Monday, November 07, 2011

Were the lying Dutchman's lies important?

Rush Limbaugh makes a case that the now discredited Dutch psychologist Diederik Stapel was riding the old Leftist hobbyhorse of trying to prove scientifically that conservatives are psychologically defective: Good projection but bad science.

The paper that Rush concentrates on is here and it implies that we dislike blacks because we often see them in messy "slum" environments. Even if that were a genuine finding, however, I don't really see it as much of a problem. Stapel did not claim that he had isolated the ONLY cause of negativity towards blacks and the possibility that the very high rate of violent crime among blacks has a central bearing on attitudes towards them was not addressed at all.

Stapel did however claim that a "heightened need for structure" was behind the effect that he observed -- i.e. it was only people with a heightened need for structure who let the messy environment influence them. That too seems innocuous enough at first sight but when one realizes that a heightened need for structure has been identified by many psychologists over the years as characteristic of conservatives, we begin to see the "conservatives are defective and that's why they don't like blacks" story emerging.

That a need for structure is a bad thing is of course highly debatable (does it mean that Leftists have a need for chaos?) but in any case I did many years of research on the "conservatives have a greater need for structure" hypothesis and other hypotheses like it and found that all the "proof" offered was based on research methods not much better than Stapel's. You can read my papers on the subject here.

Stapel also claimed that meat-eaters are a bad lot but I think Rush deals well with that claim.


Conservatives don't let imperfections ruin their lives

The imperfections in the world can bring some entertainment. I am glad for that. Unbroken comfort can make you more numb than jumping into that frozen lake with a polar bear club.

Recently I enjoyed sitting outside during the dirt storm that hit the area. My young daughter enjoyed it with me. She ran around laughing as the dirt engulfed her - obviously exhilarated by the novelty of the situation. We could have hunkered indoors and complained about the weather, but look at the joy we would have missed. Adverse conditions can be fun to sit through, with the right attitude. Witness storm chasers.

Some people live lives of bitterness just because everything in the world isn't perfect. They seem to believe the only way to make themselves feel better is to force everyone else to conform to their idea of "perfect." That is sad. Sure, there are so many things that could be better, but you may as well enjoy what you can when the opportunity presents itself. You are only responsible for your life, and you have an obligation to mind your own business. Remembering that frees up a huge amount of your life.

For example: I value liberty, but I can still enjoy life even though I am surrounded by a government that I don't need, I don't want, I don't respect, and that only gets in the way. There is no Utopia. Even in a free society there will still be bad guys trying to use coercion or other aspects of the political method in order to deprive individuals of their life, liberty, and property. If you can't enjoy life now, under government, you wouldn't be able to enjoy a life of liberty, either. If you can't enjoy a little dirt storm now and then, you probably can't enjoy the rainy days. There will always be something you could complain about.

That doesn't mean you let evil go unnoticed or unchallenged. It just means you call a spade a spade, then move on and don't let it ruin your day. In fact, you can probably get on with the business of living more easily when you clear the air and stop trying to justify the unjustifiable.

Just weather the storm, try not to get blown away, and laugh at the foolishness of it all. Especially the foolishness of those who mistake the storm for life.



How to Fix the Housing Crisis

Fannie and Freddie must die

The foreclosure crisis has crawled on for going on four years now with no end in sight. The S&P/Case-Shiller index for August fell 3.8 percent from a year ago. The index includes home prices for 20 US cities.

"Continued house price declines could lead to even more defaults, foreclosures and distress sales, undermining wealth, confidence and spending," William Dudley, president of the Federal Reserve Bank of New York said. "Breaking this vicious cycle is one of the most pressing issues facing policy makers." ...

Any business dominated by entities only in business because of the good graces of the government cannot be considered part of the free market. The reason the housing market is not clearing is that the government stands in the way by propping up the large mortgage holders.

No reasonable person sees Fannie Mae and sister entity Freddie Mac, which were seized by the government in September 2008, as the product of spontaneous order. To stay in business, the two firms together have needed about $169 billion in taxpayer bailout funds, with no end in sight.

Changes to FASB rules 157, 115, and 124, which allowed banks greater discretion in determining at what price to carry certain types of securities on their balance sheets and recognition of other-than-temporary impairments have made the big banks wards of the state as well.

The real help for underwater homeowners will only arrive when Fannie, Freddie, and the rest are allowed to fail. The equivalent of a chapter 7 bankruptcy filing (liquidation) would put these underwater loans out for bid in the market place.

No one can get a loan for a 110 percent of value in this market, let alone 125 percent, or 100 percent for that matter. Those looking for mortgages should expect to put 20 percent down. Values in a bankruptcy sale would reflect this reality and then some. Based on the liquidation prices received by the FDIC and other distressed debt sellers, this mortgage paper would likely be scooped up for half or a third of the home's value.

Buyers of the paper would immediately negotiate with borrowers to create loans that are conforming (80 percent LTV) and performing.

For instance, Selene Residential Mortgage Opportunity Fund purchased the mortgage secured by the home of Anna and Charlie Reynolds in St. George, Utah, for a deep discount, the Wall Street Journal reported in a front-page story. The Reynolds were struggling with a $3,464 monthly payment and the value of their home had plummeted.

Selene, run by Wall Street legend Lewis Ranieri, buys loans to make a profit on them, not as a public service, but company officials say it is often more profitable to keep the borrower in the home than to foreclose. If a delinquent loan can be turned into a "performing" loan, with the borrower making regular payments, the value of that loan rises, and Selene can turn around and either refinance it or sell it at a profit.
Home values in St. George had plummeted in similar fashion to that of Las Vegas, only a two-hour drive away. Selene slashed the principle balance of the loan due from $421,731 to $243,182 and lowered the interest rate, reducing the Reynolds' monthly payment to $1,573.

"Around 90% of Selene's loan modifications involve reducing the principal," James R. Hagerty wrote in the WSJ, "compared to less than 2% of the modifications done by federally regulated banks in the first quarter."

And while many upside-down borrowers can't even find a human to talk to about their loan, let alone sit down and renegotiate terms that will benefit both parties, Selene immediately tries to contact the borrowers on the notes they have purchased, "sometimes sending a FedEx package with a gift card that can be activated only if the borrower calls a Selene debt-workout specialist." It's hard to imagine Fannie and Freddie being so proactive.

Ludwig von Mises explained that one government intervention leads to an endless succession of interventions to deal with the effects of the first and subsequent interventions. Ultimately, it comes down to two choices. "Either capitalism or socialism: there exists no middle way," Mises wrote.

Likewise, there is no middle way to solve the housing crisis. For capitalism to work its magic and set underwater homeowners free, mortgage holders must be allowed to fail.



Obama's Economic Team: Charlatans and Quacksalvers

If a man is judged by the company he keeps--what does Obama's choices say about him? Consider Obama's choices for his economic advisors. There seem to be three overarching principles that guide their decision-making--all bad.

First, Obama's advisors believe that economic growth can be achieved by rewarding dubious, but favored, industries. Second, Obama seems to think that the financial assistance provided to his "favorites" can be achieved by taxing and placing additional regulatory burdens on small businesses, prudent savers and job creators. Third, Obama seems to think he can act irresponsibly with other people's money--take enormous risks--and refuse to accept any responsibility for failure as the cumulative effect of his policies expands the role and power of government.

Americans have watched, over the past three years, as the recommendations of Obama's economic advisors have crashed and burned, exacerbating rather than improving the economic situation in the U.S.. Nowhere is this flawed approach to economic growth more apparent than in the recent debacle surrounding M F Global Holdings and Jon Corzine, the President Obama's "Wall Street Guy".

What the current MF Global scandal has shown is the likelihood that Corzine has been flimflamming investors. Huge and irresponsible risks were taken, all with someone else’s money, in the blind hope that government would bail out any losses. Worse yet, according to most recent reports in the press, Corzine seems to have illegally tapped as much as $900 million dollars from individual investor accounts in a vain attempt to cover and hide his many misdeeds.

Playing fast and loose with other people’s money was a skill Corzine developed and refined as the Democratic Governor of New Jersey, but, when exposed in the real world, the inevitable result is Chapter 11. Here, too, it is important to note that Corzine’s ruinous actions will almost certainly result in the immediate termination of the jobs of 3000 employees that once worked for MF Global and were dependent upon Jon Corzine's stewardship.

As his investors and former employees now face economic ruin, Jon Corzine’s vast, personal fortune, estimated at $300 million or more remains unaffected. Small business owners that make boneheaded decisions face certain economic ruin, but Corzine is, incredibly, eligible for a $12 million severance package after plundering MF Global Holdings, ruining employees' jobs, and losing investors' private funds.

The Corzine Affair also offers insights into the Obama Administration's compendium of new rules, regulation and increased oversight designed monitor the level of risk within financial institutions. The system clearly didn't work--or at least not well enough to save the MF Global Holdings investors.

Americans should also remember that Obama believed so strongly in Jon Corzine back in July of 2009 that he campaigned aggressively for Corzine against Chris Christie. Obama even went so far as to claim that Corzine was "one of the best partners I have in the White House."

Corzine has been closely involved with the Obama Administration as far back as Obama's presidential campaign--where Corzine was often cited and photographed as being one of Obama's close economic advisors.

Obama has shown a consistent pattern of keeping bad company, bad advisors and the result has been bad for the American economy. Most of the President's early economic advisors have abandoned him.

Christina Romer, Chief of the Council of Economic Advisors, left after only one year, when neither the $787 billion dollar economic stimulus had any effect, nor did unemployment decrease, despite her promises and predictions.

Larry Summers, Director of the National Economic Council, left after a year, during which increased regulations strangled small businesses and unemployment remained at staggering highs.

Austan Goolsbee, Romer's replacement, only lasted 11 months.

Peter Orszag, Obama's Director of the Office of Management and Budget, the first to leave and move on to greener pastures, left Americans with a federal budget almost $3 trillion dollars more annually than when he first entered the job and the realizations that the economic growth promised by critical infrastructure projects that never occurred left the nation worse off than ever.

What is somewhat startling is the sheer number of Obama's economic advisors who have departed the White House. Many of the lower levels of Obama’s National Economic Council team (Sarah Cannon, Eric Lesser, Bryan Jung, Kyle Watkins, Pascal Noel) abandoned the sinking Obama ship. This mass exodus of Team Obama’s economic advisors seems a clear vote of no confidence in the President’s economic policies.

Americans are left with many questions-- but two rise to the top. First, is President Obama the only one who still believes wealth distribution schemes, favoritism, and punishing job creators is the best way to advance the American economy? Second, who has replaced Jon Corvine and the many other mountebanks who provided Obama with such poor economic advice over the past three years?

Obama gave us the answer to one of the questions. Where is he getting his economic advice now? Looks to me like Obama is now getting his economic counsel from The Occupy Wall Street crowd, who seem to be the only people left that still believe it is possible to expand government and all entitlements, reward favorite industries, despite the growing number of bankruptcies and failures, and fund the madness by punishing job creators. If that doesn't scare Americans--then nothing will.




UK army chief secretly visits Tel Aviv: "Richards who is Britain's Chief of the Defense Staff reportedly held several meetings with the senior commanders of the Israeli regime's army though there are no details on the subject of his talks. He also visited the northern parts of the Israeli occupied territories at the regime's borders with Lebanon. The secret visit comes as Israel's Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak are reportedly making efforts to rally enough support in the cabinet to launch a military attack on Iran though an Israeli minister has dismissed a conflict as imminent. Moreover, after it emerged that Richards secretly met with Israel's military and intelligence senior staff, Barak arrived in London on Wednesday to meet with Richards and Britain's Defence Secretary Philip Hammond and National Security Adviser Sir Peter Ricketts."

There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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