Some weeks ago, Judge Richard Posner wrote two policy analysis pieces on Harvard Law School Forum on Corporate Governance and Financial Regulations (part 1 & part 2).  They addressed a government report discussing the financial crisis along with legislative solutions.

One of his main points, was that due to the recency of the events,  we likely don’t know all the mechanisms which helped put is into the current mess (from part 1):

The Report is premature in two respects. The first is that it advocates a specific course of treatment for a disease the cause or causes of which have not been determined. Now it is not always necessary to understand the cause of something you don’t like in order to be able to eliminate the effect. If you have typical allergy symptoms you may get complete relief by taking an antihistamine; it is not necessary to find out what you’re allergic to. But generally, and in the case of the current economic crisis, unless the causes of a problem are understood, it will be impossible to come up with a good solution. The causes of the crisis have not been studied systematically, and are not obvious though they are treated as such in the Report. (Remember, the Great Depression of the 1930s ended 68 years ago and economists are still debating its causes.) We need some counterpart to the 9/11 Commission’s investigation of an earlier unforeseen disaster.  The Report asserts without evidence or references that the near collapse of the banking industry last September was due to a combination of folly—a kind of collective madness—on the part of bankers (in part reflected in their compensation practices), of credit-rating agencies, and of consumers (duped into taking on debt, particularly mortgage debt, that they could not afford), and to defects in the regulatory structure. This leaves out many potential causes that other students of the crisis have emphasized….

The Report is premature in a second sense, one illustrated by the proposals (discussed in greater detail in the second part of this two-part article) for limiting the provision of credit to high-risk borrowers. In an economic boom, thrift (restraint in consumption) reduces the amplitude of the business cycle by reducing consumption and increasing savings, savings that can be reallocated to consumption at the bottom of the cycle. Thus thrift makes the peak of the cycle lower and the trough higher. But in the trough of the cycle, thrift, by reducing consumption, retards economic recovery, because the less that people spend on consumption goods the less production there is and therefore the higher the unemployment rate, which by reducing incomes further depresses spending, which further depresses production, and so on. To tighten credit at the bottom of the cycle is therefore bad timing. And while the Report creates the impression that high-risk borrowers are feckless consumers unable to curb their greed for material goods, many high-risk borrowers are small businesses dependent on credit-card debt to finance their business….

Additionally, there should be little fear that businesses and investors are going to make the same set of mistakes before the recovery has even begun in full force (in part 2):

…For a time at least, the world’s central bankers, and the financial industry itself, will be hyper?alert for another housing or credit bubble. The wisdom of delay is confirmed, in my eyes at least, by the proposals in the Report….

What Mr. Posner failed to see (as did I) is that the government would, in less than a microsecond,  decide to continue the same policies which helped cause the current mess.  Reported by WSJ:

WASHINGTON — The Obama administration is close to committing as much as $35 billion to help beleaguered state and local housing agencies continue to provide mortgages to low- and moderate-income families, according to administration officials.

The move would further cement the government’s role in propping up the housing market even as some lawmakers push to curb spending at a time of rising debt.

The effort, which could be announced as early as this week, is aimed at relieving pressure on government-operated housing finance agencies, which have been struggling to find funding amid the downturn….

For those playing the home game, this means we are taking a problem caused by excessive credit and government incentives and trying to fix it by:

1. Preventing the normal contraction that needs to happen by artificially propping up failed business and bad home purchasing decisions.
2. Keep money cheap by keeping interest rates very low.
3. Then, repeat the same process that got you to the recession in the first place by incentivizing the market to buy a commodity (housing) which is still overvalued in some places.

As Einstein was once quoted saying, “The definition of insanity is doing the same thing over and over again, but expecting different results.”  With all due respect to Mr. Einstein, I’m beginning to think that “insanity” is too nice of a moniker as the word connotes misunderstanding due to ignorance or failure to be able to understand.

In this case, I’m not sure what word or phrase will have encompass the idiocy of our government, but I’m thinking this is willful stupidity combined with a big helping of arrogance.

Of course if voters refuse to punish those people responsible, we’ll continue to have the same government.

President Obama, among other distinguished guests, got together at the UN for a conference on Climate change.

This pressing issue, that Mr. Obama cares so much about – that issue which his party fights for daily was so important, that his words must have been strong and firm on our commitment to the environment, right? (here):

…”I have been in office for just nine months, though some days it seems a lot longer. I am well aware of the expectations that accompany my presidency around the world. These expectations are not about me. Rather, they are rooted I believe in a discontent with a status quo that has allowed us to be increasingly defined by our differences, and outpaced by our problems. But they are also rooted in the hope that real change is possible, and the hope that America will be a leader in bringing about such change.

“I took office at a time when many around the world had come to view America with skepticism and distrust. Part of this was due to misperceptions and misinformation about my country. Part of this was due to opposition to specific policies, and a belief that on certain critical issues, America has acted unilaterally, without regard for the interests of others. This has fed an almost reflexive anti-Americanism, which too often has served as an excuse for our collective inaction.”…

Ok – so unilateral action in our interests are different from other unilateral actions other countries make how?  And should we care why?

I know, this again will make me be seen as heartless and I do understand that we have to act in a way that is semi-consistent with international laws, but it’s not our job nor is it our responsibility.  I would like to think that when despots are killing their own citizens, we can act unilaterally if we wish.

Please understand; I’m not for an expansion of foreign entanglements mind you, I’m only saying that when something is a just cause and others are unwilling to do anything, then unilateral action is the moral response.

But, he did go on to say that he wouldn’t apologize for defending the nation’s interests.  So there’s that… but this as well:

…”We know the future will be forged by deeds and not simply words. Speeches alone will not solve our problems. It will take persistent action. So for those who question the character and cause of my nation, I ask you to look at the concrete actions that we have taken in just nine months.

“On my first day in office, I prohibited — without exception or equivocation — the use of torture by the United States of America. I ordered the prison at Guantanamo Bay closed, and we are doing the hard work of forging a framework to combat extremism within the rule of law. Every nation must know: America will live its values, and we will lead by example.  “…

Maybe the President is out the loop or something, but GITMO remains open, and without knowing the specific interrogation techniques which are now being allowed, “not allowing torture” is a joke.  I think it’s obvious that both President Bush and Vice President Cheney didn’t believe they were “allowing torture”, but maybe he meant something else – like;

“I started a committee to look into closing GITMO, but I still support the Patriot Act, sending prisoners to other nations who torture, and really, most of my predecessors policies, with the exception of the committee and DOJ investigation.”

But this is politics, so he continues:

…”We have set a clear and focused goal: to work with all members of this body to disrupt, dismantle, and defeat al Qaeda and its extremist allies — a network that has killed thousands of people of many faiths and nations, and that plotted to blow up this very building. In Afghanistan and Pakistan, we — and many nations here — are helping those governments develop the capacity to take the lead in this effort, while working to advance opportunity and security for their people.”…

Where’s Iraq?  Oh, here:

…”In Iraq, we are responsibly ending a war. We have removed American combat brigades from Iraqi cities, and set a deadline of next August to remove all of our combat brigades from Iraqi territory. And I have made clear that we will help Iraqis transition to full responsibility for their future, and keep our commitment to remove all American troops by the end of 2011.:…

Well, that’s not really true.  We’re pulling back troops and have a date to leave, but the Iraqi government can ask us to stay and we would likely oblige… but even without that, does this match the campaign promise?

Hmmm….:

…On Tuesday, Obama introduced the “Iraq War De-escalation Act of 2007,” which calls for a goal of all U.S. troops to leave Iraq by March 31, 2008, in a phased redeployment worked out with military commanders….

It’s almost becoming too easy to poke holes in damn near anything he says, but remember first and foremost that this was a UN Conference on Climate Change.

To be fair, he did get there.  Out of roughly 1000 words spoke, he spent 46 words on climate change.  For an administration that recently published a report described as this:

…The report describes in vivid detail how our urban infrastructure will be placed in peril from intense hurricanes and storm surges, how heat waves, poor air quality, and insects will increase, and how a rapidly intensifying climate change will make it difficult for both society and the natural resources we possess to adapt….

His discussion on the world stage leaves a lot to be desired.

For real climate change discussions and solutions: I highly recommend the Copenhagen Consensus.

With the state of Missouri’s recent fiscal problems and a 9.4% unemployment rate, the state worker’s union has decided now is the time to act.

Questions for the unions:  Is it time to cut back?  Become more lean?  Follow the rest of private industry and cut back as revenue growth loses momentum?

Union’s answer:  Surely ye jest!  We’re the union & the time is ripe for a pay raise!

That’s correct.  As the entire state population spends less money to try to tread water in these tight times, the unions apparently believe they are in prime position to negotiate:

…The union has proposed a 6 percent annual pay raise for the next three years and a “fair share” fee for nonunion members who are covered by union-negotiated contracts. The negations are over a contract for patient care support workers that expired in June and one for craft and maintenance employees that expired in December.

But wait!  Ask them nicely and they’ll tell you that they only have the best of intentions:

Curt Ostrander, the union’s chief negotiator, told The Associated Press that the union’s priority is protect state workers, address staff shortages and help people do their jobs better. He described discussions with the state thus far as “cooperative,” and said the two sides are trying to find ways to be more efficient to save money and solve problems.

“Our top priorities are to provide a contract that gives workers the necessary protection in order for them to perform their jobs in a safe, effective manner and to provide state services,” Ostrander said….

For those MBA’s out there – please note the very sound logic incorporated in “address staff shortages and become more efficient to save money” while simultaneously asking for a 6% raise for the next 3 years during a recession.

The audacity it takes to ask the tax payers of this state to pony up 6% annual raises, while many in the state can’t or won’t get a raise at all this year, is pompous and arrogant.

This combined with them selling the money grab as something that will reduce costs, while increasing staff, is completely disingenuous.

To be fair, this is an opening gambit and it’s not likely they’ll get everything (though the governor is pro-union), but if we continue to allow our elected leaders and unelected leaders (read: special interests) to operate within side the quiet world of doublespeak without so much as a whimper of an objection, then we surely are going to get exactly what we deserve.

Read all about government wages versus free market wages in The Great Recession here

I wrote last week about Mr. Obama’s decision to forgo plans to put ballistic missile defense systems in Poland.  At that time, I considered the Republican talking points to be more than excessive.

Sound bites about  appeasing Russia and abandoning our allies was disingenuous considering all the known facts.

As seems typical with this President however, is that each time I agree, he does something so stupid as to defy rational thought:

WASHINGTON — President Barack Obama sharply dismisses criticism that Russian opposition influenced his decision to scrap a European missile defense system, calling it merely a bonus if the leaders of Russia end up “a little less paranoid” about the U.S.

“My task here was not to negotiate with the Russians,” Obama told CBS’ “Face the Nation” in an interview for broadcast Sunday. “The Russians don’t make determinations about what our defense posture is.”…

This seems extremely hard to believe and if you analyze the situation while taking the President’s words at face value, you’re only left with one looming question, “If not for Russia, then why?”

Mr. Obama’s current position:

…In its place will be a different missile-defense plan relying on a network of sensors and interceptor missiles based at sea, on land and in the air. Obama says that adapts to the most pressing threat from Iran to U.S. troops and allies in Europe, potential attacks by short- and medium-range missiles….

Which, according to the CBO, will be more expensive and make us less safe overall.  From the report:

• Defense of Europe. All of the alternatives CBO considered would provide defense of most of Europe roughly equivalent to the defense provided by MDA’s proposal against most types of ballistic missiles that Iran is thought to have developed or could develop in the future. Because the alternatives CBO considered would locate interceptors closer to Iran than MDA’s planned system, they would generally provide more extensive defense of southeastern Europe than would MDA’s proposal. Moreover, because they would be composed of mobile or transportable components, deploying the alternative systems would not require building permanent facilities—including missile silos—at European sites.

• Extended defense of the United States. A second goal of MDA’s proposed European system is to give the United States an extra layer of defense against potential Iranian intercontinental ballistic missiles. CBO’s analysis indicates that by 2012 systems already in place at two bases in the United States would protect more than 99 percent of the U.S. population from this threat. MDA’s proposed European system would extend defensive coverage to the other 1 percent of the U.S. population. It would also provide redundant defense from a third interceptor site for all of the continental United States, giving system operators more flexibility by creating an opportunity to launch a second interceptor from the United States, if necessary. None of the alternatives considered by CBO provide as much additional defense of the United States.

• Costs. For roughly the same cost as MDA’s European system—a total of about $9 billion to $14 billion over 20 years—the United States could deploy either of the ground-based alternatives. The ship-based alternative would cost almost twice as much as MDA’s proposal—a total of about $18 billion to $26 billion over 20 years—largely because CBO assumed that the Navy would need to buy additional ships to operate it.

• Availability. The alternatives that CBO examined might not be available as early as MDA’s proposed European system.

So again Mr. President – if this wasn’t to sooth relations with Russia and the alternative path you’ve chosen is both more expensive and makes us less safe – then why?

Unless you were lucky enough to be traveling or otherwise unavailable on Sunday, you were likely deluged with Mr. Obama’s media storm to sell not only health care, but apparently many other items as well.

First, it should be noted that this WH is above all, extremely insecure.  The President could be seen on 5 Sunday news shows: NBC, ABC, CBS, CNN and Univision.   But he didn’t have time for Fox, the number one rated Sunday news show…

Regardless of the WH being extremely petty and worrying more about perceived injustices than an honest discussion with those who might disagree, what he actually said is far more serious.

When asked if a health care mandate was a tax increase on ABC’s this week, the President responded:

…”I absolutely reject that notion,” the president said….

“What it’s saying is, is that we’re not going to have other people carrying your burdens for you anymore,” said Obama. “Right now everybody in America, just about, has to get auto insurance . Nobody considers that a tax increase.”…

Using flawed logic is nothing new for Presidents, but this one isn’t even close.  Hhe’s analogizing the privilege of driving with the “privilege” of being a citizen.

The difference of course as that by my very birth, I have a “right” to be a citizen, whereas driving has always remained a privilege with constraints.  You see, I can forgo auto insurance, so long as I don’t drive.  There are many ways around without a car in this day and age, but if I “choose” to drive, then constraints can be placed on me.

Health care on the other hand would be required simply because I existed and no other reason.  & If the government says, “You have to buy this” – it is a tax increase as not paying it can land you in very serious legal troubles.

On CBS’s Face the Nation, with an omnipotent sense of when health care, our fearless leader goes further:

…Obama put his support behind the idea of taxing employers that offer high-cost insurance plans.

“I do think that giving a disincentive to insurance companies to offer Cadillac plans that don’t make people healthier is part of the way that we’re going to bring down health care costs for everybody over the long term,” Obama said on NBC’s “Meet the Press.”…

Even ignoring the fact that this goes against his basic premise that more people need more health care, one wonders if there is anything our President doesn’t know.  So far, he’s taken over banks, car companies, told car companies with whom to merge, who to hire, who to fire, what to build… and now we find out he knows how much health care is too much.

But let’s not stop there.  Not only is our community organizer one of the smartest men in America when it comes to economics and health care, he’s also a brilliant strategist with respects to Afghanistan:

…”What I’m not also gonna do, though, is put the resource question before the strategy question,” Obama told NBC’s David Gregory on “Meet the Press.” “Until I’m satisfied that we’ve got the right strategy I’m not gonna be sending some young man or woman over there- beyond what we already have.”…

I’m not sure exactly what happens to man to think he has the answers to every single last question. Maybe it’s just arrogance and ignorance, as Hayek stated:

If most people are not willing to see the difficulty, this is mainly because, consciously or unconsciously, they assume that it will be they who will settle these questions for the others, and because they are convinced of their own capacity to do this.

Whatever the reason he believes so strongly in his ability to decide what’s best for our own good, history shows us without question where this inevitably leads.  Hayek again:

To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.

Let’s hope we begin to understand the value of humility before we do too much damage.

First – a disclaimer – I have a feeling that some of you who might agree with me normally, might feel uncomfortable about this discussion.  However, if we truly want an open and honest debate, tough questions will need to be asked and answered.

According to a recent Harvard Medical School study via Rueters:

WASHINGTON (Reuters) – Nearly 45,000 people die in the United States each year — one every 12 minutes — in large part because they lack health insurance and can not get good care, Harvard Medical School researchers found in an analysis released on Thursday.

“We’re losing more Americans every day because of inaction … than drunk driving and homicide combined,” Dr. David Himmelstein, a co-author of the study and an associate professor of medicine at Harvard, said in an interview with Reuters.

To begin, we should take note of the wording itself as the 45K number is logically very tough to substantiate.  The report itself states these people died “in large part” due to lack of insurance, noting in the wording the difficulty of the definition.  Not only would you need to find people who might have lived with insurance, but I think you should also remove those people who could afford it but chose not to (usually younger professionals with a belief that they don’t need it).

Having said that, even if we assume the 45K number is accurate, it is true that it’s higher than both homicide and drunk driving rates combined at around about 30K deaths a year.

Using the 45K & the “ideal” $200 billion a year (CBO reports government health care spending with the new bill will be 1 trillion in new spending over the next ten years), we would be spending about 4.5 million for each life saved.  This assumes that the government projections are correct, which we know history shows us it’s likely to cost much, much more.  & it assumes that giving them insurance would truly save lives.

The difference in the analogy therefore is that no one in congress is currently setting up a bill where will spend an additional 4.5 million dollars per homicide & drunk driving deaths in order to save those lives.

I recognize for some, cost/benefit analysis is by definition wrong since human life is sacred, but we have to recognize that spending 4.5 million on say cancer or heart disease research is likely to save many, many more lives than spending it on the current health care plan.

Globally, spending this much money on portable water, malaria drugs, childhood vaccinations, and other fairly cheap solutions would save literally tens of millions of people each year.

I know – cold-blooded, heartless, etc – but given my current income level, I wouldn’t even force my own family to come up with 4.5 million to save me, much less think it’s my neighbor’s responsibility to pony up part of the cash through the force of law to do so.

Today, MO Congressmen Todd Akin – R (and I’m sure others) released a statement concerning a change the President is making in foreign policy arena:

“The President’s decision to back away from our plans to put missile defense sites in Poland and the Czech Republic effectively abandons two of our allies who had worked hard and taken political risks for the sake of European and American security. The Administration has sent a clear signal to our central and eastern European allies that the United States, under this President, cannot be counted on to stand by our commitments.”

“With the Iranian regime continuing its aggressive pursuit of nuclear weapons and Russia’s commitment to reassert its regional hegemony, the United States must strengthen, not weaken, their commitment to the safety of our friends and allies around the world. The technology changes proposed may be of some merit, but the Administration needs to fully brief the Congress and our NATO allies before proceeding with this dramatic change in course.”

“Given our desire and need for a stronger commitment by our NATO allies in Afghanistan, President Obama’s decision to abandon our Polish and Czech allies will only make that effort all the more difficult.”

Not to attack Mr. Akin directly on this view as he is ranking Member of the House Armed Services Subcommittee on Seapower and Expeditionary Forces, the rhetoric is simplifying a more complex issue.  As Russia tries to reassert itself within the region and the question of giving missile defense technology to Poland and Chech is tricky.  These countries are seen by Russia as inside their historical sphere of influence (Eastern Bloc).

Additionally, Russia has used these countries as a man made border to reduce any potential opponents ability to invade.  They do this and are concerned by it because they have no real natural borders such as the US with two oceans.

So while it’s true that this move strengthens Russia, what we need right now is Russia’s help to control Iran from building nukes.  When the UN passes embargo’s against Iran, but Russia and others continue to trade with Iran, we basically haven’t done anything that is likely to deter Iran from their current stated goal of obtaining nuclear weapons.

Realistically and by all known analysis, Iran isn’t anywhere near being able to build an actual weapon.  They are close to having the fuel required, but the technology to actually make that fuel into a weapon is very complex and not something with which they have experience.

Additionally, even if Iran could build a nuclear war head that could result in a very large explosion, they still don’t have good missile technology, circuits capable of withstanding the radiation, and many other technologies required to make all of it useful.

Having said that, Iran is a threat and as a proactive supporter of terrorism, remains a country we have to be cognizant of.

So my personal opinion is that our fear of Iran right this second might be overblown which would make this decision unnecessary, but I also know what I don’t know… like whether Russia has given us assurances of help with Iran, whether the existing publicly available analysis is correct, or any number of other factors which should be used in the calculus for deciding on any given action.

Either way, taking knowns & the unknowns together, the decision itself isn’t as easy as the “abandoning our allies” rhetoric would make one think.

I heard about a recent sobriety checkpoint in my area and what seemed to me a ridiculous use of resources compared to the payoff.  This being quite some time ago, I almost lost the story, but thanks to Google Cache… here it is:

St. Charles police Detective Derek Piasecki reported this morning that a DWI checkpoint this past weekend resulted in 29 arrests. The checkpoint stopped a total of 1,797 drivers at Highway 94 and Portwest Drive. Of those, 920 were westbound, and 877 were eastbound.

Here’s a breakdown of the arrests:

* 25 for driving while intoxicated

* 3 for driving with a revoked license

* 1 for failure to comply

A total of 23 officers from the St. Charles and St. Peters police departments and the St. Charles County Sheriff’s Department worked overtime between 10  p.m. and 3 a.m.

Maybe it’s just me, as from the websites I’ve viewed people seem to be not only ok with this, but actually wanting more of it.

Looking from just the numbers however, you have 23 officers working 5 hours @ at least time 1/2.  This equates (23*5) to 110 man hours or (23*7.5)  or 172.5 hours of paid time to arrest 29 people while stopping 1768 other people.

This equates to (110/29) approximately 3.8 man hours per offense, with only 25 actually being arrested for the offense the checkpoint was supposed to stop.

Not only is this an incredibly inefficient use of resources, but to me, seems to be overkill.  98% of the people that were stopped had no other offense than driving in the area the police officers were targeting.

Additionally, this particular stop was announced before hand, making the actual offenders not only stupid for drinking and driving, but also clueless and uninformed.

Of course some can argue that it is worth it to help push down the scourge that is drinking and driving.   Statistics are hard to come by because the only ones compiling them are groups with interests of conflict, but taking their numbers – which includes any fatal accident where alcohol was involved (even if the drunk was passed out on the shoulder of the road and was run over) – about 45 people die daily from drunk drivers.

Maybe for some this makes up for the stunning inefficiencies, for me, I’m not so sure and therein lies the question:

If you have to stop 1787 people to find the 25 you are looking for – is that considered a success?