THE VIEW FROM CHAOS MANOR
View 496 December 10 - 16, 2007
Highlights this week:
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December 10, 2007
The Wall Street Journal says that we're not out of the woods on the credit crisis, but it's manageable. They compare this to the tech stock disaster, and the S&L collapse.
The problems started when theorists and moralists decided it was a Good Thing for people to own homes. I don't disagree with that proposition. Aristotle defines democracy as rule by the middle class; the middle class are those who possess the goods of fortune in moderation; home ownership is a pretty good cushion against the ups and downs of life, and while it's not Jeffersonian democracy of small nearly self-sufficient land owners, it's a good thing.
So the government set out to make it easier to own a house. They created mortgage guarantee agencies that eventually spun off to be more or less private companies. These outfits originally did no great harm, but when they went commercial they had a big incentive to get those loans out. They were able to bundle loan paper into packages and resell those. This created more money to lend. A sort of feeding frenzy went up, and as the free market always does, the result was a race to the bottom: who could make the worst loans and still survive?
Anyone could predict the coming bubble, and some of us did, but it did no good. The free market will sell anything including your grand daughter's virtue, and compete until the price is as low as it can be. The free market will use any kind of tricks to get customers. The ethics of the Oriental bazaar prevail as evolution takes its course and the ethical are driven out by the rest. Gresham's Law holds in commerce too.
The bubble created money looking for borrowers. The market found borrowers. Lots of them including the chap headlined in the LA Times a few weeks ago: an illegal immigrant who bought a $500,000 house on essentially nothing down and low interest only payments, on an income as a "landscape designer" otherwise known as a gardener: under $10/hour. He now sits in his tears awaiting foreclosure. He will lose his house.
Which is pathetic, but it was inevitable.
We have done the same with education. We wanted more people to go to college, so we set up systems to inject lots of money into the college system. The result was that college and university bureaucracies found ways to spend all that money and demand more, and now the middle class graduates as debtors, headed for bankruptcy even as they begin their families.
And they never catch wise!
When I was a youth my European friends used to say that you could get a very good High School education in the United States. Of course you had to go to four years of college to get it.
Now your four years of junior college won't generally equal what we used to get in the better high schools, the universities have watered everything down so they can bring in more and more students with their endless supplies of borrowed money, and we sow the wind once more.
When you throw money at a problem the one thing you can be sure of is that they money will be absorbed and spent. You may or may not get the problem solved.
In my aerospace days, the government threw money at the ICBM market, and by God we build ICBM's; but those were the days when if your company couldn't do a job there was another eager to get that money, the jobs well well defined, and people like Schriever demanded results.
Now we just throw the money and watch bureacracies catch it. Alas, Babylon.
The latest mailbag is up at Chaos Manor Reviews, and the column will be up presently.
I am listening to a couple of radio commentators who seem to swallow whole the notion that the government, particularly the feds, never prosecute people unless there is good reason. Child porn possessors are always terrible people. Of course John and Ken are champions of the border patrol agents whom they say were prosecuted on vendetta. Ah well.
I see Fred was upset by an item that got to me as well.
|This week:||Tuesday, December
There is a letter on comparative advantage, and my response, over in mail. That will take the place of today's essay.
December 12, 2007
Back to work. I solved a couple of plot problems during our morning walk. Now all I have to do is write the scenes.
Mail will have to do for today.
We're going on holiday schedule here.
Query: Does anyone have a reliable way to change the scrolling in the old Warcraft II games? That is, they work fine on fast machines, but the scrolling is impossible. Actually, a good way to slow the game down would be useful, but slowing the scrolling is nearly vital.
I note that the Federal Reserve is going to make interference in the money supply an international affair, in order to relieve the great shortage of credit that is strangling the world economy.
Of course this means injecting more money into the markets. We know the expected results; I wrote about that a couple of days ago. Now it's going to be international. We can expect more booms, inflated prices, distorted investment patterns, more speculation, and since the U.S. is incapable of following a consistent economic policy for more than a year or two, probably wild swings. We could be engineering another world depression.
I suppose I ought to be happy. Story tellers always do well in bad economic times. But it does seem a shame.
I'm sure you'll get this from a dozen sources, but Terry Pratchett's announced that he has early onset Alzheimer's. There's a BBC article here: <http://news.bbc.co.uk/1/hi/entertainment/7141458.stm> and his statement here: http://www.paulkidby.com/news/index.html. For some reason the news of an author's sickness always hits me harder than other celebrities. Here's to your own health.
Terry is an old friend. When he was a Chaos Manor I showed him Wing Commander, and gave him a copy (I bought it at Fry's), but far from slowing him down it seemed to wind him up even more. I have his phone number but I have hesitated to call. I suppose I ought to, but it's hard to know what to say.
And Roberta found this
Subject: Starswarm anyone?
Inventor powers Christmas tree with eel Not even a blackout could put a damper on festivities at one Japanese aquarium where an electric eel is being used to light up its Christmas tree. http://www.msnbc.msn.com/id/22242648/from/ET/
Kindle DRM hacked to allow copy-protected MobiPocket files to be read.
--- Roland Dobbins
The question is, Amazon Kindle contracts are non-exclusive, but one wonders if that will matter since they can be hacked so easily? This needs thinking about.
December 14, 2007
There is a speech by Newt Gingrich that is worth your morning's reading time. I have put it in mail.
It is now time to get to work.
I will remind you that Mrs. Pournelle's Reading Program makes a wonderful Christmas gift for the parents of any child who has the slightest difficulty in reading. Many reading problems develop at 4th grade as subject matter brings in words that have not been taught in the controlled vocabulary readers. That and other suggestions are in this week's column.
And of course you can always give someone a gift subscription to this web site...
December 15, 2007
If it's not one thing it's another. The another this time is a sinus headache I woke up with.
Mamelukes moves along. I have solved all the plot problems (I think) but I will have to build some new characters. Several of them. This should go pretty fast, assuming I can see to work. Charge!
My thanks to all those who have recently subscribed or renewed subscriptions. You're keeping me going while I finish Inferno and Inferno II (done), and Mamelukes, so I can get moving on a new series.
Monday there will be two radically divergent views of Newt Gingrich's speech, and my comments.
December 16, 2007
Happy Birthday, Sir Arthur
Monday there will be radically divergent views of Newt Gingrich's speech, and my comments. Today I am doing the mail column. Still have sinus problems but not as severe. Yesterday was a pretty bad day, but today is better. Thank heaven for my sinus pump.
If you know anyone with sinus problems, get one of these. It's a present they'll appreciate.
This is a day book. It's not all that well edited. I try to keep this up daily, but sometimes I can't. I'll keep trying. See also the weekly COMPUTING AT CHAOS MANOR column, 8,000 - 12,000 words, depending. (Older columns here.) For more on what this page is about, please go to the VIEW PAGE. If you have never read the explanatory material on that page, please do so. If you got here through a link that didn't take you to the front page of this site, click here for a better explanation of what we're trying to do here. This site is run on the "public radio" model; see below.
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