Cain, FTL, and Fannie

View 699 Sunday, November 06, 2011

I just did a big mail collection. Alas I still do not seem to have mastered the art of links in this new text editing system. I sure miss FrontPage. I don’t know why the new editing system can’t do things we were doing with FrontPage over a decade ago. I guess it’s progress.

It’s cold in Los Angeles, and the weather seems to have affected me a bit.

Here is an excellent question:

Herman Cain

I was wondering if you’d heard whether Mr. Cain is accused of "classic" sexual harassment, (Using a position of authority to obtain sex.) or "contemporary" sexual harassment, (Offending a women.)? I suspect if one looked closely that the impetus behind this fresh airing of old dirty laundry is from the beneficiaries of the complexities in the tax code rather than liberals. Anyone who wants to simplify taxes had better be squeaky clean, independently wealthy and bring a much bigger shovel than Mr. Cain.

Good health to you and yours,

Tim Harness.

The answer is that we don’t know, do we? So far as I can tell there are no specific specifications, so one can’t say. He can be accused of anything you can imagine. We have this from Reuters

But a woman who received a cash settlement from the restaurant association in response to her harassment claim rejected Cain’s denials on Friday. She said through her lawyer that she was the victim of a "series of inappropriate behaviors and unwanted advances" by Cain in 1999.

But that doesn’t specify who proposed what to whom, and whether any of the propositions were accepted. We don’t know who the women were. We can be pretty sure that no actual sex took place and no soiled dress will appear in evidence, but even that’s an inference. And the beat goes on. http://www.arcamax.com/thefunnies/wizardofid/s-973370

Mike Powers provides this:

A couple weeks back, before the "FTL neutrinos" turned out to be just round-off error, you were speculating about whether FTL information transfer could create an apparent causality violation.

Here, xkcd notes that we already have a similar thing, as far as earthquakes are concerned: http://xkcd.com/723/=

Hilarious!

But I had not heard that the FTL neutrinos were a round-off error. If that proves to be true it would hardly be startling, but it is disappointing.

And we have this question:

On Fannie, Freddie, and the financial collapse

Jerry, you have occasionally cited Fannie Mae and Freddie Mac for their responsibility for the recent financial unpleasantness. Michael Bloomberg recently expounded the same theme.

I thought you might be interested in a review on Andrew Sullivan’s page of various arguments for and against this thesis:

http://andrewsullivan.thedailybeast.com/2011/11/dish-check-who-caused-the-financial-collapse-not-fannie-and-freddie.html

The conclusion seems to be that Fannie and Freddie were corrupt and badly designed, but played at most a marginal role in the bubble and collapse.

I’d welcome reading your perspective on these arguments.

Best,

Jon

It is my understanding that absent the nearly unlimited funds of Fannie and Freddie the bubble would have collapsed much earlier. Fannie and Freddie were able to buy those toxic loans and bundle them, using them as the capital against which they could issue more loans. The whole scheme was madness, but the commissions were so high that everyone had to get in on it. That of course is how Madoff worked. But in this case it could flow on longer because there was government money backing the whole play. Suppose Madoff had been able to borrow Fed money at essentially 0% interest; how long would his play have continued?

I am no expert on this.

My own view is that Fannie and Freddie were too big and should not have been allowed to become so. But then I think any organization that is too big to fail ought to be broken up into smaller pieces. Perhaps a progressive tax on market share above, say, 20%? But that’s pure speculation and half baked thought. I don’t know how to avoid the enormous concentrations of wealth that we are undergoing. I don’t want to penalize success, but I do think success ought to be involved with providing goods and services, not moving money in circles and taking in each others washing. I probably need to spend more time thinking this through.