Spam comments dilemma

My policy with comments to the blog is to leave them unmoderated. So anyone can post any comment any time without getting prior approval from me. My feeling is that people have a right to express their opinion. So even though there seem to be some people who scan the web to find anything even remotely related to their pet topic and then post very long screeds about their pet theory that has only marginal relevance to my post, I have let those comments stand, not wanting to be in the position of censor.
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Skyhooks and cranes-4: Understanding the mind

Currently people seem to be pinning their hopes for a skyhook on the workings of the human mind. This is not because the case here is stronger. In fact, there is no reason whatsoever to think that science cannot explain how the mind works because, unlike with origins of the universe, there are no extraordinary circumstances involved. There is every reason to think that the laws of science that apply outside the brain, and which we can study carefully under controlled conditions, also apply within the brain. There is no reason to suspect that there is anything more to the mind than brain activity.
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Skyhooks and cranes-3: The last four skyhooks

Some people simply cannot get over their childhood infatuation with magical thinking. They want and need to believe in skyhooks. They do not want science to fill in all the gaps in our knowledge. They want there to be some gap that they can only plug god into. Or as the TV character House says, “You know, I get it that people are just looking for a way to fill the holes. But they want the holes. They want to live in the holes. And they go nuts when someone else pours dirt in their holes. Climb out of your holes, people!”
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Possible models for newspapers

As a result of the financial pressures that all papers face, my local newspaper, the Plain Dealer has adopted the cost-saving strategy of cutting back on national and international coverage and op-eds, focusing more on local news and sports. The paper is now a lot thinner with the sports section now the largest, and sports news often dominates even the front page.

Is this a bad thing? Some time ago I would have said yes, especially since I rarely read anything in the sports section beyond the first page. It would have signified the further dumbing down of news. But now I am not sure. The coverage of local news seems to have got better and more interesting, and many people do care passionately about sports and can’t seem to get enough of it, so the paper is now perhaps finding a niche. The paper’s regular stable of local and syndicated op-ed columnists is unbelievably vapid so the reduction assigned to them is not something I mourn. In fact, I hardly ever read them, unless they publish the occasional new voice.
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Skyhooks and cranes-2: Replacing skyhooks with cranes

Darwin’s big idea of natural selection essentially removed the necessity for skyhooks. According to natural selection, complex things could and did emerge from simpler things and hence we no longer need to invoke skyhooks to explain how they came about. Instead we now have ‘cranes’ that can do all the lifting we need.

Daniel Dennett in Darwin’s Dangerous Idea (1995) uses the metaphor of the cranes used in building construction to contrast with skyhooks. Cranes are devices that can lift things, just like skyhooks can, but they are not magical devices that suddenly appear out of the sky. They are real, we know how they are built and where they come from, and they are planted on solid ground. Furthermore, small cranes can be used to build bigger cranes that can in turn be used to build yet bigger cranes and so on, until we end up with some really powerful cranes that can do amazing and, to the untrained and unobservant eye, may appear to be skyhooks and do seemingly magical things. But the wonderful thing is that they come about naturally.
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Newspapers in crisis

As someone who grew up in Sri Lanka, a country that has a strong newspaper-reading ethos, I feel a sense of regret at what seems to be an irreversible decline in the fortunes of daily newspapers. Growing up, my family subscribed to two morning newspapers and two evening newspapers each weekday, and three papers on Sundays, if you can imagine that. Wherever I have lived I have had a daily subscription to the local paper.

For almost all my life, I used to have a rigid routine in the mornings. I would start the day by getting a cup of coffer and reading the newspaper for national and world news. If for some reason the paper was not delivered, I felt disoriented without my fix of news the first thing in the morning.
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Skyhooks and cranes-1: Why skyhooks are appealing

I occasionally meet people who, knowing something about my interests with science and religion, say something like “I am not religious but I am skeptical of the theory of evolution.” These people are often well-educated but not biologists or archeologists or paleontologists or anthropologists, so it is unlikely that they have done any kind of scholarly study of the evidence in favor of evolution and found it wanting. Their skepticism of evolution seems to spring from a different well.

When questioned, it usually turns out that the major reason for their doubts is that we live in a world that has an amazing array of diverse and complex organisms. If one doesn’t look closely into the science and mathematics of evolutionary theory, it can seem quite incredible that all this could have emerged by purely natural causes. So for some people, skepticism about evolution arises purely from a sense, a gut feeling if you will, that it is highly unlikely that life arose in the unguided way that evolution proposes. Just last week I had a discussion with a professor of chemistry who argued in precisely this way, that he could not imagine that all this could have come about without some kind of guiding intelligence, and what could that be but a supernatural agency of some kind?
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American oligarchy-7: What needs to be done

(For previous posts in this series, see here.)

So where does Barack Obama fit into this picture? We saw him strike various populist themes during the campaign. But it should be clear from the people he has surrounded himself with on economic policy that he too is completely subservient to Wall Street interests. In fact, populist and supposedly liberal Democratic politicians like Bill Clinton and Barack Obama are far more useful to Wall Street in many ways, because they hide their subservience to Wall Street better. Liberal watchdogs tend to let down their guard and thus allow these politicians to give away the store in ways that Republicans, with their naked greed, would find hard to get away with.
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American oligarchy-6: The victories of the oligarchy

(For previous posts in this series, see here.)
In his article in the May 2009 issue of The Atlantic magazine titled The Quiet Coup, Former chief economist of the IMF Simon Johnson lists the fruits of the collusion between both political parties and Wall Street interests.

From this confluence of campaign finance, personal connections, and ideology there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing:

  • insistence on free movement of capital across borders;
  • the repeal of Depression-era regulations separating commercial and investment banking;
  • a congressional ban on the regulation of credit-default swaps;
  • major increases in the amount of leverage allowed to investment banks;
  • a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement;
  • an international agreement to allow banks to measure their own riskiness;
  • and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation.

Just examine that list for a moment. Did you hear about any of those important actions while they were being carried out? Were there front page news reports and commentary on them? Loud arguments? Highly publicized congressional hearings? Fierce partisan debates? When all that was going on, was there any attempt at informing the public of the potential consequences of these wide-ranging decisions? Of course not. The chances are that during those times our attention was focused on Monica Lewinsky, Terri Schiavo, gay marriage, Chandra Levy, Valerie Plame, and the like. This is why observing politics has to be like watching a magician. If you look at what your attention is being drawn to, you are missing what is actually happening. The real action takes place in obscure committee hearings, at the regulatory bodies, in private meetings between members of government and the heads of the financial firms, over lunch and dinner and on golf courses.

Did you notice how in the fall of 2008, as we lurched daily from crisis to crisis as one big firm after another like Merrill Lynch and Lehman Brothers fell, we were presented by the Treasury and Federal Reserve officials with ‘solutions’ to the problems that had been worked out seemingly overnight involving the taxpayer-subsidized purchase of one major institution by another that involved hundreds of billions of taxpayer dollars? The only way that consensus could be reached so quickly and smoothly on such major actions was if there had always been collusion between the government and the financial firms involved and they saw their interests as one and the same.

Simon Johnson continues:

Throughout the crisis, the government has taken extreme care not to upset the interests of the financial institutions, or to question the basic outlines of the system that got us here. In September 2008, Henry Paulson asked Congress for $700 billion to buy toxic assets from banks, with no strings attached and no judicial review of his purchase decisions. Many observers suspected that the purpose was to overpay for those assets and thereby take the problem off the banks’ hands—indeed, that is the only way that buying toxic assets would have helped anything. Perhaps because there was no way to make such a blatant subsidy politically acceptable, that plan was shelved.

Instead, the money was used to recapitalize banks, buying shares in them on terms that were grossly favorable to the banks themselves. As the crisis has deepened and financial institutions have needed more help, the government has gotten more and more creative in figuring out ways to provide banks with subsidies that are too complex for the general public to understand.
…
This latest plan—which is likely to provide cheap loans to hedge funds and others so that they can buy distressed bank assets at relatively high prices—has been heavily influenced by the financial sector, and Treasury has made no secret of that.

Johnson says that the same remedies that the IMF routinely gives to developing countries in similar financial crisis should also apply to the US. But they are not, because the American oligarchy is immune to the pressure that the IMF can put on oligarchies in other countries. The American oligarchy is not responsible to anyone.

As the IMF understands (and as the U.S. government itself has insisted to multiple emerging-market countries in the past), the most direct way to do this is nationalization… Nationalization would not imply permanent state ownership. The IMF’s advice would be, essentially: scale up the standard Federal Deposit Insurance Corporation process.
…
This may seem like strong medicine. But in fact, while necessary, it is insufficient.

Then Johnson gets to the crux of the problem and what must be done. When reading it, remember that Johnson is a centrist technocrat, not some ideologue, and his understanding comes from dealing with many countries that have gone through financial crises.

The second problem the U.S. faces—the power of the oligarchy—is just as important as the immediate crisis of lending. And the advice from the IMF on this front would again be simple: break the oligarchy. (my italics)

But the IMF is not going to give this advice to the US because the US oligarchy, through the US government, pretty much dictates IMF policies.

The only way that the oligarchy will be broken is if the public demands it.

Next: Barack Obama’s role

POST SCRIPT: God as CEO

When you look at god’s actions as revealed in the Bible, you realize that he is not very good at strategic long-range planning, preferring to go for cheap and popular gimmicks. But not to worry! His apologists know how to explain away all the absurdities and contradictions.

(Thanks to Machines Like Us.)

American oligarchy-5: How Wall Street builds its power

(For previous posts in this series, see here.)

In the previous posts, we saw how people with connections to big Wall Street firms like Goldman Sachs are everywhere in government, especially in key economic policy-making positions, so that whichever party wins, their interests are protected and advanced.

In his article in the May 2009 issue of The Atlantic magazine titled The Quiet Coup, Simon Johnson explains how firms like Goldman Sachs have carefully cultivated their power structure.

[T]he American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.

One channel of influence was, of course, the flow of individuals between Wall Street and Washington. Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W.Bush. John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco, perhaps the biggest player in international bond markets.

These personal connections were multiplied many times over at the lower levels of the past three presidential administrations, strengthening the ties between Washington and Wall Street. It has become something of a tradition for Goldman Sachs employees to go into public service after they leave the firm. The flow of Goldman alumni—including Jon Corzine, now the governor of New Jersey, along with Rubin and Paulson—not only placed people with Wall Street’s worldview in the halls of power; it also helped create an image of Goldman (inside the Beltway, at least) as an institution that was itself almost a form of public service.

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