huey, Duey, and Louie had in the cartoon below. He tried he doesn't know how many times and utterly failed in each attempt. Please notice the pirate flag:


BTW, FLG's other favorite Donald Duck cartoon is the one where he bakes a plastic airplane.

Differences Between Men And Women: Risk-Taking

One of FLG's professors once mentioned something about some disparity between men and women, FLG forgets what it was, and chalked it up to discrimination. FLG pointed out that differing risk aversion could also explain the disparity. The professor said, "Yes, it could, but I don't know of any empirical studies that indicate greater risk aversion among women."

After class, FLG looked it up and, well, he began to question the professor's statement. It's not so much that the prof wasn't aware, but that he probably never bothered to look. Because FLG found study after study that found women are significantly more risk averse than men.

Anyway, FLG was reminded of this because a blogger at the WaPo says that risk aversion is holding back women's career progression:
Perhaps it's the fear of a risk back-firing that restrains us. Donna Callejon, chief operating officer at GlobalGiving, shared her own observation of this trend when she noted, "I regularly see a pattern of younger women who are not sure what they want to do and are afraid to take a wrong step. They seem to think if they screw up, they won't be able to bounce back." Could it be that we disqualify ourselves from plum assignments, projecting that the potential damage could be permanent?

Interestingly, the discussion touches upon FLG's theory that men care less about society thinks of them, which kind of makes sense. Part of the risk a person takes is embarrassment and other social consequences. If those matter more to you, then you're less likely to take risks:
Girls learn about risk differently. Risky behavior, girls are told, is dangerous. For many young women, perfection is the more popular state for which to strive. Being simultaneously popular, a top student and pretty becomes a recipe for greatness. As you get older, this ideal morphs into Superwoman syndrome--the pressure to be that strange creature with endless energy who manages to be smart, unflappable, beautiful and selfless. And always at the same time.

FLG isn't sure he buys the girls are conditioned to be risk averse, so if we could just recondition them, then we could eliminate the disparity argument. Like most thinks he thinks it's a combination of Nature and Nurture. You're never going to get rid of the entire disparity. Although, to be honest, we probably don't want to get rid of it entirely. Moreover, he thinks it's largely a function, not of risk taking, but,as he indicated earlier, of the greater emphasis placed by women upon what other people and society think of them.

Monday, December 20, 2010

EU Keeps Going Down The Elite, Anti-Democratic Path

FLG apologize. He started drafting this post a few days ago, and now he can't find the original article.

Le Monde:
Les dirigeants des 27 pays européens sont tombés d'accord dans la soirée du jeudi 16 décembre pour modifier le traité de Lisbonne. Ces changements permettront de créer un Fonds de secours permanent en faveur des pays de la zone euro, qui sera activé en cas de grave crise financière...

Rough translation:
The leaders of 27 European countries agree on December 16th to modify the Lisbon Treaty. These changes will permit the creation of an permanent fund for the eurozone to be used in case of a grave financial crisis...

What continually amazes FLG is the audacity of the European elite and the contempt for their constituents. Let's leave aside for a moment whether the fund is necessary and look at this in context. FLG isn't an expert in the Lisbon Treaty, but apparently they put provisions in that don't allow this sort of thing, which makes sense given the implications for sovereignty and whathaveyou. This seems like it might be important to the citizens of the various countries, but they move ahead anyway. Then one must consider that the Lisbon Treaty itself was just recently ratified by the countries, itself an end around directly asking the people because when they are asked, as in France and Ireland, they have this habit of saying "No."

There's a case to be made that the economic situation demands quick action on this eurozone stabilization, and so the people don't need to be consulted. Moreover, these are elected leaders who will have to justify their actions to the people. Granted. But there's this troubling history throughout almost the entire European project of pushing forward without consulting the people and FLG thinks the chickens are going to begin to come home to roost. At each step, European elites felt the people would come along. And so far more or less they have. The problem is that the Euro isn't ever going to make real economic sense without coordinated fiscal policy, which means, for all intents and purposes, the Euro won't work without an integrated superstate to which the current nation-states basically yield all sovereignty.

The Euro was always a political tool, not an economic one, and FLG has been saying that in real life and on this blog for years. Well, now that use of a monetary unit for political ends has come to a crossroads. They'll need to fully commit to a European superstate or step back and in their incessant desire to step forward regardless of public opinion, they cannot possible cross that threshold without huge problems. Perhaps they can hold on, using things like this stabilization fund, for a little bit, but FLG thinks they'll have to make the choice within the next five years or so. Probably what will happen, like everybody seems to think, is that the "core" nations (France, Germany, Benelux, etc) will stick it out and the rest will break off. But once that happens the European Dream is dead. And it's all because they were so eager to move forward at each step that they didn't consult the people.

FLG Gets Worried

The common explanation from people on the left, the ill-informed ones if you ask FLG, is that the financial crisis was caused when bankers got "too greedy." Well, FLG pretty much assumes businesses, including banks, are always as greedy as they can be. So, in effect, that's never an explanatory variable. Businesses are always as greedy as possible, so it must be something else that changed. (Which is where more informed people on the left point to deregulation, but are often still wrong; however, we'll leave that alone.)

Well, that brings FLG to today's E.J. Dionne column. He's writes that progressives need to change their thinking about business because, well, business creates jobs and progressives like people to have jobs, particularly "good" jobs. So, if you want people to have "good" jobs, then you need to work with business. Dionne then says that to create "good" jobs, we need work with, you guessed it, "good companies, although he doesn't call them "good":
It's also important to recognize that there is no single business class or corporate model. Obama doesn't need to coddle CEOs so they will say warm things about him at parties in the Hamptons. He should figure out which parts of the private sector share an interest in reducing the dreadful inequalities that have metastasized over nearly four decades and in creating an economy that produces well-paying jobs.

There have been moments in our history when important elements of business were "progressive" in the sense of recognizing that social reform was in capitalism's long-term interest.

In a seminal 1995 article in the American Prospect about business opposition to President Bill Clinton's health-care reform, the political writer John Judis recalled that during the Progressive Era, "business leaders and organizations played an indispensable role in developing and promoting the social legislation that first blunted the sharp edges of laissez-faire capitalism." Judis's conclusion still rings true: that "without a business community moderately supportive of social reform, little is possible in the present era."

While this should be appealing to FLG, you know long-term interest and all, something concerns FLG here. Let's agree that social legislation is in the long-term interests of any number of companies here in the United States. Moreover, let's agree that progressives could partner with them. What worries FLG is this -- these businesses aren't doing this out of the goodness of their heart; they're doing it to maximize profits. Now, FLG has no problem with profit-seeking; he's a big fan in fact. So, what's the problem? Well, what's in the long-term interests of these companies might not be in the long-term interests of other businesses, economic, or the nation.

FLG has already fleshed out this argument somewhere, but he is too lazy to find where and doesn't have time to regenerate the whole thing -- so here's the basic gist:
Large firms are far more amenable to government policy for a variety of reasons, but most importantly because 1) the people who work in large firms are, quite simply, bureaucrats are first cousins to government bureaucrats, which makes things easier, and 2) somewhat perversely, even though government imposed costs are the highest in nominal terms for these large firms, they have the economies of scale to turn them into relative advantages.

Just because some business leader is saying that government ought to do something for the good of the country doesn't mean it is. In fact, almost always the proposed policies just so happen to be in the long-term interest of their firm. Surprise, surprise. FLG isn't saying that these business leaders are stupid or evil. They have two major weaknesses when it comes to national policy discussions. First, they have an outsized sense of the importance of their industry and firm to the nation and the economy, not because they're egotistical jerks but because it's just natural and most people feel that way. Second, and most people seem surprised by this, they don't usually have a good grasp on economics. Business leaders seem to have pretty good handle on the economics that apply to their firm directly and in the short-term, but they almost lack a broader and longer term understanding. FLG can't even count the number of times CEOs have said stuff that sounds like an idiotic comment in Econ 101.

What's the takeway from all this? FLG thinks businesses are always as greedy as possible and he gets suspicious when they claiming to do the right thing when FLG can't see how it is in their own interest. Likewise, let's not think that just because some preferred national policy is in some company's or companies' interest that this means it is the business community's, economy's, or nation's interests. (Not that this was Dionne goal; he's just talking tactics. Although, FLG thinks Dionne thinks he's talking long-term national strategy.) Lastly, take economic analysis or policy recommendations from business leaders with a huge grain of salt. That last piece of advice actually goes to out more to conservatives more than progressives.

Correlation Does Not Imply Causality

...apparently doesn't hold anymore in Paul Krugman's world:

How, after the experiences of the Clinton and Bush administrations — the first raised taxes and presided over spectacular job growth; the second cut taxes and presided over anemic growth even before the crisis — did we end up with bipartisan agreement on even more tax cuts?

Saturday, December 18, 2010

And FLG Gets Emails Saying Not To Pick On LOG So Much

Say what you want about FLG: he's immature, crude, stupid, crazy, an asshole, whatever, but you'll never see something this fucking weird here at Fear and Loathing in Georgetown.

Mr. Kain explains some here.

Friday, December 17, 2010

Quote of the day

Conor Friedersdorf:
You’d think from Chait’s post that liberals never approach matters of constitutional law in this way, looking past the utility in a given policy area to ask what the long term implications are for state power.

[Insert an FLG time horizons theory rant here.]

Thursday, December 16, 2010

FLG's Idea For A Movie

Let's make a live action, 3D version of Scooby Doo. FLG knows what you are saying. "FLG, this has already been tried back in 2002 and it sucked." Au contraire, mon frère. They forgot to include Phyllis Diller, Sandy Duncan, Tim Conway, Batman and Robin, and the Harlem Globetrotters. What could go wrong with case like that?

If we have the budget, we'll throw up some digital versions of Don Knotts and Jerry Reed.

Leisure Follow-Up

Noah Millman was nice enough to follow-up in the comments on my post:
Thanks for the link. Not sure I'd talk about a right to leisure, nor entirely sure that "leisure" is the right word to use. But if you think that Marx was aiming at a society at leisure then, yes, I'm talking about that sort of thing, because what Marx was talking about was the experience of freedom in the act of work. Though the identification of wealth with freedom is, I think, originally Aristotelean, and is the reason why only the propertied can be citizens in his conception of a republic.

Think about the way Google pays people to work on whatever they want one day a week, on the understanding that Google owns the product of their "labor" - though, of course, the "laborers" also own a big chunk of Google.

Or think about Miklos Haraszti's description of Soviet-era Hungarian factory workers doing a crappy job on the job, and then lavishing attention on objects and devices, some useful, some entirely decorative, that they made surreptitiously using the same equipment.

FLG responded in the comments of that post as well, but thought this could do with a bit more examination. Here is probably the most clearly articulated end goal of Marxism as described by Marx:
as soon as the distribution of labour comes into being, each man has a particular, exclusive sphere of activity, which is forced upon him and from which he cannot escape. He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

That does sound a lot like what Noah is concerned about. The equality of the freedom to fish in the morning, yet criticize after dinner.

But Noah is also correct that Aristotle equated wealth with freedom. In fact, FLG has long maintained that the end goal of Marxism is actually a bastardized version of Aristotelian leisure. Many people, including apparently Noah, see the goal of Marxism as, to quote Noah directly, "the experience of freedom in the act of work." FLG sees this as sort of a red herring. Sorry, he had to go there.

Marx is very good at articulating the problems of capitalism, but he doesn't really focus on what his goal is besides that one paragraph above. Many people logically think that because Marx was so focused on the problems of labor that he envisions some new form of labor as the ideal. But it's not labor at all. It's Leisure. It's the ability to choose what to do and when to do it for your enjoyment. It's the freedom of Aristotelian Leisure without the duty, if that makes sense to any of you.

Quote of the day

Roger Ebert:
When "2001" was in theaters, there were fans who got stoned and sneaked in during the intermission for the sound-and-light trip. I hesitate to suggest that for "Tron: Legacy," but the plot won't suffer.

Wednesday, December 15, 2010

Leisure

Many of you probably remember FLG's obsession with the topic of Leisure. It's still there; he just bombards you with time horizon posts instead.

Anyway, it sure sounds like Noah Millman is arguing in favor of a right to Leisure at the end of his most recent post:
We are living in a very interesting period in history, where the boundaries between work and play, and between productive and nonproductive activity, are becoming more and more fluid. Having the freedom to cross and recross that boundary is enormously valuable to an individual, and a society. But that freedom is not remotely evenly distributed. I hate to sound like some kind of socialist, but when we think about inequality, in my view we should be thinking primarily about two factors: first, whether absolute deprivation of essential goods is a real problem in our society (I would argue that it is, at least for some essential goods); second, whether some measure of wealth in the sense I am using it – as freedom, rather than as relative positioning – is reasonably broadly distributed across society, and is a plausible aspiration for most people at some point in their lives.

BTW, if you click on the first leisure link above, you'll find this quote from FLG:
The ultimate goal of Marxism, in its purest, Platonic form, is Leisure. Leisure in this case means the ability to pursue one's goals free from constraints. Those constraints could be cultural, economic, or political.

So, in that sense, FLG does think Millman sounds very much like a Marxist.

Happiness And Other Differences Between Men And Women

FLG has long maintained that basing your personal happiness on the approval, admiration, or acceptance of other people is a futile task. One needs to define their own standards and goals and try to achieve them. And this goes for society as well. FLG contends that the more concerned people are about what societal expectations are, the less likely that person is to be happy. It's a roughly indirectly proportional relationship.

Now, it is admittedly difficult to separate your own goals from those of society or to ignore its demands. FLG understands that. However, to the extent you can approach that ultimately unachievable goal of not caring what other people, or society, say the happier FLG thinks you'll be. Just to be clear, FLG isn't advocating being a self-involved jerk. Be nice. Be polite. Just don't define yourself by the standards of other people.

Great, FLG. What does that have to do with women and men?

Well, it all started when Mrs. FLG was watching Oprah. FLG doesn't even remember what the specific episode was, but you know the drill. Some female guest and Oprah commiserate about failing to live up to society's standards of some kind or another, beauty, career, love life, doesn't really matter. And then Oprah and the studio audience proceed to inflate the person's self-esteem balloon.

This is an idiotic strategy. If there's one thing FLG learned in D.A.R.E., it was that one criticism deflates the entire self-esteem balloon. Basically, if somebody worries about how they look, then while compliments are nice they still pale in comparison to the one snide comment. Therefore, it's stupid to try and build each other up while lamenting what society values. The more effective, though definitely harder path, would be for the person to stop caring what other people think.

Obviously, this is all easier said than done. And as FLG mentioned earlier completely disregarding what other people and society think is impossible, and probably not even desirable. However, FLG thinks a certain distance is healthy.

Okay, FLG. Again we ask, what does this have to do with women and men?

Well, obviously Oprah is watched primarily by women. But there have been a variety of posts by Phoebe that have brought this entire topic to the fore of FLG's mind. Specifically, today's post about the dearth of female libertarians, the too-brilliant-too-bathe series combined with the girls are organized post, and the answer isn't to remove pressure on women to look good but to put more pressure on guys to look good series of posts.

On the libertarian issue, down deep, libertarianism, in which FLG swims often, probably too often, is basically a big FU to society's rule. Well, that's not quite fair. Rightly understood, liberty is a marvelous thing. But it's really about not being told what to do. So, this made FLG wonder if guys, for whatever reason nature or nurture, maybe white male privilege, don't really care about what society says? That maybe they care less about what people think?

On the girls are organized issue, here's a passage from Phoebe:
The "commonality" we're looking at here is that girls are expected to be organized and tidy. (See also: the capacity of girls with Aspergers or just run-of-the-mill social awkwardness to compensate from a young age and appear friendly and social regardless of what's going on in their brains. See also: too-brilliant-to-bathe.) There's no 'she's a genius who can't manage to put worksheets into a folder' out for upper-middle-class girls, but there sure is for their male equivalents. It is not natural for girls to keep binders organized. Girls - even messy, scatterbrained ones - keep track of when assignments are due because there's no chance they will get labeled brilliant but constrained by middle-school expectations.

But boys! "The problem is not the homework helpers; the problem is the homework itself, and a system that requires young children to master complex, if banal and often pointlessly difficult, systems, at an age where they should be out in the yard playing with sticks or watching birds migrate." A commenter responds, "Why do so many in the less-homework movement perpetuate this outrageously naive notion of childhood activity? Try playing video games and trolling the internet." Yes, that.

Again, what if boys just care less about what is expected of them?

Ditto for appearance. What if men just care far less than women about societal expectations in general? Also, FLG will say, at least anecdotal, that at least insofar as relationships go, whether romantic or platonic, men and boys seem to have far less expectations than girls and women.

There was this article in the NYTimes a few years ago about how men are happier than women. In the 1970s, women were slightly happier than men, but over the last four decades men are now happier. The authors of the studies that produce this data argued that it was a result of the "second shift" that is to say balancing career and home work expectations:
What has changed - and what seems to be the most likely explanation for the happiness trends - is that women now have a much longer to-do list than they once did (including helping their aging parents). They can't possibly get it all done, and many end up feeling as if they are somehow falling short.

A couple of paragraphs later:
Stevenson was recently having drinks with a business school graduate who came up with a nice way of summarizing the problem. Her mother's goals in life, the student said, were to have a beautiful garden, a well-kept house and well-adjusted children who did well in school. "I sort of want all those things, too," the student said, as Stevenson recalled, "but I also want to have a great career and have an impact on the broader world."

[...]

When Stevenson and I were talking last week about all the possible reasons, she mentioned her "hottie theory." It's based on an April article in this newspaper by Sara Rimer, about a group of incredibly impressive teenage girls in Newton, Mass. The girls were getting better grades than the boys, playing varsity sports, helping to run the student government and doing community service. Yet one girl who had gotten a perfect 2,400 on her S.A.T. noted that she and her friends still felt pressure to be "effortlessly hot."

As Stevenson, who's 36, said: "When I was in high school, it was clear being a hottie was the most important thing, and it's not that it's any less important today. It's that other things have become more important. And, frankly, people spent a lot of time trying to be a hottie when I was in high school. So I don't know where they find the time today."

Look, FLG isn't saying that there isn't unfairness at work here, but these girls and women are overwhelmed because they care deeply about society's expectations, or at least feel them deeply.

As a teenager, to be hot and get straight As and perfect S.A.T.s. As a woman, "to have a beautiful garden, a well-kept house and well-adjusted children who did well in school and a great career and have an impact on the broader world."

Many women realize that the many expectations of society are impossible. One cannot be the the perfect mother and the perfect career person, nor can one be the Madonna and the whore, nor the hottie and nerd. However, when women realize these messages are impossible, the most common response seems to be this Oprah-esque group therapy session that says it's okay to feel overwhelmed, that you are a strong, beautiful person, and we ought to change society's expectations.

FLG isn't against that, per se.; he just thinks it won't work for the self-esteem balloon reason outlined above. Likewise, trying to change society's expectations when so many women have accepted and are losing their minds trying to live up to them is also futile.

Wait a second, FLG? Are you saying that men aren't influenced by societal expectations?

No, FLG is sure men are influenced by societal pressures. He's simply saying they are less influenced. Now, he might, as a man, be blinded to the multitude of ways in which men are influenced by societal expectations, and there are certainly expectations surrounding making money to provide and to avoid being seen as weak, etc, but it seems to FLG that men are in general less influenced by these societal pressures. Sometimes, for example, when it comes to educational performance and a whole host of other activities, this is probably for the worse. Other times, such as being happier it seems to help a great deal.

What's the point here, FLG?

Two-fold. First, a great many women seem to have so deeply accepted the expectations of society that when they realize that they are unattainable they try to have society say it's okay not to attain them. That ain't gonna work, even if Oprah stayed on the air for another 25 years telling people it's okay. Instead, women need to try to not care about societal expectations. Well, in actuality, care less. If enough of them stopped caring, FLG thinks the expectations would die down as well because they wouldn't be so effective in driving behavior. Second, men need to care more. In fact, FLG thinks that there are relatively less societal pressures on men precisely because of the reason he just mentioned -- it hasn't been as effective. (Although, in the 1950s there were strong expectations, it's only been since about the 1970 when that started to back off. Incidentally, when men started to get happier.) But this insouciant, blasé relationship toward other people's and society's expectations, if true, is also why boys are doing so much more poorly in school than girls.

How do you make women care less and men care more? FLG has no fucking clue.

Tuesday, December 14, 2010

FLG Can't Take It Anymore

Despite the immense mental anguish Rufus is causing FLG, the man persists in blogging the canon. Today, it's Thucydides.

From experience, FLG knows Rufus' posts are like a star nose mole fucking a warthog -- it's hideous to watch, somebody is going to get hurt, but you cannot avert your eyes from the awful spectacle. This post didn't stray to far from that. Reading his post felt like somebody took a ball-peen hammer to FLG's eye sockets and skull, removed his brain, ran it through a cheese grater, then a mortar and pestle, and finally thinned the concoction with urine and battery acid.

To be fair, Rufus does address an interesting question -- whether democracies can be successful empires -- but that's only because somebody else raised the issue first.

FLG'll just jump to the end and save y'all the excruciating pain:
At some point, I think we do need to question the last 2500 years of propaganda about the greatness of Athenian democracy. But, in terms of Gach’s concept, what’s most interesting about the Peloponnesian war is how incompatible the culture and concepts of that democracy were with maintaining an empire in essentially the same way he suggests they would be. Republics seem to have great difficulty maintaining the mentalité of democracy in the metropole and that of empire in the periphery. Maybe states should choose one of the other.

We need to question the propaganda about the greatness of Athenian democracy? Oh, really? Several issues. First, who is the "we" ? Rufus cannot extricate his thinking from his tiny, pea-sized little modern, democratic mind. Thus, does he want to put the greatness of Athenian democracy on trial within the constructs of modern, liberal democracy? That's like trying Socrates; even if you find him guilty, you'll still look like an idiot. Second, perhaps he ought to consider that maybe the people in the past 2500 years have respond to more than just propaganda, the insolent little fuckwad. Rufus has no business questioning anyone's or anything's greatness.

Lastly, what the fuck is up with the French spelling of mentalité? FLG can overlook the pretentious use of the word metropole because, well, it makes sense and FLG can't think of another word that by itself expresses the same idea. But French spellings of English homophones is too far, even for Canadians.

This Is Fantastic



H/T

A Conversation

FLG: We haven't visited The Sartorialist in a while.

FLG: True.

FLG: Okay. Weird. Weird. Kinda cool. Interesting. Weird.

FLG: Hmmm...Houston St. Weird.

FLG: Wait a second. Did you pronounce it Hue-stun street? Are you a fucking tourist now?

FLG: Sorry, I know it's How-stun street. It's much like how I know French, but have to stop my self from saying Fah-kade everytime I see the word facade.

FLG: Alright, but don't let that shit happen again.

France's Google Policy

France apparently has a burgeoning Google policy, which consists of slapping a 1% tax on online advertising and requesting a reduction in VAT for "cultural products" sold online.

The White House Reads This Blog

Recently, Greg Mankiw noticed that the White House reads his blog.

FLG has no such definitive proof, but he does have it on very, very good authority that Fear and Loathing in Georgetown is considered by the White House as THE source for all things pirate and object sex related.

"Wow, FLG," you are probably saying to yourself. "What sort of influence does this give you on policy?"

Jack shit, which is precisely how FLG likes it. However, it does warm FLG's heart that it makes for some silly moments at 2 in the morning in the West Wing.

Daniel Sarewitz Obviously Hasn't Been Reading Fear And Loathing In Georgetown

Writing in Slate:
A Pew Research Center Poll from July 2009 showed that only around 6 percent of U.S. scientists are Republicans; 55 percent are Democrats, 32 percent are independent, and the rest "don't know" their affiliation.

They could've saved the cost of the study if they'd just been reading this blog. Of course, scientists are Democrats -- they're empiricists.

Sarewitz asks whether it matters because scientific facts are facts, and then writes:
Think about it: The results of climate science, delivered by scientists who are overwhelmingly Democratic, are used over a period of decades to advance a political agenda that happens to align precisely with the ideological preferences of Democrats. Coincidence—or causation? Now this would be a good case for Mythbusters.

Look, if you'd been reading FLG, then you'd know this is an effect, not a cause. Scientists are staunch empiricists, which will forever put them on the Left, all other things being equal.

You can measure things in the material world, let's say the speed of light, and since it doesn't change after you've measured it several times you can assume its still the same. So, in regards to phenomena in the material world, scientists don't appear to be short-term focused because they can project forward and backward millions of years. But that's only because of their assumption that the laws of physics haven't changed.

Human interaction is different. There isn't some mechanical process. They react to new information, and don't act according to some deterministic algorithm. Here, in the world of human interaction, the scientist's empirical focus makes them inherently short-term focused, and consequently Democrats.

A not so brief aside on the climate change issue, most of which you've already heard a million times from FLG:
Whether the world has warmed or not is a question of fact. Whether the world will warm in the future is a question of prediction based upon assumptions about natural mechanisms and processes and human activities. However, even if we knew irrefutably that the world was, is, and will continue to warm, science qua science (FLG hates himself for doing that) does not tell us anything at all about what to do. To recommend a course of action is to apply non-scientific values to facts. For example, if you say you are going swimming and FLG says you are going to get wet, so you ought to bring a towel, then FLG is stating a fact (you will get wet) and applying a value (being dry is better than being wet) to make a recommendation.

Science and consequently the authority of scientists as experts in science stops at the description of the natural world -- the Earth is either warming or not, and we project to the best of our ability that it will continue to warm. This will have these natural effects, which we believe will effect human beings and the environment in these ways.

It is then left to the political process to determine a course of action based upon values. From whence do these values come? FLG thinks it is from what is meaningful to people. People define meaning in different ways. Some find polar bears and the natural enviroment meaningful. Most people find their food, clothing, and shelter a meaningful concern.

So, just to wrap up this digression, science ought to make positive claims, not normative. Likewise, scientists ought to recognize that once they go from descriptive to prescriptive, they are moving into applying values. Now, FLG is well-aware that the entire scientific project was conceived out of the normative goal of "the relief of man's estate," but scientists really ought to be circumspect when make recommendations. Once you do that, then politics is going to enter into the equation because you are applying values. End of aside.

Sarewitz concludes:
Yet there is clearly something going on that is as yet barely acknowledged, let alone understood. As a first step, leaders of the scientific community should be willing to investigate and discuss the issue. They will, of course, be loath to do so because it threatens their most cherished myths of a pure science insulated from dirty partisanship. In lieu of any real effort to understand and grapple with the politics of science, we can expect calls for more "science literacy" as public confidence begins to wane. But the issue here is legitimacy, not literacy. A democratic society needs Republican scientists.

No, a democratic society doesn't necessarily need Republican scientists; it simply needs to understand the limits of science and even more importantly that in its relationship with policy making there is an inevitable application of values. If you assume that scientists, as empiricists, weigh the present situation in terms material conditions and what can be measured and quantified over what cannot be, then you are well on your way.

Most Obscure Reference Of The Day

NYTimes:
Conditions were much better, in fact, than at most public hospitals in the third world. Hospitals that mainly serve the poor have very little political clout, which means that conditions in their wards sometimes seem to have been staged by Hieronymous Bosch.

Hieronymous Bosch, really? FLG bets less than 1% of the readers of that article knew the reference.

Monday, December 13, 2010

Government That Helps Markets

A lot of people come across this blog and think FLG is some sort of crazy pro-market ideologue. Well, perhaps he is crazy, but he isn't a pure market ideologue.

Jim Manzi's recent column in the National Review raised a lot of good points, but never touched on what FLG sees as a key benefit, or key drawback if you are Prof. Deneen, of the welfare state -- deracination.

Prior to and without the welfare state, people relied largely upon or family, friends, and neighbors for support. We still do rely upon these people for support, but less so because of the welfare state. For better or worse, we don't have several generations living under one roof. Certainly, our society's increased wealth makes this possible, but the direct impact of programs like Social Security and Medicare should not be overlooked or understated. This undoubtedly helps labor mobility, which helps the economy. Does it help the economy more than the inefficiencies, dead weight losses, and moral hazards created by the taxation and redistribution inherent in the programs? FLG doesn't know, but the increased labor mobility ought be considered as a pro insofar as economic growth is concerned.

Perhaps more obviously, government facilitates commerce by providing a competent legal system. Here in the states we tend to whine about the overlegalization of our lives. The simple act of installing a computer program entails accepting a massive contract. Robert Putnam famously lamented the loss of social capital that often acted as grease in the economy. And yes it would be great if people did business with their bowling buddies so that they didn't resort to legal action so quickly.

But there's another side to this. The New York Times had another piece about the frustration of Chinese university graduates to find acceptable jobs. FLG still thinks the H-O theorem is the explanation, but there's a key passage in the more recent article:
While some recent graduates find success, many are worn down by a gauntlet of challenges and disappointments. Living conditions can be Dickensian, and grueling six-day work weeks leave little time for anything else but sleeping, eating and doing the laundry.

But what many new arrivals find more discomfiting are the obstacles that hard work alone cannot overcome. Their undergraduate degrees, many from the growing crop of third-tier provincial schools, earn them little respect in the big city. And as the children of peasants or factory workers, they lack the essential social lubricant known as guanxi, or personal connections, that greases the way for the offspring of China’s nouveau riche and the politically connected.

Guanxi is, for all intents and purposes, the extreme form of what Putnam was arguing. China's legal system is, well, problematic. Contracts aren't particularly ironclad. Instead, it's all about relationships. A fact further exemplified later in the piece:
For weeks Mr. Li elbowed his way through crowded job fairs but came away empty-handed. His finance degree, recruiters told him, was useless because he was a “waidi ren,” an outsider, who could not be trusted to handle cash and company secrets.

Not to say the United States legal system is perfect or that wealth or power don't influence the outcomes, but it's far better for the entire society to be able to draw up a contract than to rely solely connections.

So, institutions and rule making are certainly important.

Krugman Has Finally Lost It

Apropos of FLG's time horizons theory, Krugman argues that the various stimuli, including the tax cut deal, are too short-term focused. Instead, he argues we need to take a "long-term" strategy of stimulating and stimulating until were fully stimulated:
What the government should be doing in this situation is spending more while the private sector is spending less, supporting employment while those debts are paid down. And this government spending needs to be sustained: we’re not talking about a brief burst of aid; we’re talking about spending that lasts long enough for households to get their debts back under control. The original Obama stimulus wasn’t just too small; it was also much too short-lived, with much of the positive effect already gone.

Krugman keeps dismissing concerns about the deficit as worries about mythical bond vigilantes. (As you know, this is consistent with FLG's time horizons theory.) But does he really think the government has a blank check to keep running deficits until the develeveraging, which could take several more years to complete, is done? Furthermore, even if it does, then isn't running government deficits to stimulate the economy while people pay down their debt akin to indirectly nationalizing their debt? Is that really a wise decision? FLG gets how it could be appealing from a progressive standpoint since you can nationalize middle class debt and then get the rich to pay the taxes to pay it down, but is that really a good long-term strategy?

All told, for whatever reason, FLG is constantly astonished by Krugman's inability to separate long-term from short-term. And to the extent that people bring up long-term concerns, Krugman dismisses them as irrelevant or irrational because there is no empirical evidence to suggest right now that the bond market will price in additional default risk in the future. Consequently, let's keep borrowing and spending and when we see something, well, we'll worry about it then. Kinda reminds me of the Titanic. Sea looks clear. Full speed ahead. Do-do-do. Oh shit, Iceberg! Full stop! Hard to port!

Much better to take precautions now -- sorta like not going full speed into a fog over what most people presume to be treacherous waters -- than to recognize the problem too late to stop.

PS. FLG has seen no evidence that either party is better on this deficit issue.

Call FLG Crazy

...cuz he likes Jeff Bridges, Matt Damon, Josh Brolin, Barry Pepper, and especially the Coen brothers probably as much as anybody, but True Grit didn't need to be remade.

Don't get FLG wrong. He'll see the fucking movie, but he won't be happy about it.

Sunday, December 12, 2010

Dear Robbo:

Mrs. FLG bought FLG an XBOX 360 for his birthday a while back, and for all its gaming awesomeness, it gets used most as a Netflix streaming device. So much so, in fact, that FLG recently bought a Roku for the upstairs.

So, Robbo, do yourself a favor and just order one already. The FLGs use theirs all the time between Netflix and Pandora.

Sincerely,
FLG

A Tit Loser

Robbo flags this passage for FLG:
What about the average guy in Alexander the Great’s army? What about his contribution to history? Yes, it is important that Alexander extended the influence of such legendary Greek philosophers as Aristotle throughout most of the civilized world, thus significantly affecting the development of Western thought and culture to this very day: but is it not also important that, at the same time, some of his lowly foot soldiers were perfecting the Rubber Spear Trick, or determining that the letters in “Aristotle” can be rearranged to spell “A Tit Loser” (also “Tater Silo”)?

- From Dave Barry’s Complete Guide to Guys.

FLG snarfed his coffee.

Maybe It's FLG

FLG has been asked three times in the last month or so by professors if he is enjoying their class. Now, the smart answer, perhaps the one they expect, is "yes." Then we comfortably can move on to other issues or conclude the conversation.

Problem is FLG hasn't been enjoying their classes as much as he has other classes he's taken at Georgetown. So, he has responded with "Yes, but I'd like the class better if you did or didn't do these one or two specific things for these specific reasons." Each time, the professors got all defensive.

FLG is a slow learner, but third time is the charm. Next time it comes up, a simple "yes" will be forthcoming.

Saturday, December 11, 2010

A Quick Thought

A month or so ago, FLG borrowed Discipline and Punish from the library, but with b-school and all he only read it sporadically. He figured no big deal; he'll just renew it. Well, when he went to renew it somebody was waiting for the book. So, he only got through about a third.

That's great, FLG. What's your point?

Glad you asked. Jon Rowe posted a video in which Steven Pinker argues he is optimistic about a long-term decline in violence among us humans. Pinker specifically mentions that while torture is still currently used, as a means of extracting information, but that it is no longer used as a form of criminal punishment.

Well, this reminded FLG of the first section of Discipline and Punish. Foucault argues that torture and ritual surrounding execution in the Middle Ages was about the physical. About punishing the convict's body for transgressing against the law, which was an extension of the body of the sovereign. It's focused on the physical. Questions about the person's motives or state of mind while committing the crime were largely irrelevant. The person physically committed the crime, attacked the body of the sovereign, and so they must be punished. The punishment was a spectacle for a variety of reasons, but mostly to serve as demonstration of justice and warning to the rest of the community.

Foucault then contrasts this with post-Enlightenment punishment. He specifically mentions the guillotine. The spectacle was still there, but the device was designed to minimize the physical punishment. One quick slice and done. The very opposite of the drawn out torture ritual. But Foucault says, the punishment had shifted from focus on the body to focus on the soul. It was no not about punishing the body of the convicted, but about examining and reforming his soul.

Foucault openly questioned whether that was more humane. That's where FLG stopped. Pretty interesting, and FLG can see from his past Foucault readings where this moves into the systematic application of power in society through a prison system. It's always about power for Foucault.

Anyway, FLG hadn't ever really thought that the shift from torture and execution to prisons could be considered less humane, but Foucault, for all the ways he annoys the shit out of FLG, was one smart fucker.

Quote of the day

Telegraph:
masturbate him using a cow vagina filled with hot water

Friday, December 10, 2010

FLG is currently listening to

There Are Days

...when FLG wants to try his Dread Pirate Roberts-esque Succession Plan again. Then, there are other days, like today, when he thinks that's too much work and he's tempted to just redirect readers of Fear and Loathing in Georgetown to Dennis the Peasant. Dennis is way more entertaining. Although, FLG is still waiting for him to explain what an anarcho-syndicalist commune is exactly.

Quote of the day II

Rollcall:
One unidentified lawmaker went so far as to mutter “f--- the president” while Rep. Shelley Berkley was defending the package the president negotiated with Republicans. Berkley confirmed the incident, although she declined to name the specific lawmaker.

“It wasn’t loud,” the Nevada Democrat said. “It was just expressing frustration from a very frustrated Member.”

FLG isn't really all that interested in the politics of all this. He just finds the words "very frustrated Member" hilarious. Is that anything like Blue Balls?

H/T

Quote of the day

This one goes out to Dance and will probably make no sense to any of you because the relevant conversation happened mostly in email:
I [Kane] am involved in a dispute relating to whether or not a blog can be considered part of one's academic writing. Williams College restricts the use of undergraduate theses as follows:

Non-commercial, academic use within the scope of "Fair Use" standards is acceptable. Otherwise, you may not copy or distribute any content without the permission of the copyright holder.

Seems obvious enough. Yet some folks think that my use of thesis material in a blog post fails this test because it is not "academic."

Silicon Valley's Secret Sauce

Via Ace, FLG learns of this Chatham House paper on China. Its primary focus is one that FLG is constantly harping on:
we should consign linear thinking to spreadsheets, and try to understand the consequences and flashpoints resulting from economic and political processes.

Small aside:
FLG tried to bring this point up to his fellow MBA classmates when the discussion during the class break turned to China. One classmate said that since FLG hadn't been to China that he had no idea how dynamic it felt over there. FLG immediately asked if that's because of all the new, cool buildings. "Yes," the classmate replied. "That's what I thought," FLG said. "Look, economies aren't solely on cool buildings. They're tangible and nice to look at and all, but that doesn't mean China is on some inexorable path to economic predominance. This is a one time shift from agriculture to industry, and increase in inputs. Because they are so big the shift is taking a long time, but it's still a one-time shift. And I'm pretty sure they cannot keep their present form of government after the shift and still be successful. In fact, there are strong signs that it's a real estate bubble over there." Everybody poo-poo'd FLG on that one. BTW, FLG is constantly distraught that his fellow classmates are so enamored of buzzwords and fads. It's almost like they take the Tom Friedman Kool-aid intravenously. Generally they're smart people, but not also very deep thinkers. End of aside.

The main point of this here post is about Silicon Valley's secret sauce:
You can certainly create world leadership in the production of screen-based goods and green energy products and processes along the Yangtse Delta, but this is not the equivalent of a Silicon Valley, which thrives on adversarial conflict in innovation, proprietary ownership of processes, patents and copyrights, and the absence of hierarchy and political interference.

This is one of those things that FLG thinks most people miss, including the people who try to copy the formula elsewhere. They all think it's a matter of good schools, strong IP protections, and letting entrepreneurial people do their innovation thing. That's all well and good, and they're all parts of it. But the secret sauce, why other people try to copy it and often fail, is they forget the finance part.

Silicon Valley is the tip of the spear in reallocating capital to new and productive activities. It's not just the absence of political interference, it's also the presence of bunch of finance people (angel investors, venture capital firms, etc) that provide capital. Furthermore, the Anglo-Saxon market-based financial system facilitates this process even more because it provides an exit strategy for those investors (IPOs), as well as additional liquidity.

FLG understands why people focus on the engineering and patents. Most people naturally see the product and the processes that went into their development. The engineers and programmers who made it happen. Finance is something that sort of happens in the background. Or as a benefit after the product has been developed for a job well-done. But FLG really think that is Silicon Valley's secret sauce -- finance. Well, it's a combination of educational institutions, entrepreneurial talent, and finance, but finance is the one people don't see and in many ways is the hardest to copy. There are plenty of good schools in the world and plenty of smart people with interesting ideas coming out of those schools. It's really a matter of acquiring and deploying resources to execute those ideas, and then doing it again. This isn't to disparage the skills, hard work, and creativity of the entrepreneurs and engineers in Silicon Valley, but simply to say that the infrastructure to provide them capital is what makes Silicon Valley special.

In Case You Didn't Know: Frank Lloyd Wright LEGO Edition

FLG was perusing the selection at one of the toy stores in Georgetown for possible Christmas gifts when he stumbled upon a LEGO version of Fallingwater. Apparently, a version of the Guggenheim also exists as part of the LEGO Architecture Frank Lloyd Wright collection.

Fantastic Mr. Fox

FLG looked out his back window and saw a fox sleeping. As he hurried off to get the camera, Miss FLG knew something was up. When FLG returned, she demanded to "See!". So, the pictures came out blurry because he couldn't keep his hand steady while holding a toddler.





Thursday, December 9, 2010

A Conversation

FLG: I'm excited to take Miss FLG to Disneyland later this month.

Mrs. FLG: Me too.

FLG: I'm especially excited to take her on Pirates of the Caribbean.

Mrs. FLG: She's too young to go on Pirates. She's not even two!

FLG: Nonsense! You're never too young to enjoy that ride. Dead men tell no tales...Yo Ho, Yo Ho, a pirate's life for me. We pillage, we plunder, we rifle, we loot. Drink up me hearties, Yo Ho! We kidnap and ravage and don't give a hoot. Drink up me hearties, Yo Ho!

Mrs. FLG: There's something very wrong with you.

FLG: Nevertheless, Miss FLG is so going on that ride.

FLG is currently listening to

FLG is currently listening to

Well, not this version, but you get the idea:

Miss FLG's Favorite Christmas Song

Liberalism In France

This short essay in Le Monde about liberalism in France (in France that means economic liberalism, not social liberalism) caught FLG's eye. Perhaps it's a bit of a sideshow or just cynical speculation, but the piece made FLG wonder how much of the interactions between President Sarkozy and the head of the IMF, Dominique Strauss-Kahn, who is on the short list to be the Socialist presidential nominee, will be for domestic, French consumption.

Object Sex

So, dave.s. was complaining in the comments that there's been no object sex reporting here lately. Well, FLG strives to bring top notch object sex and pirate, and where possible pirates having sex with inanimate objects, reporting to his readers.

Today, he's got this:
A pen that vibrates and comes with a silicon sleeve.

He he. He said, "comes with a silicon sleeve." Amazon says it helps with "writer's block."

It's still no vibrating beaver, however. That continues to slay FLG.

Wednesday, December 8, 2010

FLG Knows He Said He'd Shelve His Time Horizons Theory

...but James Hanley asks:
Does Obama Lack a Sense of Irony?

"This is a long game, not a short game."

That’s President Obama talking explaining why he accepted extension of the Bush tax cuts in exchange for extension of unemployment benefits. So if he’s playing a long game, why does he keep sacrificing long-term wins to get short-term ones, instead of sacrificing short-term wins in pursuit of long-term ones? He seems to have twisted the old saying, “we lost the battle but won the war” into “I can’t focus on winning the war until I’ve won this battle.” In addition to lacking a sense of irony, he also appears to be a president with precious little sense of strategy.

The reason he confuses the short-term and the long-term is because he is liberal. Therefore, he discounts the future very steeply. Therefore, to some extent the long-term doesn't even exist. Therefore, he wouldn't know a long game if it smacked him in the face.

FLG is currently listening to

Quote of the day

Buttonwood:
Does a combination of deficit-financing and QE mean the US is inexorably headed down the inflationary road? The indicator I watch is the breakeven inflation rate, measured by the gap between conventional and index-linked bond yields. On the 20-year issue, this is still under 2.4% and precisely where it was a month ago. But this is the measure investors should monitor closely in the run-up to Christmas.

Bank Size

FLG was surprised by this Room for Debate on the size of banks. Only one contributer argued in favor of reinstating Glass-Steagall, but that was "Nomi Prins...a senior fellow at Demos" -- no surprise somebody from Demos would make that argument. And no surprise that FLG ignored it just as quickly. Although, in fairness, she was a managing director at Goldman at some point.

On the other hand, Jeremy Stein, a professor from Harvard, writes:
The Glass-Steagall issue in particular strikes me as a red herring; I know of no hard evidence to suggest that the combination of traditional lending and investment banking services such as stock and bond underwriting has destabilized the financial system.

In any case, she was the only one who argued for Glass-Steagall, which goes to show that this idea was always a bit flaky. In fact, FLG can't remember anybody making a serious economic argument about why the repeal Glass-Steagall was a problem. It was always a sort of correlation equals causation or it was better before type argument. Prins' argument is no different:
Before Glass Steagall was repealed in 1999, the top five banks held 19.5 percent of national consumer deposits. Today,they hold 40 percent.

But that's not about investment banking versus commercial banking. The more likely cause is the relaxation of interstate banking, which began in 1994 with the Riegle-Neal Act and was only fully implemented with the Gramm–Leach–Bliley Act in 1999, which also happens to be what repealed Glass-Steagall. Seriously, customer deposits doesn't really have much to do with this investment banking versus commercial banking stuff because it only deals with one side of it, the commercial banking, which is FDIC insured anyway. Moreover, FLG contends that the repeal of Glass-Steagall helped in the crisis because commercial banks were able to buy the investment banks before they failed.

Prins concludes her argument thusly:
Glass-Steagall was designed to prohibit the risk of speculative, bonus-driven practices from eradicating the hard-earned money of ordinary citizens. By not allowing our riskiest banks to go bankrupt when they were at the financial abyss, and not deconstructing their merged nature, while following a policy of pumping up asset and Treasury prices, we have already failed to stop the next stage of this crisis.

This is just confused. Lehman Brothers, a pure investment bank, meaning it would have been able to exist under Glass-Steagall rules, failed and it almost brought the system down. Therefore, FLG isn't quite sure how separating them protects the system.

The simple fact is that new financial products, including derivatives, possess qualities that are hybrids of the old products and make it difficult to separate risky from non-risky activities. For example, it's easy to see how a commercial banking could use interest rate swaps or currency futures to hedge interest rate and foreign exchange risk quickly, cheaply, and easily. It's also easy to see how they could use those to speculate. Problem is that there's no bright line where one cross over from one to the other, at least from looking at the accounting data. And so even if it would be desirable to go back to Glass-Steagall principles, FLG isn't at all convinced it's even possible given technological innovation and the concomitant financial innovation.

So, FLG is still waiting for somebody to make a logical case for why going back to Glass-Steagall is 1) the right thing to do and 2) actually possible. (And FLG doesn't mean politically possible, he means that given financial innovation how it becomes literally possible to cordon off speculative activities.) Until now FLG has heard this recommendation from numerous people, almost always on the Left and almost always without any real economic training or even insight. Sure, there's been a couple of people who worked in investment banks who've made this argument, but it's surprising how little insight into the financial system they offer. When you really boil it down, their objection is usually a moral one against the culture of Wall Street, not an argument about the operations of the financial system.

Tuesday, December 7, 2010

Tocqueville, Purtianism, and Virginia

Peter Lawler offered up a rather fascinating post a few weeks ago.

The first Americans of the North chose exile in America not for prosperity or physical liberty, but to satisfy an intellectual need that has nothing to do with their bodies. The Virginians, by contrast, were extremely moved by singularly materialistic–really, criminal–pursuits. (Most colonies, Tocqueville notices, originate in the lawless greed characteristic of pirates.) But that’s not to say the men of New England thought of themselves as too good or too pure for this world.

[...]

Both the North and the South—New England and Virginia—began with extreme views of what human liberty is. Neither Tocqueville could affirm as what’s “true and just,” although both have elements of truth and justice. The Americans, with their subtle and unprecedented statesmanship, haven’t found it necessary to choose, as Tocqueville says people are often stuck with doing, between the excesses of one extreme or another. America at its political best is a compromise between colonial North and South, between New England and Virginia, between meddlesome, intrusive idealists and vulgarly self-indulgent and morally indifferent pirates.

It's interesting in its own right, but again, probably to the massive annoyance of everybody who reads this blog, FLG sees inklings of his time horizons theory. However, he's not quite sure how it fits. But damn it, like Prego, it's in there. There's always something about the Viriginians', well, let's just say Jefferson's political philosophy that FLG always felt was short-term focused despite the high fallutin' rhetoric.

In any case, he's going to put his time horizon theory on the shelf for a while.

Green Economy

FLG has received an influx of new readers lately, so he'll just state at the outset of this post that he has long maintained that the "Green Economy" as a path forward for future economic growth is a bunch of shit. He equates it to the old adage of breaking windows to kick start economic activity. Put simply -- destroying wealth to artificially create demand. It gets people moving, but society is worse off after it. Now, in fairness, given the externalities associated with climate change, it's possible that these policies could make us better off overall (although FLG isn't so sanguine, but it is certainly possible), it's just that we won't be better of in strictly economic terms.

Anyway, there's a sort of ignorance or cognitive dissonance required to make the case for green economy growth. Marketplace offers up an example almost every week. Last night, it was this:
President Felipe Calderon voiced hope the outcome will put to rest what he called the "false dichotomy," that dealing with climate change conflicts with economic growth. He insisted it's not just possible to battle global warming without harming the economy -- it's good business.

There's the common refrain, but then jump to the end of the story:
But it's the Kyoto Treaty on climate change that makes this investment possible. And renewing that treaty is on shaky ground at the U.N. talks here this week. That uncertainty could limit Mexico's ability to get a good return on the climate change investments it's already made.

If it were good business, then an international treaty wouldn't be required. There'd be what FLG calls organic demand, meaning demand created by individual and firm wants and needs, not by government fiat and regulation. If it would make people better off, at least from a strictly economic individual perspective, then they'd do it without international treaties. When the politics has to come together to ensure good returns, then the probability that it provides a good return to society is pretty nil.

Just to be clear, this doesn't mean that individual firms can't profit from this. Numerous firms will profit as a result of these regulations. What FLG objects to is the idea that this is a path for society to be better off economically. It's just doesn't make any sense. It's possible that with the right regulation that we could all be better off as a society, FLG agrees with that and perhaps that ought to be the point of public policy anyway, but the idea that green technology and green jobs will increase the economic pie is, as far as FLG can tell, logically false.

FLG is currently listening to



...because of the previous post.

Monday, December 6, 2010

A Conversation

FLG is driving through Falls Church.

FLG: Hey, look The State Theater.

FLG: Interesting...I wonder who is playing.

FLG: Probably the normal...tribute band, 80s cover band, another tribute band.

FLG: Do you see what I see?

FLG: Wu Tang Clan!

FLG: They ain't nothin' to fuck wit!

FLG: Remember to check the website to see how much tickets are.

The next morning...

FLG: You gotta check that damn website.

FLG: $50. Okay, I'll think about it.

FLG: Wait a second. No RZA? No Bobby Digital? Fucking forget it.

FLG: But GZA, GHOSTFACE, METHOD MAN, RAEKWON, INSPECTAH DECK, MASTAKILLA, U-GOD, MATHEMATICS, CAPPADONNA, and STREETLIFE are all going to be there!

FLG: GZA is The Genius. And FLG does like Ghostface Killah and Method Man. But no RZA, no deal.

Holy Fuck

This is depressing.

Glenn Beck, Michelle Malkin, Ann Coulter, and Sean Hannity really make people's top ten list of conservative thinkers?

If you don't hear from FLG for the next week or so, it's probably because he's studying Seppuku. If you don't hear from him after that, well, you know the reason.

This Made FLG Laugh

Bagehot:
The contrast was striking with student demonstrations I have reported on elsewhere, over the years. In France and China, for example, students are fantastically articulate, but in a slightly creepy, parrot-like fashion. In France, it is impossible to escape the feeling that students have been marinated in a sour soup of sub-Marxism by their teachers: talk to a score of them, and your notebook soon fills with near-identical little sermons full of abstract nouns and odd verbs, about the need for massive struggle that fundamentally rejects the brutalising logic of a capitalist system that renders the disfavoured fragile and promotes social anguish.

FLG laughs because one of the first posts on this blog was to this story.

Time Horizons

William writes:
Someday, by the way, I'm going to make a savage attack on this time horizons stuff. You're not going to know what hit you.

To which FLG replied:
Try your best, but it's an irrefutable theory. Plus, I'm rubber; you're glue.

However, William, if you do have a savaging in store, then FLG promises to post it here in full.

Quote of the day

Bruce Schneier:
Securing the Washington Monument from terrorism has turned out to be a surprisingly difficult job. The concrete fence around the building protects it from attacking vehicles, but there's no visually appealing way to house the airport-level security mechanisms the National Park Service has decided are a must for visitors. It is considering several options, but I think we should close the monument entirely. Let it stand, empty and inaccessible, as a monument to our fears.

FLG Has Been Out Of It

He had no idea what was going on in Cote d'Ivoire.

He blames all the damn business school assignments. Cuts into his normal international news reading.

Time Horizons

nadezhda writes in the comments:
The light bulb just came on with those Hume quotes. You need a two-dimensional (at least) typology. Hume's talking about probability.

"Epistemology" emerged as a central topic of 17th-18thC philosophy in the debates over scepticism. There wasn't just one question -- "how do we know." There was also "what is knowable." If scepticism was profound enough, fideism was as or more likely an outcome as atheism (see e.g. Montaigne and Bayle).

And those questions are still with us today, though obviously focusing on a host of new areas of knowledge. Still, faced with the same evidence and proposal for action, two empiricists will use very different discount rates about the future, depending on the degree and source of scepticism. So as a rough cut, you need four ideal types that combine two dichotomies: empiricist/rationalist-idealist with sceptic/believer.

The reason you may need a third dimension is that the degree and source of scepticism itself is related to how one views causality. Rather than lose myself in contemporary epistemological debates, to simplify our ideal types I'm going to go back to the period Hume was writing in.

The freedom vs necessity stuff could be mapped on a two-dimensional typology of:
(1) causes, as either materialist (physical or human) or non-materialist (whether divine Providence or something like Fate) and
(2) processes, as either contingent or reflecting an eternal order. (There are undoubtedly better labels, but you'll get my drift).

So to use our super-simplifying pairs of ideal types:
- one pair has Epicurean random swerving atoms or a bunch of individual free wills that produce historical contingency, so contingency is baked in to a material universe and we can only talk about probability.
- In a second pair, the source of contingency is a non-materialist divine Will (debates over voluntarism, miracles, Jehovah intervening in history, etc) or fickle Fate, which doesn't conform to predictable laws, so all we can do is conform our behavior to what we have reason to believe (through observation or deduction or revelation etc) might attract the benevolent attention of Providence/Fate (or for a Calvinist, serve as evidence of election by an arbitrary deity). Though poor Job always stands a cautionary tale.
- In a third pair, divine Providence operates in conformity with God's eternal laws, so we have non-materialist causality that operates according to fixed (that is, predictable) laws -- the big debate re that pair returns to the "how do we know" issue -- observation vs revelation vs revelation-combined-with-right-reason etc.
- And in the fourth pair, where empiricism can turn into "scientism" (in both physical and social sciences) we have material (physical and human) causes operating entirely according to fixed laws that have necessary effects -- the challenge there again is how do we go about discovering and applying those laws, not whether the laws "exist".

[...]

To take an example of two rather different people who shared a sense of "the fierce urgency of now" within "the long arc of history" (though focused on quite different historical forces and processes). I think you could just as easily look at Martin Luther King as more of a Providential idealist and Maggie Thatcher more a material (in the sense defined above) empiricist. But neither was what I'd call an extreme sceptic when it came to "knowledge" of an imperative for immediate, major action.

FLG isn't quite sure the additional dimension is needed at least insofar as this theory has a good amount of explanatory power, but he's nevertheless thinking about it. What is more interesting, and perhaps problematic for his theory, is the idea that both King and Thatcher shared a sense of "the fierce urgency of now" within "the long arc of history."

Obviously, my theory has never stated that those on the left have no conception of the long arc of history, but rather that they place relatively less importance on it than conservatives. Clearly, King had a conception of the long arc of history. He'd been to the mountain top and all that. Although, FLG thinks that comes directly from being a preacher and his faith. Therefore, there's definitely something to be said for the various dichotomies listed above. The question then, for FLG, is does it matter what contributes to the person's discount rate? He's not entirely sure it does.

Let's imagine a continuum of discount rates, or alternatively weight given to the present and short-term, and at the two extremes you have somebody who doesn't care about anything even one minute away and another who values the future so much that present circumstances have little to no impact on their decision making process.

Well, perhaps King, if you took his only his political predisposition, was short-term focused, but that his faith, which provides that sense of long arc of history, shifted him more toward long-term on the continuum.

Since nadezhda hasn't been around here from much of this discussion, FLG will repeat something that FLG discussed a couple of times, including recently with William Brafford, and that's the consequential versus deontological argument. William was concerned that this mode of analysis would classify conservatives who argue from deontological positions with being short-term, thus undermining FLG's theory. FLG maintains that deontological positions, that something is forever and always right or wrong, is inherently a long-term position. However, most people today use consequentialist arguments.

Getting back to the King issue, it's a question of how much his stances were influenced by his observations of the specific problems and negative consequences of the situation (consequentualist) versus the more abstract principles of justice and truth (deontological). And that sort of parallels what nadezhda proposed.

Ultimately, however, what's important, at least in most political/policy discussions is where their discount rate lies along the continuum. That's something FLG thinks we can observe, or at least get a good approximation of, given a person's reasoning, arguments, the evidence they marshal, and the relative importance they place on specific facts. Why they do those things is more obscure. So, why they are on at some place on the spectrum is probably difficult if not impossible to ascertain.

FLG does believe, however, that most people who are empirical (and FLG guesses you could also include those who make largely consequentialist arguments) are oriented somewhere closer toward the short-term, and conversely that rationalist, deontological people are more toward the long-term. But having just written that FLG isn't so sure that he isn't simply repeating himself. Can one be empirical without being consequentialist? Can one be rationalist without being largely deonotogical?

Oh, and FLG is ashamed to admit this, but he doesn't really know enough about Thatcher to comment about her, which is why he was largely silent on that example.

UPDATE:

FLG just reread this and sorry it's so stream of consciousness. He just woke, went to the keyboard, and popped this out.

UPDATE II:
To clarify, or perhaps to equivocate, depending on your view, because FLG has gotten a couple of emails pointing out that left-wing ontologists exist, the consquentialist versus deonotological portion of the argument is as it applies to politics and policy. So, a person who is a consequentialist, who is most focused on the short-term and direct consequences, will be on the left. While the person focused more on the long-term consequences will most likely be on the right. To the extent that somebody makes deontological ethical and political arguments, to say that something is always good or bad, and present consequences are entirely irrelevant, is more likely a conservative position.

It's confusing because there are ontologists who are on the left, as the emails attest, but that's not quite the point. It's whether they bring consequentialist arguments to bear to politics, which FLG is willing to say those academic ontologists do.
 
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