Friday, January 30, 2009

Pie-Eyed Pickle of the Week

The Pie-Eyed Picayune hasn't seen such a perfect candidate for this award in years.

ROD "Blago" BLAGOJEVICH


Governor of Illinois (2003-2009), impeached for being more concerned
with what he could get from the people of Illinois
than with its good.

2 Points for Honesty

Here is Michael Kinsley on the looming entitlement crisis.  His basic response for the generation entering the workforce is to "Let them rob their own children, just as their parents did."

Wednesday, January 28, 2009

The Stimulus Bill Sucks

That is my informed opinion.  The tax cuts in the bill are horrible.  To the extent tax cuts are included, a cut in payroll taxes would do much more to save/create jobs.  However, what irritates me more than anything is the paucity of infrastructure investment.  We should really be focusing on Mass transit, Intercity Rail, and High Speed Rail.  The bill doesn't do that.  There is an absurd amount going to higher education, which, given that there is already money going to State and local governments seems superflous.  I know everybody thinks what we need to do is do something big and do it now, but I actually disagree on the latter point.  This will be an extended recession.  We should make at least some effort to make sure that our spending is directed towards worthwhile investments.

Tuesday, January 27, 2009

Why Cramdowns Are a Bad Idea

There is something of a populist sentiment that says we need to do more for struggling homeowners. To some degree I agree but I think what Speaker Pelosi and others are proposing of full cramdowns is a complete disaster. In their current form, bankruptcy judges would be given the authority to cram down the mortgage to the current appraised value (ostensibly you would have to either be delinquent by a certain period and/or underwater).  End of story.  Why is this bad one might ask?  Well, one, there are terribly perverse incentives.  I think a lot of homeowners will be musing to themselves how their mortgage payments are terribly high and wouldn't it be nice if they missed a payment or six so they too could get a cramdown.  

But this is comparatively trivial.  If you were a bank and you were forced to cram down your mortgages with no share of the upside how would you make money?  Well, by raising interest rates on new homebuyers.  What effect will this have on home prices?  If you raise the cost to borrow appreciably, which cramdowns would likely do, you would depress home values further, as people would be able to afford less then can even now.  By the way, this might put more houses underwater.  

A better route would be a policy where there is shared risk and shared reward.  A homeowner who gets a cramdown should forgo some of the upside, not all of the upside.  An own-to-rent proposal a la Dean Baker where the undewater owner is reduced to a renter in lieu of foreclosure would give the owner no incentive to maintain the property.  

If we are going to piss away more TARP money this would be a good area to spend it.  Create a program: Bailie Mae.  Bailie would facilitate cram downs by purchasing part of the mortgage.  In order to have your mortgage purchased, the lender must agree to a cramdown.  When the house eventually sales, any profit is split into thirds, one third to the gummint, one third to the lender, and one third to the home owner.

Crap Subsides but Does Not Vanish

While Bill Kristol will no longer plague the NY Times op-ed pages, he will be a monthly fixture of the Washington Post op-ed pages.  At least the frequency is diminishing.  Between Fred Hiatt, Richard Cohen, and Charles Krauthammer the Washington Post already has enough columnists covering the "we gotta invade more countries" angle.

More Food Blogging

If you are looking for some bistro style French food, the place to go is Bistrot Du Coin.  The ambience is terrific and the food is great.  The rabbit stew is delicious.  My old favorite Montsouris has unfortunately closed.  Do not, DO NOT under any circumstances go to Brasserie Beck unless somebody else is paying.  Even then, suggest an alternative.  It tries to be too many things at once, a fine dining establishment and a yuppy watering hole.  These two things are not mutually exclusive but it is difficult to manage and Brasserie Beck does not pull it off.  It's a great place to get a drink in the company of attractive people, but the food leaves quite a bit to be desired.

New Tyler Cowen Ethnic Dining Guide

Tyler Cowen, he of Marginal Revolution and he who should be the next NY Times columnist, has updated his dining guide and has created an html based guide to complement his blog based guide.  

I've been to a couple of Tyler Cowen's "SOME PLACES YOU MUST TRY" list:

Hong Kong Palace- this place is incredible. Always packed.  Get the lamb with cumin.

Horace & Dickie’s Seafood Carryout- I don't share Cowen's enthusiasm for Horace & Dickie's but then again I am not such a fried fish fan.  The Macaroni is mediocre, the Collard Greens are average.  It definitely has character, though. Surprisingly, D.C. does not have a good offering of reasonably priced soul food.  Georgia Brown's, which is a good deal more expensive is supposed to be quite good.  Though Georgia Brown's is really a higher end low country cuisine place.  I have also heard good things about the Florida Avenue Grill.

Shamshiry- This place always hits the spot.  Persian food is simple and a bit bland, but tasty nonetheless.

Fogo de Chao- Don't eat for days in anticipation.  Fogo de Chao is a massive meat orgy.  The salad bar alone is worth it.  This place is simply excellent.

Monday, January 26, 2009

Using the Internets for Public Health

Megan McCardle links to an article about using eCards to inform people they have the clap.  I think this would make for a killer facebook app.

New Development Blog

Bill Easterly of "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good" has started a new blog: "AidWatch".

Why We Should Do Infrastructure Now

Ryan Avent has a good rundown:
1. Borrowing Costs for the Government are LOW!
2. Commodities prices are LOW!
3. Shipping costs are LOW!
4. Labor costs are LOW!

Tyler Cowen to Replace Bill Kristol at the NY Times

Actually, there is no rumor of such a thing taking place, but I believe it should.  He writes well, is a very interesting thinker, and would provide a unique viewpoint.  All of these things distinguish him from Kristol, who really sucked.

Kristol is Gone

Bill Kristol will no longer be writing for the NY Times.  This is excellent news.  He is a piss poor writer and his only novel contributions to public discourse are suggestions of which Middle Eastern countries to invade next (I said novel not good). 

Thursday, January 22, 2009

Good News


Now that Fiat is "bailing-in" Chrysler there is a good chance that the cute but cool Fiat 500 will be coming stateside.

Wednesday, January 21, 2009

President Obama on Public Service

“Public service is a privilege. It’s not about advantaging yourself. It’s not about advancing your friends or your corporate clients,” Mr. Obama said. “It’s not about advancing an ideological agenda or the special interests of any organization. Public service is simply and absolutely about advancing the interests of Americans.”

Friday, January 16, 2009

Resourcefulness on the Hudson

Give people credit, stop calling it a "miracle".

Citi, Bank of America, and GM

If we are going to own Citibank and Bank of America, can't we just nationalize them and sell them off?  It seems part of the mess we are in is the convergence of allowing institutions to become to "too big to fail" and also failing to regulate them adequately.  Why don't we address the whole "too big to fail" issue when it presents itself, namely, as Citibank and BofA appear to be failing and are asking the taxpayer to prop them up?  We can nationalize them and sell them off into little tiny pieces.

And GM is apparently getting ready to ask for yet more money.  Chapter 11 time, yet?

Thursday, January 15, 2009

Man Down

It looks like Mary Schapiro, Obama's nominee for the SEC, may not survive her confirmation hearings.  Among other things, her firm, FINRA, was one of many that miffed on Madoff.  Felix Salmon has the goods.

Ezra Klein Hearts Peter Orzag

And so do I.  Klein has a good profile on Orzag and the role the CBO and OMB will play in health care reform.

Tuesday, January 13, 2009

Consumption Taxes

Alan Krueger proposes implementing a consumption tax in a couple years for deficit reduction. It will be interesting to see what happens with regards to tax reform. At this point there are several different moving pieces that will or could affect taxes: the expiration of the bush tax cuts, climate change legislation, and health care (what to do with the tax exemption for employer provided plans). Add to that mix there will be some desire to increase revenues above and beyond what the current tax structure allows, obviously allowing some of the Bush tax cuts will do something but not as much as one thinks (provided Obama maintains his pledge not to raise income taxes for those who earn less than $250k).

Ads on This Site

So I put up google ads awhile back with the thoughts of making beer money. But with a readership of 5 not even that has come to fruition.  Anyhow, we are now getting ads from a russian dating site (russianeuro.com): classy.  Click on it- maybe you can find your next green card marriage partner.  Reeks of mail order brides.  

All of this reminds me of a co-worker who happens to very well informed on Russian dating sites in general and mail order brides in particular.  Sort of disturbing, at least the latter part, the former too considering he is an older gentlemen and is angling for early 20 somethings.  But nonetheless, this simply adds to office intrigue.

Securities Transaction Tax

Bob Herbert has a column pimping a securities transaction tax.  I blogged the tax earlier, though, the revenue estimates I quoted were purely for revenues raised from stock transactions.  Herbert, citing Dean Baker, estimates that a tax on all manners of securities transactions (bonds, commodities, futures, derivates, etc.) would raise in excess of $100 billion.  One of the challenges for the foreseeable future will be to raise revenues and it is important to do so in an efficient manner as possible.

More Chrysler Woes

Toyota is now #3 in truck sales, passing Dodge.  What does Chrysler have going for it exactly?  Maybe the approach on the auto bailout should be Chapter 11 for Ford and GM, Chapter 7 for Chrysler.

Great Qoutes

"People say, 'How can I help on this war against terror? How can I fight evil?' You can do so by mentoring a child; by going into a shut-in's house and say I love you."
-GWB

You can find more of these golden oldies over at Slate where Jacob Weisberg has compiled his list of top Bushisms.

Jobs Credit

Bruce Bartlett has a good column on why the Jobs Credit is a stupid idea.  Namely he points out that it has been tried before and has been ineffective.

When Generations Clash

Before the stock market crash, state and local pensions nationwide were already severley underfunded.  In many cases this was a result of overly generous pension promises in the first place (consider the New York Metro strike from a couple years ago).  It will be interesting to see how this pans out.  Places like New York, California, and New Jersey, have absurdly generous pension plans, you can join the police department or fire department work for 20 years and retire and collect 60% of your highest salary.  Granted, this is a great deal for public sector workers but residents of such jurisdictions will probably chafe at the notion that they will be paying ever higher taxes and an ungodly portion of those taxes will be going to people who are no longer providing services.  I anticipate in some jurisdictions you will see situations where residents are paying a higher share of their taxes on current pensioners than education.  Such a situation is untenable.  I think this will ultimately result in a wave of municipal bankruptcies throughout the next decade.

Mazda on Crack

The design team for Mazda should be drawn and quartered.  The Mazda 3 is probably the best value/most fun economy car out there and it is also a good looking car to boot.  The smiling fascia just destroys the design of an otherwise good looking car.

Monday, January 12, 2009

CitiCorpse?

It looks like CitiGroup is about to die. This will be the first big task/indicator of the Obama administration. It will be interesting to see if the Obama administration nationalizes CitiGroup (something akin to the Swedish model) or bails out Citi again.

update: this is all presuming Citi survives till next week.

Rare Good News

The TED spread is down.

Russia: Liberal Autocracy or Illiberal Democracy

Stories like this foretell an interesting political future in Russia.  Dmitry Medvedev, Russia's President (and heretofore thought as Putin's puppet) has been feeling his oats lately.

Stimulating Packages, Pt. II- Packages of Another Sort

A college student is auctioning off her virginity.  The bids have reached up to $3.7 million.  Mizuage!  Life imitates art (which in fact was an accurate imitation of life in a different era).  I love this little part from the article: 

"It's shocking that men will pay so much for someone's virginity, which isn't even prized so highly anymore."

Really, it's not highly prized anymore!?!?!  It's a damn good thing she is going into therapy not research.

Stimulating Packages

hehe, I said package.  Anyhow, Paul Krugman worries that the stimulus package as it is currently contemplated is too small and conservatives will swoop in and blame Obama for the economy and use the failed stimulus as evidence that keynsian economics is discredited.  I think the problem with making the stimulus as big as Krugman would like (in excess of $1 trillion) and in the manner he would like it (government spending on bridges and stuff) is that it is simply not tenable.  I do not mean that we have everythig that we want already, just that those things that are worthwhile (medical health records, a smart grid, rail-intercity and high speed rail, mass transit) all need some lead time.  Any building will require substantial lead time as there will be eminent domain issues, rights of way, and environmental impact statements.  I think this is why the stimulus package is tax heavy, taxes are one way of putting money into the system now.  One can certainly argue that the taxes as proposed are less than ideal.  

With regards to infrastructure spending we should sear into our minds the old saying "haste makes waste."  I think it would be much better for Obama to deliver a smaller fiscal stimulus in the current year but plan infrastructure expenditures in the out years.  Liberals may decry that postponing spending is a waste of recession.  However, I fear that this criticism will ultimately be undermined by a prolonged recession, thus giving rise to plenty of opportunities for clamoring for more spending.  In the meantime, it would be better to wait for some of the worthier projects to become "shovel-ready" than plow ahead and repave all of West Texas in search of the vaunted fiscal multiplier.

update: I retract what I said about Krugman.  Here is an op-ed where he also advocates spending over the next several years.

The New Surgeon General

Dr. Sanjay Gupta has been appointed the next Surgeon General, he of CNN fame.  Several bloggers seem to think that this indicates that the Surgeon General position will be used in the Obama administration as a point person on the public education of Obama health initiatives.  I suspect this is right.  Gupta is ostensibly qualified for the position in its current structure and is ideally suited for this added public education role.  My real gripe with him is he is a patsy on pot.

Friday, January 09, 2009

Quotes to Live By

"A lot of people like to fool you and say that you're not smart if you never went to college, but common sense rules over everything. That's what I learned from selling crack."~Snoop Dogg

What I learned from selling crack is you best be packing heat.

Essential Reading on Israel/Gaza

1. The LRB has made available an old article by Henry Siegman on how to understand Israel's relationship to Gaza and what would need to be done to provide Israel a sense of long-term security.

2. Rashid Khalidi's recent op-ed in the NYT, "What You Don't Know About Gaza," rehearses many of the points made in Siegman's article, but is worth reading nonetheless.

Wednesday, January 07, 2009

Sentences That Make Me Smile

“We expect that discussion around entitlements will be a part, a central part” of efforts to curb federal spending, Mr. Obama said at a news conference. By February, he said, “we will have more to say about how we’re going to approach entitlement spending.”

The Inside Scoop

I view my task as a douchebag occasional blogger to provide my readers (all five of you) with ground breaking, earth shattering information.  Well, check yourself before you wreck yourself, the OED (the Oxford English Dictionary) is considering including the word- conversate, as in we be conversating.

"TNC: Will conversate be included after the next revision of the OED?
JS: It's very likely to go in."

You read it here first, well, unless you read Ta-Naheisi Coates' blog, in which case you probably read it there first.

Tuesday, January 06, 2009

More on the Big Four Sucking, KPMG edition

Some of KPMG's accomplishments over the last fiver years, courtesy of wikipedia:

  • In 2004, KPMG agreed to pay $115 million to settle lawsuits stemming from the collapse of software company Lernout & Hauspie Speech Products NV.[10]
  • In 2005, the U.S. member firm admitted criminal wrongdoing in a multi-billion dollar tax shelter fraud.[11]
  • In 2006, Fannie Mae sued KPMG for malpractice for approving years of erroneous financial statements.[12]
  • In February 2007, KPMG Germany investigated for ignoring questionable payments in Siemens bribery case.[13] (Siemens agreed to pay a record $1.34 billion in fines to settle the case in December, 2008.)
  • In October 2007, KPMG's member firms in the UK, Germany, Switzerland and Liechtenstein merged to form KPMG Europe LLP. They now have joint Chairmen, John Griffith-Jones and Ralf Nonnenmacher.[3]
  • In March 2008, KPMG accused of enabling “improper and imprudent practices” at New Century Financial, a failed mortgage company.[14]
  • In March 2008, KPMG agreed to pay $80 million to settle suits from Xerox shareholders over manipulated earnings reports.[15]
  • In November 2008, Siemens Supervisory Board recommended changing auditors from KPMG to Ernst & Young.[16]
  • In December 2008, two of Tremont Group’s Rye Select funds, audited by KPMG, had $2.37 billion invested with the Madoff "Ponzi scheme."[17] Class action suits were filed

The Big Four Suck

The Big Four (the big four accounting firms- KPMG, PriceWaterhouseCooper, Ernst and Young, and Deloitte Touche) are getting embroiled in the Madoff scandal. Basically it seems they were incompetent. This doesn't surprise me having worked with (not for) one of the four a decent amount and having some exposure to the other three. I saw an amazing number of fuckups and idiots, but I had always attributed this to being exposed to private firms public sector practices.