happy independence day

A patriot is somebody who says what needs to be said, does what needs to be done, even if it means personal risk and sacrifice.

Fortunately, we have many American patriots showing us how to do it today.

goodbye apartment

Thanks to everyone who came by this weekend. It was a wonderful sendoff for the apartment and a great start to the summer!

not cool enough for the central west end

But I'm moving there anyway. Ha.

This will be interesting. And you can see the cathedral basilica from my window.

Moving help appreciated on Saturday, June 13th :)

is this really happening

A month into the season, can the stats really look like this?

All five AL Central teams in the top half of baseball? Two in the top five? And what's that? Is that the Royals leading the division, garnering spot #3?

This must be a misprint, a mistake, a misunderstanding. At least, it's May.

And that's kind of exciting. Maybe, just maybe, they can keep this up.

ten commandments for an economic resurrection

(P) A couple weeks ago, I wrote a detailed post emphasizing that we have options in restoring our financial system and our broader economy. We don't have to panic or accept bailouts of the very corporations that are responsible for our mess.

This morning, I'm posting a concise version that boils it down to the solutions. If you are interested in a more thorough discussion, here are the thoughts behind this.

Ten Commandments

for an

Economic Resurrection

"Human destiny will be what we make of it."

-- President Barack Obama in Prague

There’s a lot of concern about the current status of our economy. It leads to natural questions like

What, exactly, should we do about it?
Don’t we have to bail out these companies?
What alternatives do we really have?

These steps can be taken immediately to address our present situation:

1. Take over failed firms that are 'too big to fail'.
2. Break up non-failed firms that are 'too big to fail'.
3. Provide direct assistance to stimulate the economy.
4. Make the jump from a minimum wage to a living wage.
5. Use our public policy to save communities, not companies.

After these initial coping mechanisms, we can start addressing some of the broader challenges we face:

6. Re-connect wages and productivity.
7. Re-regulate industries like financial services.
8. Re-invest in our public commons.
9. Re-write our tax code.
10. Re-think our social and military policies.

Call your Senators and Representative to see what they think about bailing out people instead of companies.

i want my money back

(P, R) Well, my checks to the Department of the Treasury and the Missouri Department of Revenue cleared the bank yesterday. I'm passionate year round about responsible uses of public dollars, but tax time does serve as a nice reminder as it puts the specific numbers in front of you in a way that can't be ignored.

For fun, I thought I'd break out rough estimates of spending categories exceeding $1,000 in 2008. I realize not everybody gets worked up by numbers, but these kinds of things really make me mad.

What's my top expense? Rent? Car insurance? Utilities? My Roth IRA? Nope. Federal income taxes.

1. Federal income taxes: $5,600
2. Roth IRA: $5,000
3. Rent: $4,900
4. Europe/Other travel: $4,000
5. Payroll taxes: $3,500
6. Groceries/Eating out: $2,500
7. Missouri income taxes: $1,800
8. Other taxes: $1,600
9. Car insurance: $1,300
10. Utilities: $1,300

In case you're keeping score, my rough estimate of my total tax burden last year (income, property, sales, OASDI, and medicare) is approximately $12,500.

Now, what separates me from the conservatives like Grover Norquist is that I'm not opposed to taxation per se. I recognize that programs require resources, and the purpose of taxation is to raise revenue to pay for those programs. I happen to like courts and armies and fire departments and schools and roads and subways and sewers and parks and so forth. Indeed, most people understand that in order to have these popular services, we have to be taxed.

What's aggravating, what gets me ranting around tax time, is the unnecessary expenses, the waste, the programs that do nothing to invest in the safety and prosperity of our country. The Republican Party has taken an interesting strategic course, which is to talk about fiscal responsibility while doing the opposite. The enormous disconnect between rhetoric and reality from the GOP leadership has done much to put them in an amazingly restrictive demographic situation looking forward. And the Democratic Party has certainly shown progress. But what stands out is how little has changed since the Democrats took control of Congress over two years ago now. It's like celebrating cutting an alcoholic back from 10 drinks a day to 9. Well, that's great and all, but it's only progress if much more noticeable changes are around the corner.

From corporate subsidies to war profiteering to the costs of inaction on things like mass transit, energy, and healthcare, there is enormous waste and outright theft going on in our system. We devote massive resources to law enforcement efforts against petty criminals, and yet these master thieves walk around freely enjoying the spoils of their endeavors. Maybe it's one of those cases where being mugged personally makes it easier for you to get angry about the more impersonal kinds of muggings going on.

AIG has been mugging me every month since last September. The broader financial bailouts, from Goldman to Citi and on, will be mugging me for years to come. The Iraq war has been mugging me every month since 2003. The drug war mugs me a couple times a year. Farm subsidies, wealthy tax cheats, on and on, these are greater thefts than any petty criminal who steals a hundred bucks from your wallet. Over six million Americans are incarcerated or on probation or parole. We've done God knows awful things to 'high value' detainees all over the world. And yet the very people who have caused massive suffering and looting still walk around in charge of our government and the financial industry they wrecked.

And then that doesn't even cover the opportunity costs, the extra expenses we pay because we don't have good mass transit systems, passenger rail lines, freight rail lines, wind and solar energy, single payer health insurance, universal unemployment insurance, and all the other investments that actually make us better off.

It's probably unrealistic to ask the rich to play by the same rules as the rest of us. The Bernie Madoffs of the financial world will be the Lynndie Englands of the war crimes world, people who did bad stuff, but who can serve to be scapegoats for the larger perpetrators rather than compasses pointing to the larger perpetrators. But at least, stop taking my tax dollars. If you want me to bail out Goldman Sachs, sell me as an investor, not a taxpayer. If you want me to fund a trillion dollar defense industry, fund everything else that lavishly, too, from education to healthcare to employment services to affordable housing to energy to transportation to the environment to every other sector that produces a bigger return than another Reaper flying over Pakistan.

congratulations mayor slay

(P) I know the polls are open another half hour, but I feel pretty confident calling it. To be fair, I've never thought anybody had a chance against Slay. But my experience this evening adds a little more specificity to that thought.

Upon arriving at my polling place about 6:15pm, I was greeted by two folks with the 26th Ward Democratic party. They had two pamphlets, both of which a more cynical person might conclude were almost purposefully designed to undersell Mayor Slay, as if the fact his name is on the ballot is an afterthought. The first one, the 26th Ward sample ballot, includes names of five Democrats. Only one of them, Mayor Slay, is running for a contested position. The other one highlights President Obama, Senator McCaskill, oh yeah, and our Mayor.

Then, I was greeted by a gentleman with the Green Party. Now, as an aside, the Green Party has always fascinated me in St. Louis. Urban politics is not my native tongue, and it's particularly confusing for a 'third' party to actually be the second party in your town. We suburbanites are trained from an early age to accept that there are two major parties and these parties compete with each other for voters. The actual truth, that regionally in many rural and urban areas, there is one major party and several minor parties, is a lot messier and thus not introduced to confuse us white kids from the suburbs. If we're told that the Libertarian Party believes in smaller government and the Green Party believes in universal healthcare, it raises sticky questions about what exactly the Republican and Democratic Parties believe.

Anyway, back to tonight, the Green Party rep had one flyer, and this was specifically for their Mayoral candidate (they are not running a candidate against Darlene Green). It sported the basic message, 'a new day' on one side [ie, a new day from Slay, gotta love those implied marketing slogans], and more detailed policy information on the other.

I was not greeted by anyone from the Coleman or what's-his-name camps (addendum, I of course looked up the Libertarian's name, Robb Cunningham, but I thought it fair to admit that 20 minutes after staring at his name on the ballot, I couldn't recall it).

This is of course informal, unscientific, and only reflective of my precinct after work. It's much like the initial impression you get from a marketing campaign, when you first hear that slogan or see the packaging or something. Gut instincts aren't always right, and they certainly aren't rigorously researched. But if Coleman was counting on enough anybody-but-Slay voters, I think McCowan did a good enough job of earning votes in his own right that even if there's more organized opposition to the Mayor than at first glance, I think Slay walks away with this pretty easily. At about 6:20pm, I cast ballot 165 in my precinct. That's about how many people were waiting in line at 6:00am for the general last fall.

I of course could be wrong. But the Mayor elected my freshman year in college looks to be headed for his third term. Which, interestingly, has actually been very rare. Only three St. Louis Mayors have served three or more terms since about the Civil War. The stuff you learn.

Speaking of stuff you learn, one last tidbit I feel almost embarrassed to have just discovered today. Apparently, McCowan's family van was attacked by an arsonist last week. I don't have any reason to doubt Mr. Rainford's assurances that Mayor Slay had nothing to do with it, but it's very interesting to say the least. I read about it today on CounterPunch when I was googling the race. You'd think that would be big news, particularly since it's not like anyone's scared McCowan could actually win the race, but in fairness, I suppose it is hard to compete with the Women's Final Four, Opening Day, and that airplane-stealing Canadian.

anybody else find this amusing

This ad was on Facebook this evening. Just wondering if you found it as funny as me.

temporary bracket awesomeness

After some rough moments the first weekend, my NCAA bracket is momentarily looking in decent shape. I wanted to pull this screen shot from ESPN tourny challenge before things fall apart heading into the Final Four. Check it out.


And after a perfect 8 for 8, my Facebook bracket has become competitive again. With the right bit of luck, I might knock off Andy and Brian.

I find myself in an interesting fan position, too. I think it looks like there's a really good chance all four #1s make it again to the Final Four. Yet, I find myself rooting for all four of the other teams, Missouri and Michigan State on the left hand side and Oklahoma and Villanova on the right. Isn't March great! Every year, it brings spring, professional unpaid amateur sports, and of course, the last day of the month.

the ppip roulette table

(P) Exciting news on the bailout front, we have some more details to chew on regarding the Public-Private Investment Program (ie, the Geithner plan). Essentially, the plan is for government to subsidize the purchase of assets owned by banks.

The plan is neither new nor much of a program. In fact, what was revealed is more like a slow leak of what's been leaking for weeks now about what exactly Geithner, Summers, and other economic voices in the Obama Administration have in mind. What's notable, to be blunt, is the continued lack of transparency about what exactly the ultimate goal is and how exactly the program will get there. It is also hard not to look at the evolution of this idea as being to become purposefully more convoluted and opaque as to make it increasingly difficult for citizens to understand what's going on; the program seems unnecessarily complex precisely for the purpose of masking what it does, and masking what could be done instead.

Before going on, let me add one caveat, and that is that this is easily remedied. Lack of transparency can be very easily addressed by being transparent. This has the additional benefit of being politically sensible as well as letting us analyze the policy outcomes.

But to understand the concept, we don't need to know exactly who will be allowed to buy assets or exactly how the subsidy will work or exactly what the strategic plan is two or three or five steps down the road. And to be honest, that's not where my interest or expertise lies. There are detailed explorations of this that are floating around places like naked capitalism and calculated risk from people who actually are experts about various economic topics.

What I think is helpful is a comparison to an activity that most people can understand. Essentially, the Geithner plan works like a roulette table. There are an equal number of red and black numbers, plus two green ones. [Interesting side note, the American table has two green numbers. The European roulette tables only have one, so the house odds in American casinos are basically twice those of similar European operations. That's a pretty good indicator of how Americans and Europeans differ on a whole range of issues related to risk and corporate control.]

One way to bet is to bet on a color. So say you put $1 down on black. If it comes up black, the house pays you a dollar. If it comes up red, you pay the house a dollar. This is roughly a coin toss, but the 'roughly' is how the casino makes money. Every once in a while, a little over 5% of the time, neither red nor black come up, because two of the numbers are green.

So if you think of this simple bet in expected-value terms, you would expect to earn a dollar about half the time on black, lose a dollar about half the time on red, and lose a dollar every once in awhile on green. In other words, your roulette bet is worth less than a dollar because you expect to lose a dollar more frequently than you expect to gain a dollar. The way that casinos get you to pay a price of one dollar for something that is worth less than one dollar is simple: they appeal to something other than rational, expected-value calculations. They make it fun to gamble. They promise the potential of a big gain. They convince your friends to bring you along on their excursions. Etc.

How does this relate? The core element of plan Geithner is the pricing mechanism. Geithner and Summers are making a very important bet, and like any bet, it's risky. The risk itself is what is costly. The bet is that the various asset-backed securities are priced incorrectly. PPIP is founded on the belief that these assets are priced artificially low; that their 'real' value is higher than current markets are pricing them. The plan is to have government pay private actors to bid on these assets. When the government subsidy is added to the market price, the purchase price will increase.

Here's the problem. On the roulette table, everybody agrees how many black, red, and green numbers exist. Markets, however, do not agree with Treasury and Fed officials about the ratio of black to red to green. Markets are currently pricing assets much lower than banks hold them on their balance sheets. Market prices suggest there are a lot of red numbers and not very many black ones; in other words, the odds of losing money on your black bet aren't close to a coin toss any more. Instead of an expected value of close to one dollar, your expected value has now dropped substantially, perhaps to 40 or even 30 cents on the dollar.

The logical question of a plan designed to leverage private investment is what the Treasury and Fed officials think they know that the very private actors they are relying upon don't know. Hence the need for transparency, for without it, this plan looks like a pretty straightforward transfer of taxpayer money to the banks, just as if the casino decided to remove half the black numbers from the wheel after you had already placed your bet.