WND column

Irrational Finance
"The public in many countries is understandably concerned by the commitment of substantial government resources to aid the financial industry when other industries receive little or no assistance. This disparate treatment, unappealing as it is, appears unavoidable. Our economic system is critically dependent on the free flow of credit, and the consequences for the broader economy of financial instability are thus powerful and quickly felt."

– Ben Bernanke, chairman of the Federal Reserve, Jan. 13, 2009

One of the more remarkable things about the expansion of the subprime financial crisis into a general economic contraction is the Federal Reserve System's narcissistic focus on itself. In his speeches, Ben Bernanke spends more time talking about the Federal Reserve's balance sheet and how stupendously fabulous it continues to be despite the vast quantities of loans it is making to shore up various aspects of the financial system than he does about the unemployment rate or the expected effects of economic contraction on the public.

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And this is the case for the defense?

The New York Times hosts an open debate on the value of a graduate degree:

"As an M.A. student in English, I don’t think I’ve met one person in my program, or one professor for that matter, who has expressed that he or she is “in it for the money.” In fact, most people, including myself, are there because they are genuinely interested in the subject matter, and in discourse with others who have similar interests... For M.A. students like myself, the benefits have little to do with money."

"What if knowledge itself is what you seek? Master’s of Arts and Liberal Arts degrees are not designed to get you a high paying career."

"The reason I went for my MLA (graduated in June 1997) was because I was fascinated by the subject matter. Has it paid off for me financially? No. In fact, I am no longer even employed. I have never even paid off my student loans, nor do I believe that will ever happen. Do I regret earning that MLA? No.... Learning how to learn appears to be the single, greatest lesson one can learn in going for the advanced degree."

"If you measure graduate degrees in dollars, mine Ph.D. is worthless. I earned less money with each graduate degree. If, however, you measure it in terms of quality of life, understanding of the world, personal satisfaction and the accomplishment of non-monetary goals, it is priceless."

One thing I've noticed is that no one contemplating spending thousands of dollars on a graduate degree ever admits that it's of no probable monetary value BEFORE they make the decision to go to grad school. Those who actually think the expense of a monetarily worthless graduate degree was worth it tend to fall into two categories. The first are grad students still in school who are enjoying the process and have neither begun paying the costs nor genuinely understand the consequences of being deeper in debt with no marketable job skill. I suppose that men utilizing the services of prostitutes also believe said services are worth the expense while in the midst of obtaining them. But they may well think otherwise upon discovering that their wallet is missing, learning that the test results are positive, or being handcuffed and reminded of their rights.

The second type are the sort who believe that their personal enjoyment trumps all concerns about expense. It should come as little surprise that these people usually also mention the importance of learning how to learn. In other words, these are the individuals who are dumb enough to genuinely require at least 17 years in school in order to learn how to learn, so the value of their opinion is quite high if taken in the negative.

It's fine if you genuinely enjoy taking classes so much that you're willing to spend thousands of dollars on them. But understand that doesn't make you any different than someone who enjoys spending thousands of dollars on cars, drugs, or professional women. The only significant difference is that the car, drug, or escort aficionado seldom believes he will become a better person through paying for his pleasures.

One of the saner, if sadder, perspectives on the matter was expressed by one recent purchaser of an advanced piece of paper from an advanced paper seller: "As one of the many now-graduated, now-unemployed Masters of Fine Arts, I have felt that this great accomplishment is akin to opening up a nicely-wrapped gift box, only to discover that it was empty." Except, of course, it wasn't exactly a gift....

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A portrait in jealousy

Maureen Dowd considers Sarah Palin's resignation with all the intelligence and political astuteness we have learned to expect from her, colored by the emotional temperance of a head cheerleader forced to confront the reality of a new and prettier transfer student:

Caribou Barbie is one nutty puppy.... As Alaskans settled in to enjoy holiday salmon bakes and the post-solstice thaw, their governor had a solipsistic meltdown so strange it made Sparky Sanford look like a model of stability.

It's entirely possible that Palin resigned for reasons that are narcissistic, ambitious, greedy, or insane. But we simply don't know. The fact that she was smart enough not to offer an explanation when none short of imminent death from cancer would be considered sympathetic indicates that lunacy is the least plausible reason.

What I find most interesting is that two of the leading contenders for the GOP nomination appear, at least for the moment, to have taken themselves out of the running. If one considers this from the economic perspective of 2010 being 1931, it suggests that the prospect of being forced to deal with the challenges ahead is a daunting one. Unfortunately, these are the circumstances in which the human predators of the world tend to see their opportunities; to paraphrase Rahm Emmanuel, one never wants to waste a crisis.

I don't pretend to know why Palin resigned. Not being a supporter, I can't even say I particularly care. But I do know that it's far too soon to dig her political grave, as many in both the Republican and the Democratic parties are now attempting. As both Ronald Reagan, Hillary Clinton and even Newt Gingrich have demonstrated, it's always dangerous to assume a politician is finished. As a class, they're very much like zombies; never count one out entirely until you've actually seen it dismembered and burned.

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Steve McNair killed

Former Titans quarterback Steve McNair has been killed. Police said McNair suffered a fatal gunshot wound to the head in downtown Nashville.

A real shame. I didn't follow McNair's career closely, but he struck me as the positive ideal on whom more ballyhooed but lesser quarterbacks like Michael Vick and Vince Young should have patterned themselves.

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A treasure hunt

In case you could use a break from scarfing hamburgers while you wait for the evening fireworks, I'm looking for quotes from 2006 - 2009 about the prospects for recession and depression from every mainstream or contrarian figure of note. I've collected a fair number already, but the more, the merrier. I intend on grading them on the following curve:

Grade: A-
Another major problem is that the housing bubble has finally burst. Thus far it has only produced a slow leak, but by next year the air will be rushing out with gale force winds.... If Bernanke tries to borrow from Greenspan’s playbook and attempts to prevent or mitigate the severity of the coming recession, the excess liquidity will not simply move into another asset class, as it did from stocks to real estate, but into real stuff, such as commodities and consumer goods.
Peter Schiff, June 29, 2006

Grade: F
“As I’ve discussed on CNBC’s Kudlow & Co., the strong, across-the-board, five-month rally in stocks cannot possibly be predicting a recession. While the stock market can sometimes emit false positives on recessions, rarely does it give off false negatives. In fact, I think it is predicting a "Goldilocks" soft-landing for the economy.”
Larry Kudlow, Debunking Krugman’s Recession, December 2, 2006

The more direct the quote, the better. I don't care if it's positive or negative, as it's just as useful to have someone declaring there is no recession or there will not a depression as the contrary. I don't have much use for the mealy-mouthed attempts to have it both ways, though. Please include the date, the name of the economist or financial figure, and a link to the source along with the quote.

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Provoking the Palindrones

Jonah Goldberg upsets fans of the Alaskan governor:

Dear Governor Palin,

You’re blowing it.

We haven’t met, but you might remember I was one of the first columnists to tout you for John McCain’s running mate. I cheered you mightily when Senator McCain selected you, and I still believe that you were the smartest choice he could have made given the obstacles before him. I’m also assuming you want to run for president some day.

I really don't see what Palin's more hysterical fans are so upset about. Goldberg is correct. Palin has great natural political gifts, but her performance as a vice-presidential candidate in 2008 was sub-par. If she makes the mistake of relying upon her natural talent rather than improving her game, she will likely lose the nomination since the GOP squish faction is gunning hard for her.

Although I correctly predicted Palin would be McCain's running mate, I'm not favorably impressed by her. Like Obama, she's just bright enough to think that she can coast through the big leagues, but that's only true when the powers-that-be are laying down the palm leaves for you. The fact that she let McCain's advisors tell her what to do told us all we needed to know about her capacity for judging some of the more complicated factors of national politics. If she's learned her lesson and is now playing for keeps, she'll listen to Republicans who wish her well, like Goldberg, while paying no attention to the likes of Brooks and Frum, who do not.

UPDATE: It seems Mrs. Palin may have taken Mr. Goldberg's advice too much to heart, seeing as how she immediately announced her resignation from the governorship.

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The Best Little Whorehouse in Washington

Closes temporarily:

Washington Post publisher Katharine Weymouth said today she was canceling plans for an exclusive "salon" at her home where for as much as $250,000, the Post offered lobbyists and association executives off-the-record access to "those powerful few" — Obama administration officials, members of Congress, and even the paper’s own reporters and editors.... Weymouth said the paper had planned a series of dinners with participation from the newsroom “but with parameters such that we did not in any way compromise our integrity.

I don't see what the problem was. It's not as if they had any integrity to start with. Nor is it any secret as to why the media is dying so quickly, not with complete cretins like these in charge.

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But it's an investment!

I believe most regular readers are familiar with my opinion that taking out student loans in order to obtain pieces of paper from paper-selling institutions is usually a remarkably stupid idea. However, even those who think equate spending on education with investment must admit that the utility of the concept has its limits:

Robert Bowman was refused entry to the New York bar because of $400,000 in student debt.... “The size of this account is extremely unusual, but not surprising given that the customer took out 32 loans to pursue undergraduate, law and masters of law studies and has not made a single monthly payment over his 26-year student loan history,” Ms. Holler said.

Doesn't the New York bar know that that studies show people with graduate degrees make loads more money over their lifetime? With an investment of $400,000 in Mr. Bowman's education, surely he'll be worth hundreds of millions soon!

As if this story wasn't amusing enough, one can only wonder what Mr. Bowman would have to do in order to sufficiently establish: "the character and general fitness requisite for an attorney and counselor-at-law". Murder his mother with an axe? Rape a baby seal? Run an underage gay prostitution ring?

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