A pretty strong Canadian cold front has moved into Northern California. I took the opportunity to make a couple gallons of pasta sauce so I can freeze it. Here’s a few pics of my afternoon.
One of the best scenes from The West Wing. It doesn’t have it in this clip, but just before this takes place, the President’s arrival into the room is announced and (almost) everyone stands up.
The following is taken directly from the transcript of the interview that Charlie Gibson of ABC News had with outgoing president George W. Bush:
Gibson: What were you most unprepared for?
Bush: Well, I think I was unprepared for war. In other words, I didn’t campaign and say, “Please vote for me, I’ll be able to handle an attack.” In other words, I didn’t anticipate war. Presidents — one of the things about the modern presidency is that the unexpected will happen.
George Bush, in his own words, is admitting that he wasn’t prepared to be President of the United States. He says he was “unprepared for war”. Why is that the same as saying he wasn’t prepared to be President? Because being President means being the Commander in Chief.
The President has sole authority over our country’s military. The primary responsibility of our nation’s military is to protect our country, especially in times of war. Congress is given the power to declare war and control over the budget, but the enforcement of that declaration, or any use of the military, rests solely with the Commander in Chief. Even when war is not officially declared, as it has not been since World War II (as far as I know), the President can, and obviously has in many instances since WWII, use the full force of the military for any reason he deems appropriate, as long as Congress agrees to continue funding once the money runs out for the initial campaign.
Therefore, President Bush is admitting that he was unprepared to shoulder one of the primary, and many would argue the most important responsibility of being the President of the United States. He was unprepared to be the Commander in Chief.
What was he thinking? Was he treating the Presidency as some kind of game? Truly, this man will go down in history as one of the worst presidents in the history of this nation.
Who doesn’t love “clean sheet” night? You know, that night you crawl into your bed with freshly washed sheets. Well this is even better. This is new (and clean!) sheets with a new comforter and new comforter cover. I love it!
Next up, I think I’ll be getting a new McRoskey bed some time in the next six months or so.
I heard the following idealized description of how and why a truly free market can work. For purposes of this example, the term free market simply means a market where no regulations are present or required. Similar to, for example, the Credit Default Swap market that’s been identified as a contributing factor to the financial crisis the major world markets are currently experiencing.
Ok, so here’s the example. Let’s say you have two kids, both of whom like chocolate bars. And you have one chocolate bar. To be fair, each child should get half of the chocolate bar. And because this is a “free market”, you can’t have a third party (e.g. the government) divide the chocolate bar in half. The two kids need to do it themselves.
How do you accomplish this?
You do this by telling the children that one of them is allowed to divide the chocolate bar in half, but the other gets to choose which piece he or she wants.
Sounds pretty cool, doesn’t it? Isn’t this a great, if highly simplified, example of how a true free market can operate without regulation?
Well, no, it isn’t.
Here’s the problem as I see it. If the rule is that one child gets to divide the chocolate bar and the other gets to pick which half they want, and no one is there to oversee the process, what happens if the bigger, stronger kid decides he or she wants the entire bar all to themselves? What’s the other kid going to do about it? There’s no one to enforce the one rule that exists.
That’s the problem with a truly free market. If there aren’t some minimum regulations that are also enforced, then there are always going to be people who cheat the market and get away with it.
As game theory predicts, this can’t go on indefinitely because cheaters will eventually be identified and will be shut out of the market. So a particular player in the market probably can’t keep cheating and continue to get away with it. But as we’ve seen in real life, it can continue on long enough that it can lead to disastrous consequences. This is what has happened to us. A bunch of people saw an opportunity to “cheat” in the mortgage and related markets, and they got away with it — for a time. But now they’ve been found out and the markets are correcting, albeit at a cost of trillions of dollars.
This is why markets need some amount of regulation that is both enforceable and enforced. And why, when we overturn laws such as the Glass-Steagall Act and allow (essentially) unregulated (and largely un-understood) markets such the Credit Default Swap market to exist, we run the very real risk of the type of implosion we’re seeing happen today.
Love this goodbye letter from Andy Lahde. The whole thing is good, but I especially like what he says in the second paragraph:
“I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.”
This has been around for a while, but it still makes me laugh whenever I watch it. The editing is so good. Whoever did this should get an award, an Oscar for mini-editing or something.
The public radio show, This American Life, has broadcast two excellent episodes that really help explain, in an easy to follow way, what’s happened over the past several years in the mortgage and financial industries to bring us to the present “credit crisis”.
If you have any questions about how sub-prime loans became so rampant, or what Credit Default Swaps (CDS) or Collateralized Debt Obligations (CDO) are, or anything related to any of that, listen to these shows.
Here’s the first episode, which was originally broadcast in May, called The Giant Pool of Money. If you’re on a Mac (not sure if this works on Windows with iTunes installed), you can click here to go directly to iTunes to purchase the program. This one costs 95¢.
Here’s the second episode, from October 3rd, called Another Frightening Show About the Economy. This one is offered as a free mp3 download.
Each of these episodes is an hour long. And though they do make it relatively easy to understand what happened and what’s going on, you do have to pay attention. That is, you can’t just listen to it in the background and expect to learn anything. Well, at least I couldn’t.
