Fiorina's 2 min hate on the public sector

The latest from failed Senate Candidate and failed CEO Carly Fiorina really chaps my hide. She was on one of the gasbag Sunday shows with Paul Krugman (ht Balloon Juice), and they got into it about public vs private sector jobs. Here is some of the transcript, thanks to Think Progress:

CARLY FIORINA:I think it’s important to remember, when we talk about the economy, that a private sector job and a public sector job are not the same things. They’re not equivalent. I’m not saying public sector jobs aren’t important. But a private sector job pays for itself. A private sector job creates other jobs. A public sector job is paid for by taxpayers.

This fiction that somehow a private sector job is the only way to get money moving in the economy is such hogwash. Much of public sector is intended for investment into the commonwealth and the common good, all so we can have a decent society and invest in the future. I can give you two very good examples: my wife and me!

My wife is a public high school teacher, providing instruction on biotechnology and health care to a population of relatively low socioeconomic students that are almost all Hispanic or black. She's training the next generation of scientists and health care workers and drawing from a population with very few opportunities. This undoubtedly will have a great impact on our economy in the future as many of these kids go on to college and take 21st century jobs.

I'm a scientist, working at a private research institute, and the vast majority of my funding comes from grants from the National Institutes of Health. My work focuses on the development of the brain, with special focus on how thyroid hormone shapes neural circuits. Cretinism and other thyroid-hormone related disorders that affect the brain are still a major issue world-wide, including in the US, and research into this issue will help keep our medical costs in check throughout the 21st century.

But according to Fiorina, we're just greedy bureaucrats sucking on the public teat and twiddling our thumbs. We offer no value to the economy. The truth is we make very meager wages. Our friends in the private sector, at least those lucky enough to be in finance or the defense contract business, make mad money. Virtually every single penny we make goes into buying things or paying for services. We pay rent (which is ludicrously high in SoCal). We buy clothes and shoes for our kids. We pay for soccer and baseball leagues. We buy overpriced food and fuel. We hardly have a single penny to save from our wages every single month. But Fiorina thinks that if I fork over $1400 (!) for daycare and after-school every single month, I'm not helping to create jobs. That money must just disappear into the ether, because it once was "tax money".

I hope she runs for Gov next time around. I can't wait to end up at one of her events and ask her about these comments...

For Whom does the Bailout Bail Out?

Cross posted at Angry Bear

Both the Senate and the House have passed the big $700 billion bailout (actually now larded up to $800+ billion) to save the “financial system” from complete collapse. This is to supplement the various actions taken by the Fed and the SEC to shore up financial institutions, including halting short selling of hundreds of corporations and the creation of an alphabet soup of lending windows to “provide liquidity” to troubled institutions.

Much has been made of the fact that if nothing is done, the markets could come crashing down. Having watched some of the House floor debate this evening in my Berlin apartment thanks to the wonders of live-streaming from C-SPAN via the intertubes, I heard this argument over and over again from many members of the House. The big drop on Monday was cited as an example many times as a sign of impending doom if nothing is done. Of course, all of this is especially ironic given that the markets took a huge nosedive as soon as the House passed the bill.

Anyway, there is no doubt that a 1929-style crash would have an incredible impact upon the economy. But for whom in our society would a market crash have the most direct impact upon?

I found the answer to this question via the Economic Policy Institute in their report titled The State of Working America 2006/2007. They have a table which lists the concentration of stock ownership by income level from the year 2004, which I found particularly interesting. I decided to make a figure that illustrates some of the data from this table:
This shows that the 2.5% of the population that makes more that $250,000 a year own 44% of the shares on Wall St. Another way to look at it is that the 16.1% of the population that makes more than $100,000 per year own 73.2% of all shares. The rest of the 83.9% making less than $100,000 per year only own 26.8% of all the shares. The 57.2% of the population making less than $50, 000 own a paltry 9.2% of all shares.

To reiterate, many in Congress who supported the bailout package admitted that this needed to be passed in order to prevent a crash on Wall St. My guess is that allowing corporations to offload toxic assets onto the backs of taxpayers will certainly ease the strain on those corporations balance sheets. But do keep in mind, going forward, just who among stands to benefit the most in this "transaction".

House Bill Voted Down Open Thread

by Afferent Input

Current iteration of the bailout bill goes down in flames 205-228.

Dow is down over 700 pts. NASDAQ and S&P 500 both down over 8%.

Ugh-lee.

Go Cubs

Mrs. AI has the details.

They'll probably blow it in the end, however. They always do.

Some Thoughts on Bailouts

First, there was the shotgun marriage of Bear Stearns and JPM. Then $85 billion to AIG. Next came the loans to shore up money markets. Finally Friday’s announcement of a special program (most of the important details still unknown) that will cost “hundreds of billions of dollars”.

And of course don’t forget the alphabet soup of special facilities created by the Fed to protect the big money movers.

Bailouts, all. A lot has already been said, of course. But there are two things that I wanted to add to the conversation.

First, folks on the left and the right have referred to the recent onslaught of government bailouts as “socialism”. On the surface, it may seem that way, given that government now “controls” vast swaths of the nation’s financial system. But nothing could be further from the truth.

Let me say it more plainly; this is not socialism. Socialism is a form of government that seeks to equalize the playing field for all, insuring that that the fruits of labor are shared equally (but not fairly, necessarily. That’s one of the major reasons why socialism doesn’t work). Does anyone seriously think that captains of finance have embraced the philosophy of “workers of the world, unite!”? The same guys with multi-million dollar “golden-parachutes”, sometimes taking home more than a billion dollars in a year. The same guys who have embraced shady accounting practices so that they and their companies pay as little in taxes as possible, sometimes percentages of income far less than the average American worker. The same guys who have broken union after union over the decades. We’re supposed to believe that just this week this crew has decided to abandon Friedman and embrace Marx with open arms? Come on…

Let’s look at it another way; does anyone seriously believe that the average American stands to benefit financially from the actions taken this week? That the profits of AIG, or BS, or Fannie and Freddie will be split equally amongst the masses? Of course not. Instead, tax payer money will flow from the Treasury to shore up the accounts of what should be insolvent corporations. Essentially out of your pocket and into the hands of Wall St, only making a quick pit stop in DC. Or worse, putting it on the national credit card by selling even more treasuries. This is not socialism. Instead, this more resembles a different form of societal structure: kleptocracy.

Second, how did we get to the point that simply the failure of one company would mean utter chaos for society at large? This fact alone illustrates very nicley that the financial system ceased to be a free market long before last week. The lifeblood of free markets is competition. Competition gives birth to fair pricing of goods and services as well as efficiency of commerce. If one business fails, another takes its place.

The fact that these corporations were to big to fail means they were too big. Period. If AIG couldn’t hack it, then some other corporation would have stepped up to the plate. That is if the market place was truly free. But clearly it was not. Instead, what existed was at the very least a pseudo-monopoly. Many markets left to themselves will gradually evolve into monopolies, and one of the roles government needs to play is to insure that monopolies don’t get to the point where they distort free markets to the point where they aren’t really free anymore. Obviously government failed to meet that obligation in the financial sector the last few years.

I suppose that’s what happens when the foxes are put in charge of the hen house. Only time will tell if the foxes can keep fooling everyone into believing that there are still some hens left.

Note: It should go without saying that the above is my opinion and my opinion alone. No doubt that many of the other Angry Bears would disagree with at least some parts, if not the whole. But I'll say it anyway.

OTC Derivative Growth Since 1998

CROSS POSTED AT ANGRY BEAR

As the world financial markets head into complete meltdown, it is worth taking a moment to look back to see where all this began. Much of the current crisis stems from the shadow banking system’s dependence upon the explosive growth in derivatives market. These complex financial instruments are meant to monetize risk of default. Futures contracts, options, swaps, and many others allow one party to insure money is exchanged, but the outcome of the contract depend upon many underlying factors that make up the terms of the contract. Though many forms of derivatives are traded in exchanges, many are not necessarily.

Derivatives that not necessarily traded on market floors are known as “over-the-counter” derivatives. They are usually bilateral contracts between investment banks and a customer and can be generated simply over the phone or over the internet. This form of contracting is largely unregulated. The OTC market has been monitored by the Bank for International Settlements since at 1998, and they publish detailed information on various forms of OTC derivatives every six months. The most recent data can be found here.

This market was very big in 1998, but it has exploded since then. I’ve generated a figure of the amounts outstanding of OTC derivatives since 1998 broken down into their various types.


You should note that the Y-axis is in billions of dollars. Yes, billions. That means, as of Dec 2007 (for which BIS has the most recent data), the total OTC derivative market was almost $600 trillion dollars. In 10 years, it has gown 826%.

The growth is even more disturbing if you look at some of the subcategories of OTC derivatives. Below is a figure illustrating the ratio of amount outstanding contracts relative to the amount outstanding in June 1998 for interest rate contracts, commodity contracts, and credit default swaps.


Though commodity contracts still make up only a small proportion of the total OTC contracts outstanding (1.5%), its growth has been astronomical, increasing over 2,000% since June of 1998. Even interest rate contracts, which make up the largest portion (66%) of all OTC derivatives, increased over 900% in 10 years. And most troubling of all is the credit default swap market. These are contracts that are activated in the event of a default.
This market has increased 905% in just three and a half years since BIS starting monitoring this form of derivative. It was a mere $6.4 trillion in Dec 2004; In Dec of 2007 this market ballooned to $57.9 trillion. Just think of the unwinding of credit default swaps that is involved when big investment banks like Lehman Bros. go under.

Of course, all of it is very complicated, because derivatives are essentially a “zero-sum” instrument. They way derivatives are supposed to function is that money is exchanged depending on the outcome. Nothing is lost, at least in an ideal environment; it is only exchanged hands. But what happens when one party of the contract can’t pay?

I think we’re going to see that many times over very soon…

Ugly Ass Costume

WTF is up with this costume?

Don't get me wrong; the kid is cute enough. I just don't what's up with the two headed Curious George. I say again, WTF?

Suckers = us

Atrios says:

Reading through what's been released I still don't really get a sense of the important details. "Who eats how much shit" is the big question and it isn't entirely clear.

As the old saying goes, if you're sitting at a table, and you don't know who gets to eat how much shit, guess who gets to eat the most.

PTCRHMHIOD

Last week John McCain was asked just how many houses he and wife own. This may seem like a simple question to answer. For instance, if someone were to ask me how many houses I own, I would reply very quickly with:

0

McCain, on the other hand, had this to say when asked such a simple question:

"I think — I'll have my staff get to you," McCain told Politico in Las Cruces, N.M. "It's condominiums where — I'll have them get to you."

Is McCain an out-of-touch elitist who is so f-ing rich he doesn't even know how many homes his family owns? This may seem like the case, but only if you are completely ignorant of the demons that haunt McCain day-in and day-out. McCain's campaign was alluding to this affliction when asked to respond to the fact that McCain has no idea how many homes he owns. His campaign spokesman, Brian Rogers, had this to say:

“This is a guy who lived in one house for five and a half years — in prison.”

This may seem like McCain is, yet again, pulling out the ole "Noun, Verb, POW" card to shield himself from any criticism over any subject. But this is simply not the case. Instead, McCain suffers from PTCRHMHIOD, or Post Traumatic Can't Remember How Many Houses I Own Disorder. This horrible condition has forever altered the lives of countless Vietnam Vets, and especially former POWs, after their return to the States. In fact, it is the number one cause of divorce between former POWs and their millionaire liquor-heiress wives.

It is a shame that Democrats, and especially the Obama Campaign, will exploit McCain's ailment just to win an election. Obviously they will trivialize the service of any and all former military men-turned-politicians that use any suffering they endured while serving to deflect criticism of any kind, even it's about how much f-ing money they have.

Dems should be ashamed. Leave this honorable man and his four seven ten twelve houses alone!

House-gate

Or is it Houses-Gate? The question of the day is:

HOW MANY HOUSES DOES JOHN McCAIN OWN?

Honestly, you might think this would be an easy question to answer. At least for regular folks. For instance, I own exactly zero homes. Just like most of the people I know.

I do know one guy who's a lawyer and does very, very well. He also owns some investment properties. If I were to ask him how many homes he owns, this is how the conversation would go:

Me: Hey, how many homes do you own?

Him: 4, my house and three other that I rent.

Me: Cool, thanks.

Him: How many you own?

Me: None. You know that; I make jack shit as a scientist.

Him: oh...

Yet here's what John McCain said when asked the same question:

"I think — I'll have my staff get to you," McCain told Politico in Las Cruces, N.M. "It's condominiums where — I'll have them get to you."

He doesn't even fucking know how many homes he owns? WTF? Is he that f-ing rich? Or is he just senile? How can anyone not know how many homes they own? WHAT. THE. F?

Anyway, the DNC has put together a helpful guide to let McCain know just how many homes he owns:

Must be nice to be so f-ing rich that you don't even know how many homes you own...

Update:

Here's the audio of John "I'll have my staff get back to you on that" McCain

Clipped Quote = Same old regular BS

Jesus Christ, I'm so glad I'm not there to watch this BS on a regular basis...

Wake me when the stoopid season ends...

Ricahrd Cohen is an idiot

Richard "ultra-liberal" Cohen says this:

McCain's true virtue is that he is a lousy politician. He is not a convincing liar, and when he adopts positions that are not his own, they infect him, sapping him of what might be called integrity energy.

I think the best response I've seen for this vapidity is this from the comment section at Yglesias's place from Tim Conner:

You know, to take Richard Cohen seriously, you would have to think he was an honest man.

Like McCain, he is not. You see, to be honest, it's not enought to be uncomfortable with lying. You have to tell the truth when it's inconvenient.

At least, that's what my mom told me when I was little.

How Cohen can look at McCain's flip-floppery and see something honorable completely escapes me. McCain's a douchebag for flushing his integrity down the toilet; Cohen is even for worse respecting it.

Go Obama Go!

We went to the Obama rally last Thursday. I don't have time to give a recap, and it's already old news anyway. But Mrs AI gave a nice recap here, and check out this video a friend took of baby AI getting on gettin' on with a good ol' "Go Obama Go" chant and finishing it off with a classic terrorist fist jab. He's such a cute little terrorist.

I said halb Kilo of Cherries!

I went to the local farmer's stand today to get some produce. It's a little weird here; you don't get to pick your produce. Instead, you stand in line and wait your turn to talk to some guy to let him know what you want. Then he puts your produce in a bag and then you pay.

So I wanted funf Apfel und vier Pfirsiche (five apples and four peaches) and ein halb Kilo Kirschen (half a kilogram of cherries). The guy put my apples and peaches in the basket, and then piled the cherries into a paper bag. He gave me my basket and I walked into the store to pay.

When I got up to the counter, I noticed that I had TWO paper bags of produce in addition to my plastic bags of apples and peaches. Both bags had stickers that said the they had about 1/2 a kilo each. I figured that the guy outside gave me two bags of cherries, or one 1/2 kilo too many. I started to tell the guy, using my 100-word vocabulary of German, that I only wanted 1/2 a kilo of cherries. And he looked at the bags and said "OK, you want half kilo, you have half kilo." I kept pointing to the bags as saying, "No I only want ONE 1/2 kilo", and he kept saying "yeah, you get one half kilo" but kept trying to make me pay for both bags. I finally gave up, figuring these guys were trying to take advantage of the dumb American who can't speak German, sticking him with some extra cherries like some dumb schmuck!

Anyway, I got home and was pretty steamed. I told Mrs AI about what happened, and she was pissed that I paid for both bags. I tried to explain to her that I just gave up and something was being lost in translation. I started to put the produce into the fridge, and lo and behold, the second bag didn't have cherries in it at all. Instead, it was filled with Turkish Apricots that the guy outside accidentally put in my basket! No wonder the guy thought I was such a douche for wanting ONLY half a kilo of cherries! Next time I'll be sure to actually look inside the bags!

Man am I an ass...

Brunch

Holy Fuck. The brunches here are Ah - Mazing! I guess it's a Berlin (German?) tradition to have brunch on Sunday. We had one last week, and one today. These things are all you can eat, and are filled with fine cheeses, meats, various breakfast dishes such as scrambled eggs (but good ones with great spices and cheese and real eggs, not the shitty kind you would get in a crappy American cafeteria that is made from a toxic powder and water. Oh yeah, and they call scrambled eggs "omelets". What's up with that?). Belgian waffles with fresh fruits and jams and syrup and real butter.

The place we went to today was an Italian resturant in Prenzlaurer Berg called Belluro. They had this bowtie pasta cooked to perfection with bits of what I was pretty sure was some kind of crayfish. Not shrimp, for sure, but some kind of crustacean that was similar to crayfish. Tiramisu that was simply heavenly. Pretty damn good pizza. And of course really good coffee.

Anyway, we made our way to Tiergarten this afternoon and checked out the Berlin Siegessäule, or Victory Column. It was kind of late this evening, so things were slow and there weren't too many people (and the weather sort of sucked; grey and had rained earlier). But here are some pics.

In thie pic on the left you can see the famous Berlin TV tower in the lower right, a major landmark in East Berlin and remnant of the Communist past. An interesting dichotomy.

Research in Bird Brains Uncovers Cure for All Human Suffering

Well, not exactly. But it is an interesting step in understanding the underlying molecular mechanisms that mediate neurodegneration of brain circuits due to the withdrawal of circulating hormones. From the press release:

Neurons in brains of one songbird species equipped with a built-in suicide program that kicks in at the end of the breeding season have been kept alive for seven days in live birds by researchers trying to understand the role that steroid hormones play in the growth and maintenance of the neural song system.

It is the first time scientists have shown that inhibiting an enzyme involved in programmed cell death can protect a brain region in a living animal from neurodegeneration following the withdrawal of steroids.

In addition, the University of Washington research being published in tomorrow's edition of the Journal of Neuroscience reports that the infusion of this enzyme inhibitor into one brain region also kept another connected brain structure from degenerating.

The research has potential to help scientists develop clinical strategies for treating strokes and such human age-related degenerative diseases as Alzheimer's, Parkinson's and dementia, all of which may involve the death of brain cells.

Previous work by the co-authors Christopher Thompson and Eliot Brenowitz showed that neurons in a brain region called the HVC begin regressing within 12 hours after the withdrawal of the steroid hormone testosterone, followed soon thereafter by cell death. The new study indicates that enzymes called caspases, which play a key role in a cell suicide process called apoptosis, are involved in this process of neurodegeneration and that inactivation of caspases protects brain cells for at least a week.

Thompson, who just earned his doctorate in neurobiology and behavior at the UW and is now a postdoctoral researcher at the Freie Univeristät in Berlin, and Brenowitz, a UW professor of psychology and biology, study the brain regions controlling the singing behavior of a white-crowned sparrows.

This work was also featured in "This Week in The Journal" in the Journal of Neuroscience. Yay me again.

100

100 posts. Yay me.

From an email I sent to a friend, which I figured might be funny to others:

This morning, I was doing my hausufgabe on the train (which sort of makes it zeugaufgabe). I had to read two paragraphs, one about Heidi Klum, the other about Arnold Schwarzenegger, and then fill in the blanks of sentences below. For example: "blank" ist eine Model. Really hard stuff.

A girl, who was apparently a student from Humboldt University, sat next to me and worked on some of her homework. Hers was a little more complicated; it looked to be some kind of advanced calculus. The really sad thing was that I think I was having a harder time with my homework than she was with hers. I'm such a loser.

Not Enough Water

Since I arrived in Berlin 1 week ago, I have had nothing but coffee and beer, both of which are delicious beyond belief. I had better coffee at the Deutsche Bank when we were opening up our bank account than any F-ing Starbucks I have ever been too. Ever.

And the beer here is A-M-A-Z-I-N-G!!! They come in 0.5L bottles, about twice a 12oz bottle at home.

Incidentally, the color of my pee has turned from clear, to yellow, to this weird orange-ish brown-ish color. I'm pretty sure I should be drinking more water.

Anyway, enough about my excrement. I've been too busy adjusting to the time change, getting my visa stuff in order, going to language classes, working on papers from my thesis, and fighting a stomach bug to post anything. But if you're interested in following the in-and-outs of how the Afferent Input family is adjusting to life in Germany, I encourage you to check out Mrs. Afferent Input's blog 50% of my DNA. Lot's of funny details, including pics of Dr. AI and baby AI.

More soon later this week.

In Germany

Wow.

What a move. Got here and there are German flags all over the place. Made it home just in time to see the Euro2008 Cup. This morning there are many sad faces walking the streets of Berlin. More on that later.

But not us. We're really excited to be here. We had an amazing breakfast with some of the best coffee I've ever had, went to the grocery store and bought some essentials, and got home to eat tasty cherries (not from WA, though).

Anyway, I'm off to the language institute to prove that I know "kein Deutsch." Then they will put me in a class with kindergartners (I mean the US translation of "kindergarten" here).

half-moved

We've moved our stuff from where we lived the last eight years to my parent's house. Now I have to figure out what of my earthly possessions are most important to me and put them into two suitcases to take to Europe where we will live the next two years.

The thing is, all of it seems kind of like crap. I think I'd prefer to move there with just two changes of clothes and my toothbrush.