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Getting gloomy about the dismal science — 39 Comments

  1. Neo, In her post today entitled “Dems Run,” the Anchoress links to a City Journal article from 2000 that you will want to read. It is toward the end of the post.

  2. Worldwide competition has lowered the margins for financial houses, so any new area that promises good returns is soon overloaded. The herd instinct in business has two rules: 1. Most CEO’s have no clue where the next big thing is and 2. If you are the first in or have the largest share you may be the only one to make money.

    (Rule 2 has a corollary that if you are the first in you had better be the first out).

    Growth in the residential mortgage market could only happen if a new group of untapped buyers could be found. Since Freddie and Fannie proved cooperative, sub-primes could be sold economically and respectable institutions could own them. If the total amount invested was kept low, risks could be kept low. But the herd stampeded and we know the results.

  3. Every day, in every way, the phrase “brilliant economic mind” becomes progressively oxymoronic.

  4. Try it this way:

    Exceedlingly complicated systems whose academic disciplines generate a lot of “experts” who generate a lot of “predictions” can generate a sub-set of those predictions that when they intersect with reality are classified as “accurate predictions,” but that the happenstance of being “right” about an economic reality is no predictor that the solutions proposed by those who were “right” will be the “right” solutions.

    I think that about covers it.

  5. “(5) Can the situation be remedied? And, if so, how?”

    Lamposts. Nooses.
    Stakes. Bonfires.
    Chopping blocks. Axes.
    Spikes. Heads.

    Pour encourge les autres.

  6. I was persuaded by an article recommended by a respondent to a previous post of yours that this mess we are in is due to demographics. Too few younger people qualifying for loans which caused the banks to engage in more risky loans to keep profits in line with expectations. Everyone in Washington was talking about the effect of the demographic shift on social security. No one apparently thought of this happening. Perhaps when this reality sinks in there will be a 180 degree change on the immigration issue and we will begin begging young people from Mexico to come and live here. This demographic problem is not going to go away. We may have to get used to a much slower economy. I’m going to have to read up on demographics in history.

  7. Obama has been encouraging voters to look at his plan for the economy, so I did. He has sponsored a bill, cleverly titled STOP FRAUD ( a long acronym) that promises to punish fraud in the mortgage marketplace. The wording of the bill is as vague as hell. It looks like a law against mortgage flipping, which is already illegal. The current rash of subprime foreclosures resulted from individuals without the means buying houses with no money down, an adjustable rate with nowhere to go but up and sometimes 100% interest. All in the name of affordable housing, a liberal code word meaning bringing home ownership to minorities with bad credit ratings and low paying jobs. A recipe for the disaster which is unfolding. McCain needs a crash course in economics from one of his team, because his sound bites railing against Wall Street greed are just an echo of the class warfare call by Obama. He has the right instincts, just needs to stop pandering. We won’t solve the problem by passing laws against CEO compensation packages. That’s like wetting your pants wearing a dark suit: gives you a warm feeling and nobody notices.

  8. I’ve read many stories from the late 90s and into the 2000s about the mortagage situation.

    There was lots of warning… there was warning all the way down the hole. The Democrats didn’t care.

  9. It was clearly foreseen and predicted.
    When Phil Gramm was deregulating the financial industry, particularly the derivative business, it was clearly stated what the probable and disastrous outcome would be.
    If you were not aware of it, it is because you chose to be so.

    John McCain backed Phil Gramm all the way. His observations in 2005 were observations the party in power did not act on.
    As far as I know, he did not make similar observations about the actions of his friend, Phil Gramm.

    The incredible irony of the financial mess is that it results from the Trickle-Down Economics in place since the 1980s.
    The loss of value in the billions of dollars on Wall Street is the value added to the wealthy by their preferential treatment over the past quarter century.

  10. montag is lying by ommission.

    This is from the NYT 23 Oct 1999

    WASHINGTON — The Clinton Administration and top Republican lawmakers reached an agreement early Friday to overhaul the financial system, repealing Depression-era laws that have restricted the banking, securities and insurance industries from expanding into one another’s businesses.

    For instance, the nation’s largest financial services company, Citigroup, would have been forced to sell some of its insurance operations as part of the $72 billion merger last year between Citibank and Travelers Group without either the legislation or a waiver from regulators.

    The legislation will more easily enable financial companies to offer corporate clients a full range of services, from traditional loans to investment banking services, like public stock offerings. And for consumers, it paves the way for financial supermarkets, which will be able to offer one-stop shopping for an array of services, all under one roof. The measure is also expected to clear a path for a new and bigger wave of corporate deal-making as more companies consolidate.

    White House officials withheld final approval of the agreement until aides could see the measure’s language. But the officials indicated Friday night that, with broad support from Democrats in Congress, the measure was all but certain to be signed by President Clinton. As such, it will be one of the most significant pieces of legislation to be written by the White House and the 106th Congress, which began its term considering whether to remove Clinton and has had a bitter relationship ever since.

    Treasury Secretary Lawrence H. Summers said in an interview, “At the end of the 20th century, we will at last be replacing an archaic set of restrictions with a legislative foundation for a 21st-century financial system.” The measure, he added, “would provide significant benefits to the national economy.”

    Senator Gramm said the measure “is the most important banking legislation in 60 years.”

    The legislation repeals the Glass-Steagall Act, or, as it is formally known, the Banking Act of 1933, which broke up the powerful House of Morgan and divided Wall Street between investment banks and commercial banks. It also makes significant changes to the Bank Holding Company Act of 1956, which had restricted what banks could do in the insurance business.

    The Glass-Steagall Act was enacted after the stock market crash of 1929 and the ensuing banking crisis and Great Depression. On the day it was signed, along with the National Industrial Recovery Act and other measures, President Franklin D. Roosevelt called the package “the most important and far-reaching legislation ever enacted by the American Congress.”

    The breakthrough in Friday’s legislation came in a backroom meeting at the Capitol soon after midnight, when a group of moderate Senate Democrats — led by Christopher Dodd of Connecticut and Charles E. Schumer of New York — forced a compromise between Gramm and the White House over the legislation’s effect on the Community Reinvestment Act, a 1977 anti-discrimination law intended to encourage lending to minorities and others historically denied access to credit.

    Dodd, whose state is home to the nation’s largest insurance companies, and Schumer, with strong ties to Wall Street, have long sought legislation to repeal the Glass-Steagall Act. Both men said in interviews Friday that they moved to strike a compromise after it became apparent that the legislation might be killed, as it was last year by Gramm, over the debate about the Community Reinvestment Act.

    Gramm had maintained that he did not want anything in the bill that would expand the application of the Community Reinvestment Act because it was, he said, unnecessarily burdensome to banks. He had sought a provision that would exempt thousands of smaller banks from the law. He also wanted a provision that would expose what he has described as the “extortion” committed by community groups against banks by requiring the groups to disclose any special financial deals the groups extract from the banks.

    But the White House found that provision unacceptable and had its own ideas about community lending. It wanted the legislation to prevent any bank with an unsatisfactory record of making loans to the disadvantaged from expanding into new areas, like insurance or securities.

    The White House had insisted that the President would veto any legislation that would scale back minority-lending requirements. Four days of intense negotiations between Summers, Gene Sperling, the President’s top economic policy adviser, and Gramm, while moving the two sides closer, failed to resolve the differences.

    ..
    After receiving calls from executives of some of the nation’s leading financial companies, Dodd and Schumer began trying to work out a compromise. An agreement was quickly reached on the issue of banks and expanded powers — no institution would be allowed to move into any new lines of business without a satisfactory lending record.

    The lawmakers bogged down on Gramm’s insistence that all community organizations disclose to the regulators what benefits they get from banks. Some Democrats expressed the fear that Gramm’s proposal would require the Boy Scouts to file reports with the regulators.

    Ultimately, the following provisions were drawn up and both the White House and Gramm said they could accept them:

    ¶Banks will not be able to move into new lines of business unless they have satisfactory lending records.

    ¶Community groups will have to make disclosures to regulators about certain kinds of financial deals with banks that they have pressed to make loans under the Community Reinvestment Act.

    ¶Wholesale financial institutions, a new kind of business that takes large, uninsured bank deposits, cannot be affiliated with commercial banks.

    ¶Small banks with satisfactory or excellent track records of lending to the underserved would be reviewed less frequently under the Community Reinvestment Act. As a practical matter smaller banks are reviewed about every three years. The deal struck today allows all rural banks and banks with less than $250 million in assets to undergo examination once every five years if their last exam resulted in an “outstanding” grade and every four years if they last scored “satisfactory.”

    For more than 20 years, Congress has tried unsuccessfully to rewrite the nation’s financial services laws and repeal Glass-Steagall, particularly as many other industrial nations had no similar restrictions on their banks. But until recently, the three main industries affected by the legislation — banks, securities companies and insurers — had competing interests and were able to lobby any legislation to a standstill.

    That all changed in recent years as the lines between the industries began to blur and it became more broadly acknowledged that a deregulation of financial services could be beneficial to insurers, bankers and securities firms alike. Once the three industries rallied around the legislation, they became a formidable political force, raising millions of dollars for lawmakers and pressing both Republican leaders in Congress and the White House for new legislation.

    http://partners.nytimes.com/library/financial/102399banks-congress.html

  11. There are views all over the map on this. I don’t favor over-regulation, but I do favor over-sight. That being something on the radio I couldn’t believe. I will post a link after my comments. I think so much of this can be traced back to Fannie and Freddie. The banking committees in both the house and the senate are culpable in this – trolling for votes – and president Bush touted, himself, the largest minority home ownership ever. Unfortunately many of these people were never going to be capable of repaying the money they were loaned. I’m not saying the idea wasn’t good but it certainly wasn’t executed (or even thought out ) well. Not surprising since I think (contrary to most of those in congress) that the best and the brightest are, at this moment, fighting in far places- not in the halls of Washington. the worst thing is – they knew it and they KEPT DOING IT.

    http://www.youtube.com/watch?v=usvG-s_Ssb0

  12. At the core the problem is one of perception not prediction.

    if one could control what one is asking or the masses are asking, their savings account would yeild ZERO. for without any fluctuations, there would be no risk, and without any risk, no real profits.

    the very reason that they are making money on mortgages is that is has risk associated to it.

    the reason they lost a lot of money is that the state compelled them to take on more risk that they couldnt value because they had to have enough bad loans or else be fined and not make profits on the good ones.

    however there is no such thing as a company lasting in perpetuity. the crisis comes from too much fractional banking. however those are business decisions and in capitalism if you cant make good ones, you end up at fire sale.

    while policy can set a crisis in motion, its not policy that can stop one.

    the first can be done with no knowlege of the system, the second can only be done with knowlege not detailed enough nor small enough to handle.

    fractional banking is the issue because the cash is not backed up with gold, its fiat, or if you want backed up by US assets.

    how many people can i loan 100 dollars to if i have 100 dollars. if you say 100, your not the banking type. if you asked how trustworthy the loan recipients are, your an actuarial.

    until they get a faith and drive quotient they really cant tell who can or cant pay a loan, and as such, they can only play a stats game on batches that work in average.

    any way you shake it, its unrealistic to imagine that if you dam up flow of cash, and release it at the same time you require highly risky loans, you can be sure that there will be some bad times for a while…

    but like every time before it, the winners will adjust, the system will bounce back to its real value, and it wont really matter whether the state does something or not other than when it does things generally take longer.

    the industry has not been told not to make those loans, and so the survivers are going to be better at batching their loans, and they will make it work in ways that those that didnt adapt and were over leveraged couldnt.

    you listed out 10 crashes…

    are you expecting us to reach a number and have no more of them? its a complex chaotic system that has many feedback loops to it, and so it has stable and unstable states.

    any attempt to actually control it tends to make the swings larger because they are moving systemic energy around, if they werent they would have no force to apply.

    with the right dam i can turn a trickle you can step over into a torrent that washes out houses… the state has no way to promote actoin, it can only constrain actions and so it can only put in dams to switch flows (and once it puts one in, it forgets them till they burst).

    banks get loose beause the states set the rules, and the banks then use faultu rules as their determinant of where they should be rather than theit judgment. the state WANTED them to behave the way they did that got us here, and did so by creating rules, and shifting the dams.

    the urge to fix the crisis is the urge that creates the crisis.

  13. but ultimately persuasive argument of the limits of statistical analysis to explain an economy.

    any analysis is a transformation applied to some stunted piace of data that is worked on by machines who have finite decimal places and that round values which throw interative calcualtions out of wack the longer they run.

    an ‘economy’ is a phantasm. it doesnt actually exist. its defined by the pools of data collected and used to monitor it.

    As a real entity, it doesnt actually exist. at any time its the sum of all our financial actions, legal and illegal, that occur in some point in time, all together so that a sample can develope a figure we believe describes a real thing.
    (which is why we get scared when things get shaken up)

    the economy is a group of samples, that we beleive sum of all those actions. As such the values you sample out of it will have chaotic order (at any sample level). they will have trends and movements, but one will not be able to predict them.

    often the preductions are an illusion of a trend. we believe we are predicting till we are wrong. (its what makes bubbles)

    all state actions amoint to falsefying the financial territory we are looking at by some unnatural move to make us move in a way that by extension is unnatural.

  14. So, Artfldgdr, if we can’t measure it exactly, it doesn’t exist? How exactly? We can’t actually measure a coastline because its length differs according to the scale of measurement (since it has fractal properties). But I won’t accept the argument that it doesn’t exist.

    “The economy” is a universe of activities and we can reasonably argue a lot about what belongs in it and how to measure it, but I reject completely the notion that is is merely a construct of our minds without any reality. The problem isn’t a lack of reality, but an excess; its complexity exceeds our comprehension. That’s true of almost everything, really, but we can get along ignoring the fact for most things most of the time. But for the economy we can’t forget the complexity and simultaneously have any realistic thoughts about the economy.

  15. Elevating economics to the level of “science” is exaggeration of the level of substance it essentially embodies, much of it is simply “intellectualizing”. At the end of the day it’s all quite basic, starting with finding food and shelter, then additional creature comforts, with increasingly complex forms of barter management involved beyond the individual, for family, tribe, state, etc. Like the 1929 and 1987 crashes, this too shall pass, and it’s small potatoes in comparison anyway. The real danger lurking out there n the long run is not “derivitives”, it’s smothering left-wing government and fascist culture control…

  16. There is a good deal of comment. It is very interesting.

    To respond to Vince P, however, on his level of discussion: If I am lying by omission, Vince P is lying by commission.

    I am not even sure to which of my myriad of omissions he is responding in his lengthy rebuttal.

  17. Being a mathematician whose main field of interest is behavior and stability of complex self-organizing non-linear systems, I immediately recognized financial subsector of economics as exactly such type of system. And I must assert that financial market behavior is inherently unpredictable (just as of global climate system) and no mathematical model can be a reliable approximation to it. The only possible remedy is prudent behavior of all participants of the market: borrowing and lending always is a gamble, so one should risk only money that one is ready to lose. The same can be said about regulation: effects of any regime of regulation are unpredictable, because supressing of some type of instability inavoidably leads to another type of instability, may be, more catastrophical in its possible outcomes.

  18. Examples: supressing of small forest fires in national parks (naturally occuring once in several years as a part of ecological cycle of forest succession) leads to a major conflagration destroying the landscape for decades to follow. Predator control in the same territories leads to extinction of many species due to overpopulation and major epizooty outbreaks.

  19. The most fundamental principle of economics, that professional economists tend to forget, is the simple fact that nothing really has a value. Value simply is not an objective property of matter, like mass and volume are; not even gold has any kind of standardized value. It’s subjective and situational, and yet can still be mapped to a number system and treated as objective, and it works well enough to make people start to think money really can have a fixed, objective value, and this belief is where the market gets all its power. But even if everyone in the world believed it was objective, that still would not make it so, any more than if everyone in the world believed Venus orbits the Earth, it would somehow come true.

  20. The jump in the stock market may support McCain’s contention that the “fundamentals” of the economy are fine. No sustained rally is possible without that underlying condition. If it continues, we’ll know he’s right.

  21. NJcommuter,
    you are confusing the two meanings. there IS a real economy, but what we work with is not it.

    the UNDEFINED collection of all transactions we assume happening but cant track or plumb is the real economy.

    the economy that politicoes and others work with is a false model. the model is enouhg to tell us things about the real economy, but the model isnt real.

    you cant touch economy. you cant hold it, divide it, and do much with it, other than influence the proportions of transactions by skewing our view of reality.

    its not a real thing that can be harnessed, controlled or mediated by force (and only one force at that).

    we seldom realize that our arbitrary groupings are not real things..

    the masses as such dont actually exist… its a name we give to the summed actions of millions of individuals, and one can divide them up arbitrarily and call each group a mass..

    these are symbolic tools that allow us to work and influcence things by aggregating pools of information and then giving them a name, but they dont exist in any REAL sense.

    REAL to us is not REAL to REALITY.

    we live in mental construct of the world, a model itself.

    reality has no concept of economy, or masses, or abstract groupings…

    WE create those things as constructs to work with things that are too large and unweildy in all their detail.

    the model is not real… models never are…

    we constantly fall in love with our models over reality… and often spend more time trying to get reality to fit our models rather than get our models to fit reality.

    thats what we do when we think we understand the entity we call economy that we can believe we change.. so when the stock market doesnt match what our idea and model of economy is, we then seek to change it to fit our models, rather than accept that its doing what a REAL ECONOMY does, and we are in crisis bcause our REAL ECONOMY doesnt match our MODEL ECONOMY that we create with sample data, and play with.

    when the weather doesnt behave the way the global warming model says it should, we have political orgs and things to force the people to see the world the way the model dictates, and even make it illegal to view the real world over the model!

    we have lots of things like this that arent real… we operate on them as if they are, but any examination would show that they are constructs and conveniences not actual entities.

    i was trained as a physicist, and make my money in information sciences (for the past 30 years)… so i am VERY aware of the difference between models i create that people use to see things, and the actual things that they are trying to understand. they are not equivalents.

    the economy that we imagine, is not the economy described by the model we call economy.

    yes, we can make better judgments if our model is better… but no matter how good the model is, it is never real.

    no matter how real virtual reality becomes, it will never be real….

    if one doesnt have an absolute sense of reality, then one has a difficult time understanding this concept. Its not relative, its how we operate converting a real world into a symbolic representation that we can handle and glean information from.

    to us, our models are reality… but to reality, they are nothings… thoughts are not real, and symbolic manipulation, even if aligned with real information, never is the same as real.

    [even if we had perfect formuleas, and perfect understanding, the lack of infinite precision in our machines would doom us to wrong answers!]

  22. Hi –

    Well, in stark contrast to most here, I actually an economist, and a non-academic one to boot.

    The problem isn’t that people listened to the economists: it is much more that people stopped listening to economists back in the late 1980s and only now are waking up to the fact that lawyers and accountants are better at selling themselves than economists are, but aren’t economists.

    I’ll plug myself here: the fundamental causes of the problem were easily seeable a few months ago, and I just posted a “I told you so” here:

    http://21stcenturyschizoidman.blogspot.com/2008/09/you-read-it-here-first.html

    The problem is that the idiot accountants and lawyers have set up positive feedback loops that have created the problem, coupled with a coerced market unequalibrium aka subprimes.

    No subprimes, no subprime crisis: it really is that simple. The problem dates back to Carter and Congressional stupidity (and that is the real oxymoron nowadays), and is made worse by the severely flawed concept of Fair Value in the IFRS and of reserve requirements under Basel II.

    If you want more background, go here:

    http://21stcenturyschizoidman.blogspot.com/search?q=IFRS

    This is a real problem that is not getting better because people are still listening to non-economists. This is the kind of stuff that should be obvious to a second-semester econ student: a forced disequilibrium in any economic system can only be resolved with policy that aims at a negative feedback loop, rather than a positive one.

    Things are going to get worse before they get better. They will get better.

  23. If the economy hadn’t been set up for a fall by the Fair Value doctrine, it would have been set up for one by some other flawed concept. It’s simply the nature of anything based on human psychology to behave in unpredictable ways, and often we can’t even bring ourselves to analyze how it works because we so deperately want to believe in things that just aren’t true.

    The main problem, as I see it, is that the very principle of scientific inquiry is under sustained attack by people who demand the certainties religion offers. To be fair, it was the scientists who fired the first shots in the war, but the world will be much worse off no matter which side wins, whether all science is replaced by superstition or all religion is replaced by cultism.

  24. The problem is wider in scope than simply bursting of mortgage bubble. This bursting ignited deleveraging, that is, chain reaction of dumping overpriced assets. This reduce their price even more and makes harder to get enough money from selling them to regain liquidity. There are no buyers for contaminated assets, and due to dissemination of junk mortgages by derivatives, too many equities on the market are looking now contaminated. Finacial market can not normally function without trust, and this trust is undermined.

  25. I do not have a degree (well, an AA and that doesn’t count for much.) I do have lower division business classes. And I could see this coming just from my reading on the Net. There is no excuse for those in power to claim that they could not see this coming. They were blinded by greed pure and simple. If the money were still rolling in, no one would care, any more than they did when they triggered the problem.

  26. religion is not making that fight, philosophers are. religion in the west is responsible for the seeking of knowlege for knowlege sake. they are the ones that wanted to know god by knowing how his works worked. the results of that created the inventive society we have now, and removed the philosphers from the power of declaring how the world works through pure thought. the battle you percieve is religion, is philosophy wanting their ideas to be the description of reality. meanwhile they are against impericism since it screws their utopian concepts. tabula rasa, and all these other things are all philosophical constructs.

    dont forget that all this came out of a time that was much more religious where religion had a lot more power, and it didnt stop it…

    its convenient that the philosophers have pawned off the responsiblity to their cousins in religion, because that means you may side with them and not side with empiracism.

    after all, it was philosophers that are dominating with multiculturalism (and against science that proves it cant work), releativism against impericism, tabula rasa against evolution (and lots of other feminist things too).

    did you notice that no one yells about stem cells because there is no more chance of them beingn used to justify abortion? that we have lots of stem cells and not from fetus’s precisely because we didnt go that way.

    but the minute that the science wouldnt back up a ideological eugenics point, teh noise dies..

    and the evolution battle has more than just religion around it because of dialectical materialism… or havent you noticed the other side in the fight are communist secularists? a religion in itself too.

    by the way… remember who discovered gentics? a priest… and the gun? a priest..

    the whole idea is ideological by making religion and science uncompatible (ignoring histotry anr revising it and our view), they get to abolish religoin and put in dialectical materialism through SCIENCE…

    communism and fasism have always sought to manipulate science to its ends, even if that end is the removal of religion and morals so that leaders are free to do whatever they want to the others under some scientific excuse.

    Lysenko did more harm to gentics than religion ever did in the soviet union.

    ideology wants things to be decided through ideology. so science is under assault to comply…

    take a look at this response to someone requesting a blogger to add a link to a social test on liberals and conservatives..

    want to see who has been assaulting science? who had larry summers thrown out of harvard? who has destroyed the career of Watson of genetics fame? who has fought to remove results of study on gender interactions, partner abuse, tabula rasa, genetic determinism, etc? who poisoned the social sciences with false work (meade)? who poisoned the science of sex (kinsey) for political reasons? who created the false concept of the authoritarian mind (adorno)? who is arguing about genetics evolution and the abolition of religion (dawkins)?

    if yout ake a lot more time to see who is actually hurting things, you will fidn its the same old game of do the harm and shift the blame.

    ALL those above meade, kinsey, dawkins, etc.. ALL are working towards a communist controlled state where they, the intelligentsia, will control everything with science and ignore or remove the spiritual.

    why?

    because if our rights dont come from a higher power than the state, then the state declares what is rights. .. then they can declar kulaks have no rights. enemis of the state hae no rights.

    command economies which live on the theft of labor of the slaves they call proletariats need to abolish morals or esle the proletariats will revolt, they will not comply… they will fight and act as if this is not the only life they ahve, and that dying for a higher purpose is a goodness.

    here is the response of ACE

    With all due respect, why bother? I’ve read these studies before. You already know all the answers: Liberals vote out of rationality and hope; conservatives vote out of irrational prejudice and fear. There’s no point collecting data when the conclusions have already been drafted. Thank you for your interest, but I can write your paper for you without bothering with the middleman of data collection.

    Added a PS:

    To make my complaint clear:

    We all know that conservatives are more fond of tradition and liberals are more fond of fads and “new things.” Now, we already know that. There is no reason to even collect data on it. It’s a fact. It’s 75% of what makes conservatives conservative and liberals liberal. But rather than framing it neutrally, you — if you are anything like the six bazillion psychologists before you — will say “liberals show they are more OPEN-MINDED and RECEPTIVE OF NEW IDEAS AND NEW EXPERIENCES than conservatives, who are CLOSED-MINDED and FEARFUL OF ANYTHING NEW OR DIFFERENT.

    I could take the same data and give it a different spin: Conservatives are more mature and comfortable with themselves. Liberals, however, similar to juveniles, are seek out fads and transient fashions, much like teenagers “identity shop” by trying out new personae until one fits.

    The thing is, the data should be reported straight. Neutrally. And if you’re going to spin a value judgment on to it, there is no reason to favor the “CONSERVATIVES FEARFUL” spin over of my own “LIBERALS FADDISH AND ONLY PARTIALLY-FORMED IN THEIR ADULT PERSONAE” spin.

    But I know in advance — well, I know to a 99% certainty, based on the all of the similar studies I’ve read previously — that it’s going to be CONSERVATIVES FEARFUL. Why bother? Let’s just skip the whole pretense of faux scientific rigor and get right to the money graf: Conservatives suck, liberals are better and smarter. And like trying out new foods and listening to “World Music.”

    after you have been reading hoaky thing after hoaky thing and always tying it back to 5th column groups with ideology as their goal, it gets rather tiring.

    it gets most bothersome when people believe the common knowlege, and dont realize that that has been skewed to misdirect them.

    left ideology seeks to control things.. what it cant control it destroys…

    religious people answer to a higher morals than the state, and so the state either controls religion (as russia tried) or it destroys it (as russia tried).

    eitehr way, it cant let this social force exist as a contrary idea to communism/socialsm.

    for the one argumetn as to allow the concept of creation to be discussed on the table i can show the most attacks are the left all over the place.
    AND the left has control of schoosl and research departments and journals… which is why we dont see what they do.

    for all that you worry about a discussion, you arent worried at all about the vastly more philosphical attacs byt he side distracting you with religion.

    Thus, undergraduates in women’s studies courses are routinely introduced to the notion that, for instance, Newton’s “Principia” is a rape manual. Even odder is the movement to create a feminist mathematics. The authors discuss at length an article along these lines entitled “Towards a Feminist Algebra.” The authors of that piece don’t seem much concerned with algebra per se; what exercises them is the use of sexist word problems in algebra texts, particularly those that seem to promote heterosexuality. The single greatest practical damage done by feminists so far, however, is in medical research, where human test groups for new treatments must now often be “inclusive” of men and women (and also for certain racial minorities). To get statistically significant results for a test group, you can’t just mirror the population in the sample, you have to have a sample above a mathematically determined size for each group that interests you. In reality, experience has shown that race and gender rarely make a difference in tests of new medical treatments, but politically correct regulations threaten to increase the size of medical studies by a factor of five or ten.

    how about environmentalism?

    do you really think that discussing the possiblity of creation is more harmful to all of science than the false science and consensus for political reasons that global warming theocracy is doing?

    i dont see articles all over the place (yesterdays daily news kids science section) working to convince anyone of creation… nor people realising that the way the world is and behaves including evolution was the intent of creation… (so its not compatible)

    personally i think that using one author to rewrite all the sex based laws and education materials to fit communist luckaks stuff was a lot more harmful than wanting people to discuss creationism.

    after all, all the groups i am mentioning never wante iot to be discussed, they only want their position to be IMPOSED… and that imposed position is also to be for religion too.

    postmodernism and social constructivism has hurt science much more than creationists wanting their ideas to be honestly discussed.

    dont you think?

    The basic notion behind the postmodern treatment of science is social constructivism, the notion that our knowledge of the world is just as much a social product as our music or our myths, and is similarly open to criticism. The authors have no problem with the fact that cultural conditions can affect what kind of questions scientists will seek to address or what kind of explanation will seem plausible to a researcher. What they object to is the “strong form” of social constructivism, which holds that our knowledge is simply a representation of nature. The “truth” of this representation cannot be ascertained by reference to the natural world, since any experimental result will also be a representation. Constructivists therefore say that we can understand the elements of a scientific theory only by reference to the social condition and personal histories of the scientists involved. This, as the authors correctly note, is batty.

    that there is no such thing as impiracism is a much more harmful thing than arguing that impiracism cant prove or disprove the existence of god.

    while your out there arguing the interpretations of impericism, they are taking impericism off the table completely!

    here is anothe excerpt…
    The postmodernist critics of science usually ply their trade by studiously ignoring what scientists themselves actually think about. The anthropologist Bruno Latour, for instance, has made a name for himself by subjecting scientists to the kind of observation usually reserved for members of primitive tribes. Once he was commissioned by the French government to do a post-mortem on their Aramis project. This was to be a radically new, computerized subway system in which small trams would travel on a vastly complicated track-and-switch system along routes improvised for the passengers of each car. The idea was that passengers would type their proposed destination into a computer terminal when they entered a subway station. They would then be assigned a car with other people going to compatible destinations. The project turned into a ten year boondoggle and was eventually cancelled. The French government hired Latour to find out what went wrong. Now, the basic conceptual problem with the system is obvious: the French engineers had to come up with a way to handle the “traveling salesman” problem, the classic problem of finding the shortest way to connect a set of points. This seemingly simple question has no neat solution, and the search for approximate answers keeps the designers of telephone switching systems and railroad traffic managers awake nights. Latour did not even mention it. He did, however, do a subtle semiological analysis of the aesthetic design of the tram cars.

    Postmodernists regard themselves as omniscient and omnicompetent, fully qualified to put any intellectual discipline in the world in its place. They have this confidence because of the mistaken belief that science has refuted itself, thus leaving the field clear for other ways of understanding the world. They love chaos theory, for instance, having absorbed the hazy notion that it makes the universe unpredictable. Chaos theory in fact is simply a partial solution to the problem of describing turbulence. Indeed, chaos theory is something of a victory for mathematical platonism, since it shows that some very exotic mathematical objects have great descriptive power. The implications of chaos theory are rather the opposite of chaos in the popular sense, but this idea shows little sign of penetrating the nation’s literature departments. The same goes for features of quantum mechanics, notably the uncertainty principle. Quantum mechanics actually makes the world a far more manageable place. Among other things, it is the basis of electronics. To read the postmodernists, however, you would think that it makes physicists flutter about their laboratories in an agony of ontological confusion because quantum theory phrases the answers to some questions probabilistically.

    On a more esoteric level, we have the strange cult of Kurt Goedel’s incompleteness theorem, first propounded in the 1930s. Now Goedel’s Theorem is one of the great treasures of 20th century mathematics. There are several ways to put it, one of which is that logical systems beyond a certain level of complexity can generate correctly expressed statements whose truth value cannot be determined. Some versions of the “Liar Paradox” illustrate this quality of undecidability. It is easy to get the point slightly wrong. (Even the authors’ statement of it is a tad misleading. According to them, the theorem “says that no finite system of axioms can completely characterize even a seemingly ‘natural’ mathematical object…” It should be made clear that some logical systems, notably Euclid’s geometry, are quite complete, so that every properly expressed Euclidean theorem is either true or false.) Simply false, however, is the postmodernist conviction that Goedel’s Theorem proved that all language is fundamentally self-contradictory and inconsistent. Postmodernists find the idea attractive, however, because they believe that it frees them from the chains of logic, and undermines the claims of scientists to have reached conclusions dictated by logic.

    Postmodernism, say the authors, is the deliberate negation of the Enlightenment project, which they hold to be the construction of a sound body of knowledge about the world. The academic left generally believes that the reality of the Enlightenment has been the construction of a thought-world designed to oppress women and people of color in the interests of white patriarchal capitalism. Or possibly capitalist patriarchy. Anyhow, fashion has it that the Enlightenment was a bad idea. Now that modernity is about to end, say the postmodernists, the idea is being refuted on every hand. Actually, it seems to many people of various ideological persuasions that the end of modernity is indeed probably not too far off: no era lasts forever, after all. However, it is also reasonably clear that postmodernism is not on the far side of the modern era. Postmodernism is simply late modernity. Whatever follows modernity is very unlikely to have much to do with the sentiments of today’s academic left.

    from: Higher Superstition: The Academic Left and Its Quarrels with Science

    you can find all kinds of things like this.

    but you wont find the newspapers hollering how they are destroying the nations abilitu to think…

    religion is the scapegoat… its influence is minimal compared to the socialists of the left, and postmodernism, social coolectivism, etc.

    you forget that newton and leibnitz did their work in search of affirmation of devine order…

    It may be right for a state to have peaceful existence with communism. I do not know. That is a question for Johnson and Goldwater to decide. But the church can never have peaceful coexistence with atheism. Everybody would laugh if I would say that health can peacefully exist with the microbe of tuberculosis, that the FBI can coexist peacefully with gangsters, that the church can peacefully exist with drunkenness, but communism and atheism is much worse than drug addiction and drunkenness. You drink a little wine and the next day it passes, but communism poisons youth and our children since 50 years. How can there be peaceful existence with this on the side of churchmen and the church leadership I cannot understand. Reverend Wurmbrand in his testimony to senate.

    remember that until america became secular, religion didnt block education…

    remember that the majority of the best schools before the state made them with stolen taxes, were all religous schools…

    if religion hated science so much then why did religion teach it when it owned all the schools?

    Harvard, Yale, Princeton, Columbia, Brown, University of Pennsylvania, Cornell and Dartmouth, were all training grounds for christian missionaries and ministers…

    and you claim religion and science cant mix…

    well, is religion the creator of this list?

    Marxism, Darwinism, Freudianism, Higher Criticism, communism, multiculturalism, relativism, naturalism, positivism, socialism, liberalism, egalitarianism, feminist studies, gay studies, transgender studies, transvestite studies, outcome-based education, radical environmentalism…

    do you think all those are helpful and consistent with the absolute reality that religion teaches?

    or are these religions of the state vying for control of the older system? [after all, liberatin theology is seeking to attack the church from within, and those things above are attacking science and religion from without]

    they seek to remove all other power..

    or havent you and others figured out yet what totalitarian really means?

    most do not get it till they live under it, and then its too late.

  27. Artfdgr writes

    you cant touch economy. you cant hold it, divide it, and do much with it, other than influence the proportions of transactions by skewing our view of reality.

    You can destroy it or severely damage it, which is as near to ‘touching’ as I need.

    We have some idea of what works and what doesn’t: free markets with individuals each contributing their decisions) versus ‘markets’ with people running with the herd, where individuals are not contributing by their decisions, and command economies of whatever kind. And we have other ‘what works’ and ‘what doesn’t’ knowledge. All imperfect, and yet if it had been applied here we wouldn’t be in this mess. (We might be in another mess, of course.) But the people who set the rules (the regulators) and the people who rule the rulers (the congresscritters) aren’t rewarded on the long-term function of the economy. They are rewarded for things like how many extra votes a particular Congressional district will produce.

  28. Tatterdemalian,

    the smallest distance in our universe is thought to be the plank length… its about 10**-33 centimeters… the width of our observable universe is about 10**28 centimeters… the difference between the two sizes is about 10**61 plank lengths. thats 10 trillion trillion trillion trillion trillion..

    through Andrie Linde’s work, we know that the universe is larger than 10*1,000,000,000 times what we can see (which makes the big bang a local effect).

    a measurment so large that the lengths we use are not even relevant… the unit of visible universe is so small that it cant even be used as a unit in this measure.

    10**61 isnt even a rounding error in that number… the number is so large that whether you use units of plank length or units as large as the width of the observable universe that they are nothings…

    and he and others arent done… their figures on inflation are showing that it may be even larger…

    with such a universe… and the fact that it could be one in infinite parallel ones… and there could be structures above that…

    and all that is for no purpose at all… 🙂

    its all real and not real…

    schrodinger shows us that with is dead cat.

    athiests have no explanation for the universe existing at all… none… empty… its all meaningless…

    which is kind of interesting that they care about anything because thats a waste in such a universe. though they cant see the end of their reasoning.

    in a universe with no purpose there is no morals, there is no reason… all those are empty concepts… not that they acn be alternatively defined… they cant…

    as soon as this is invoked, all meaning and purpose ceases to exist…

    dawkins says there is no god… fine… there is none.. and there isnt a purpose to the universe…

    if you accept that, then is anything i do wrong? oh there are things that i do that others do not like, but in a universe so wide there is no more units to measure by, it has no meaning.

    want to know the mental change that can allow one to send 10 million to starve?

    athiesm… the ability to realize that the universe has no meaning no purpose, nothing… and so there is no reason to choose one action over another action because of some false abstraction called morals.

    the impetus to remove religion is the impetus to reinstal on the thrown the provisino that might makes right… and bring in a new neo feudalism which will literally be able to do anything it wants to create an end that it wants…

    this is why they are so selfish… that is what happens when you construct your own meaning and you live in a world in which your mind has constructed it through social constructivism.

    life only has the meaning we give it…

    atheism gives life no meaning
    religion gives life some meaning

    we are religious because otherwise why struggle to live at all? the religious impulse is the impulse to live and meaning in life agasint a universe that has no meaning.

    religion gives us meaning, and meaning gives us purpose and direction. atheists dont dominate becasue their argumetns are neutralized by their core argument.

    the universe has no meaning, so why then should i listen to a person that believes this telling me what i should do? it has no meaning, so he has no meaning, and if he has no meaning then anything he suggests has no meaning, so if i do it or dont, it has no meaning… so the only reason to suggest it is that, is that it gives his meaningless life a distractoin in pretending to have meaning through wanting, while forgetting it violates the tenets of the belief.

    the result of all this is nihilsm… and as neitsche said, the inversion of the virtues…

    chastity becomes lust
    Abstinence becomes gluttony
    liberality becomes greed
    diligence becomes sloth
    patience becomes wrath
    kindness becomes envy
    humility becomes pride
    justice becomes injustice, dishonesty

    notice how we dont even get it in our political races now..

    obama uses envy to whip up the crowd to vote for him in favor of sloth, while he will do the work and become wrathful of those doing something else, and that we can take pride, as we seek social justice (as the new definition of justice), etc

  29. njcommuter,
    You can destroy it or severely damage it, which is as near to ‘touching’ as I need.

    no you cant…

    you cant destroy an economy… you can change it till everyone exclaims its destroyed, but its still there.

    its like the concept of polution. you really cant pollute things. all you can do is cahnge the situation in some way that you judge you dont like it.

    wait 1 million years and there is nothing remaining of what you call pollution..

    you cant destroy the planet…

    all these things are not things, and so cant be destroyed.. they can be cahnged in a way in which those who live in them dont like it or it doesnt favor them, but that is not destroyed, only changed.

    the point being is that in order for the economy not to be destroyed, it must produce at an even level in perpetuity… a condition that cant exist, ever.. its a utopian pipe dream.

    you cant destroy the economy, you can only change it for a short time…

    give me an example of one destroyed economy..

    remember, destroyed means destroyed… stopped working.. no one did deals… etc…

    its the difference between the real economy, and the construct… the real one is still an economy thats different when the model is destroyed!

    and again, thats the point… its only destroyed when the model is broken.. and we dont say our models are broken, we say that the economy is destroyed and our models dont work anymore!!!!

    We have some idea of what works and what doesn’t: free markets with individuals each contributing their decisions) versus ‘markets’ with people running with the herd, where individuals are not contributing by their decisions, and command economies of whatever kind.

    we have ideas of principals that create an environment that is better for all.

    we label the outcome of these principals economy and discuss what they create, but the thing doesnt exist… its an abstract construct in our heads…

    what makes a better economy?

    kings think that a better economy is when they rule totally and their subjects have little..

    socialists think that its when no one owns anything and a few in state control everything.

    and you can go down the list..

    all of them are referrring to economies, but in reality all they are truly focusing on is what principals cause what outcomes, and all outcomes they call economies and then argue benifits.

    But the people who set the rules (the regulators) and the people who rule the rulers (the congresscritters) aren’t rewarded on the long-term function of the economy.

    this kind of statment is kind of funny… did anyone inform you of the ‘rules’? the principals of trade? do people that come from a communist system not know how to live in a capitalist one? according to the milliionaire next door, russians are one of the most successful immigrant groups… and they were taught rules.

    and thats why you dont see that the thing we call economy is false. everyone lives their lives trying to figure out how to do better. our model of economy doesnt include the black market… we dont sample for that… but the undermarket where people trade work, money, and other things witout tax interference is a large part of the market. and the drug trade is part of the REAL economy, but the model the state uses, doesnt include the moneys and outlays and traffic of that part of the economy… and i could go on.

    no one sets the rules… the rules are set by biology… which is why the state rules by a monopoly on deadly force.

    deadly force woudlnt be needed if we all just accepted and followed rules, and not acted our own way as individuals.

    and thats why the economy isnt real from the political control sense… the difference between and ocean and a sea are what? they are arbitrary symbols.. which is why pluto isnt a planet anymore.

    did that declaration change anything in reality?

    the illegal drug trade is a 100 billion a year part of our economy that is ignored in the model economy, and yet you can assert that the model economy is real and that we can use it to contrl the real economy.

    again… we love our models more htan we do reality, and we think that like putting a needle into a voodoo doll that if we do things according to a very incomplete and simplefied model (The doll) we can cause control changes in the real one.

    perhaps sergey can give a shorter explanation than i of feed forward non linear dynamic systems with autocatalytic events generated by the disordered interaction of feed back loops (and augmented by random events in nature).

    dont worry though.. they have hammered away at people all their lives convincing them that they have control and that this model gives them the knowlge they need to mold outcomes..

    when most of the time all they are doing is claiming victory when it works, and claiming blame when it doesnt. and we add up that and through a false view, think they know whats happening.

    the problem stems from believing this cut down thing we create is an accurate model that we can use to exact control

    however there is a diffeernce between living by a set of principals (we have an idea of what works), and changine the appearance of reality to get a large group of people to be coerced to behave in a certain way that one only believes will create the outcome.

    we can monitor things in the economy that can give us an idea of how things are in the areas we want to focus on.

    but thats a world apart from how our politicians pretend to use this information and how it defines the economy. a few years back they changed the numbers we used to see the economy, and they changed the commpanies they used too…

    if you could go back and run those twho things in parallel… you would see that they would describe two different economies… ecven though they are supposed to be a description of the same economy!

    and both groups using this data would swear that the data was more true to the economy..

    by changing these rulers, we get an economy that looks more like what we want… but did the real thing change at all? it cahnged as much as pluto did.

  30. Does the End of Bretton Woods Hold Lessons for Today?

    The closing of the “gold window” on August 15, 1971 by President Nixon ended the convertibility of the US dollar into gold and triggered the collapse of the Bretton Woods international monetary regime. The crisis was caused by a persistent US balance of payments deficit, which was the result of inflationary US fiscal and monetary policies.

    The US dollar was the sole reserve currency in the Bretton Woods international monetary system and the only currency to be pegged to gold. Other currencies set a par value to the dollar, which remained “passive” in the exchange markets and let other currencies determine parity rates. The dollar, in turn, could be exchanged for gold at the fixed rate of $35 per ounce. This last institutional feature would prove to be an important one, for it explicitly took away US policy autonomy in the sphere of setting exchange rates. Other countries could change and/or manipulate their exchange rates against the dollar, but the US was unable to effect a devaluation (or a revaluation) of its currency against others.

    As the only reserve currency in the Bretton Woods system, the US was obliged to maintain price stability as the primary goal of its monetary policy. Over the course of the previous decade, US officials had become increasingly unwilling to pursue price stability as they grappled with the problems of financing the Vietnam War and domestic Great Society programs. US deficits put severe pressures on the dollar, requiring US policy makers to jack up interest rates and/or decrease the money supply in order to restore market confidence in the strength of the dollar.

  31. advisers to both Presidential candidates were part of the mess: Gramm for McCain,

    (AP) Regulators on Friday shut down Silver State Bank, saying the Nevada bank failed because of losses on soured loans, mainly in commercial real estate and land development.

    It was the 11th failure this year of a federally insured bank.

    Nevada regulators closed Silver State and the Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.

    Andrew K. McCain, a son of Republican presidential nominee John McCain, sat on the boards of Silver State Bank and of its parent, Silver State Bancorp, starting in February but resigned in July citing “personal reasons,” corporate filings with the Securities and Exchange Commission show. Andrew McCain also was a member of the bank’s audit committee, responsible for oversight of the company’s accounting.

    The younger McCain, who is the chief financial officer of Hensley & Co., the beer distributorship of which Cindy McCain is chairwoman, is the Arizona senator’s adopted son from his first marriage.

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