Fannie and Freddie: where should they go now?

I heard Senator Chris Dodd, head of the banking committee, being interviewed on NPR this morning.

He sounds like he's really going to miss that F&F lobbying money; the new entity isn't allowed to lobby. He won't be the only one.

Dodd believes the GOP want to liquidate F&F. He feels that will end 30 year fixed-rate mortgages in the US, pointing out that other nations don't have them.

I believe him. So now we get into interesting questions -- should we be subsidizing home purchases and creating 30 year fixed rate mortgages?

I'd like to hear DeLong and Krugman discuss this. I assume that this is supposed to be a form of income redistribution, but does it really work? Doesn't subsidizing loans also increase asset prices -- thereby reducing the initial purchase advantage?

If we want to distribute wealth, either for enlightened self-interest reasons of national peace and prosperity or beneficent reasons of social good, is this the best way to use our resources? Would we be better to liquidate F&F, forego the 30 year fixed rate mortgage, and instead shift funding to education or health care?

The answers to the questions depend very much on who's in charge.

If it's McCain/Palin, then the answers would be to keep F&F. They'd simply transfer the liquidation earnings to their financial backers -- the very wealthy.

If it's Obama/Biden I'd trust them to liquidate F&F and shift the subsidies to education or health care.

Aaronson critiques Kurzweil and the 2045 Singularity

Kurzweil's desperate drive to live to 2045 and guaranteed immortality makes him easy to mock. Scot Aaronson, one of my favorite science bloggers, avoids the easy mockery, and writes a respectful review of why he things The Singularity Is Far - by which he means at least a century away - and probably after 2300.

The topic is not entirely academic. If you believe that artificial sentience bounded only by physics will transform the world beyond recognition by 2045, you might not bother with everyday trivia like peaceful prosperity for China, global warming management, and sustaining pluralistic democracy in America.

Like Aaronson I share areas of agreement with Kurzweil (from The Singularity is Near) ...

I find myself in agreement with Kurzweil on three fundamental points. Firstly, that whatever purifying or ennobling qualities suffering might have, those qualities are outweighed by suffering’s fundamental suckiness....

Secondly, there’s nothing bad about overcoming nature through technology...

Thirdly, were there machines that pressed for recognition of their rights with originality, humor, and wit, we’d have to give it to them. And if those machines quickly rendered humans obsolete, I for one would salute our new overlords. In that situation, the denialism of John Searle would cease to be just a philosophical dead-end, and would take on the character of xenophobia, resentment, and cruelty...

Yeah, Searle annoys me too.

My only objection to Aaronson's summary is I'd dispense with the originality, humor and wit requirements-- I don't demand those of humans so it's hardly fair to demand it of non-humans. Also, if obsolete means "ready for recycling" I'm not so objective as to welcome that transition. Indeed, I find prospect of recycling cause to hope that the Singularity really is beyond 2200.

Aaronson (and I) are skeptical of Kurzweil's exponential projections though...

... Everywhere he looks, Kurzweil sees Moore’s-Law-type exponential trajectories—not just for transistor density, but for bits of information, economic output, the resolution of brain imaging, the number of cell phones and Internet hosts, the cost of DNA sequencing … you name it, he’ll plot it on a log scale. ... he knows that every exponential is just a sigmoid (or some other curve) in disguise. Nevertheless, he fully expects current technological trends to continue pretty much unabated until they hit fundamental physical limits.

I’m much less sanguine. Where Kurzweil sees a steady march of progress interrupted by occasional hiccups, I see a few fragile and improbable victories against a backdrop of malice, stupidity, and greed—the tiny amount of good humans have accomplished in constant danger of drowning in a sea of blood and tears, as happened to so many of the civilizations of antiquity....

So there's a bright side in Governor Palin et al's desire to reverse the Enlightenment and join bin Laden in the middle ages -- it delays the Singularity.

And some people think I'm too negative.

In any case, even if we don't destroy civilization by electing McCain/Palin (maybe India will save civilization even then), my personal computer technology doesn't feel like it's on an exponential growth curve. It feels about as slow as it did eight years ago (though that's partly because of the crapware corporations now install on machines). I think we've gone sigmoid well ahead of Kurzweil's timeline. In fact, the book was written five years ago -- I think we've already fallen off his roadmap.

Aaronson's essay makes a quiet digression into one of my favorite topics -- the Fermi Paradox (inevitably tied these days to the Singularity). Note here that Scott is a certified deep thinker about Bayesian reasoning (italics mine)...

... The fourth reason is the Doomsday Argument. Having digested the Bayesian case for a Doomsday conclusion, and the rebuttals to that case, and the rebuttals to the rebuttals, what I find left over is just a certain check on futurian optimism. ... Suppose that all over the universe, civilizations arise and continue growing exponentially until they exhaust their planets’ resources and kill themselves out. In that case, almost every conscious being brought into existence would find itself extremely close to its civilization’s death throes. If—as many believe—we’re quickly approaching the earth’s carrying capacity, then we’d have not the slightest reason to be surprised by that apparent coincidence. To be human would, in the vast majority of cases, mean to be born into a world of air travel and Burger King and imminent global catastrophe. It would be like some horrific Twilight Zone episode, with all the joys and labors, the triumphs and setbacks of developing civilizations across the universe receding into demographic insignificance next to their final, agonizing howls of pain. I wish reading the news every morning furnished me with more reasons not to be haunted by this vision of existence.

Hmm. Scott has seemed a bit depressed lately. Following American politics will do that to a person.

I'd argue that the Doomsday Argument makes the case for a (sometime) Singularity however. Global warming won't wipe out humanity, and neither would nuclear war or even most bioweapons. We're tougher than cockroaches, which, I read recently, only thrive in the US because of our delightful garbage. It would take something really catastrophic and inescapable to do us in. Something that would likewise eliminate every sentient biological entity. Something like an inevitable Singularity ...

Of course that will wipe us out just as thoroughly in 2240 as in 2040, so I wouldn't use that argument to advance our date with destiny.

Aaronson concludes with one of the more interesting critiques of the Singularity thesis. He says that while it may well happen someday (strong AI that is), the result probably won't be incomprehensible ...

As you may have gathered, I don’t find the Singulatarian religion so silly as not to merit a response. Not only is the “Rapture of the Nerds” compatible with all known laws of physics; if humans survive long enough it might even come to pass. The one notion I have real trouble with is that the AI-beings of the future would be no more comprehensible to us than we are to dogs (or mice, or fish, or snails). After all, we might similarly expect that there should be models of computation as far beyond Turing machines as Turing machines are beyond finite automata. But in the latter case, we know the intuition is mistaken. There is a ceiling to computational expressive power. Get up to a certain threshold, and every machine can simulate every other one, albeit some slower and others faster. Now, it’s clear that a human who thought at ten thousand times our clock rate would be a pretty impressive fellow. But if that’s what we’re talking about, then we don’t mean a point beyond which history completely transcends us, but “merely” a point beyond which we could only understand history by playing it in extreme slow motion.

So Aaronson's saying that faster isn't the same as incomprehensible. He is a world expert on the physics of computation, so it's not surprising that he reminds us of those limits. Kurzweil and Vinge know that too though, albeit not at Scott's level of detail.

So what do I think? On the one hand I don't think we're anywhere near computational physics limits, so I could believe that a sentient AI would be far more than Aaronson at warp speed. On the other hand, I could also believe that at a certain level of sentience all other sentience may be more or less imaginable -- and that some humans are there now.

I like Scott's essay -- probably because it fits my prejudices about "2045". It's nice to be affirmed by a true expert. I might be more worried about 2100 than he is however. It may come down to how discouraging the RNC is ...

... while I believe the latter kind of singularity is possible, I’m not at all convinced of Kurzweil’s thesis that it’s “near” (where “near” means before 2045, or even 2300). I see a world that really did change dramatically over the last century, but where progress on many fronts (like transportation and energy) seems to have slowed down rather than sped up; a world quickly approaching its carrying capacity, exhausting its natural resources, ruining its oceans, and supercharging its climate; a world where technology is often powerless to solve the most basic problems, millions continue to die for trivial reasons, and democracy isn’t even clearly winning over despotism; a world that finally has a communications network with a decent search engine but that still hasn’t emerged from the tribalism and ignorance of the Pleistocene. And I can’t helping thinking that, before we transcend the human condition and upload our brains to computers, a reasonable first step might be to bring the 17^th-century Enlightenment to the 98% of the world that still hasn’t gotten the message.

I agree with the sentiment ... but there's a curious slip in here. Aaronson is saying that a healthy Enlightenment is an important step towards a sentient AI Singularity, but he's already established that the Singularity is unlikely to be an unmitigated gift. It could be an extinction event instead.

In which case the logical thing to do is vote for Palin/McCain. Down with the Enlightenment!

Update 9/9/08: A somewhat similar response to mine from a Singularity student. There's a bit of synchronicity, though where I write "prosperous and peaceful China" they write "Chinese military dominance". A revealing distinction I suspect. I guess I fall between Aaronson and Hanson on the Singularity spectrum, which means we all have a fair bit in common.

Exercise cannot control obesity gene associated weight gain

The title on this SciAm summary is silly (emphases mine) ...

Do I look fat in these genes? Exercise can cancel out effects of 'heavy-weight' DNA: Scientific American Blog:

... Physically active people who carry gene mutations linked to obesity are no more likely to be overweight than those without the variants -- as long as they exercise at least three hours a day...

Exercising 3+ hours a day is not compatible with life in a post-industrial world. If these results turned out be generalizable to a reasonable portion of the obese population (big if), then we'd know that exercise won't control our expanding (sorry) obesity problem. We already know diet doesn't work, so here's hoping for great drugs ...

Either that, or we get rid of our cars ...

Update: see a good comment critiquing this post

iTunes 8: what really matters is the household library – and its DRM

iTunes 8 is coming out sometime soon, maybe tomorrow.

When it does, there will be the usual array of obvious improvements, and probably a few regressions.

The interesting parts, as always, will involve digital rights management in general, and iTunes approach to household media repositories in particular. Consider the setup described by a reader of my tech blog …

Gordon's Tech: The ultimate AirTunes, iPhone Remote, iTunes setup

From Jan ...

It looks like Remote with iPhones/iPod Touch and AirTunes is the solution for for the multi-room audio setup I was waiting for years to come.

I installed several AirPort Express boxes with AirTunes in the rooms and installed 3 users on a mac mini with fast user switching on. All users have their own iTunes setup and have access to a central NAS Server with all the MP3 files. This won´t work with Windows because Windows won´t allow fast user switching running iTunes !

With this setup every family member is able to hear their music independently on different AirTunes outlets….

Yes, and every family member can have their own media preferences and their own iTunes 8 recommendation profiles. They can’t, of course, sync DRMd music or iPhone/iTouch apps to their user profiles; currently only one account owns the DRMd media and only one account can add music.

Let’s see how iTunes 8 behaves. Apple can either continue to (very, very) quietly support this arrangement, or they can make things more restrictive, or they could validate household media libraries by allowing multiple accounts to add music and supporting multiple DRM accounts in a single media library.

I wouldn’t be shocked if Apple were to ship a revision of the AirPort Extreme that supported putting the media library on the 1TB AirPort drive …

Update 8/8/08: Adam Engst (tidbits) has the same thoughts about the household library, but he says he'd be shocked if Apple announced a fix. Either way, we agree -- what matters now is the management of the media library in the multi-device multi-user household.

Turning Japanese

Krugman readers know he’s long said “Japan can happen here”, and sometime in the past decade that became a shared consensus among economists. There was nothing uniquely Japanese about their real estate crash and deflationary spiral, and Japan fought mightily to slowly, painfully, turn it around.

We don’t hear much about Japan these days. That’s downright strange – I think Japan is still the world’s 2nd or 3rd largest economy (depending on how you treat the EU).

Time to remember …

Op-Ed Columnist - The Power of De - Op-Ed - NYTimes.com

… The current U.S. financial crisis bears a strong resemblance to the crisis that hit Japan at the end of the 1980s, and led to a decade-long slump that worried many American economists, including both Mr. Bernanke and yours truly. We wondered whether the same thing could take place here — and economists at the Fed devised strategies that were supposed to prevent that from happening. Above all, the response to a Japan-type financial crisis was supposed to involve a very aggressive combination of interest-rate cuts and fiscal stimulus, designed to prevent the crisis from spilling over into a major slump in the real economy.

When the current crisis hit, Mr. Bernanke was indeed very aggressive about cutting interest rates and pushing funds into the private sector. But despite his cuts, credit became tighter, not easier. And the fiscal stimulus was both too small and poorly targeted, largely because the Bush administration refused to consider any measure that couldn’t be labeled a tax cut.

As a result, as I suggested, the effort to contain the financial crisis seems to be failing. Asset prices are still falling, losses are still mounting, and the unemployment rate has just hit a five-year high. With each passing month, America is looking more and more Japanese.

So yes, the Fannie-Freddie rescue was a good thing. But it takes place in the context of a broader economic struggle — a struggle we seem to be losing…

At least we can benefit from the hard lessons Japan learned. I am confident Obama and his team of economists would do the right thing. If a president McCain were true to his current rhetoric, he’d drive the US economy over a cliff.

The interesting Fannie and Freddie question

Robert Reich asks the same question that interests me:

Robert Reich's Blog: Fannie and Freddie, and Why the Accounting Gimmicks Continued

... Accounting gimmicks first came to light at Fannie and Freddie in 2003, at which time Fannie's and Freddie's former CEOs were sacked. Why, then, did they continue for another five years, even under new CEOs, even after policymakers first learned of them?...

I read a persuasive NYT summary of the newest accounting scams. On initial review they weren't technically illegal, but the motive for they key maneuvers was deception. (One of the pair was more honest than the other, unfortunately I can't say which.)

So the interesting question is indeed why the new CEOs, chosen after an accounting scandal, ended up toasting, if not cooking, the books.

I'm open to suggestions, but here are my biases:

1. I suspect most CEOs would play the same games. This is, by and large, how publicly traded companies do business. Legal, but tricksy.
2. With a few luck breaks it might have worked, in which case the CEOs would be lauded for their brilliant leadership, feted in the Harvard Business Review, and the accounting gimmicks would be forever forgotten.
3. If we don't like these games, we could try changing accounting rules. I believe that's supposed to happen sometime in the next decade. I suspect the changes won't work however.
4. We should do more to keep corporations smaller and competion more active -- so when games are played taxpayers don't bear such a great risk. Let the shareholders pay the price for creative accounting.

Dark Crossings: Closing the Strauss gap with the GOP

Four years ago I was offended by the GOP's Strauss strategy - a strategy that assumes most Americans are gullible peasants ...

Gordon's Notes: IHT: The long reach of Leo Strauss (Pfaff 2003)

... Bush and Rove live the Straussian story. The key element is that 'stories' are what the masses need. It's why Bush has absolutely no credibility among anyone who thinks. It's not that Bush is stupid, it's that we know everything he says is a 'story' for the 'masses'....

Gordon's Notes: Rove , Bush and the Swift Boat Veterans. Goering Lives.

... Now we begin to understand where the swift boat fraud is coming from. Kerry's biography portrayed some of them to as incompetent leaders and war criminals. They responded with a frantic barrage of accusations, amplified and encouraged by Bush money and right wing adulation. The more the money, the more the power, the more their memories changed.

There are links to the successful attacks on Dukakis, Clinton, McCain and others. This strategy works, and it works well. The masses can be swayed. Goering perfected these techniques 70 years ago, Rove is merely refining the master's work.

Leo Strauss, idol of the neocons, preached the power of stories to guide the masses...

Of course we know how it turned out four years ago. The Strauss strategy worked beautifully.

It still works...

Will the GOP's negativity produce a backlash? - Glenn Greenwald - Salon.com

... there is this Rasmussen Reports poll from today, taken after Palin's speech:

A week ago, most Americans had never heard of Alaska Governor Sarah Palin. Now, following a Vice Presidential acceptance speech viewed live by more than 40 million people, Palin is viewed favorably by 58% of American voters. The latest Rasmussen Reports national telephone survey finds that 37% hold an unfavorable view of the self-described hockey mom.

A CBS poll taken during the GOP Convention shows Obama and McCain tied (after showing Obama with a 6-point lead last week), while the Gallup daily tracking poll continues to show Obama with a 7-point lead...

... But the idea that Americans instinctively recoil from negativity or that there will be some sort of backlash against Republicans generally and Palin specifically because of how "negative" their convention speeches were is pure fantasy. Cultural tribalism and personality attacks of those sort work, especially when they're not aggressively engaged..

Now, four years later after attacking the Strauss strategy of Cheney, Rove and Rumsfeld, I realize I've crossed over to the dark side ...

Gordon's Notes: Daily Show savages the GOP flip-floppers

... Some of my more logically minded friends are having trouble believing that the right wing can be so internally inconsistent. They need to read more Orwell.

The GOP has DoubleSpeak deep in their DNA. They do this stuff because it works; because a very large number of Americans are driven by emotion rather than reason...

Has America really changed, or was it always so? My reading of American history is that that authoritarian power of the Strauss strategy has waxed and waned here, just as it has in many democracies. In our time it's strong. I don't know why the Strauss strategy works so well now. Maybe it's driven by a power shift from less educated males to more educated females, maybe by changes to the economics of the media business, maybe it's due to the aging of the voter pool, maybe it's all of these and more.

Whatever the reason, Strauss rules today.

The problem for the enlightened rationalist is that there's a Strauss Gap between the GOP and the Dems.

In Straussian terms we can divide the GOP voters into the peasants and the masters. The masters know the GOP rhetoric is irrational propaganda, but they're fine with that. They imagine the GOP will serve their interests [1], and they believe that the rhetoric is needed for the masses.

Unfortunately, I can also divide the Dems into two groups -- but they're different groups. We too have voters who feel rather than reason -- though in our case their feelings are in fact aligned with their interests. Unfortunately, we have the Idealistic Rationalists instead of the Straussian Rationalists.

The Idealistic Rationalists are my former tribe. They believe that appeals to reason and noble values will work.

They're almost right. The elections are finely balanced. I fear, however, that American is still in a Straussian cycle -- and we could get worse.

We need to convert our Idealistic Rationalists to the Dark side, to convert them into reluctant Straussians. At the very least, they need to accept a painful truth -- Obama will not be speaking to you. He will say what he must say -- and you won't like it.

Harsh times. I wish they weren't so, but we know where wishful delusions lead.

Join me Luke, join the Dark Side of the Force ...

[1] Jonathon Schwarts explained beautifully why GOP rationalists are wrong to think the GOP serves their interests. They need a world that works as much as the rest of us, and whatever the short term gain the GOP gives them they'll lose big within they and their children's lifespans.

Update 1/19/2009: It's a good think I wasn't running Obama's campaign. Obama didn't need no stinkin' Strauss. I don't understand why Americans weren't fooled again, but, apparently, we weren't.

Coming soon: Palin's pastor problems

It's tough having extremist pastors wandering about ...

Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong

... nominates somebody who takes their children to a church where they teach that suicide bombers in Tel Aviv are righteously executing God's vengeance on Israel for rejecting Jesus Christ...

So Palin's pastor is pro-Terror?

I wonder how much GOP attention that will get ... (joke).

Update 9/6/08: more details

The rich are not like you and I - the McCain's covert adoption

We have adopted 3 children. Our agency interviews would have been rather brief if we tried a "Cindy McCain" ...

Talking Points Memo | What Does This Say About McCain?

... Karl Rove this morning told yet another variation on the story of the McCains' adoption of their daughter Bridget. In his version, like the others I've heard, Cindy didn't tell John in advance that she was bringing this child back with her from abroad. She just did it, a fact which usually gets a hardy-har-har from friendly audiences.

In Rove's version today, Cindy specifically told someone else not to tell John in advance. The point of Rove's story was that John McCain needs to reveal more of himself publicly so that voters can see the kind of character he has...

Holy cow. Did Child Protective services in her state know what the $%!#$ Cindy McCain was doing? In Minneapolis the animal shelters don't allow this kind of "surprise" adoption (seriously - they interview).

Cindy McCain is astoundingly wealthy. She doesn't have to follow the laws we mortals face.

Tell me again about Obama's elitism. I seem to be having some kind of hearing problem ...

Daily Show savages the GOP flip-floppers

In a brilliantly savage video the Daily Show contrasts right winger's responses to Palin to ... well ... everything they've ever said before. John Stewart looks like he's about to explode. You can't blame Dick Morris though, because, as Stewart says, "he's a lying sack of ****".

Some of my more logically minded friends are having trouble believing that the right wing can be so internally inconsistent. They need to read more Orwell.

The GOP has DoubleSpeak deep in their DNA. They do this stuff because it works; because a very large number of Americans are driven by emotion rather than reason.

I fear it's not enough, but John Stewart is a certified guardian of the enlightenment.

Update 8/5/08: Krugman connects GOP DoubleSpeak to their successful exploitation of a culture of resentment. Of course by stating the obvious, that Americans are easily exploited this way, we expose our skepticism of the wisdom of the average American, which makes them resentful, which serves the GOP agenda ...

They're really good at this game.

Curse of the cookie

Jeff (Coding Horror) Atwood falls prey to an XSS cookie exploit.

His writeup is relatively readable. I think it's worth a look, to understand how frail our net security is.

We can only hope Chrome will move things forward a bit.

Singularity alert: Picasa web album face tagging

Gack!

Picasa Web Albums Adds People Tagging

... CNet reports that Picasa Web Albums will add some interesting features today. After implementing face detection in the image search engine, Google adds face recognition in Picasa Web Albums to facilitate photo tagging...

Yeah, we all knew it was coming, but it's creepy-cool anyway. Not quite goose bumps, but a grade 2 singularity event. (Grade 7 is when the Great God Google refers you to your soylent green processing station, Grade 1 is personalized search.)

So will Google link the faces to the appropriate Google Profile? You just know they've got that one on their social networking strategy. (So how do kids get their profiles? Is it like Confirmation?)

I love it. Now if there were only some way to sync the tags back to iPhoto ...

I'll report on my tech blog after I try it. I'm sure the servers will be smoking tonight, so it'll take a few days. (Update: yeah, it's pegged. Stuck at 44% of faces.)

McCain on science: you knew it would be bad

A self-styled "independent" (ahh, to be young) has reviewed the Obama and McCain positions on science.

Needless to say, Obama does pretty well. True, he's no more of a scientist than Bill Clinton was, but they both hang out with real scientists.

Obviously, McCain/Palin are a disaster.

Cocktail Party Physics: physics politico

... Even more damning points against McCain: he notoriously flip-flopped on the abortion issue, and now is opposed to stem cell research. Obama supports stem cell research. Plus, McCain's shiny new VP pick, Sarah Palin, is a far-right social conservative, global warming denialist, anti-abortion advocate, is anti-stem cell research, plus she supports teaching creationism in public schools (via the "teach the controversy" strategy).

... With Palin at his side, and a party platform filled with ideological rhetoric so stale it's developing icky green moldy bits around the edges, he's offering a change, all right -- all the way back to the late 1980s. (Cue chorus: "And that's not change we can believe in!")

Honestly? Regardless of how McCain answers (if he answers) the questions from Science Debate 2008, his selection of Palin pretty much makes it impossible for anyone who values the science and technology enterprise to vote for him...

Alas, I know this knowledge won't make any difference to faux-rationalist Republicans. Denial is strong.

Incidentally, I'd like to join a "Democrats for Palin" group. We'd all right glowing letters defending her to media outlets, join up with supportive demonstrations, etc. Of course we'd need to be incognito ...

Sad news for us Dems

Yes, there's sad news for we Obama/Biden supporters.

It now looks like Palin will break the 18 day Eagleton record.

We were really hoping she'd last at least a month.

So did McCain do it because he was really, really, mad at the religious right?

Even the anarcho-republicans rioting in St. Paul can't kill the Palin buzz, but all good things must end.

Google mocks the idiotic security question

Even as some Google engineers succumb to security question idiocy, others openly mock the madness.

At least, that what I assume is going on. My (113) Google Profile now asks me many of typical security questions (nickname, etc) -- so my answers can be indexed and added to Google's public knowledge base.

This is either crude commercialism (set up the victims, then sell the lockpicks) or cruel mockery.

I'm betting on the latter. Google shares are a bit down, but Chrome will boost them. Google's not that desperate for revenue. The Profile engineers are making fun of their colleagues.

(via Google Operating System)