The people on the short side of the subprime mortgage market had gambled with the odds in their favor. The people on the other side — the entire financial system, essentially — had gambled with the odds against them. Up to this point, the story of the big short could not be simpler. What’s strange and complicated about it, however, is that pretty much all the important people on both sides of the gamble left the table rich. . . . The CEOs of every major Wall Street firm were also on the wrong end of the gamble. All of them, without exception, either ran their public corporations into bankruptcy or were saved from bankruptcy by the United States government. They all got rich, too.
What are the odds that people will make smart decisions about money if they don’t need to make smart decisions — if they can get rich making dumb decisions?
Notes from the Golden Orange
EppsNet Archive: Government
The kind of man who demands that government enforce his ideas is always the kind whose ideas are idiotic. — H. L. Mencken
The arguments for regulation of the market for goods and the regulation of the market for ideas are essentially the same, except that they’re perhaps stronger in the area of ideas if you assume consumer ignorance. It’s easier for people to discover that they have a bad can of peaches than it is for them to discover that they have a bad idea.
Our hotel in Atami was on the eastern coast. Where we live in California, you can watch the sun set over the ocean every day if you want to, but here the sun rises over the ocean, which is a little bit different.
These photos are from the balcony of our room. If you look closely, you can see the United States in the background. It looks very small from this far away.
We started the day on a sightseeing boat at Lake Ashi:
Owakudani (lit. “Great Boiling Valley”) is a volcanic valley with active sulphur vents and hot springs in Hakone, Kanagawa Prefecture, Japan. It is a popular tourist site for its scenic views, volcanic activity, and especially, Kuro-tamago (lit. “black egg”) — a local specialty of eggs hard-boiled in the hot springs. The boiled eggs turn black and smell slightly sulphuric; consuming the eggs is said to increase longevity. Eating one is said to add seven years to your life. You may eat up to two and a half for up to seventeen and a half years, but eating a whole third is said to be highly unadvised.
Owakudani is accessible via the Hakone Ropeway. In the States, we’d call this a tramway. I swear to god when I heard “ropeway” I thought we were going to have to pull ourselves up the mountain with a rope.
Our guide is on the right:
See the large buildings at the bottom of the photo below? Look up a bit from the one on the right and you’ll see the stand where the black eggs are cooked up and sold. It’s a short hike up the mountain.
We ate some black eggs:
They also have black ice cream:
Mount Fuji (Fujisan), located on Honshu Island, is the highest mountain in Japan at 3,776.24 m (12,389 ft). An active stratovolcano that last erupted in 1707–08, Mount Fuji lies about 100 kilometres (60 mi) south-west of Tokyo, and can be seen from there on a clear day. Mount Fuji’s exceptionally symmetrical cone, which is snow-capped several months a year, is a well-known symbol of Japan and it is frequently depicted in art and photographs, as well as visited by sightseers and climbers. It is one of Japan’s “Three Holy Mountains” (Sanreizan) along with Mount Tate and Mount Haku; it is a Special Place of Scenic Beauty, a Historic Site, and was added to the World Heritage List as a Cultural Site on June 22nd, 2013.
As per UNESCO, Mount Fuji has “inspired artists and poets and been the object of pilgrimage for centuries.”
At the Mount Fuji Visitor Center, you can fold an origami Mount Fuji to commemorate your visit:
The yellow one is mine:
Shinjuku (Shinjuku-ku, “New Lodge”) is a special ward located in Tokyo Metropolis, Japan. It is a major commercial and administrative centre, housing the busiest train station in the world (Shinjuku Station) and the Tokyo Metropolitan Government Building, the administration centre for the government of Tokyo. As of 2008, the ward has an estimated population of 312,418 and a population density of 17,140 people per km2. The total area is 18.23 km2.
The Tokyo Metropolitan Government Building is 48 stories tall, and splits into two sections at the 33rd floor.
The 45th floor of each tower has a panoramic observation deck. It was late afternoon when we got up there.
Unconstrained thinkers either do not recognize, or refuse to come to grips with, the fact that not everything that is good is worth the cost of its achievement — and that not everything that is bad is worth the cost of its obliteration. Unconstrained thinkers are also typically gripped by romantically unrealistic notions of the abilities of people wielding power, as well as of the trustworthiness of such people. Unconstrained thinkers, because they can imagine people with power exercising that power for the greater good and only for the greater good, are unwilling to suffer any imperfections in reality –- for why suffer such imperfections if a Great and Good Leader (or Great and Good Council) can possibly make the world a better place?
The Internal Revenue Service issued $4 billion in fraudulent tax refunds last year to people using stolen identities, with some of the money going to addresses in Bulgaria, Lithuania and Ireland, according to an inspector general’s report released Thursday.
The IRS sent a total of 655 tax refunds to a single address in Lithuania, and 343 refunds went to a lone address in Shanghai.
In the U.S., more fraudulent returns went to Miami than any other city. Other top destinations were Chicago, Detroit, Atlanta and Houston.
Hmmm . . . aren’t there some sort of sanity checks built into the IRS system? Doesn’t a warning bell go off when 655 tax refunds are sent to a single address in Lithuania?
Does this erode your confidence in the federal government’s ability to manage complex systems and gigantic sums of money?
I’m sure they’ll do a much better job managing health insurance, right? Right?
Cindy Vinson and Tom Waschura are big believers in the Affordable Care Act. They vote independent and are proud to say they helped elect and re-elect President Barack Obama.
Yet, like many other Bay Area residents who pay for their own medical insurance, they were floored last week when they opened their bills: Their policies were being replaced with pricier plans that conform to all the requirements of the new health care law.
Vinson, of San Jose, will pay $1,800 more a year for an individual policy, while Waschura, of Portola Valley, will cough up almost $10,000 more for insurance for his family of four. . . .
Covered California spokesman Dana Howard maintained that in public presentations the exchange has always made clear that there will be winners and losers under Obamacare. . . .
“Of course, I want people to have health care,” Vinson said. “I just didn’t realize I would be the one who was going to pay for it personally.”
To ignore the government’s poor performance of its present duties when deciding on whether it should or should not take on new duties is obviously wrong.
Gov’t delays requiring rearview cameras in cars — Associated Press
Rearview cameras in cars seem like a good idea. Who wants to accidentally back over a child or a pet, right? It’s upsetting, not to mention whoever the child or pet belonged to is probably going to hold it against you forever.
Let’s make rearview cameras required by law.
In fact, let’s make rearview and frontview cameras required, because kids and pets can get under the front of your car too, and running over them is bad, no matter what direction you’re going.
I’ve seen TV commercials where cars can detect obstacles in their path and stop automatically to avoid a collision. That’s great. Let’s make that required too.
In fact, let’s make so many features required by law that you can’t even buy a car anymore for less than $50,000.
You know what else is a good idea? Freedom, which is the reason we started up this country in the first place. Let people buy and sell whatever they want.
Frankly, one of our political parties is insane, and we all know which one it is. They have descended from the realm of reasonableness that was the mark of conservatism. They dream of anarchy, of ending government.
My fellow Americans –
I’ll tell you who’s insane: anyone who’s not dreaming of anarchy at this moment in history is insane. People forget that this great nation was founded by anarchists, born out of an armed revolution against a corrupt government.
As I said at the time, “Whenever any Form of Government becomes destructive, it is the Right of the People to alter or to abolish it.”
I assure you, though, that regrettably neither current political party dreams of anarchy. They both dream of exactly the same things: self-aggrandizement and rewarding their most powerful supporters with political spoils.
The well-known liberal cartoonist Ted Rall wrote a book a couple of years ago advocating a new American revolution. Unfortunately, while popular uprisings do continue to occur around the world, I am not optimistic that it will ever happen again in America.
The great majority of our citizens now are far more informed about fantasy football and reality TV than they are about current events. They understand politics at only the most simple-minded level: Team Red vs. Team Blue.
I’m Team Blue! Let’s go, Blue! BOOOOO, Team Red! Or vice versa.
Notice, for example, that all of the things that Team Blue hated so much about the George W. Bush administration are okay now that they’re being carried out by President Obama.
Obama didn’t stop the wars or the torture or the spying. He’s just as cozy with Wall Street. Gitmo is still open for “prolonged detention.” Moreover, he’s killing foreign civilians, and sometimes American citizens, with drone strikes, and he’s eliminating whatever civil liberties you think you have left.
Torture and war and economic collapse don’t matter as long as they’re being supervised by my team! Go Blue! We’ll all be in a gulag in 10 years. Go Blue!
Some despotic regimes around the world rely on starvation and threats of violence to keep the people in a state of submissive compliance. Here in America, the same collective stupor is effected via mindless entertainments and gadgetry.
I should raise myself out of depression, paralysis and failure and resist this massive government/corporate dystopia — but I might miss my TV programs.
In 1776, we decided that being Americans meant being free men and women, not serfs and lackeys. We mutually pledged to each other our Lives, our Fortunes and our sacred Honor to throw off the abuses and usurpations of the Government, and to secure the blessings of Liberty.
How soon they forget.
I bid you God speed,
Thomas Jefferson, anarchist
President Barack Obama’s speeches have a familiar ring these days — no matter if it’s guns, immigration or the budget.
Tout what he’s already done. Say the public’s in his corner. Demand Congress do something. Lament Washington dysfunction. Lay out his own plan. Avoid details. Urge voters to keep up the pressure. Warn it won’t be easy. Bask in the applause.
It’s the fill-in-the-blank approach to selling a presidential agenda: same template, just adjusted for the topic.
Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.
That headline should not read “DESPITE new health law,” it should read “BECAUSE OF new health law.”
But we were going to get things for free! We were promised better things at a lower cost!
In my day, most of the citizens were farmers or merchants or tradesmen. They lived by their hands and their wits. They had horse sense and they knew when they were being sold a bill of goods.
Of course, that was before television.
Americans today are unfortunately rather stupid. Most of them don’t know anything about economics, science, history, government . . . as George Carlin says, “Think of how stupid the average person is, and realize half of them are stupider than that.” George is here in heaven now. He breaks me up, he really does.
Your president and Congress have decreed that every American will have health insurance whether they want it or not. They have further decreed that a lot of Americans will not have to pay for their own health insurance, which means that the cost of their health insurance has to be paid by the rest of you. That’s one reason why your health insurance premium is going up.
Another reason your premium is going up is the “guaranteed issue” provision. “Guaranteed issue” means that no one can be denied health insurance because of pre-existing conditions.
Funny story: My friend Paul Epps, his wife has an insurance agency in Southern California. It’s an area that’s susceptible to wildfires in the summer months. When a fire breaks out, people who live near the fire actually call this woman wanting to buy a homeowners policy.
Of course, she doesn’t sell it to them. Insurance companies are a little bit smarter than that.
Buying a homeowners policy when your house is already on fire is analogous to “guaranteed issue” health insurance: Hello, I’d like to buy some health insurance. Oh by the way, I have cancer, but the doctors think that with lengthy and expensive treatment, I have a chance to pull through.
This is not even insurance anymore. Insurance is something you pay for now to protect against the risk of having to pay a lot more later. In these cases, there IS no risk. The bad news has already happened. It’s a dead loss for the insurance company and they have to spread the cost of that loss to other policyholders. That’s another reason your premium is going up.
This isn’t even economics, folks, it’s just common sense.
A slight minority of Democrats (48%) say the government should be extremely or very involved compared to 13 percent of Republicans. Non-whites (47%) are more likely than whites (25%) to say the government should be very or extremely involved in finding solutions to the country’s obesity problem.
My fellow Americans –
The country doesn’t have an obesity problem. If you’re obese, that’s your problem, not the country’s problem, and you bear the costs of it, financial and otherwise.
Some people might argue that obesity causes an increase in public health costs. That is untrue.
Think about it. If you die in your 40s because you’re too fat, you have saved us all a lot of money, to the extent that your healthcare costs are borne by the public. If you’d maintained a normal weight and lived to be 80, you’d still have end-of-life medical expenses, plus an additional 30 years of expenditures in between.
For those who want a solution to the “obesity problem,” I offer two:
- Eat less.
- Exercise more.
Got that, fatso?
According to this White House press release, the federal government is ringing in the new year by simultaneously raising tax rates (i.e., penalizing people for working) and extending payments to two million people who do not work (i.e., rewarding people for playing Xbox). Has this ever happened before at any time in the history of the U.S. (or anywhere else in the world for that matter)?
zu-Kung asked about government. The Master said, sufficient food, sufficient weapons, and the confidence of the common people. Tzu-Kung said, Suppose you had no choice but to dispense with one of these three, which would you forgo? The Master said, Weapons. Tzu-Kung said, Suppose you were forced to dispense with one of the two that were left, which would you forgo? The Master said, Food. For from of old death has been the lot of all men; but a people that no longer trusts its rulers is lost indeed.
[Thomas Jefferson] then considered the general phrase of the Constitution that identified the purpose of the taxing power as “to pay the Debts and provide for the common Defence and general Welfare of the United States.” Congress, he said, was to levy taxes only for these purposes, not for any purpose they pleased. “In like manner they are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose.” To interpret this provision in any other way would reduce the Constitution to “a single phrase, that of instituting a Congress with power to do whatever would be for the good of the U.S. and as they would be the sole judges of good or evil, it would also be a power to do whatever evil they pleased.”
America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again.
I hardly know where to begin with this . . .
First of all, what is the relevance of the 1950s as opposed to any other period of American history? America prior to 1913 had no permanent income tax and contrary to left-wing propaganda, it prospered. Why can’t we do that again?
Of course we’re all in favor of fairness — right? — but why is it only important that “the rich” pay their “fair share”? I don’t remember ever hearing anyone, certainly not Krugman, use the phrase “pay their fair share” in reference to any group except “the rich.”
If you’re concerned about fairness, isn’t it also important that the middle class “pay their fair share”? Isn’t it important that the poor “pay their fair share”? Shouldn’t we all have some skin in the game?
Why not say that everyone should “pay their fair share” instead of making a class warfare issue out of it?
Should five percent appear too small
Be thankful I don’t take it all
America in the 1950s had a top tax bracket of 91 percent for incomes greater than $200,000. For every dollar you made in excess of $200,000, the federal government took 91 cents as its “fair share.” You got to keep nine cents as your “fair share.”
Out of those nine cents, you also had to pay Social Security taxes, state taxes, local taxes, sales taxes, property taxes and excise taxes. Am I forgetting anything? It doesn’t seem unlikely to me that nine cents on the dollar wouldn’t be enough to cover all those taxes, in which case you’d actually lose money on every dollar.
If I’d been a business owner in the 1950s, with the knowledge that once I made 200 grand, I’d be operating at a loss, I would have just shut the place down at that point and sent everyone home till the next year. I don’t care if it was November or August or January.
Finally, when Krugman talks about workers having “the power to bargain,” he’s talking about unions, as though the two things are inseparable. I’ve never been in a union but I’ve bargained for wages and benefits at every job I’ve ever had. Anyone with marketable skills can bargain for wages and benefits.
If [Affordable Care Act] implementation goes as intended and widespread utilization and automation are achieved, providers could save about $11 billion per year.
You really can’t dispute something as vague as that but it does raise a number of questions:
- What does it mean for thousands of pages of legislation affecting the entire healthcare industry as well as every man, woman and child in America to go “as intended”? It’s a circular argument. If it goes as intended, we save $11 billion. If we don’t save $11 billion, it didn’t go as intended.
- Is “widespread utilization and automation” part of going “as intended” or is that a separate thing?
- Assuming that implementation does go as intended and widespread utilization and automation are achieved, the best we can say is that providers “could” save “about” $11 billion per year? Could they save more? Less? Break even? Could they lose $11 billion? It’s meaningless speculation.
- Can anyone remind me of a large-scale government program that went “as intended” and saved everyone a lot of money?
- Why, despite all evidence to the contrary, do people continue to believe that government can successfully engineer social aspirations?
In other news, if my plan to grow wings on pigs goes as intended, it could revolutionize the way we export bacon.
These things never go as intended. They can’t possibly go as intended. There are always unintended consequences. I can’t implement a policy in my own house and have it go as intended and there’s just two people and a dog.
I asked the friend who called the NEJM article to my attention what going “as intended” means in the context of the ACA and he said, “I think it means legislators don’t muck with it too much.” What does “muck” mean? What does “too much” mean? We could go on and on . . .
Though it is disguised by the illusion that a bureaucracy accountable to a majority of voters, and susceptible to the pressure of organized minorities, is not exercising compulsion, it is evident that the more varied and comprehensive the regulation becomes, the more the state becomes a despotic power as against the individual. For the fragment of control over the government which he exercises through his vote is in no effective sense proportionate to the authority exercised over him by the government.