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Richard Careaga
Bradenton, FL
I'd hate to be held to a one-line bio
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Even if calling from Hampshire College?
Toggle Commented Oct 31, 2011 on Memo to Google at Grasping Reality by Brad DeLong
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Those who cannot remember the past are condemned to repeat it. -- Jorge Agustín Nicolás Ruiz de Santayana y Borrás (Reason in Common Sense, Vol. 1, 1905). The people who were fully-grown adults thinking critically about what should be done about the Great Depression, four years on, in 1933 were mostly born before 1908 (perhaps there were a few precocious 20-year olds, which would bring it up to 1913). Not many of us are listening to what the surviving nonagenarians or centarians are currently saying about the subject. Aside from Chairman Bernacke, not many in office have made a study of what happened then and whether it was only WWII that brought the economy fully back. Parsimony suggests that "it's different this time" doesn't make any more sense as an explanation of busts than it does as an explanation of booms.
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For those of you suffering from semiotic and hermeneutics deficiency disorder, here is how to parse this post. Lynne Kiesling is put out with Brad DeLong's style of discourse, which she contrasts to "civil discourse" as that term was understood in the 1700s. DeLong speculates that it is because of a hypothetical that he had posed in 2004 with two questions concerning degrees of being free and whether the differences matter. Jonathan Wilde, in a now lost post, commented on the hypothetical. Kiesling commented on Wilde's point that DeLong created a false dichotomy: "'do you care how free you are if your life is better in other ways?'" (Kiesling quoting Wilde). This may be part of a larger "Nanny State" debate about which choices may be made by the individual and which by the State. Kiesling's view in 2004 when her comment on Wilde was posted appears to have been that individual consent should have primacy. DeLong's comment in the last paragraph of the post puzzles. Does it refute the complaint about discourse style or the importance given to personal autonomy or both? "I must say that I cannot think of a single eighteenth-century thinker who would have argued" suggests that a standard of proof is whether a thinker in the 1700s would have argued in favor of a proposition. Let "X" be the proposition, and we might expect arguments such as, "all 169 eighteenth century thinkers argued in favor of X, so X is more credible." Or "119 of 169 eighteenth century thinkers argued in favor of X." Or, of the 37 of the 169 eighteenth century thinkers who addressed X, 19, a majority, argued in favor of X." Or "no eighteenth century thinker addressed X, but eight of them addressed the similar proposition, X', and of those five argued in favor of X'." Perhaps there is only evidence from what eighteenth century thinkers argued based on the proposition anti-X from which to infer what they would have thought about X, had they thought about it. This provides arguments of the form "because all, some or one eighteenth century thinker would have argued in favor of X, X is more credible." This invites the argument "because no eighteenth century thinker argued or would have argued in favor of X, X is thereby less credible." DeLong's assertion, however, is more removed: it is not on what eighteenth century thinkers argued or would have argued about X, only on what DeLong is able to recall about eighteenth century thinkers. The argument is now, "DeLong's inability to think of a single eighteenth century thinker who would have argued in favor of X makes X less credible." Let's put aside the offer of proof and look at the proposition: "it is essential for me to protect your right to watch your children die of smallpox I have given them because I thought that the benefits to you and yours from having me vaccinated are outweighed by the risks to me of getting vaccinated." This breaks down into four pieces, a duty ("essential for me to protect"), a right ("to watch your children die"), a predicate ("of smallpox I had given them") and a reason for the predicate ("because I thought the benefit to you and yours from having me vaccinated are outweighed by the risks to me of getting vaccinated"). Looking only at the duty and the right, it is clear that the duty to protect the right can only arise if the right exists, so let's assume that the right exists. DeLong's argument doesn't spell out why the existence of Kiesling's right imposes on DeLong an affirmative duty to protect, not merely respect, it or whether it might be even permissive (rather than "essential") for DeLong to protect Kiesling's right. In DeLong's present hypothetical, the "I" decided against being vaccinated and transmitted smallpox to the children of "you", who are dying as a result. Call "I" by DeLong's name and "you" by Kiesling's. DeLong weighed the risks of vaccination to himself against the benefits to Kiesling's children (avoiding a potential source of infection) in favor of reducing DeLong's risk at the expense of increasing the risk of Kiesling's children. Whether DeLong had a right to this decision is not directly addressed by the hypothetical, which concerns itself with Kiesling's right to watch her children die as a result of DeLong's decision. Why DeLong's decision to make himself an agent of fatal infection gives rise to a duty on his part of vindicate Kiesling's right to watch her children die is not addressed, either. For the student: Is DeLong's post an example of civil discourse or philosophical discourse? Is DeLong's present hypothetical concerning vaccination "jockeying, positioning, and preening" as Kiesling describes the kind of blogging for which she has no patience? Does DeLong intend the present post primarily as a continuation of the original discussion of freedom or as a criticism of Kiesling for her style of discourse?
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I learned to type on one of those old mechanical boat anchors in 1960, and I can tell you the real reason for two spaces: If you don't follow the rule, you'll jam the keys. It's as simple as that. I described this a while back at http://goo.gl/Qe23s, which has a blow by blow account of the mechanical process.
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They were infelicitous in expressing their position (http://goo.gl/tpzZ): English Heritage looks after Stonehenge on behalf of the nation. But we do not control the copyright of all images of Stonehenge. And we have never tried to do so. We have no problem with photographers sharing images of Stonehenge on Flickr and similar not-for-profit image websites. We encourage visitors to the monument to take their own photographs. If a commercial photographer enters the land within our care with the intention of taking a photograph of the monument for financial gain, we ask that they pay a fee and abide by certain conditions. English Heritage is a non-profit making organisation and this fee helps preserve and protect Stonehenge for the benefit of future generations. The majority of commercial photographers respect this position and normally request permission in advance of visiting. We regret the confusion caused by a recent email sent to a picture library.
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While it's the case that foreclosures almost always occur as a result of nonpayment, that doesn't justify the "it's only paperwork" excuse. Since when is it ok to cheat if you're already winning?
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We used to have bankruptcy cramdowns up to the mid-90s and although not much liked in the residential mortgage securitization biz, we had provisions to deal with the consequences to bondholders and allocating the pain of what was called a "deficient valuation." The way it worked, in effect, is that the bankrupt borrower would total up assets and liabilities (notice we're talking balance sheet, not income statement) and be underwater. "I owe $500K on a house that is now worth $300K." And the court says to the lender: You are now secured to the fair market value of the property and an unsecured creditor as to the balance. After all the if ands and buts, exceptions, preferences and the other mysterious whatnots of bankruptcy practice, the debtor ends up with a lower balance and lower payments and the lender has to write off whatever portion has been discharged in bankruptcy. The debtor gets a fresh start (or a free ride, depending on your view of the advantages of modern insolvency law over debtors' prison), the lender gets a (theoretically) performing loan, and the housing market avoids a huge overhang of zombies. Without that mechanism to deal with undercollateralized debt, we are thrown back on the unsatisfactory alternatives of loan modifications and foreclosure. Either of these is unsatisfactory even when working as intended. "Affordable" payments only go so far when the fundamental problem is debt far in excess of the current value. Foreclosure keeps property idle and depresses prices (a homeowner may fight for the last 3%, but a lender is perfectly willing to drop its asking price by 5% per month). In commercial lending workouts a bankers sit down with an account and they duke it out. Residential is different. It was never banking to begin with; it was sales. A "loan consultant" sold a banking product with no warranty that may have been defective (because it was premised, for example, on an assumption that it would be refinanced in two years) to a borrower who now has a faceless bureaucracy full of people with no surnames and no direct lines who get no reward for making sure modifications happen, only for making sure that any that do happen are fully documented and initialed by the 32 departments who have to sign off. (I'm making up the number, but the reality doesn't depend on the detail.) Shoddy foreclosure practices have become a disgrace not because they're new, but because of the volume and because of the burden from the housing finance crisis that has been so successfully externalized by the surviving players. Granted that most botched foreclosures are due to the failure of the borrower to pay, there is still something fundamentally wrong with the notion that it's ok to cheat if you're going to win anyway.
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Since Mankaw used a hypothetical $1,000 gig as an example, let's go with that. Assuming that it is taxed at the highest marginal tax rate and taking into account his other taxes, next year he estimates he will only earn $523 after tax. Whereas, this year it would be $535. Twelve bucks. A half page of the NYT to complain about an extra $12 tax?
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Richard Careaga is now following J. Bradford DeLong
Oct 7, 2010
I wish I could remember the source of the story, which I have since adopted as you would a cute cat. During the heady days of peristroika, Gorbachev was giving the Politboro a pep talk. "Camrades!" he exclaimed gesturing to a huge map of the world behind where he stood. "Someday this entire wall will be painted red." Dutiful applause. "Except!" he cries out again, spinning on his heel and placing his finger on New Zealand. Silence falls. Nervous glances from side to side. What can he mean? Gorbachev tapped his foot impatiently until Vladimir Ivashko spoke up. "But Mikhail Sergeyevich, why not there too?" "Nu. We have to have someone to tell us what the market is doing."
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You can find the primary court documents in the al-Aulaqi case at http://goo.gl/pc1V; registration with the US Court Pacer System is required and the cost of downloading the United States' motion to dismiss is approximately $6.00. Nassar al-Aulaqi, a relative of Anwar al-Aulaqi, is seeking an injunction restraining the administration from killing Anwar “unless he is found to present a concrete, specific, and imminent threat to life or physical safety, and there are no means other than lethal force that could reasonably be employed to neutralize the threat[.]” (Motion to Dismiss, quoting plaintiff's filing.] In other words, al-Aulaqi concedes the right of the administration to kill him just so long as the due process protections are satisfied as to the existence of the threat and lack of other means to neutralize it. His complaint is not that he isn't getting the __same__ due process protections that apply in other situations, just that he might not get the more limited due process that applies in his case. He raises no constitutional issue. The administration opposes the injunction not only because it might want to kill al-Aulaqi (it declines to take a position) but because a prior restraint on the discharge of law enacted and signed into law is an intrusion by the judicial branch that is unworkable if a law has not yet been found unconstitutional. Should the authorizing legislation be repealed as an overreaction to 9-11 unworthy of a free society? That's a different, political not judicial, question.
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Let's see if I can spin a tale of woe that will garner sympathy from some and derision from others, based on whether to emphasize 2010, 2009 or the cumulative effect of 1965-2009 in terms of accumulation. Poor me: In 2011, 95% of my family income will go to health care costs and we will have to live off of capital until Medicare. Undeserving rich: In 2009, my family income was enough to generate well over $100K in income taxes off just three months of work. We paid cash for a house and a new car. Class traitors: In 2008, we gave the maximum to the Obama campaign. Generational transfers: One side of our family has been generous over the years. Thrifty: Paid off $350K mortgage in 10 years. Lucky: Made more money on home sales than lost. Beneficiary: Undergraduate education heavily subsidized by grants. Hardworking: Supported stay-at-home wife with part-time work while also attending first two graduate programs. Partners: One of us put the other through law school Privileged: Began second career at Big Law in SF. Thick-skinned: Was 42-year old first year associate. Unlucky: Laid off twice, once recently. So, are we the undeserving rich, a paragon of the American dream, spongers off of transfer payments, victims of the Great Recession, the justly punished/rewarded for choice of career or does some other label fit? Or, should judgment be suspended, heeding Herodotus, to see what we suffer or enjoy over our remaining years? Will our capital last? Will transfer payments continue? Will we have to further downsize our comfortable lifestyle? Will stars fall upon us by lottery? Will my specialty revive from the dead? Or is Taleb right, it's all been just the luck of the draw? It can be hard to have class interests when class membership becomes fluid. So, class, discuss: Is Careaga rich? Is Careaga deserving of his economic condition?
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Mom always said "don't put that money in your mouth, you don't know where it's been."
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I think we're beginning to pile on, here, even though the guy has some pretty lame opinions. But according to his "I'm sorry" at http://truthonthemarket.com/2010/09/ 1. He did it over his wife's objections 2. She's very unhappy about it 3. He's being buried in ad hominem attacks (granted he could have minimized those by not arguing from personal experience) 4. They have an infant at home, which anyone who has gone through the experience knows can lead to stress 5. He concedes, sort of, that he might be wrong or even stupid In addition, 1. He hasn't been yelling back 2. His net brand for the next five years has already been set in concrete 3. The Geneva Convention may prohibit continued pillorying in these circumstances 4. Even the rich deserve pity, so let's just increase his taxes
Toggle Commented Sep 21, 2010 on Oh Dear... at Grasping Reality by Brad DeLong
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I'm beginning to think that Professor Henderson is well on his way to being known, perhaps permanently, for his contribution to the debate about income inequality, which may well eclipse anything else he has ever had, or will ever, say. Whether this is a just result I leave for others to say.
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Two point to contribute: 1. Anyone with the gross income to pay nearly $100K in state and federal taxes shouldn't be doing his or her own taxes and his wasting time speculating about how much they will go up. If the Henderson family is in a household budget crunch, they should find out now how much they need to adjust in 2011 so that April 2012 doesn't present a crisis. Depending on what does or does not happen in Congress, they are probably looking at a monthly increase of $500-1000 in their income tax burden. If the Republican plan were to somehow pass, it goes up $500; if nothing happens, $1000 with other outcomes within that range 2. So why is Professor Henderson obsessing about $500 a month? He clearly has the ability to work around it. For example, he could ditch the home equity building (indulging in the assumption that property values are stable) and apply part to the increased tax burden and the rest to paying down student debt. Something else is going on, and I suggest it is an attempt to cope with a harsh reality. The cognitive elite are not immune to the economy and, until they have accumulated sufficient savings, they are no different from any other wage slave just a few paychecks away from falling down the socioeconomic staircase. Granted that with his promotion to full professor this year, Prof. Henderson may be feeling more secure in his employment, but perhaps Dr. Henderson's medical position is less secure. Or, given the family's other expenses, disability income insurance may be lacking and a serious injury or illness would leave the family unable to meet its obligations. As ever, I could be wrong and all that is at work is an overdeveloped sense of entitlement as a reward for doing so well getting one's ticket punched.
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Two additional troublesome parts bother me: 1. "Muslim life is cheap, most notably to Muslims" means what? There's an exchange rate that values non-Muslim life more highly? 2. "worth of the privileges of the First Amendment" is a Con Law flunk. The sovereign passes out privileges, but speech is a right. And it's a right not only of the worthy, not only of citizens but of any person subject to the laws of the US. There's no speaker's license exam.
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Employers may hesitate to reduce __nominal__ wages, but they have no hesitation at all in reducing __effective__ wages through overloading. While this is limited by wage and hour laws and union contract, exempt employees are fair game. Since the speed at which it is possible to attend meetings is a constant, and the speed at which it is possible to answer email and prepare reports declines as a function of context switching, the inevitable result is longer hours for the same wage.
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Just because the Ed biz is highly successful at separating parents from money and inducing children to borrow doesn't make the transaction entirely an economic proposition. As noted above, there are things that are darned near impossible to do without directed education and many others where an undergraduate degree is simply a barrier to entry. Perhaps human nature has changed in the long interval since I was 18, but neither I nor my classmates had any very clearly defined ideas of what we wished to do in the real world or, if we did, they were usually wildly inaccurate in the event. I ended up trodding a path away from my initial interests in Soviet relations through geology into city planning, project management and finally ending up as a mortgage securitization lawyer. Long, strange trip indeed. The prefrontal cortex is fairly plastic in young adults until around age 25. (Someone on Wait Wait Don't Tell Me describes it as 'insane with car keys.') One useful office of higher ed is simply keeping things in play longer, discouraging situations leading to serious failures by providing ample opportunities for a variety of crash and burn experiences in a somewhat more forgiving environment.
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Richard Careaga is now following The Typepad Team
Sep 1, 2010