Wednesday, May 28, 2008
Tuesday, May 27, 2008
The real question is whether or not Hillary will be able to bring her blue collar white supporters. I doubt it. I think many of those who are supporting Hillary are not so much supporting Hillary but opposing a Black male. I think for many of those voters a Barack-Hillary ticket would be a diversity freak show. For Obama to appeal to these voters he will need a white male, plain and simple. Ideally this potential VIP would also bring other credentials than his whiteness (this rules out John Edwards), such as foreign policy experience or experience in general.
But the other reason Hillary would be an awful choice is that she more anything the Republicans can do themselves, will engergize the conservative base.
Monday, May 26, 2008
Thursday, May 15, 2008
Wednesday, May 14, 2008
Go read Cato-Unbound's lead essay. The topic is the resource curse. The author, Leif Wenar, proposes approaching the resource curse as a property rights issue. His premise is that a given country's resource is the property not of the government but of the people. What he is getting at is that every country should have some sort of trust fund like in Alaska where people are reaping the dividends of extracted resources. I think that's a great idea, but his proposal for bringing a resource trust about are troubling on many dimensions and impractical. He presents the scenario of Sudan selling $3billion of oil to China and plowing the money into its civil war/ethnic cleansing. The US would create a trust for the Sudanese people and impose tariffs on Chinese imports till there was $3 billion in the fund. It's one of those ideas that strikes you as novel, sort of an aha moment, and then of a sudden you realize its massive flaws. For instance, how do you get the money to the Sudanese people? What if you actually get money into the hands of actual Sudanese as opposed to the government only to find that they use the money to arm themselves? Should Europe impose tariffs on US imports to fund a trust for Iraqis? What if the Sudanese use the monies received to invest in infrastructure or education? etc. Anyhow, it's an interesting if clumsy attempt to grapple with a very serious problem.
Anne Applebaum makes the case for intervening in Burma. I guess if we are invading Iraq for among other reasons to promote democracy, why not invade a country for strictly humanitarian reasons. This is the dangerous logic that Iraq has spawned. I don't know quite what one does. Do you fly over Burmese airspace and carpet bomb them with food, clothing and medicine? I do think these types of tragedies are situations where the US should be grabbing onto to try to improve our international reputation.
Over at Gristmill they have a good rundown on McCain's cap and trade plan. The takeaway is that it is nowhere near as serious as Obama's plan but does pass the laugh test. A low bar admittedly, but I have low expectations for McCain. For me a cap and trade is clearly inferior to a carbon tax, and a cap and trade that does not auction permits is piss poor. Though, sometimes piss poor is an improvement (which is possibly the case).
Monday, May 12, 2008
Background: Mortgages are Nonrecourse Loans
What makes a mortgage distinct from other loans is that it is non-recourse. What does this mean? Well, say I have a $500,000 mortgage and I default within six months of the loan's origination, the bank forecloses on my home and is only able to sell the home for $300,000. The bank can't come after me for the difference. They are stuck with the loss.
Scenario One- the Foolish Speculator
A lot of folks got into mortgages that they couldn't reasonably afford but were banking on being able to take on a line of equity credit based on their home's appreciation. Thus, they're plan to pay for the mortgage was to take out more debt. This actually worked during the housing boom. However, when the bubble burst, homes ceased to appreciate, and thus there was no equity to tap. These folks went into to foreclosure and are going into foreclosure.
Scenario Two- the Solvent Homeowner who walks away
In Scenario two, the homeowner, while he can afford his mortgage, walks away from it because the bursting of the housing bubble has caused his mortgage to exceed the value of his house. I find this scenario unlikely for a number of reasons. The biggest reason, is if a homeowner simply walks away from his house which then goes into foreclosure, his credit will be wrecked. Your credit is vitally important. Landlords will look at your credit as a basis of whether or not to accept you as a tenant (an important consideration now that you don't hava a house). Banks look at your credit if you try to get a business loan from them. And the same applies to credit cards.
If the homeowner can afford the mortgage, he can ride out the housing downturn and wait till prices go up again, all the while, keeping his credit intact. There may be some regions where the downturn in real estate prices is more likely to be a permanent phenomenon (e.g. the rust belt) but for most areas prices are likely to rebound after awhile. Thus, it should come as no surprise that this second scenario, contra the emerging conventional wisdom, does not appear to be occuring.
Saturday, May 10, 2008
Wednesday, May 07, 2008
Monday, May 05, 2008
Here is a quick run down:
- During the summer gasoline demand is the highest and gasoline production at the refinery level is at its peak.
- The current high gas prices work to lower demand by detering consumption, dropping the price of gas by 18 cents per gallon (the current Federal tax level) will lower prices thus encouraging people to buy more and raise demand.
- Since production is already at capacity the increase in demand will not raise the quantity of gasoline available to consumers and will instead raise prices completely cancelling out any savings to consumers.
- So now instead of using that 18 cents a gallon to build and maintain things such as roads we will just be sending that 18 cents to oil companies.
Summation – Hillary’s plan is complete bullshit political pandering.
On Sunday Hillary Clinton was asked if her plan was endorsed by any economist. She dodged the question but then responded "I'm not going to put my lot in with economists... this mind-set where somehow elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans."
What’s next? Maybe Hillary Clinton wants to start regulating the auto industry and requiring that all new cars receive 300 miles per gallon powered by Care Bear Stares?
But how would this work? Well that’s easy; the collected Care Bears stand together and radiate light from their respective tummy symbols (see above photo). These combine to form a ray of love and good cheer which could be harnessed to power all of our cars of course.
Who cares that those elitist engineers say that it won’t work. Care Bear power is more than capable of handling all of our energy needs, it is just one big elitist conspiracy that is keeping the technology down.