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Archive for June, 2009

Vanity

Finally got a chance to read the Vanity Fair article on Sarah Palin:

The first thing McCain could have learned about Palin is what it means that she is from Alaska. More than 30 years ago, John McPhee wrote, “Alaska is a foreign country significantly populated with Americans. Its languages extend to English. Its nature is its own. Nothing seems so unexpected as the boxes marked ‘U.S. Mail.’”[...] As in any resource-rich developing country with weak institutions and woeful oversight, corruption and official misconduct go easily unchecked. Scrutiny is not welcome, and Alaskans of every age and station, of every race and political stripe, unself-consciously refer to every other place on earth with a single word: Outside.

That’s true, but in an essential way beside the point: the crime of Sarah Palin is not anything particularly essential to her or her sometime home state, but that anyone would not take one look at her and recognize someone who should not be trusted anywhere near an important decision.

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The pretense that the General Motors assets are being bought out of bankruptcy by a completely different, unrelated company funded by the Federal government has always been a bit difficult to sustain.  New GM, for example, is making no effort to renegotiate Old GM’s labor contracts, or even to refuse to recognize seniority or other benefits presumably accrued at Old GM.

On the other hand, the dance is imperative for the government’s approach to the proceeding to have even the slightest tinge of the rule of law.  The government’s case hinges on the idea that this new buyer – New GM – has come to the table to buy a specific set of assets from the bankruptcy estate.  New GM just coincidentally happens to be offering the United Auto Workers a very generous stock award that is much larger than the UAW would receive if cash were simply provided the court and divided up according to priority.

Random fluke, has nothing to do with old obligations of GM or the UAW’s stance as a creditor, just a case of trying to create some value for a future critical supplier of labor.  And votes.

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Simon Johnson takes on the hedge fund industry’s lobbying efforts in today’s Baseline:

if hedge funds dig in too deeply with “the crisis was not our fault” position, that is just asking for trouble – and to be scapegoated – down the road.  It would be much smarter to get out ahead of the political dynamic, and to propose ways to measure, control, and regulate risk.

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Iran

So far I have avoided talking about Iran because, well, because Iran is weird.

It is a country of seventy million people – about the same population as California, Texas, and Illinois combined – where a quarter of the population is under fifteen and nearly two thirds are under thirty (compared with the US, where 40% are under thirty), demographics brought to you by Islamic revolution, the Iran-Iraq war and an emphasis on reproduction, and presumably a lack of good late-night television.

Iran has roughly the GDP of Pennsylvania, which wouldn’t be such a problem if it did not have six times the headcount, and even this statistic – calculated off of 2008’s high oil prices – is rather misleading.  You see, as best as anyone seems to tell, Iran doesn’t make anything.  It extracts oil, and to a limited extent tries to refine it.  It’s the love child of David Ricardo and Dutch Disease: there is no point devoting resources to anything other than oil e&p, so no one does anything else, so the entire country sits around and waits for the oil to hit the market.

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Governor Crazy

I’m kind of enjoying this whole Mark Sanford AWOL thing; it’s a refreshing throwback to the days when a governor could do something completely nuts and not have threats of prosecution for prostitution across state lines.  I have no idea what the guy has been doing, but my guess is that it has very little to do with hiking and quite a bit more to do with the sort of thing that had Pat Geary in tears in Godfather II.

The truly crazy thing would be if the cover story were true: Mark Sanford really did wake up one morning, not tell his wife or any government officials, ditched his security detail, and went and spent four days on the Appalachian Trail with no advance preparation or provisioning.

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Catching up on missed reading and came across this exchange between Bill Simmons and Malcom Gladwell.  Gladwell is a famous writer, but his talents are most obvious when commenting on sports – there are several other excellent social commentators, but a comp set that includes Dan Shaugnessy offers far more room to excel.  Here is Gladwell on the full-court press in basketball:

one of the most common responses I got was people saying, well, the reason more people don’t use the press is that it can be beaten with a well-coached team and a good point guard. That is (A) absolutely true and (B) beside the point. The press doesn’t guarantee victory. It simply represents the underdog’s best chance of victory. It raises their odds from zero to maybe 50-50. I think, in fact, that you can argue that a pressing team is always going to have real difficulty against a truly elite team. But so what? Everyone, regardless of how they play, is going to have real difficulty against truly elite teams. It’s not a strategy for being the best. It’s a strategy for being better. … I wonder if there isn’t something particularly American in the preference for “best” over “better” strategies. I might be pushing things here. But both the U.S. health-care system and the U.S. educational system are exclusively “best” strategies: They excel at furthering the opportunities of those at the very top end. But they aren’t nearly as interested in moving people from the middle of the pack to somewhere nearer the front.

I might simplify the argument: the full-court press is a strategy that increases volatility but reduces the expected value.

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The Idea Locker doesn’t like my proposal to break California into three states:

California doesn’t need to be broken up.  If you were to give each of the de novo states that same comically bad constitution that California has now, each mini-state would have the same problems.  It’s not that California has such an unwieldy mix of people that it needs to be divided geographically; it’s the governance structure that virtually mandates the dysfunction.

Unfortunately, the governance structure does not exist independently of the governed.  The governance structure is a direct result of the need to accommodate the population of California.

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