Month: July 2012 (Page 2 of 3)

Charles Pierce at Esquire posted a screen cap of a tweet from Governor Scott Walker (R-WI):

Imagine if Noah needed help from the government to build the ark. It might have never been built.

A couple of things:

1. It was never built. Can’t you recognize a fairy tale when you hear one?
2. In the fairy tale, it was done with the direct supervision of the “government,” though in this case the government was a petulant prick named Jehovah (or Yahweh, or Yoohoo, depending on who you ask) with no redeeming qualities.
3. Said petulant prick’s tax scheme included the life of a child (before that was revealed to have been a sadistic practical joke).

Let’s play a game:

Imagine if John L. Savage needed help from the government to build the Hoover Dam. It might have never been built.

Imagine if J. Robert Oppenheimer needed help from the government to build the atomic bomb. It might have never been built.

Imagine if Neil Armstrong needed help from the government to build the Apollo 11 space vehicle. It might have never been built.

Imagine if J. C. R. Licklider needed help from the government to build the internet. It might have never been built.

All interesting facts…

I will continue yesterday’s theme of “people who brilliantly present spectacularly wrong ideas and are richly rewarded.”

MoDo, Bobo, and, if you remove the word “brilliantly,” Ross Douthat have all failed their way up the Old Grey Lady’s mothball-laced bloomers. True, Maureen Dowd is only wrong two thirds of the time. But David Brooks is wrong somewhere in excess of 90% of the time. Each has some writing talent that has allowed the Senile Old Lady to promote them to the status of masseur/masseuse to the stars (of politics). Note: For your own safety, try not to imagine Bobo giving Mitch McConnell a rubdown. But of more interest is overgrown 14 year old naif Ross Douthat. His writing is slightly above average for an undergraduate political science major. His philosophy reflects that of an alter boy. A current alter boy.

Who is Douthat’s boss? For some reason, I imagine a doddering old codger at the Paper of Record who daily tells anyone who will listen that “That young feller’s gonna grow up to be a fine writer some day, I tells ya.” before the meds kick in. Douthat does have an interesting talent in the ability to spew out juvenile ideas wrapped in the prose of the young adult. But his columns are silly calls for a return to a Pope-dominated white male hierarchy in not so many words. He may not sound like an obnoxious blowhard like Limbaugh, but he is merely a Blathering Bigot of the Airwaves without the grotesque overt racism and sexism. A mild mannered version, if you will.

But I digress…

The important thing is that he is never right. When he wanders off the reservation of opinion into anything even vaguely testable, he is wrong somewhere in the neighborhood of 100% of the time. It pains me a little that in modern American Journamalism there are never any consequences for being wrong.

I have read some really interesting books on economics lately. It seems that my economic theories have been fleshed out completely and in rigorous fashion by great thinkers of the past. More importantly, however, I feel fully vindicated in my thoughts on Milton Friedman. His theories are complete horseshit. They are shoveled largely from the same dungheap as those of Friedrich Hayek. What, one might ask, makes them horseshit? I’m glad you hypothetically asked.

Back in the old days, brilliant moral philosopher Adam Smith almost singlehandedly developed what would become the basis of modern economic thought. He understood the limitations of his theories. Friedman did not. Friedman took the basic theory and ran with it. Under his stewardship, Smith’s “invisible hand” was allowed to fester in a cesspool of wrongness. It was infused with a greed rarely seen outside of cartoon villains. The putrid flesh became a grave wax capable of being molded to support any policy, so long as that policy resulted in a net flow of wealth from the peasants to the oligarchs. I am saddened that so many authors tell of a respect they have for Friedman despite the fact that his influence lent itself handily to the murderous regime of Pinochet and the general promotion of plutocracy in the West culminating in the legalization of bribery in the form of the Citizens United v. Federal Election Commission ruling.

Forget for a moment that Milton Friedman was a vile monster. Someone should notice that he was spectacularly and horrifyingly wrong. Why is it that this is forgotten? Not only have his misanthropic ideals been proven terrible empirically, but more importantly, they should appear obviously implausible to anyone with even the most basic knowledge of human nature. The most basic premise? Everyone plays fair. There are two things that could convince someone of the veracity of that statement: a traumatic head injury, or a powerful hallucinogen. I don’t mean just sociopaths like Friedman, either. A reasonable human, endowed with empathy and decency, will press the advantage. The concept of “enlightened self interest” depends critically on the “enlightened” part. History has show, rather clearly, that that part is somewhat elusive.

Fooling All of the People Some of the Time
A Long Short Story
David Einhorn
426 pages
Wiley, John & Sons, Incorporated, 2010

This is not the sort of book I can imagine myself having chosen. Yet when I had finished my last book, there it was. I started in, expecting it to be every bit as boring as the topic suggested. It is hard to imagine anything more uninteresting than the intricacies of asset valuation and accounting practices. Somehow it did not bore me. On the contrary, the esoterica of of bookkeeping to which retail investors (read: filthy peasants) are not privy really do shed light on how the crisis of the past half decade came into being.

The story began thus:

A founder of Green Light Capital, Mr. Einhorn was asked to give a speech for a charity. The topic was to be the best bit of investment advice he could give. Having recently done work on Allied Capital, his topic could be summarized as “bet against Allied Capital.” The repercussions became this book.

Einhorn is a hedge fund manager. He is a member of that monied class at whom we (the filthy peasants) like to aim our rage. This narrative, however, gives an interesting perspective on the hedge fund industry. I found it amazing that much of what he does is very like science. Dissecting of business practices of other companies compares quite well to scientific research. Much of this book focuses on what the science world calls “peer review.” In the case of business, however, it is far easier to hid pathological bad practices. Aside: In way, we see this effectively done in the Global Warming denial business. Having read, the book Merchants of Doubt, I wonder if the business of professional denialism was informed by the business of business…

While aspects of the conspiracies involved here are decidedly too muted for a cloak-and-dagger action movie, they do make for an interesting case study in the rampant dishonesty that one can get away with in a time of very little regulation. Einhorn is often critical of the government’s lack of oversight and inability to deal with obvious frauds. Einhorn criticizes both political parties. He notes that Democratic Senator John Kerry was highly protective of the Small Business Administration and even of the most blatantly fraudulent business Einhorn describes. As well, it is difficult to get a government entity to act against a company whose board includes the former chairman of the Republican National Convention.

I would be interested to see another side of this story, but it seems that time has proven Mr. Einhorn correct in his assessment of Allied Capital and its subsidiaries. It is definitely eye-opening and well worth the time for the peasant investor.