Bueller, Bueller... Ben Stein talks Wall Street

In Wall Street Run Amok, financial commentator and one-time sleep-inducing high school teacher Ben Stein talks about the SEC's loosening of rules for investment firms in 2004, which he calls the Bear Stearns Future Insolvency Act of 2004.

In these rules, the SEC did two things:

1. Reduced the amount of capital that firms had to have backing their investments (e.g. less money in the piggy bank).
2. Let the firms themselves value their assets, allowing them to fudge how much was in the already reduced piggy bank.

Quote of the piece?

The S.E.C. told me that all of its actions were helpful to investors and that no one could have prevented the Bear Stearns collapse because it was caused by liquidity issues, not capital issues. My respectful response is that if Bear were thoroughly well capitalized, why would liquidity issues come up at all?

Voodoo economics, anyone?

Five things our next president must do on energy

From Robert Rapier at R-Squared

1. Raise gas taxes by $2 a gallon, offset by income tax rebates
   
2. Rebates for high-efficiency vehicles, penalties for low-efficiency ones.
3. Find renewable energy substitutes that do not rely on fossil fuel inputs.
4. Extend tax credits for solar, geothermal, and other pure renewables.
5. Increase funding for research on converting to an electric-driven transportation system.
   

Your favorite Atari 2600 games

I don't think I can do it justice. Just check it out.

"Military Analysts" means "Pentagon lackeys"

A New York Times investigation has uncovered that those generals you see on CNN aren't just post-career pundits, but are often in bed with the Pentagon publicity machine. Just how cozy is that relationship?

Internal Pentagon documents repeatedly refer to the military analysts as “message force multipliers” or “surrogates” who could be counted on to deliver administration “themes and messages” to millions of Americans “in the form of their own opinions.”

And the Pentagon strategy was worthy of the greatest psyops efforts of our time.

• These analysts want a business relationship with the Pentagon. Many of these ex-soldiers are responsible for drumming up business for defense contractors. Being cozy is their job.
• The analysts continue to be loyal to the Pentagon, from their careers in the military.
  
• The Pentagon provides the analysts with regular talking points briefings, including at least 18 meetings with the Secretary of Defense. The briefings include the sharing of classified information.
• The Pentagon has flown them to Iraq and given the analysts carefully orchestrated tours to enable them to push the administration's talking points.

Of course, nothing is done right in the Bush administration if it's not a secret:

The access came with a condition. Participants were instructed not to quote their briefers directly or otherwise describe their contacts with the Pentagon.

And the analysts weren't just offering their opinion on the skewed reality shoveled to them by the Pentagon. They were toeing the line. Or else.

When [retired marine colonel and analyst Mr. Cowan] told Bill O’Reilly that the United States was “not on a good glide path right now” in Iraq, the repercussions were swift. Mr. Cowan said he was “precipitously fired from the analysts group” for this [2005] appearance.

Just another reason to be thankful that the Constitution puts a civilian as commander-in-chief. Now we just need to elect an honest one.

Thank you, Motorola

My cell phone died about 10 days ago. I went through the repair process and everything, only to discover this fine tidbit: "phone repairs take 10-15 business days."

Lovely.

Except that it didn't. My phone got to the service center on April 17. It was in the mail on April 20 and at my door on April 22.

Hooray Motorola!

the GOP has a magic inequality spell that it chants while in office

Krugman has been examining the impact of party control of the executive (e.g. which party has the presidency) on economic inequality in the United States. He's skeptical that the executive could have so much to do with it, but the data are pretty robust: Republican presidents seem to have a magical inequality spell.

Bush administration: Let's do more domestic spying

A spy program, dubious legal authority, and an agency head determined to go ahead regardless? Just the latest episode in the Bush Administration's serial: You Weren't Really Using Those Civil Liberties, Were You?

Here's my favorite part. After submitting woefully incomplete documents about the program to Congress, the Department of Homeland Security head Michael Chertoff said:

"There is no basis to suggest that this process is in any way insufficient to protect the privacy and civil liberties of Americans," Chertoff wrote..."I think we've fully addressed anybody's concerns,"

Now that you say it like that...

Poor Mr Gonzales

After showing that loyalty to a corrupt SOB was his greatest trait, former Attorney General Alberto Gonzales is having a bit of trouble finding a new job. Can you imagine that there are law firms that don't want to hire a guy who can't recall...anything?

Pay to indoctrinate

From Paul Krugman, news that conservative businesses are paying universities to require students to read Ayn Rand. Nice to know the canon is for sale.

As long as they understand Atlas Shrugged is fiction...

The Monty Hall Problem

It's a game show and there are three doors to choose from, with two goats and one sports car. You select Door 1, but before you open it, the host opens Door 3 to reveal a goat. Do you stick with Door 1 or go with Door 2?

My mathematical training says you're indifferent, that the probability is 50/50 you'll get the car behind either Door 1 or 2. But I'm wrong, and the implications are poor for a number of psychological experiments performed in the past 50 years.

Follow the first link for the real probability, and try your hand at the game itself here.

Update: as reader rick reveals, it's all about timing:

in fact, monty reveals the goat *after* we made our initial choice. that is, that goat was relevant to our first choice.

in particular, when we made the first choice, what was the chance of picking the sports car? answer: 1/3

thus there was a 2/3 chance that the car was behind one of the two remaining doors.

which of those two doors? we don't know unless somebody shows us...

Lessons from a loaner dog

We're caring for a family dog while folks are out of town, and it's a novel experience for someone like me who has never owned a dog. I have come to understand why I would want a dog.

I would like a dog because...

• I love having someone watch me eat, intently
• I love the clicking sound of toenails across the wood floor, as you make sure to stay in my line of sight as I prepare dinner
  
• I love having an obstacle to hurdle when you wait near the door to a room or just behind me
  
• I love going outside [first thing in the morning/before I leave for work/right when I get home/before I go to bed] to let you pee...
  
• Holding your leash, because you are a disobedient wretch and do not come when called
• Because if I don't, you pee on...
• The basement floor
• The living room rug
• I love cleaning your barf off our handmade quilt
• I love the 4 AM whining when you hear a strange noise
• I love that you must re-sniff the cat's butt each time it re-enters the room
• I love that telling you to get off the furniture results in the quickest hop-off, hop-on the world has ever seen

I think I'll stick with cats.

Gun taken from Charlton Heston's cold, dead hands

Beverly Hills, CA - No more than a few moments after the famous actor expelled his last breath on Sunday, gun rights activists stormed his California home and violated his deathbed to snatch Mr Heston's gun. The move surprised police, though Mr Heston had long been a target of such activists as a leader of the National Rifle Association. Investigators think it may have been this statement that incited the activists and led them to pry Mr Heston's rapidly cooling digits to obtain the colonial musket:

Food price spikes: not so crazy if we kept some in the bank

I read this weekly farm policy column and it occasionally translates into the vernacular. This week's post notes the political unrest in many parts of the world as higher prices for food staples - corn, rice, and wheat - are creating significantly problems for developing countries. Part of the problem? The U.S. government nixed its policy of grain storage in 1996 as part of the ill-fated "Freedom to Farm" Act. Thus, a couple droughts or short seasons is all it takes to make people go hungry.

Dumb.

Why these games could be called the 'genocide Olympics'

You may have heard news reports about the protests during the carrying of the Olympic flame in Europe, but may not know why. Two reasons:

• China's human rights violations in Tibet
• China's prevention of action in the genocide in Darfur, via the UN Security Council.

There's a great NY Times Magazine piece about how one group, Dream for Darfur, hopes to change China's behavior via action during the Olympics.

There are also those who point out that Western countries could be doing more, as much as China is a convenient scapegoat.

Science and drug companies: follow the money

A new cholesterol drug, Zetia, was being studied in the past two years. It got FDA approval for lowering LDL (bad cholesterol) more than statins alone, but was being studied for its efficacy at reducing arterial plaque (the actual goal of a cholesterol drug).

The findings weren't what the company hoped for - despite hitting lower LDL targets, it turns out that it was no more effective than existing drugs.

So what was the big deal in the recent announcement?

1. The lag time - the study was completed two years ago (April 2006), but the company only released preliminary data in fall 2007 under intense public pressure.
2. The money factor - Merck/Schering-Plough made $5.2 billion off the drug last year. Why tell people it was no more effective than other drugs?
3. The science issue - how can we trust the efficacy of our medicine when so many studies are funded by those with a financial interest in the outcome?
4. The regulatory issue - the FDA approved the drug because it lowered LDL, but it turns out that's not sufficient to improve health. It's like approving teeth whitening toothpaste because it makes teeth look better, not because it makes teeth stronger or healthier. Should this practice continue?

In the end, no one's health was harmed by this company's action, though no doubt a lot of folks paid more for medicine that was no better than the alternative. Science was stymied by the company's financial interest, and the FDA gets egg on its face for fast-tracking approval of a drug that doesn't do much.

Sounds like free market health care is working great.

RNC in St. Paul (MN): no 4 AM bar close

The city of St. Paul rejected the idea of leaving bars open to 4 AM during the upcoming Republican National Convention, and I think Councilmember Thune, of the downtown area, said it best:

"Remember whose ward this is going to end up in -- it's mine. And I've got 8,000 people living downtown who don't want a bunch of puking Republican lobbyists on the streets at 4 in the morning," Council Member Dave Thune said, according to the Pioneer Press.

Democrats - a party of prosperity for everyone (data)

I'm lifting this chart straight from Paul Krugman's blog. Read his caveats. And marvel at this graphic:

Chart summary: Everyone is more prosperous (in terms of average annual income growth) under Democratic presidents. The rate of growth is also more equitable than under Republicans, who heavily skew income gains to the rich.

And that's why rich folks mostly vote for Republicans.

Anyone can cook...with a microwave?

So suggests this NY Times article, arguing that the microwave isn't just for leftovers and frozen burritos.

Mmm, burritos.

Paying for the war isn't the half of it

War is costly. We have a war in Iraq that's costing us $4 billion a year to support over 160,000 troops. And it was over in 1991.

America was still supporting vets from World War I until last year, 90 years later!

Get some more scary facts about the cost of war from Shadoweyes.

Let science, not activists, figure out autism

There's been some interesting news lately from the presidential race, with Sen. John McCain repeated the completely false notion that vaccines are related to the increasing prevalence of autism.

The scientific evidence shows that vaccines do NOT cause autism.

It's understandable that parents either want a scapegoat for their child's condition or to avoid having their child have autism. But finding the cause should be left to scientists, not activists.

And it works. A recent study suggests that autism may be related to premature births. As medical technology enables babies to live when born very early, it also may open the door to developmental problems. The study is still being vigorously discussed in the scientific community and is by no means the conclusive smoking gun, but at least it has basis in fact, unlike McCain's belief.