Links 7/13/10

Belly-buttons key to success in sport: study Raw Story (hat tip reader John D)

Businesses ‘profit from nature’ BBC

Scientists expected Obama administration to be friendlier Los Angeles Times (hat tip reader EmilianoZ from Felix Salmon)

Maybe Members of Congress Want to Cut Unemployment Benefits to Increase Unemployment Dean Baker

Spill costs to cut BP tax bill by $10bn Financial Times. Ah yes, if you are a business, the government is your partner.

Breaking News: Due to Public Outcry, Coast Guard Rescinds Ban of Reporters and Photographers from Oil Spill George Washington. I was told (but have not independently verified) that Thad Allen said the leak would be stopped as of this weekend. I wonder if this announcement has to more to do with his (oft misplaced) faith in BP (as in he believes that there will soon be nothing new to report).

In BP’s Record, a History of Boldness and Costly Blunders New York Times

Hard choices as China’s boom fades Sydney Morning Herald (hat tip reader Crocodile Chuck)

American business sours on China Gideon Rachman, Financial Times

Automated Debt-Collection Lawsuits Engulf Courts New York Times

U.S. Queries 64 Issuers of Mortgage Securities, Others Wall Street Journal

Can banks cure their social leprosy? Robert Peston

Preventing 2006 Steve Waldman. I’m late to this very good post.

Antidote du jour:

Picture 13

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    1. MyLessThanPrimeBeef

      This animal is cute precisely because it’s small – trust me.

      Let’s remember that when the time comes to talk about our banks.

      1. MyLessThanPrimeBeef

        So that the animal kingdom doesn’t accuse me of being a Homo Not-So-Sapiens Not-So-Sapiens chauvinist, you can say the same thing (about the cub being cute because it’s small) when it comes to human babies as well.

        Unfortunately, all babies, human or otherwise, grow big eventually.

  1. darkmatter

    that waldman article is great. and i love it when somebody can work in a rummy qoute. i did not care for him at all but he really was an original quote machine.

    1. albrt

      I second the acclamations for the Waldman piece.

      And I think it would be fair to call Rumsfeld the Yogi Berra of war crimes.

  2. a

    From Automated Debt Collection: “Fred N. Blitt, the president of the National Association of Retail Collection Attorneys, which represents more than 700 law firms, said the increase in collection cases was an inevitable result of the huge number of people who are not paying their bills. Given the volume of cases, Mr. Blitt maintained that mistakes were few.”

    Surely the best way to resolve this is to hold the lawyers liable for three times the amount they are suing
    for should a mistake have been made. If there really are few mistakes, this should be a negligible cost to the debt collectors and the lawyers, so how can they object?

    1. tyaresun

      If you have a good FICO score and a stable job it is your civic duty to help your fellow citizens by strategically defaulting on a $100 credit card debt on an unused card and clog up the system.

  3. Ina Deaver

    That Waldman piece is spot on. Malinvestment is the worst part of it — here we are, with crumbling infrastructure and no work at all on innovation for what we’ll sell next year, and we bailed out the banks and Wall Street with all the wealth of a nation instead of putting people back to work on the core problem.

    Terrible. And yet, no one seems to want to focus on the core problem. Perhaps that is what is so deeply, deeply frustrating and disturbing about this wasted “opportunity.”

  4. eric anderson

    Waldman concludes: **If “malinvestment” (and related maldistribution) is at the root of our problems, does it follow that austerity is the solution going forward? Not at all. Past poor investment is a sunk cost, our task now is to maximize the usefulness of resources that we still have. Failing to use perishable resources, especially resources that decay with disuse, is terribly dumb. “Stimulus” and “austerity” are both simpleminded and poorly specified strategies. **

    I must say, this is clear as mud. What “perishable resources, etc.” does he mean? And how is maximizing the usefulness of resources we still have different from austerity? I’m an Austerian myself. I mean, I have lived what is a very austere existence compared with most Americans. To me, “austerity” indeed means making the most of your resources. It doesn’t mean starvation. It means eating extremely well, for a lot less money.

    Likewise, America as a whole can live extremely well, for a lot less money. GDP does not define well-being.

    In any case, Waldman gets to the nut of the problem at the very last. The institutions we have now have proven themselves again and again to be incapable of expending more money without incredible waste and malinvestment.

    I read an article yesterday about the WWII Congressional Committee on anti-appropriations. It’s purpose was to find useless federal programs and kill them. Today, we need to create such a committee and make it the biggest and most powerful committee in Washington. Austere? Or just maximizing the usefulness of our resources?

    1. Francois T

      How much austerity can one muster when he let his house crumble due to systematic neglect?

      Check the American Society of Civil Engineers web site.
      Their annual reports (since 2004) state clearly that our infrastructure is woefully deficient.

      Hell!! The water system in most big cites was built between 1870 and 1900, then upgraded in 1945.

      Someday, repairs and complete overhaul are past due. This is one of those days, austerity be damned!

    2. NOTaREALmerican

      Re: I have lived what is a very austere existence compared with most Americans.

      I think your sentence explains why “Austere” is a non-starter.

      “Most Americans” will not agree with it. Humans – like most (all?) animals – will consume everything they can get their hands on. Debt – to most people – just means eat NOW and pay – uh – did you say eat now, let’s eat now! Who cares about paying.

      I suspect most of the “Austere” people are also Libertarians (or semi-autistic, which is probably required to be a libertarian). They can’t comprehend (completely) how human life works.

      Here’s a simple rule, tho, to remember how it does work: If you’re not running a scam – or participating in one – you are living below your maximum economic potential. Debt – as we can all see – is the ultimate scam.

    3. Anonymous Jones

      I agree we should maximize the usefulness of our resources to the extent possible. At the same time, we must be cognizant of the costs of the search for “maximization.” As long as you are incorporating the transactions cost of this maximization, I’m on board. Of course, I am incredibly skeptical that your “anti-appropriations committee” would make a significant dent in expenditures, but I think it’s likely that the committee could save more than it expends in the effort; so I in general support the cause.

      I am also Austerian in my daily life. I have found that, while a few expensive things (like flying first class) are worth the extra money to me (I am tall and still relatively like my former cruiserweight form despite the passing decades), I can enjoy myself immensely without a very large budget (at least compared to my income…it is not fair to compare my spending to someone who makes less than a few hundred thousand a year). Again, though, while I agree with you on this point as a personal preference as to how I want to live my life, I am not willing to wholesale judge others’ decisions on how to spend their money. Just because it works for you and works for me does not mean it works for them. We are not all the same. We do not have the same goals. We do not have the same psychological makeup. We do not have the same preferences.

      We must live amongst others who do not agree with our decisions, our morals, our way of life. This cannot (and will not) be changed. It is something to consider, I think, when trying to prescribe your solutions to what you see as the “problems” of everyone else.

      1. eric anderson

        You speak as if this nation has a choice. Austerity may well be the end, no matter what desperate measures are attempted to avert it. It may be in the natural, cyclical law of things. Then there is the matter of limited natural resources.

        Of course, I have no desire to impose my lifestyle on others (though they may be forced by circumstances whether I wish it or not). It could conceivably come to the point where people will learn to live in an austere manner or they simply will not survive. I would hope that could be averted, but the current general policy of trying to maintain a massive body weight by eating the seed corn is a path to an involuntary diet in the future.

    4. albrt

      >What “perishable resources, etc.” does he mean?

      He appears to be referring very specifically to human capital. I think it is pretty well accepted that long term unemployment or underemployment has a fairly drastic negative effect on the lifetime productivity of individuals.

  5. Anonymous

    BP is maintaining their reputation for boldness and costly blunders with how they are paying claims.

  6. attempter

    Re Dean Baker:

    If you ever wonder what empirical proof there is that many among the MSM are actually, by intent, not journalists but stenographic flacks, you can cite the fact that at both the NYT and the WaPo it is clearly systematic practice for the “reporter” to report as fact what politicians claim about their beliefs and intentions, when of course a true journalist would never depart from the quote-and-“he said” format. Or better yet, “he claimed”.

    This happens often enough and in enough of a pattern (the claims are invariably from those who want to help big business and hurt the people) that it’s definitely never an accident when such stenography occurs. It’s an editorial standard.

    1. NOTaREALmerican

      Plus, in a country that has a recent history (say they last 40 years) of publicly despising dissenters (those who questioning authority) it makes sense that most American “reporters” would regurgitate what they are told by “those that know”.

      American society now incapable of questioning “state-ism”. All the left and right does is question the other side’s version of it.

  7. KFritz

    Re: White House vs Scientists

    A theory: The Obama Admin is not hostile to scientists. But it’s balancing sound science versus actual/potential campaign contributors in conflict w/ scientists. With Illinois ‘pay to play’ political operatives like Rahm Emmanuel and David Axelrod @ POTUS’s ear, who’s likely to prevail? Bets anyone?

    1. NOTaREALmerican

      I’m not sure why people even complain about government and science. Science will be judged on its ability to predict the future. Government will be judged on its ability to lie to the dumbasses. Why would anybody – except a dumbass that doesn’t know the purpose of government – expect government and science to coexist?

      1. KFritz

        Excuse me. Are you referring to me, the author of the article, or anyone else as a ‘dumbass?’

        1. NOTaREALmerican

          Anybody who thinks American government exists for any ACTUAL purpose (not theoretical; but actual applied real purpose) other than to enrich its owners is – in my option – a dumbass.

          I also think people who vote in national or State elections for either wing of the Republicrat Party, and actually expect “change” are dumbasses.

          A dumbass to me is someone who does the same political thing over and over and over and over and over again expecting “change”.

          You don’t get to choose if you a born a peasant (or not) but you CAN choose not to be a dumbass.

          (I don’t know if you are a dumbass or not. You don’t have one of them “Bring Steven Home” bumper stickers, do you?).

          1. skippy

            “I’m the commander — see, I don’t need to explain — I do not need to explain why I say things. That’s the interesting thing about being president.” –as quoted in Bob Woodward’s Bush at War.

            “I know what I believe. I will continue to articulate what I believe and what I believe — I believe what I believe is right.” –Rome, Italy, July 22, 2001

            Is that you.

          2. skippy

            “I wish you’d have given me this written question ahead of time so I could plan for it…I’m sure something will pop into my head here in the midst of this press conference, with all the pressure of trying to come up with answer, but it hadn’t yet…I don’t want to sound like I have made no mistakes. I’m confident I have. I just haven’t — you just put me under the spot here, and maybe I’m not as quick on my feet as I should be in coming up with one.” –after being asked to name the biggest mistake he had made, Washington, D.C., April 3, 2004

  8. michael

    Am I the only one who cries out loud when reading the Keynes paragraphs cited by DeLong, as linked by Steve Waldman?

    I mean we had our “economic Eldorado” in 2004-2008, just like the generation before us in 1924-29, right?

    1. Ignim Brites

      Nasdaq never got close to its 2000 high. From that standpoint we’ve been in a 10 year bear market. The real “El Dorado” was 1995-1999. Also known as the reason Al Gore lost the election.

  9. MyLessThanPrimeBeef

    Re: Rachman’s article in the Financial Times

    Before, American business was sweet-and-sour on China.

    But you’re saying it’s all sour with respect to China now?

    I wonder if Congress can send some twice-cooked pork barrel projects their way?

    1. NOTaREALmerican

      Re: but it makes one wonder.

      If you assume (for a moment) that those at the top of any big organization – with lots of loot – are sociopaths then it really doesn’t make you wonder. It makes perfect sense.

  10. Rex

    Re: Belly-button story.

    That, like totally, reminded me of something. I guess I was ahead of my time. Here’s a throw-away story…

    Back in the late ’60s unisex clothing for younger people was all the rage, plus both sexes were sporting long hair. I was walking with a friend in an out-door mall one nice Saturday afternoon.

    My friend said, “Gee, it’s really getting hard to tell the guys from the girls.”

    “No it’s not.”, I say.

    “How’s that?”, says he.

    “By their navels.”, I say. (Bare midriffs were also a common style that time of year.)

    “Huh?” , says he, “What are you talking about?”

    So I elaborated that it was a center-of-gravity thing. Women had a lower center of gravity, so their belly-buttons were relatively lower. (I was making all this up as I spoke, but I was pretty good at selling a bullshit argument with a straight face.)

    “Bullshit.”, I think, was his reply.

    We were planning to have a party that night at the house we were renting, so I suggested we gather some data from all our guests.

    “Measure what?”, he asks.

    I say, “The ratio of distance, nose to navel, versus nose to toes.”

    So we did it at the party. It was fun trying to talk everyone into participating. If they didn’t have a visible belly-button, we let them point their finger at the appropriate spot to give us a reference to measure. It was a handy way to get to meet everyone, even if it was a stupid project.

    Turns out the data we gathered did not support my hypothesis and we found no male/female correlation to belly-button location. But, hey, now I learn that some strange scientists have used my bogus experiment to answer a different question. Cool.

    I wonder if they are really any more right than I was?

  11. scraping_by

    From the collections story:

    “In recent years, credit card companies have increasingly sold off debt they have considered uncollectible to debt buyers, usually for 5 cents or less on the dollar.”

    Next time, that’s going to be my price point for getting into an REO house. It may or may not be more than salvage price for the materials and lot, but it beats unending carry costs.

  12. Richard Kline

    Regarding BP’s tax-forgiveness for the Gob That Ate the Gulf, this means, of course that _we_ are paying for the clean-up. Think about that: BP breaks it, and hands the citizen the bill. ‘Cause that’s what just happened. It isn’t even ‘free to starve’ anymore in the Socialist Republic of Corpocracy we live in. It’s ‘free to pay.’ Get-out-of-debt-free card if Inc. is after your name.

    If BP is ree-eaaa-alll-ly smart, they’ll keep the ‘clean-up’ going until they’ve gotten tax-pardons worth the entire nominal $20B that Bo Prez ‘said those rascals would make available to pay [sic],’ than keep not see the need for payouts while pocketing the give-backs as bonus. . . . You read it here first . . . .

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