The real voyage of discovery consists
not in seeking new landscapes
but in having new eyes.
Marcel Proust
Regulation and Moral Hazard
I've embedded the below New Zealand-based video before contrasting traffic flow at the same time of day, the one on the left after a power failure. Consider the following example from Niels Jensen:
Maybe we should learn from the lessons learned in the Dutch town of Drachten. A number of years ago the local council took the seemingly drastic step of removing all traffic lights, most road signs, lane markers and other devices designed to control the traffic flow through the city centre.
The result? The local residents complained at first because they felt less safe, which was exactly the objective of the exercise. When you feel less safe, you slow down and you seek eye contact with your fellow drivers and pedestrians. The experiment has since been repeated elsewhere and the result is the same – a dramatic reduction in the number of accidents everywhere the ‘naked street’ approach (as they call it) has been introduced.What if we didn't know the government guaranteed our deposits, a loan, or mortgage-based security? As a consumer I would do due diligence, for example, I would want to ensure an MBS was geographically diversified with a preponderance of conventional collateral backed loans. For other things, I might look at things like ownership stakes and tenure of operations and management, independent audits, membership in industry or business groups (e.g., Better Business Bureau), prominent customers, depositors, vendors, etc.
Wednesday Night
On Sunday talk soup (e.g., MTP), there was the typical political posturing before this week's first Presidential debate, e.g., the Obama side trying to play down expectations by praising Romney as an experienced debater whom has been preparing 6 years for this debate while Obama has been busy running the country, pointing out incumbent challengers have generally done well (e.g., Mondale and Kerry).
Let's cut through the spin. Obama is trying to play out the clock. he's going into prevent defense; he has 2 major objectives: (1) avoid a Gerald Ford-like gaffe and let his mainstream media allies come away with the takeaway Obama held his own and Romney didn't land a punch, and (2) Obama will try to provoke an un-Presidential reaction, e.g., Gore's disrespectful sighs and in-his-face approach of George W. Bush. Romney has shown a tendency at times of letting his opponents getting under his skin, e.g., his notorious bet with Gov. Perry, and I remember a 2008 debate when McCain made a comment about Romney cutting jobs while with Bain, and provoked a reaction. So i fully expect for Obama to try to land some parting jabs, several are predictable--his notorious flip-flops, his jobs record in Massachusetts as governor, his Bain experience, trying to buy the Presidency, etc, I wouldn't be surprised to see Obama try to score points on the Akin and Libya 9/11 memo PR debacles, etc. Romney can try to preempt these moves,what he can't afford is to come across as overreacting, defensive and distracted; This would be a good time to have a good "there he goes again" line (might I suggest "we're in the new TV season and Obama is already in negative summer ad reruns")
In addition, Romney should be able to exploit Obama's inaccessible, rambling rhetoric.and Romney should preempt Obama's cherry-picking predictable nonsense. e.g., 29 months of underwhelming private sector job gains, the slowest job recovery in decades: xx straight months months of 8-plus unemployment., labor force participation rate, anemic GDP growth, etc.
Don Boudreaux, "Deflating arguments for inflation":
THUMBS UP
Wages are often sticky downward. think, for example, of teacher unions where longer-tenured, more expensive teachers in a seniority-based system would rather throw junior teachers under the layoff bus rather than to share in compensation an/or work rule austerity measures.
But Keynesians often prefer a little inflation in a challenged economy. Why? Because unlike compensation adjustments, inflation is more of a stealth wage cutter. in the long run, in an inflation-bound economy. workers will demand catch-up adjustments.The real (inflation adjusted) cost of labor falls providing employers with an incentive to hire. As more workers are employed and expand spending, we have a virtuous cycle driving the economy.
Now let's look at the Fed which exercises a government-sanctioned monopoly control over the money supply, presumably in the public interest. it has the power to debase currency.
Boudreaux offers some key takeaways
- "History offers powerful evidence that this trust [in the virtuous Fed]is misplaced. Since the Fed was created in 1913, the dollar has lost 96 percent of its value. By comparison, during the 123 years prior to 1913, the dollar’s value fell by a mere 8 percent."
- "Another problem with using inflation as a “countercyclical tool” is that it initially transfers wealth from creditors to debtors. Debtors repay their loans with dollars worth less than the ones that they earlier borrowed."
- "In addition, because rates of inflation are impossible to predict with any precision, an inflationary policy introduces unnecessary uncertainty into the economy. Households, businesses and investors have to do more guesswork about the future. This added uncertainty is extra drag on the economy."
There's also the Fed's dual mandate of price stability and full employment (particularly the latter); given the preference of incumbent politicians for easy money policies (consider the recent announcement of QE3 by Bernanke during the general election campaign even as Romney warned against it and said he wouldn't reappoint Helicopter Ben Bernanke) .
"Throughout its history, even up until the current times, the Federal Reserve has continuously succumbed to political and special interest group pressures, and often at the most inopportune times. Existing empirical evidence on the independence of the Federal Reserve, while suggestive of a compromised Federal Reserve, fails to adequately capture the extent of influence of political and special interest groups (Boettke and Smith 2012)."
Reflections on Dodd N. Frankenstein
Why the Dems Forgot the GSE's
Barney "let's roll the dice" Frank vs "Safety and Soundness".
In a House Financial Services Committee hearing on Sept. 25, 2003, Frank told the committee,” I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing …”Who failed worse: the crony bankers or House Dems? Maybe if MD Governor O'Malley wins his crony-casino expansion Question 7, Frank will open the new casino by rolling the honorary first dice....
Listen closely to the moderator Anthony Randazzo at the end when he distinguishes between regulation and government-run regulation (which is intrinsically incompetent and ineffective).
Entertainment Potpourri
I seriously doubt that entertainment moguls read a political blog .
Since I'm endorsing Linda McMahon to succeed Lieberman, I thought I would say something about pro wrestling/sports entertainment with prearranged outcomes. I never cared for a number of Vince McMahon decisions, e.g., he botched the acquisition of WCW; he booked the talent into jobbing to WWE regulars which undermined the promotion, I would have revamped Nitro and maintained the key PPV''s. Right now the John Cena character is a stale babyface character but McMahon refuses to turn him heel because his merchandise sells. Current plans seem to be to have Punk job to occasional wrestler/actor The Rock early next year and have Rock job back the title at Wreslemania, maybe in a triple threat match with Punk and Cena. I don't know how many times they can rerun CM Punk-Cena. Punk and Daniel Bryan are both great characters and technicians, a natural tag team. I would also pair the similarly condescending Cesaro and Sandow characters ("the Elitists"). The "AJ as GM" angle is annoying; her roles as a wrestler romantic interest and as a slightly deranged petite female wrestler are more entertaining. For the competing TNA promotion Bobby Roode is the best heel character I've seen in years; it was a mistake to take the title off him.
I haven't reviewed new series on CBS, NBC or Fox yet, although I have found new NBC comedies "Animal Practice" and "Guys with Kids" amusing so far. I disdain abstract art, so seeing a snob paying $300 for a monkey's original was hilarious.
"Revolution" is interesting. The storyline is something has caused all electrical sources (including car batteries) to fail simultaneously. the de facto authority is a roving militia and American flags are seen as part of an outlawed resistance. It seems mysterious amulets can revive some devices like secret communication terminals.
The CW is reviving one of my favorite series from the late 80's "Beauty and the Beast". In the original series , Catherine, an attorney, is viciously attacked and Vincent, a man with feline characteristics, saves her from further attack and brings her to recuperate from her injuries at his secret shared home under the metropolis streets I have only seen the excerpt tease below.
Musical Interlude: My Favorite Groups
ZZ Top,"Gimme All Your Lovin"
