Nothing about our economic system has really been fixed, or even diagnosed, and time is running out.

According to SANDY B. LEWIS and WILLIAM D. COHAN, nothing about our economic system has really been fixed or even diagnosed, and time is running out. This is the theme of a powerfully and clearly written Op-ed piece in today's New York Times, entitled "The Economy Is Still at the Brink":

We’re concerned that nothing has really been fixed. We’re doubly concerned that people appear to feel the worst of the storm is over — and in this, they are aided and abetted by a hugely popular and charismatic president and by the fact that the Dow has increased by 35 percent or so since Mr. Obama started to lay out his economic plans in March. But wishing for improvement and managing by the Dow’s swings are a fool’s game . . .The storm is not over, not by a long shot.

Lewis, who owns a brokerage house and Cohan, a Wall Street banker, succinctly present the problem and some solutions:

Six months ago, nobody believed that our banking system was well designed, functioning smoothly or properly regulated — so why then are we so desperately anxious to restore that model as the status quo? . . . Instead of hauling out the new drywall to cover up the existing studs, let’s seriously consider ripping down the entire structure, dynamiting the foundation and building a new system that rewards taking prudent risks, allocates capital where it is needed, allows all investors to get accurate and timely financial information and increases value to shareholders and creditors.

The authors lay out numerous areas of concern, many of them in the form of pointed questions. Why, indeed, haven't we taken steps to change the system? As Einstein once said, insanity is "doing the same thing over and over again and expecting different results." Lewis and Cohan urge President Obama to take these real steps, to get serious about the faux solution so far imposed (the massive injection of federal money in the absence of any systematic fix).

Instead of promising the imminent return of good times, why isn’t Mr. Obama talking more about the importance of living within our means and not spending money we don’t have on things we don’t need? . . . We are 139 days into his presidency, and while there is still plenty of hope that Mr. Obama will fulfill his mandate, his record on searching out the causes of the financial crisis has not been reassuring.

Lewis and Cohan's Op-ed is must-reading and disturbing reading.

Continue ReadingNothing about our economic system has really been fixed, or even diagnosed, and time is running out.

NYT says “It’s Torture!”

The NYT today published an obituary for a deceased American fighter pilot who was captured by the Chinese:

Harold E. Fischer Jr., an American Flier Tortured in a Chinese Prison, Dies at 83... From April 1953 through May 1955, Colonel Fischer — then an Air Force captain — was held at a prison outside Mukden, Manchuria. For most of that time, he was kept in a dark, damp cell with no bed and no opening except a slot in the door through which a bowl of food could be pushed. Much of the time he was handcuffed. Hour after hour, a high-frequency whistle pierced the air. [...] Under duress, Captain Fischer had falsely confessed to participating in germ warfare.
So - when the Chinese do it it's torture. When the US do it it's "harsh interrogation". We expect more consistency of our major news organizations. We expect more of our own government. It's time to call for a special prosecutor, Mr. Attorney General. [via Glenn Greenwald, and Andrew Sullivan]

Continue ReadingNYT says “It’s Torture!”

Glenn Greenwald: the retired military analysts story continues to be censored by the networks

Glenn Greenwald has posted another excellent report on corruption of the corporate media. Here's the background. In 2008, the NYT's David Barstow broke the story of how retired generals posing as media analysts, "had been co-opted by the Pentagon to make its case for the war in Iraq, and how many of them also had undisclosed ties to companies that benefited from policies they defended." Barstow's story received extremely limited play by the corporate electronic media. Even though Barstow has now won a Pulitzer Prize, his story about the analysts is still being censored. By whom? By the television networks that made unethical use of the generals' highly biased analyses.

By whom were these "ties to companies" undisclosed and for whom did these deeply conflicted retired generals pose as "analysts"? ABC, CBS, NBC, MSNBC, CNN and Fox -- the very companies that have simply suppressed the story from their viewers. They kept completely silent about Barstow's story even though it sparked Congressional inquiries, vehement objections from the then-leading Democratic presidential candidates, and allegations that the Pentagon program violated legal prohibitions on domestic propaganda programs.

As Greenwald reports, these networks are now adding insult to injury. They are not even reporting on the basis for Barstow's Pulitzer.

The outright refusal of any of these "news organizations" even to mention what Barstow uncovered about the Pentagon's propaganda program and the way it infected their coverage is one of the most illuminating events revealing how they operate. So transparently corrupt and journalistically disgraceful is their blackout of this story that even Howard Kurtz and Politico -- that's Howard Kurtz and Politico -- lambasted them for this concealment.

Greenwald provides lots of details in his article, and numerous relevant links.

Continue ReadingGlenn Greenwald: the retired military analysts story continues to be censored by the networks

Boats for free

The NYT reports that many people are dumping their boats--simply abandoning them:

Some of those disposing of their boats are in the same bind as overstretched homeowners: they face steep payments on an asset that is diminishing in value and decide not to continue. They either default on the debt or take bolder measures.

Marina and maritime officials around the country say they believe, however, that most of the abandoned vessels cluttering their waters are fully paid for. They are expensive-to-maintain toys that have lost their appeal.

This story reminds me of something my friend Gary once told me:
Gary: What's the second-happiest day in a person's life? Me: I don't know. Gary: The day they buy a boat. What's the happiest day in a person's life? Me: I don't know. Gary: The day they selltheir boat.
This abandonment of playthings reminds me of the 20-foot Python problem that could someday take over 1/3 of the U.S.

Continue ReadingBoats for free

How undependable are the experts?

We are in the middle of a huge economic crisis. Should we listen to the experts? Of course we should, because the economy and the financial sector are horrifically complicated. What happens when the experts disagree, however? To which experts should we listen? I took a stab at that question recently, but I remain unconvinced that any of the economics experts can be trusted. Yes, there are people like George Soros who have made a phenomenal amount of money during the crisis, but this makes me wonder whether he (and all of the other recent success stories) are smart or whether they are lucky. Today, Nicholas Kristof (in the NYT) reminds us that many experts (at least political experts) have a terrible track record. His opening sentence: "Ever wonder how financial experts could lead the world over the economic cliff?" He warns us of the “Dr. Fox effect,” named for a "pioneering series of psychology experiments in which an actor was paid to give a meaningless presentation to professional educators." Despite the fact that the lectures consisted of gibberish, they were well received. He mentions a study showing that "clinical psychologists did no better than their secretaries in their diagnoses." He also mentions a study by Philip Tetlock which determined that "The [82,000] predictions of [284] experts were, on average, only a tiny bit better than random guesses — the equivalent of a chimpanzee throwing darts at a board." Those experts who were the most impressive to most people "provided strong, coherent points of view, who saw things in blacks and whites." I'm reminded of Alan Sokal's intentionally nonsensical article that he submitted to the postmodern journal, Social Text. See here for more of the details. BTW, if you want to generate your own postmodern bullshit, use this postmodernist bullshit generator (every time you hit the link, more impressive-sounding bullshit will be assembled automatically into an article). How far astray are we led by "experts"? Consider investment "experts." There are none worse. Entire industries are built on the thoroughly disproved notion that a stock-picker can consistently beat the market. Dan Smolin has made a career of proving that stock-picker experts are thoroughly and demonstrably terrible at what they claim to be. But many of us still run to these financial "experts" to help us pick the "right" stocks. Just think of the hundreds of political military experts who were similarly awful at their recommendations and predictions regarding the invasion of Iraq. They appeared hundreds of time on network TV during the few weeks prior to the invasion, all of them confident in their assessments and advice. Consider, also that fewer than 1% of them took anti-war stances. Consider, also, that many of these "experts" were secretly in positions to financially benefit from an invasion of Iraq. Consider the thousands of religious experts, from coast to coast, who loudly and confidently tell their religious followers that there is a heaven and that they will go there, without the tiniest big of evidence in support. The followers of fundamentalist preachers continue to listen to these guys even when they attack evolutionary biologists, even though these religious leaders have no training in science and no basic understanding of the principles of evolutionary biology. Everyone loves weather forecasters, right? These guys are wrong so incredibly often that no station dares to post their track records for those five-day forecasts they confidently present night after night. The list goes on and on. We insist on listening to the experts, medical experts, beauty experts, psychologists, their track records be damned. That's because they are the best that we've got, no matter how wrong they are how often. The bottom line is that we crave experts because we crave certainty, even where there isn't any. The confirmation bias causes us to rely heavily on experts hawking our own opinions, even when there is no evidence in support, as long as the expert dishes out those opinions with a loud confident voice. And a fancy business suit doesn't hurt either.

Continue ReadingHow undependable are the experts?