Thursday, October 23, 2008

A moon of Saturn is only sort of real ...

This reminds me of the start of Pratchett's "Moving Pictures" ...
Quantum Hyperion | Cosmic Variance

... Zurek and Paz calculate ... that if Hyperion were isolated from the rest of the universe, it would evolve into a non-localized quantum state over a period of about 20 years. It’s an impressive example of quantum uncertainty on a macroscopic scale...
Hyperion is one of Saturn's moons.

Read the entire article to learn how Hyperion decoheres. Meaning stays real (albeit with locality).

The NYT's giant Obama endorsement - highlights

I don't recall the NYT going to quite this length when they endorsed Kerry or Gore. I get the feeling that when Palin/McCain wins their despair will rival mine ...

Editorial - Barack Obama - Editorial Board - Endorsement - NYTimes.com

October 24, 2008

Barack Obama for President

Hyperbole is the currency of presidential campaigns, but this year the nation’s future truly hangs in the balance...

... As tough as the times are, the selection of a new president is easy. After nearly two years of a grueling and ugly campaign, Senator Barack Obama of Illinois has proved that he is the right choice to be the 44th president of the United States.

... Mr. Obama has met challenge after challenge, growing as a leader and putting real flesh on his early promises of hope and change. He has shown a cool head and sound judgment. We believe he has the will and the ability to forge the broad political consensus that is essential to finding solutions to this nation’s problems.

In the same time, Senator John McCain of Arizona has retreated farther and farther to the fringe of American politics, running a campaign on partisan division, class warfare and even hints of racism. His policies and worldview are mired in the past. His choice of a running mate so evidently unfit for the office was a final act of opportunism and bad judgment that eclipsed the accomplishments of 26 years in Congress.

Given the particularly ugly nature of Mr. McCain’s campaign, the urge to choose on the basis of raw emotion is strong. But there is a greater value in looking closely at the facts of life in America today and at the prescriptions the candidates offer. The differences are profound. ...

.... Mr. McCain talks about reform a lot, but his vision is pinched. His answer to any economic question is to eliminate pork-barrel spending — about $18 billion in a $3 trillion budget — cut taxes and wait for unfettered markets to solve the problem.

Mr. Obama is clear that the nation’s tax structure must be changed to make it fairer. That means the well-off Americans who have benefited disproportionately from Mr. Bush’s tax cuts will have to pay some more. Working Americans, who have seen their standard of living fall and their children’s options narrow, will benefit. Mr. Obama wants to raise the minimum wage and tie it to inflation, restore a climate in which workers are able to organize unions if they wish and expand educational opportunities.

Mr. McCain, who once opposed President Bush’s tax cuts for the wealthy as fiscally irresponsible, now wants to make them permanent. And while he talks about keeping taxes low for everyone, his proposed cuts would overwhelmingly benefit the top 1 percent of Americans while digging the country into a deeper fiscal hole.

... While Iraq’s leaders insist on a swift drawdown of American troops and a deadline for the end of the occupation, Mr. McCain is still taking about some ill-defined “victory.” As a result, he has offered no real plan for extracting American troops and limiting any further damage to Iraq and its neighbors.

Mr. Obama was an early and thoughtful opponent of the war in Iraq, and he has presented a military and diplomatic plan for withdrawing American forces. Mr. Obama also has correctly warned that until the Pentagon starts pulling troops out of Iraq, there will not be enough troops to defeat the Taliban and Al Qaeda in Afghanistan...

... Mr. Obama would have a learning curve on foreign affairs, but he has already showed sounder judgment than his opponent on these critical issues. His choice of Senator Joseph Biden — who has deep foreign-policy expertise — as his running mate is another sign of that sound judgment. Mr. McCain’s long interest in foreign policy and the many dangers this country now faces make his choice of Gov. Sarah Palin of Alaska more irresponsible...

... Mr. Obama wants to reform the United Nations, while Mr. McCain wants to create a new entity, the League of Democracies — a move that would incite even fiercer anti-American furies around the world.

Unfortunately, Mr. McCain, like Mr. Bush, sees the world as divided into friends (like Georgia) and adversaries (like Russia). He proposed kicking Russia out of the Group of 8 industrialized nations even before the invasion of Georgia. We have no sympathy for Moscow’s bullying, but we also have no desire to replay the cold war. The United States must find a way to constrain the Russians’ worst impulses, while preserving the ability to work with them on arms control and other vital initiatives...

.. Under Mr. Bush and Vice President Dick Cheney, the Constitution, the Bill of Rights, the justice system and the separation of powers have come under relentless attack. Mr. Bush chose to exploit the tragedy of Sept. 11, 2001, the moment in which he looked like the president of a unified nation, to try to place himself above the law.

Mr. Bush has arrogated the power to imprison men without charges and browbeat Congress into granting an unfettered authority to spy on Americans. He has created untold numbers of “black” programs, including secret prisons and outsourced torture. The president has issued hundreds, if not thousands, of secret orders. We fear it will take years of forensic research to discover how many basic rights have been violated.

Both candidates have renounced torture and are committed to closing the prison camp in Guantánamo Bay, Cuba.

But Mr. Obama has gone beyond that, promising to identify and correct Mr. Bush’s attacks on the democratic system. Mr. McCain has been silent on the subject.

... [McCain] helped the White House push through the appalling Military Commissions Act of 2006, which denied detainees the right to a hearing in a real court and put Washington in conflict with the Geneva Conventions, greatly increasing the risk to American troops.

The next president will have the chance to appoint one or more justices to a Supreme Court that is on the brink of being dominated by a radical right wing. Mr. Obama may appoint less liberal judges than some of his followers might like, but Mr. McCain is certain to pick rigid ideologues. He has said he would never appoint a judge who believes in women’s reproductive rights...

.. It will be an enormous challenge just to get the nation back to where it was before Mr. Bush, to begin to mend its image in the world and to restore its self-confidence and its self-respect. Doing all of that, and leading America forward, will require strength of will, character and intellect, sober judgment and a cool, steady hand.

Mr. Obama has those qualities in abundance. Watching him being tested in the campaign has long since erased the reservations that led us to endorse Senator Hillary Rodham Clinton in the Democratic primaries. He has drawn in legions of new voters with powerful messages of hope and possibility and calls for shared sacrifice and social responsibility.

Mr. McCain, whom we chose as the best Republican nominee in the primaries, has spent the last coins of his reputation for principle and sound judgment to placate the limitless demands and narrow vision of the far-right wing. His righteous fury at being driven out of the 2000 primaries on a racist tide aimed at his adopted daughter has been replaced by a zealous embrace of those same win-at-all-costs tactics and tacticians.

He surrendered his standing as an independent thinker in his rush to embrace Mr. Bush’s misbegotten tax policies and to abandon his leadership position on climate change and immigration reform...

... Mr. Obama has withstood some of the toughest campaign attacks ever mounted against a candidate. He’s been called un-American and accused of hiding a secret Islamic faith. The Republicans have linked him to domestic terrorists and questioned his wife’s love of her country. Ms. Palin has also questioned millions of Americans’ patriotism, calling Republican-leaning states “pro-America.”

This politics of fear, division and character assassination helped Mr. Bush drive Mr. McCain from the 2000 Republican primaries and defeat Senator John Kerry in 2004. It has been the dominant theme of his failed presidency.

The nation’s problems are simply too grave to be reduced to slashing “robo-calls” and negative ads. This country needs sensible leadership, compassionate leadership, honest leadership and strong leadership. Barack Obama has shown that he has all of those qualities.

If/when Palin/McCain win, it will be because we don't deserve the opportunity Obama/Biden are offering us.

Arne Carlson endorses Obama

Excuse me. I'm struggling to beat back some tiny flickers of hope. This latest endorsement ...

Must repeat ..."President $150,000 Palin".

Phew. That was tough, but I'm back to feeling doomed.

This announcement really did surprise me ...
Talking Points Memo | Rumblings, Pt. 3

Former Minnesota Gov. Arne Carlson (R) is endorsing Barack Obama.

Usually when you hear these sorts of stories it's someone who was governor for like one term in the 1970s or something, when party divisions were very different from today. Carlson, though, was Minnesota Governor for most of the 1990s. My recollection is that he basically got run out by the hard right faction of the GOP in the state. But he was a moderate, but a genuine Republican. He cited Bachmann's tirade as one thing that pushed him to endorse.
Carlson was despised by the Minnesota right. He never got a primary endorsement, but he won every time he ran. He'd still be governor but for term limits. Heck, I might even have voted for him once.

Carlson was one of the last of the old, responsible, sane, pre-Gingrich Republicans. He's remembered well in Minnesota.

His endorsement matters here.

We have another Minnesota Republican like Carlson -- Representative Jim Ramstad. I wouldn't vote for him, but he's definitely respectable. Nobody serious bothers to run against him, but he's quitting politics anyway.

I notice he doesn't seem to have done any campaigning for McCain/Palin, though technically he endorsed McCain in Congress. I wonder if he could turn.

If the GOP loses the presidency, and launches an internal reform, people like Carlson and Ramstad could help craft a respectable alternative.

Must beat back hope, must beat back hope ...

Tuesday, October 21, 2008

In Our Time - Gödel's Incompleteness Theorems

The first two programmes of the 2008 season were a bit dull, but Melvyn has picked up the pace nicely with a piece on Godel’s incompleteness theorem …

BBC - Radio 4 In Our Time - Gödel's Incompleteness Theorems
…Marcus du Sautoy, Professor of Mathematics at Wadham College, University of Oxford
John Barrow, Professor of Mathematical Sciences at the University of Cambridge and Gresham Professor of Geometry
Philip Welch, Professor of Mathematical Logic at the University of Bristol..

Terrific guests and Melvyn was in good form. He seemed genuinely interested, whereas in the prior two I thought he was pushing the topic along. He does very well with math and physics, perhaps because they aren’t his primary study.

I was a bit disappointed they never mentioned Hofstadter’s Godel, Escher, Bach, but it has been about 30 years (!) since that was a best-seller. Yes, I not only read the entire thing thoroughly, I also took copious notes (since lost). I was one of four people who actually read it.

Towards the end of the show one of the guests mentions that geometry was not complex enough to trigger the incompleteness clause that one can state true things that cannot be proven true. Number systems of course are incomplete in the Godelian sense, and he thought that was somehow (lost me here) related to the role of prime numbers arising from arithmetic systems. In the same context he mentioned that Turing’s proof of the Halting Problem was equivalent to the incompleteness theorem.[1]

Naturally I immediately leapt to wondering if someday someone will prove that the relationship between the primes and Godel’s theorem means the unpredictability of prime numbers is a likewise provable. That would be reassuring to users of encryption systems!

[1] Everyone’s heard of Wikipedia, so why doesn’t h2g2 get more credit? Their discussion of the Halting Problem is much more sophisticated than the Wikipedia article.

Michele Bachmann – Minnesota’s loon jumps the shark

Sorry, I just love that title.

Five years ago Bachman might have had a quiet life as a barking mad loon (sorry, can’t stop) and talk radio favorite in very safe congressional seat, representing a mixed rural exurban district east of Saint Paul. In the YouTube era, however, a crazed interview with Chris Matthews has become a media classic.

When Bachman called for an investigation of anti-American members of Congress she elevated herself from the yipping dog in the corner to an international embarrassment for the GOP. Bachman is Sarah Palin without the brains, beauty, charm or glamour. She chose a bad moment to call attention to herself, because the GOP is getting reading for the night of the long knives. Even if Palin wins the presidency, the House will be Democrat. There’s no need for the GOP to worry about losing Bachman’s seat, they might as well get started on the purge now.

Starting with Michele Bachman.

So donations are flooding into Tinklenburg (love the name, gave $20), but the real story (emphasis mine) is how quickly the GOP has disowned her …

Bachmann finds herself in firestorm of criticism - TwinCities.com

… Three days after telling a national television audience that Democratic presidential candidate Barack Obama "may have anti-American views,'' the Republican from Minnesota's 6th District faced a re-energized and suddenly flush opponent and a firestorm of criticism from within and outside her party.

The Democratic Congressional Campaign Committee said it would spend $1 million on challenger El Tinklenberg's bid to unseat her.

A nonpartisan political newsletter, the Cook Political Report, changed its assessment of the race from "Likely Republican'' to "Tossup.''

Campaign contributions to Tinklenberg in the 72 hours since her comments Friday reached $810,000. Before then, it had taken him a year to bring in $1 million.

Her Democratic congressional colleagues from Minnesota condemned her wish that the media investigate Congress to determine which members are anti-American and which aren't.

In Minnesota to campaign for another congressional candidate, Democratic House Speaker Nancy Pelosi said Bachmann's comments reflect poorly on her. "It dishonors the position that she holds and discredits her as a person,'' Pelosi said.

Gov. Tim Pawlenty and U.S. Rep. John Kline, R-Minn., disowned her statements. "I don't think it's fair at all to suggest that Barack Obama is anti-American,'' Pawlenty said.

Even the Republican she defeated in the September primary was upset. He said he's launching a write-in effort aimed at people who don't want to vote for Bachmann but want to stick with the Republican ticket

… Just weeks ago, Bachmann had been considered a solid favorite to be re-elected to a second term and had emerged as a popular conservative spokeswoman on national cable television talk shows.

But there also were signs Tinklenberg's campaign was growing stronger. Just last week, the Democratic Congressional Campaign Committee added Tinklenberg to its Red to Blue program, which helps stronger candidates able to raise money and in a position to win….

… Aubrey Immelman, the St. John's and St. Benedict's college professor who lost the Republican primary to Bachmann in September, launched a write-in candidacy in the 6th District, which runs from the St. Croix River across the northern Twin Cities suburbs to beyond St. Cloud.

"I am putting my name forward as a write-in candidate for disillusioned Republicans who can no longer support Rep. Bachmann and who wish to voice their displeasure without having to vote for the candidate of another party,'' he wrote on his campaign Web site…

I bet Bachman will still win. This is an incredibly safe seat; they went for Bush over Kerry by about 15% in 2004 – and Kerry took Minnesota handily. I still think America will elect Sarah Palin, so getting rid of Bachman is very far fetched.

Still, it’s worth sending a few bucks to Tinklenberg just to tweak Bachman a bit more. Maybe a bit of media attention will remind voters of how much Sarah Palin resembles Michelle Bachman.

Update 10/23/08: The GOP wants her gone.

Monday, October 20, 2008

The Onion covers McCain's bus problem

The Onion goes where others fear to tread.

They have a satirical news story about John McCain Accidentally Left On Campaign Bus Overnight.

Fortunately passer-byes find Cindy's number in his pocket, and she rescues the confused senator.

Today there are 571,000 hits on "McCain dementia".

A vote for McCain is a vote for President Palin.

Update 5/11/10: McCain's political career seems to be ending, and his statements are increasingly erratic -- but there's really no mainstream media coverage of his cognitive state. We saw the same thing in Reagan's second term. He was clearly impaired, which seems pretty relevant, but the topic was forbidden.

John McCain has had quite a few head injuries, so dementia at his current age is extremely probable. Bob Vitray, writing in 2008, had a good summary ...
... His sport at Annapolis was boxing. He was knocked out at least twice in plane crashes. He probably suffered a concussion during his escape from the Forrestal fire. The North Vietnamese beat him and starved him ...
McCain has had an extremely eventful lPublish Postife, with more than his fair share of head trauma. He should retire now, and we should set aside his actions of the past few years as being a legacy of his dementia. The fault for those actions and statements falls on those who have encouraged him to continue in public life.

Crohn's disease: a bacterial component?

Crohn's is such a complex multi-system disease that it seems unlikely this is the entire story ...
BBC NEWS | Health | Bacterium 'to blame for Crohn's'

.... shortage of naturally-occurring bacteria is thought to trigger the inflammatory gastrointestinal disorder by over-stimulating the immune system.

Now a French team has highlighted the bug, Faecalibacterium prausnitzii, which they show secretes biochemicals that reduce inflammation.

The study appears in Proceedings of the National Academy of Sciences....
I'd have believed this more of Ulcerative colitis than of Crohn's disease.

I'm still impressed with how well worm infection seemed to treat ulcerative colitis, but it hasn't gone mainstream.

Melamine is deeply embedded in China's food chain

Dogs in China are most often raised for fur or food.

The death of these 1500 dogs from melamine poisoning reminds us how compromised China's food chain is.
The Associated Press: 1,500 Chinese raccoon dogs die from tainted feed: "Some 1,500 dogs bred for their raccoon-like fur have died after eating feed tainted with melamine, a veterinarian said Monday, raising questions about how widespread the industrial chemical is in China's food chain.
The revelation comes amid a crisis over dairy products tainted with melamine that has caused kidney stones in tens of thousands of Chinese children and has been linked to the deaths of four infants.
The raccoon dogs — a breed native to east Asia whose fur is used to trim coats and other clothing — died of kidney failure after eating the tainted feed, said Zhang Wenkui, a veterinary professor at Shenyang Agriculture University.
'First, we found melamine in the dogs' feed, and second, I found that 25 percent of the stones in the dogs' kidneys were made up of melamine,' said Zhang, who performed a necropsy — an animal autopsy — on about a dozen dogs.
Zhang declined to say when the animals died, but a report Monday in the Southern Metropolis Daily said the deaths occurred over the past two months.
There are lessons for the pharmaceutical chain as well.

Also a few lessons for libertarians everywhere.

McCain and Obama basically tied

At our son's game a local politically savvy parent spoke confidently of Obama's victory.

Bad idea.

Polls this weekend give Obama only a 3% lead. That's as good as being behind in this race given what lies ahead ...
Talking Points Memo | Race to the Bottom

... the really corrupt and vicious part of McCain's effort only comes now because it's only in the last couple weeks that you can pull stuff that the press won't get to call you on before election day -- after which it doesn't matter. Will it take Obama down? So far McCain's gutter campaign has hurt him more than helped. But there's no reason to be sure it will continue that way. And many Obama supporters, sure the election is basically wrapped up, appear ready to slack in the stretch and let McCain smear and cheat his way into office.
I've said all along that I expect McCain/Palin to win. Within six months it will become apparent that McCain has a dementing condition, and we'll have President Palin.

Everyone who doesn't want President Palin has to fight mightily. Don't pretend it can't happen, it probably will. You'll want to say you did your best ...

Another stab at the Drake Equation – from the physics archives

The Drake Equation lies at the heart of one of my favorite hobbies – contemplation of the Fermi Paradox.

We presume, from the absence of Little Green Men in orbit, that there are very few expansionist or communicative technological civilizations in our galaxy. Maybe none.

So either there were exquisitely few to begin with, or they don’t last very long at all.

So we “know” the result of the Drake Equation – a number between 0 and 1. The number can be so small if there are very few technological civilizations like us, or if all technological civilizations are always very short lived.

I favor the always short lived explanation, which is why there’s an upside to President Palin. She would work to end civilization, and if our civilization more or less crumbled we might push world-ending events (sentient machines?) out a few hundred years. Yes, Vote for McCain/Palin – life may be brutish but humanity might last longer.

So it’s always fun to see new attempts to estimate Drake Equation parameters ….

the physics arXiv blog » Blog Archive » And the number of intelligent civilisations in our galaxy is…

Ref: http://arxiv.org/abs/0810.2222: A Numerical Testbed for Hypotheses of Extraterrestrial Life and Intelligence… [from] Duncan Forgan at the Institute for Astronomy at the University of Edinburgh.

The Drake equation famously calculates the number of advanced civilisations that should populate our galaxy right now. The result is hugely sensitive to the assumptions you make about factors such as the number of planets that orbit a host star that are potentially habitable, how many of these actually develop life and what fraction of that goes onto become intelligent etc.

Disagreement (ie general ignorance) over these numbers leads to estimates of the number intelligent civilisations in our galaxy that range from 10^-5 to 10^6.  In other words, your best bet is to pick a number, double it….

So Forgan has attempted to inject a little more precision into the calculation. His idea is to actually simulate many times over, the number of civilisations that may have appeared in a galaxy like ours using reasonable, modern estimates for the values in the Drake equation.

With these statistics you can calculate an average value and a standard deviation for the number of advanced civilisations in our galaxy.

Better still, it allows you to compare the results of different models of civilisation creation.

Horgan has clearly had some fun comparing three models:

i. panspermia: if life forms on one planet, it can spread to others in a system

ii. the rare-life hypothesis: Earth-like planets are rare but life progresses pretty well on them when they occur

iii.  the tortoise and hare hypothesis: Earth-like plants are common but the steps towards civilisation are hard

And the results are:

i. panspermia predicts  37964.97 advanced civilisations in our galaxy with a standard deviation of 20.

ii. the rare life hypothesis predicts 361.2 advanced civilisations with an SD of 2

iii. the tortoise and hare hypothesis predicts 31573.52 with an SD of 20.

Those are fantastically precise numbers. But before you start broadcasting to your newfound friends with a flashlight, it’s worth considering their accuracy.

The results of simulations like this are no better than than the assumptions you make in developing them. And these, of course, are based on our manifestly imperfect but rapidly improving knowledge of the heavens.

The real question is whether we’ll ever have good enough data to plug in to a model like this to give us a decent answer, without actually discovering another intelligent civilisation. And the answer to that is almost certainly not.

I’ll cavil on the last paragraph. It depends on what you mean by “decent”. We will probably get pretty good at estimating the number of earth like planets in the next fifty years, and, assuming we don’t detect any interesting transmissions, we’ll get more confident that the number of extant civilizations is very low. Which should lead to some cheery predictions about our civilizational life expectancy …

Sunday, October 19, 2008

Google - please hire me to create a task list

I've been a Toodledo customer for months, but they're driving me a bit crazy. They don't grok search, their UI is web 1.0, and their web site has lots of advanced tools that aren't designed quite right.

Their multi-edit tool pushed me over the edge into madness this afternoon. When I tried to create a multi-edit search for items dated prior to today, the result included all undated items as well.

If I wanted NULL values, I'd have requested NULL values. #$!$!&*&^%

Toodledo seems to have been created by wrapping a web 1.0 tool around a very generic set of database tables. I love their commitment to data freedom and their Appigo ToDo.app integration, but there's a place for usability too.

So I went back to Remember The Milk to see if they'd improved. I took a special look at the way they handle notes and search.

Yech.

Ok Google, here's my offer.

Donate $1,000 to CARE.ORG and I'll work for free. I'll tell you what you need to make a good, task list integrated with iCal. Clearly you've been waiting for me to crack and make this free offer, because otherwise you'd have added tasks ages ago.

You know where to reach me.

Ok, maybe Appigo will do their own server. Help!!

Update 11/7/08: Appigo hasn't done their own server yet, but they've added search done right to their iPhone Todo app. Lovely work.

Message to Yahoo (and Cloud) customers: Get Out Now!

I like to think of this as an honorable act:
Slashdot | Yahoo Changes User Profiles, To Massive Outrage

... Yahoo decided to massively screw up their entire userbase by changing all user profiles to blank. No warning, no automated way to get data back, and other unwanted changes....
Yahoo is a publicly owned corporation. They can't, legally, put up a giant red announcement on their home page saying...
We're going down the tubes. You need to leave Yahoo now. Remember all that stuff about the Cloud computing? Well, the Price of the Cloud is 90% data lock. Data Lock means we own your data, and you can't move it. If we go down the tubes, you go down with us.

We are entering the the tubes now. The time has come. Salvage what you can, and take to the boats...
So, instead, they wipe out all the user profiles. It's kind of a "dog whistle" message to any customers with brains from Yahoo's inside geeks -- a back channel way to scream "get out now"!

Alas, most geeks have little sympathy for the naive user. They'll get their messages after the fact.

What about Yahoo Flickr? It will be sold. It's worth too much to just vanish. The transition may be rocky though, kind of like having your bank nationalized.

Think of this as one of life's less expensive lessons. We're going to learn the Price of the Cloud. Better sooner than later ...

Shortest lived links: Local movie listings

We've had a local movie review link on our MSP Family Recreation page for years.

Most of the links are fairly stable -- they have a half-life of 2-5 years.

There's one big exception.

Local movie listings have a half-life of about 4 months. The current two links are broken today.

Since this has traditionally been a low margin local newspaper service the short-lived links are probably another, unneeded, indicator that our local papers have one foot in the ICU and one in the crematorium.

I figured, given the failure of newspaper associated listings, that there must be emerging alternatives.

I found two.

Google has a local movie listing service. Not new and I've probably seen it before, but now it will be a rec page link.

Fandango does listings and sells tickets online. Another rec page link.

I'll miss our local newspapers.

Saturday, October 18, 2008

Rick Santorum opens mouth, inserts pin

Funny sad ...
Obama hates America and burns flags: The proof is on the Internet

... Just last Thursday, former Republican Sen. Rick Santorum told Fox News that Obama won't wear a flag pin because he is 'not in concert' with American values.

Santorum wasn't wearing a pin that day. Obama was...
Meanwhile the NYT Editorial column is decrying the latest covert Bush attack on our tattered civil liberties. It's another step in the transformation of the FBI into KGB-lite.

They end by saying that the next president will have to review the state of our post-Bush/Cheney civil rights.

I'd say there's a 50% chance that will happen and a 50% chance President Palin will finish off what's left of our liberty.

Fareed Zakaria on the bright side of the Crash of ’08

The lemon yellow Newsweek cover caught my eye. As intended.

Bright side of the Crash of '08?

I couldn't resist. Happily, Fareed Zakaria had some interesting things to say.

Some highlights (emphases mine):

There Is a Silver Lining |Fareed Zakaria | Newsweek.com

... The average household owns 13 credit cards, and 40 percent of them carry a balance, up from 6 percent in 1970...

... Every city, every county and every state has wanted to preserve its many and proliferating operations and yet not raise taxes. How to square this circle? By borrowing, using ever more elaborate financial instruments. Revenue bonds were backed up by the prospect of future income from taxes or lotteries. "A growing trend is to securitize future federal funding for highways, housing and other items," says Chris Edwards of the Cato Institute. The effect on the projects, he points out, is to make them more expensive, since they incur interest payments. Because they "insulate the taxpayer from the cost"—all that needs to be paid now is the interest—they also tend to produce cost overruns...

... Boykin Curry, managing director of Eagle Capital, says, "For 20 years, the DNA of nearly every financial institution had morphed dangerously. Each time someone at the table pressed for more leverage and more risk, the next few years proved them 'right.' These people were emboldened, they were promoted and they gained control of ever more capital. Meanwhile, anyone in power who hesitated, who argued for caution, was proved 'wrong.' The cautious types were increasingly intimidated, passed over for promotion. They lost their hold on capital. This happened every day in almost every financial institution over and over, until we ended up with a very specific kind of person running things. This year, the capital that remains is finally being reallocated to more careful, thoughtful executives and investors—the Warren Buffetts … of the world."

... Curry points out that "30 percent of S&P 500 profits last year were earned by financial firms, and U.S. consumers were spending $800 billion more than they earned every year. As a result, most of our top math Ph.D.s were being pulled into nonproductive financial engineering instead of biotech research and fuel technology. Capital expenditures went into retail construction instead of critical infrastructure." The crisis will stop the misallocation of human and financial resources and redirect them in more-productive ways. If some of the smart people now on Wall Street end up building better models of energy usage and efficiency, that would be a net gain for the economy...

How's the story go? India creates software, China creates hardware, and the US creates financial instruments?

The 13 credit cards/household is so high I wonder if it's really true. On the other hand, I buy the stories of state budget trickery. I wonder how long that will take to unwind.

For me the best part of the essay is Boykin Curry's description of how an economic bubble destroys the leadership of publicly traded companies living in the bubble. In a bubble irrational bets pay off, and rational behavior is a ticket down the org chart. Eventually only the crazies are left at the top.

I would like to read more about the people who are the winners of the financial carnage. I suspect some actors are doing rather well right now.

Update 10/19/08: See the comment from Cathy. The "13 cards" statistic may be true. I believe Cathy is right when she guesses many people collect cards for a transient 10% purchase discount, but then never intend to use them. Of course a number of people will end up using those extra cards when they run into financial trouble, which will lead to misfortune all around.

So are these 10% purchase discounts really a good idea for the stores? I suspect it's marginal, but the risk and incentives have been outsourced through a long and disconnected chain of commerce -- so the true cost is probably hidden. Accounting uber alles, again.