Four papers i wanna write if I'm ever patient

Local Organizing in a Global World: The Marginalization of Bright-eyed Idealists
(Post-industrialization has largely worked itself through the developed world, this means more and more problems are driven by external forces fundamentally outside the control of communities or would be activists. An organizer in the Rust Belt today might do better to work in New Delhi. But what does this mean for the identity or prospects of the individual who wants to affect positive change?)

The Evolution of Real versus Derived Profits on Wall Street from 1970-2010
(This information is so proprietary- but I imagine the shift from primary to derived assets would be interesting. There is no normative judgment that derived or synthetic profits are bad, but it's a macro analysis I don't know that's been done. Additionally, a larger real asset base only potentially provides a broader base for structured income products. At some point though, productivity necessitates actually making something in the first place.)

Prisoners Just Want Community: Lessons in the Green Prisons Movement
(This idea of hardened criminals wanting to cut the pesticides out of the prison yard, or compost their food or install solar cells is very interesting. What motivates this? Boredom? Manipulation? Atonement? I assert that if prisoners had access to these programs in the first place they might never have committed crimes, as the green movement connects people profoundly not just with a broader purpose, but an entire community. Parole programs could incorporate these services into their programs as both service and therapy.)

Speed of Thought as Speed Bumps for Information Transmital
As the vectors of information delivery expand and accelerate now on a seemingly annual basis, the rate limiting step of our ability to celebrate or appreciate, yet alone digest, information may increasingly be our innate capacity to process such exposure. In 2005, the email checking and AOL searching of 2000 seemed pedestrian, and in 2010, the blogging and i-tuning of 2005 seems pedestrian compared to our tweeting and i-padding, and there's little to suggest it won't be the same in 2015- my guess would be in the direction of integrated devices reaching out to us, rather than passively responding to our requests, based on the many known preferences it has compiled from our routine requests, a sort of Amazon suggested purchases feature for all media across all platforms. Yet I find myself sometimes simply unable to make sense of everything I see before me, the children's book Where the Wild Things Are turned into a major motion picture turned into a digital dowload turned into an instant App on my i-pad, to watch on the side as I work an excel sheet and check my blog-feed. There is more that I want to watch and do, and am now capable of, than I could ever complete. In these moments the brain almost freezes akin to a hardrive. Which one to open? Which to prioritize? In other words, there may be a limit to how useful such devices may be, the rate limiting step being our thoughts patterns themselves.

P.s. - As Goldman Sachs testifies today, I have a hard time understanding the allegations and think the SEC's case is going to have a hard time (it was only voted out by 3-2). Goldman was selling income streams from insurance on mortgage debt (synthetic CDOs) to two global institutions that engaged in this all the time. Any transaction necessitates a buyer and a seller, the idea that these funds would go long by buying in assumes there is a counterparty that would go short. It's immaterial what Goldman thought of the deal, they are the market maker. The funds requested assets of a certain type to buy, Goldman obliged, and in the process consulted with individuals of varying perspectives. For someone to make money on long positions, there has to be another party willing to cover the positive spread if they are proven wrong, which would be the shorts. Our regulatory system is about 30 years behind the curve and needs to be upgraded, but this vilification of the bankers society collectively depends on for basic finance as well as investment finance can at times look like a modern day witch hunt, or the populist version of McCarthyism. I am no deep sympathizer with speculators, particularly in the non-deliverable commodities sector, but last time I checked people are innocent until proven guilty. Also, derivatives need to be regulated, but this can be done through registries, clearinghouses, or exchanges, or some type of self reporting. Why the fixation on exchanges? Most of these contracts don't even involve public entities, they should just report their balance sheet to the SEC/CFTC and be done with it, John Q. Public doesn't need to be able to Google their proprietary deals so we can hear a bunch of mindless quipping and potentially damaging adjustments to market confidence.)

Sit back and enjoy the show

There seemed to be at least two over-riding criticisms of the newly passed healthcare reform law:

1) It would not, contrary to official estimates, reduce the deficit, but rather add to it.

2) It would represent something more or less "un-American"- a significant expansion of government at the cost of free market choice and competition and a general ideological move towards socialism.

What I am perhaps most pleased about with this bill is that over the coming years, certainly the next 5-10 years, we can evaluate these claims with real world results and see who is right. We can test these claims, comparing Congressional estimates of cost with those of the Administration and the Wall Street Journal and Rush Limbaugh and the American Enterprise Institute and Brookings- and we can see who was most correct. Afterall, prejudging outcomes and assuming away complexity in favor of one sized fits all answers and ideology is anathema to science. So let's sit back and see the results of this experiment. These arguments will not linger abstractly out in the ether of public debate and controversy forever, with two sides eternally duking it out over fundamentally unproveable philosophical or moral questions (I'm sure more than a few come to mind). We will get hard data about how many more people get healthcare, on the rate of price growth, on the cost of these new mandatory government spending programs on the budget and tax rates, on the success and replicability of the 27 cost control and quality care pilots this bill establishes, on whether we remain a country of elections and predominantly privately produced and procured goods and services, or whether we become the new Venezuela. All of this, and much, much more, time will reveal.

For instance, the intent of these new pilots is to look for best practices, cost control measures, and general innovation in healthcare delivery. The point is to test new things for proof of concept, cutting funds for what doesn't work, and scaling up what does. Evidence based, pragmatic cost control measures are good ideas whether in corporate America or government. Many (potentially) good, cost-saving ideas are in this bill, and the potential savings weren't even priced into the budget estimates. Stuff like bundling payments across hospitals and outpatient services to reduce administrative costs and create greater negotiating leverage, paying hospitals with higher infection and readmission rates less, sending out undercover inspectors to look for waste and abuse, working on payment systems that reward quality of outcome and care over sheer volume (as is currently the case for the fee for service model) and clearly conveying the state of peer reviewed medical literature to practitioners in the field, so there is no ambiguity about the state of scientific knowledge on what works, and what is a waste, both of treatment and money. After all these assertions and claims that have been discussed the last 14 months during the genesis of this law, we will get to concretely see what savings and best practices come out of these 27 seperate case studies. For economists or researchers looking for good data sets and means to test null hypotheses, it's almost overwhelming to think of all the good analysis that could be done. Yet one thing is for sure, we know what healthcare costs today, we know how much waste there is, we know how many errors there are, we know how many people are covered- and now we are about to discover which way this law pushes all these indicators.

One could spend a great portion of her life reading criticisms and attacks of every aspect of this law (and even criticisms of things not in it!) from countless think tanks, research institutes, lobbies, and yes, gasbag bloggers such as myself. But what is so exciting about this historic piece of legislation, in addition to the potential to provide care for millions and root out inhumane abuses in the insurance industry and expand competition and choice- is that we will get to test these assertions very clearly. I just hope we keep score, and in 2020 if everyone takes for granted that kids can't be denied health coverage, or domestic abuse can't be classified as a preexisting condition, or a consumer isn't forced to buy into an oligopoly because the government now forces companies to post their plans side by side online to drive choice and innovation, or that healthcare costs are growing slightly above inflation rather than 250% of it- that we don't shrug this off as just the natural progression of things, as some inevitable outcome or industry innovation. No, like any good science experiment, we have been operating a good control scenario for about the last 50 years, and now we can compare it to the future. If these changes come about, we can make clear scientific arguments of attribution. Whichever side has it right, it will be a triumphant essay they pen in the National Review or Cato blog- an epic example of "told you so!" In other words, after 40 years of debate, it's finally down to the 4th quarter of a close contest, and we're getting closer to seeing who the winner is.

As a caveat, on the first two criticisms- deficit control and socialism- I would point out that this bill cuts $550 billion from Medicare in the next 10 years by eliminating 15 cents on the dollar of Medicare Part D (because it's 15% more expensive than public run plans and gets no better results). CEOs and turnaround private equity guys gets plaudits for this constantly, ruthelessly cutting waste and ineffeciency to force better results and make hard decisions. Oh, and in this case, it will also fulfill a promise the previous administration made to seniors about prescription drug coverage but didn't actually fund. But cutting medicare funding hardly seems like adding to the deficit to me, and curtailing the size of government payouts hardly seems like expanding government. Also, creating competitive transparent online exchanges, for customers to review and scrutinize plans, none of which will be government programs by the way, hardly seems like something that would be expected to increase prices, and hardly something that is socialist, in fact it seems like the essence of market based capitalism.

And from a behavioral economics standpoint, I've decided to take this new system for a spin, test out all my new government benefits by being a little clumsier here and there. JK

In Remembrance: Rachel Corrie (1979-2003)

Seven years ago today Rachel, from Olympia, died in the name of freedom. This isn't about politics or one side versus another, it's about a brave soul giving her life for a cause, and remembering. Looking at ongoing developments in the Middle East today, more reflection and remembering is needed.

Saving the World one Popsicle Stick at a Time

I truly believe we are going to solve global climate change by switching over the Federal vehicle fleet to Priuses and squeezing some more caulk between our door shims and window panes and recycling the deep fried remnants of our Whoppers to power the farm combines endlessly plowing our Corn Pops. And that ought to employ tens of millions of people in real good-paying jobs for many years to come, at a minimum. I mean, fuck incentives- let’s mandate the world to behave itself with a Bible of regulations.

There is a reason why two installments of the Cash for Clunkers tax credit program sold out in a matter of weeks and put tens of thousands of cleaner cars on the road, and a year later the stimulus program’s $5B grant based weatherization program has retrofitted less than two percent of intended houses. Not surprisingly, people rushed to save themselves money, and not surprisingly, an army of state bureaucrats couldn’t give a fuck if your house is weatherized. Generally, it’s difficult to argue that incentive and choice do not trump rules and enforcement when it comes to social policy. This is not an argument against government, but a plea for government to use a stronger set of tools.

I mean we spend 25 years of our careers trying, usually in vain, to add 1.4 years to our lives. We subtract more years trying to add more years than we statistically predict could be added. The stress level involved in decades long regulation and litigation and political triangulation aimed at reducing environmental stress seems to cause more stress than the old bastard windbag we call “the climate” could ever muster. Apparently there are legions of people waiting just a few more years for some environmental and culinary rapture, where everything is flawlessly clean and carries no risk. They’ll finally cast a line in their favorite river when the Mercury concentration drops just a few more parts per billion, or tongue that bucket of spicy KFC hot wings when the hormone levels at the chicken mills they monitor from their i-phone app dips a tosh. I for one have always just cast the line and eatin’ the fuckin’ fish. I am not so confident as to think I have much say as to when environmental Jesus will decide to make on Earth as it is in the great organic farm in the sky.

There couldn’t be a better example of this self-celebratory environmental small think than in our Nation’s capital, where they decided to Save the River and Be Green, (“Keep the River Green”?), by making you pay 5 cents for a grocery bag. For starters, if you don’t buy a grocery bag, a disposable bag to store the things you just purchased (for likely many hundreds of cents), because it costs a nickel, you have far greater things to worry about than climate change slowly whittling away at your children’s health over the next millennium, should you not starve to death before they reach adulthood, or your trash bags blowing into the pristine waters of the Anacostia- than ignoring a few inconvenient truths. Namely, the state of your personal finances and next meal.

And I wonder if the City Council that passed this even knows anything about global climate change. Do they know that a majority of greenhouse gas emissions come from coal plants, and nearly all the rest from cars, planes, trains and forest fires? Or that plastic bag curtailment could save the greenhouse gas equivalent of 14 nanoseconds of China’s economic growth? Policy like this, that lacks all perspective of magnitude or context, and yet is pitched like the Great Leap Forward at every bus station and financial transaction, forcing many an awkward conversation at cash registers across the District about whether you want a plastic bag for your tampons or 17 cans of cat food, is the codification of denial- the timeless political calculus that feigning productivity and progress while claiming credit beats the appearance of doing nothing.

I empathize deeply for the bureaucratically enmeshed career environmental regulator who has to attempt to solve global problems via a thousand little regional solutions, when obviously a couple big ones are what’s required. They usually look like they haven’t seen the light of day in four weeks, having to fill out three forms to get their three different bosses to let them write a report to seek interagency clearance, to then languish in Committee on the Hill while be slowly mutated by lobbyists beyond anything that abnormal levels of hormones could achieve. By the time they reach this point a good portion of their career, and will, has passed, and they would not last two days in the wilderness they so seek to protect- slowly adopting the same ghostly hue of the countless memoranda and email chains that pile around their cubicle sized windowless office.

No wonder so many of my generation have adopted “unorthodox lives”. No wonder so many of us hate polluters, and the fucking politicians they pay off- because we see the answer and the impediments all too clearly. In fact, it’s pretty obvious. My generation (read the surveys) says something like, “Jesus! You want to fix climate change- macro econ 101 says put a fuckin’ price on carbon, offset taxes elsewhere, and watch the clean economy build around you, employing millions of modern day Rosy the riveters and decent lower middle class jobs- the jobs that gives this country stability in the first place! But so long as coal is cheap as dirt, your plastic bag policies are a pipe dream.” After all, the primary function of government is to create middle class jobs- that soothing ointment for the many wounds of life that makes all the tedium and drudgery usually tolerable.

The more people lobby to stop global, fucking global, climate change by opting to pay a Citibank credit card bill online in lieu of getting a piece of paper mailed once a month, or inflating their fucking tires 3.2 more PSI, or turning down the thermostat two degrees, the more America loses- the whole point, a whole generation and a peerless opportunity. If irony is when something’s actual meaning is totally opposite the literal- then nothing could be more ironic than modern populist environmentalism.

News

I started MyLastLecture.org - check it out, or don't. Hope it catches on like wild fire, not wildfire, like a fire, that is wild.

Also, regarding the current situation of healthcare reform legislation. Dammit. The votes aren't there in the Senate, so this means the House has to pass it, or as much of it as possible can be passed with a simple majority through the budget reconciliation process. This is the best method, because otherwise it will get pared down to a shell of itself. However, the Parlimentarian hasn't ruled yet on just how much of the bill could be passed this way. It only applies to spending or taxing, and many of the core programs (exchanges, eliminating heinous insurance company practices, setting up cost control pilots, Medicare Advisory Board) are not on budget. As is often the case in this life, the most important things are always both a blessing and a curse. These measures will likely save the most money (trillions, not to mention many lives), but because it doesn't dirctly spend money, it can't be considered through reconciliation. And all because of Kennedy's seat. The cruel cruel irony. Here's to good news out of the Parlimentarian's office.

Also, today J.D. Salinger died. From Catcher-

When I was all set to go, when I had my bags and all, I stood for a while next to the stairs and took a last look down that goddam corridor. I was sort of crying. I don't know why. I put my red hunting hat on, and turned the peak around to the back, the way I liked it, and then I yelled at the top of my goddam voice, "Sleep tight, ya morons!" I'll bet I woke up every bastard on the whole floor. Then I got the hell out. Some stupid guy had thrown peanut shells all over the stairs, and I damn near broke my crazy neck.

Anyway, I'm sort of glad they've got the atomic bomb invented. If there's ever another war, I'm going to sit right the hell on top of it. I'll volunteer for it, I swear to God I will.

Boy, when you're dead, they really fix you up. I hope to hell when I do die somebody has sense enough to just dump me in the river or something. Anything except sticking me in a goddam cemetery. People coming and putting a bunch of flowers on your stomach on Sunday, and all that crap. Who wants flowers when you're dead? Nobody.

Don't ever tell anybody anything. If you do, you start missing everybody

Enforced Mediocrity

I feel like a prisoner to mediocrity many mornings and evenings, shuttling back and forth to work on DC Metro (and perhaps for other reasons ha). DC Metro. That name has a good ring to it. The Nation’s Capital. The seat of power of the most powerful nation the world has ever known. Perhaps to introduce a (very) healthy dash of humility, introductory training for Freshman lawmakers (and perhaps the not so fresh as well) should include a requirement to have to commute via Metro for a couple months. Maybe the drive for government reform would be just that much stronger and more urgent as a result of what these aspiring legislators experienced. It would illustrate so many “fascinating” aspects of government management. And it’s a shame- that the most well worn experiences most people have with government often have to make those who fight for higher government performance and accountability and management look so pathetic. (As a disclaimer I am not proclaiming to be in this group, but I have seen them, they exist.)

If the keyword in our collective game of Family Feud was “government” I imagine the top five would be something like- taxes, DMV, seatbelts, waste, and- public transportation. If nothing else this is guilt by association. It often appears as if there is no leadership in Metro- which in and of itself is an impressive feat- to give the appearance of an utter lack of anything, a complete vacuum of management or direction or leadership. In this respect, deep space and the DC Metro are very alike. That, and they both cryogenically deep freeze the souls of any human beings who are exposed to them for more than a few minutes. Train time arrivals are like a game of dominos, the times change and cascade in different orders without warning- from perhaps, 2 to 12 minutes, with the swift authoritative and utterly random shift of an LED light. Hundreds of people fill the entire platform, sometimes up to 12 deep, awaiting a train that always arrives short two cars- needlessly leaving 25% of the platform unused. Passengers not uncommonly faint or get sick from the manual, jerky stop. My last ride from Adams Morgan to Dupont involved nine separate accelerations and brakings- to cover maybe seven blocks. There must be traffic ahead, or bumps in the tracks, or maybe a deer ran out in front. Trains arrive heading opposite downtown in an approximate three-to-one ratio to inbound trains in the mornings- and the reverse in the evening. Maybe the metro managers think rush hour works in reverse in DC. Escalators prove impossible to maintain for even a few consecutive days, with plywood cases often blocking them for weeks at a time.

Riding metro feels like stepping into the Great Depression. The energy level of grimaces, snipes, grunts, glances- mimic the feel of mass, shared suffering that defined that era. People throw their courtesies out the window- yesterday I got cut in front of by both a portly cheery-faced woman and a man with a Costco sized stroller. I don’t mind, it doesn’t bother me, I’d in fact gladly wait for the next train so they can board- which I did. But something tells me this isn’t these peoples’ normal personas. That maybe Metro naturally brings out the worst in people. That maybe that dad who girgles at his baby for two hours every night, also forearm shimmies people in the morning to slip down the escalator to catch the arriving train, and maybe he wonders what the hell he was doing at night, feels guilty, suppresses and channels that anger, and becomes a slightly more bitter, unhappy person. Perhaps this makes him a marginally worse father, worse husband, emotionally less available or feeling of his child. Perhaps Metro's service- our shared couple hours a week- tears slightly, but meaningfully at the fabric of our communities, our homes, our belief systems, our families- ourselves. Metro is a microcosm of the inert and faceless forces of modern life that simultaneously know nothing about us, but dictate the very minutia of our lives, that trusts a smaller and smaller bit of us everyday.

And before you write this off as a misanthropic diatribe (nothing about that is inherently unacceptable to me however) or observations divorced from the responsibility of constructive criticism end efforts at self-improvement- consider that Metro will get $150 million in Federal Funds this year to….very auspiciously- improve their service. Consider that every person I’ve talked to would pay more to have a better Metro, and none has ever complained about their $3.20 daily fare so they can save hundreds a year not driving. In June, nine people were tragically killed on Metro in a horrific accident. This is all the more reason to aspire to more, to a more efficient, safer train system- it is not a pretense to eliminate two cars off a train. I wish you could transfer Moscowans from 1920s Stalinist Russia to Washington, D.C.’s Metro in 2010 and explain that we have not figured out a way to safely operate an eight car train. It would utterly perplex them, as it should. Metro riders include some of the most hardworking, brilliant, beautiful, promising, driven, and often, powerful and influential, people in the country. This makes our shared enforced mediocrity all the more tragic.

Couple music videos.

My Internet connection took the better part of an hour to upload, so they're all fuzzy-

Let's make some work

All too often it seems policymakers equate increased spending with job creation, or job creation with increased spending. The two are directly correlated, in a Keynesian macroeconomic sense, which is exacerbated by all kinds of negative feedback cycles during a recession (asset depreciation, liquidity traps, wage-demand spirals) but far from the same. But does it really cost $500,000 of direct government appropriations to create a job? That’s the not so pretty math update from the Recovery Act, which has spent about $350 billion so far and created some 700,000 jobs. Just as an employer creates jobs because of the marginal productivity of that job, and not tax rates, e.g. an employer will hire a worker at salary $X if they produce something worth >$X if the tax rate is 50%, but not hire if the salary exceeds the value of marginal product even if the tax rate is 0%- the government only drives organic job growth when it's profitable. Otherwise when the appropriation runs out, the job runs out. Employers would prefer to keep more of their profit, but they don’t care how much the government takes of non-existent profit. So tax rate arguments are of almost secondary importance- of primary importance is industry, market creation.

As DC turns to Job Creation: Act II, the focus should be less on throwing more money out the door, and more on making promising nascent growth industries profitable. Temporary government expenditures will create more temporary jobs, two or three year tax credits in long-term infrastructure driven sectors, like clean energy or biotech, will continue to not pencil out on 30-year amortized balance sheets. Profits won’t return to Main Street until new industries are profitable industries. America will only sustainably recover from the latest credit driven asset depreciation shock when there is either paradigm shifting technical innovation that changes the profit calculus (say of silicone being cheaper than coal, or server space being cheaper than a piece of paper; a hard bargain), or when the government just decides to change the calculus itself.

Congress could establish a set of 30-40 year tax credits and streamlined regulations (the one or two year stuff they’re used to releasing a couple months after the last temporary set expired doesn’t fool even the macabre neophyte investor class) that will spur private sector investment and growth. On my short list of such credits? for starters a $.03/kWh clean energy production tax credit, cheap leases on set-aside government land to build new energy infrastructure, 50% tax deductions on all mass transit investments, and 30% tax offset for all biotechnology investments. Tax attorneys could fill in the details. And perhaps most beneficial of all, tax credit driven job creation would change government receipts (perhaps offset by higher top-end marginal income tax rates), but not directly add to deficit spending. The annual $1.4 trillion deficit we run now mandates we not continue short-term stimulus spending into the long-term, only further raising the cost of capital and chocking off promising nascent industries. The bottom line is there needs to be a paradigm shift from spending to incentivizing, from direct expenditures and subsidies, to indirect industrial tax policy. That’s why the much heralded “Jobs Bill” Leader Reid and Speaker Pelosi are corralling should not fall into the trap of thinking the only way for the public sector to create private sector employment is too bequeath it money, rather it could simply make it profitable. For all the economic carnage out there, we should begin to focus a little less on triage, and a little more on getting well.