McCain and Obama: The Same on ESCR?

In one sense the answer to the question is obviously yes. Both Obama and McCain favor federal funding for embryo-destroying research, and so far as I call tell there is no daylight between them on the subject of what types of research they would like to subsidize. And while McCain has occasionally made noises to the effect that he might possibly drop his support for ESCR, he hasn’t done so yet. Politics, however, is about not only the positions that one holds but about how those positions will be implemented. And on that score there is a very clear difference between Obama and McCain when it comes to federal funding for embryo-destroying research.

Federal funding for embryo-destroying research can come about in one of two ways. It could be enacted by congress, either with the President’s support or over his veto, or it could be enacted via executive order. Senator Obama has pledged that, if elected, he would immediately sign an executive order granting funding for embryo-destroying research. McCain has not made such a commitment, and the view among ESCR’s main supporters in the congress seems to be that he would wait for congress to pass a bill rather than acting on his own.

This difference is potentially decisive.

Opening Lines

The telephone bell was ringing wildly, but without result, since there was no-one in the room but the corpse. – Charles Williams, War in Heaven

It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife. —Jane Austen, Pride and Prejudice

Happy families are all alike; every unhappy family is unhappy in its own way. —Leo Tolstoy, Anna Karenina [this, btw, is not only false, but demonstrates Tolstoy’s fundamental unsoundness]

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair. —Charles Dickens, A Tale of Two Cities

Someone must have slandered Josef K., for one morning, without having done anything truly wrong, he was arrested. —Franz Kafka, The Trial

The sun shone, having no alternative, on the nothing new. —Samuel Beckett, Murphy

I am a sick man . . . I am a spiteful man. —Fyodor Dostoyevsky, Notes from Underground

Most really pretty girls have pretty ugly feet, and so does Mindy Metalman, Lenore notices, all of a sudden. —David Foster Wallace, The Broom of the System

The Other Moral Hazard

One of the arguments against having the government bailout failing businesses is that it will create a moral hazard. That is to say, businessmen, bankers, and so forth will engage in more risky behavior than they otherwise would if they know the government will step in to help them should they get into trouble.

No doubt there is something to this, as the stories about AIG turning down offers for a private financing days before being bought out by the Fed illustrate. At the same time, the peril of moral hazard isn’t limited to government bailouts of business. The fact that the government provides flood and other forms of disaster relief leads people to build more houses in areas with a high risk of flooding than would otherwise do so. Mountain climbers may take more risks knowing that massive rescue operations will be undertaken on their behalf (and at no cost to themselves) than they would if they knew they would be on their own should they get into trouble. And on a more pedestrian level the fact that people who accumulate too much debt can file for bankruptcy undoubtedly leads some people to rack up more debt than they would if there was no legal means of their ever getting out from under it. People support such things as bankruptcies, rescuing stranded mountain climbers, and flood relief not because they don’t think there is a risk of moral hazard involved in them, but because they think this moral hazard is outweighed by other considerations. And truth be told, while I don’t doubt that the knowledge of a possible bailout may induce more risk taking by lenders than would otherwise occur, I can’t imagine that the prospect of being bailed out by the government is all that pleasant.

Bush Stops War

It looks like my previous worries on the subject may prove to be groundless:

Israel gave serious thought this spring to launching a military strike on Iran’s nuclear sites but was told by President George W Bush that he would not support it and did not expect to revise that view for the rest of his presidency, senior European diplomatic sources have told the Guardian.

The then prime minister, Ehud Olmert, used the occasion of Bush’s trip to Israel for the 60th anniversary of the state’s founding to raise the issue in a one-on-one meeting on May 14, the sources said. “He took it [the refusal of a US green light] as where they were at the moment, and that the US position was unlikely to change as long as Bush was in office”, they added.

Who’s to Blame?

The current credit crisis seems to have reversed the old adage that success has a thousand fathers while failure is an orphan, as all across the political spectrum people try to pin the blame for current woes on their political opponents and favorite hobby horses. The following is a partial list of things that have been fingered as a culprit, focusing on specific charges rather than generalized accusations about “greed” or “regulation.” Some may have merit. Most are just silly. Additional items will be added as I come across them.

Open Letter on the Bailout

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, Americas dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.

Is Christianity Bad for the Economy?

Noneconomists imagine that God has so poorly designed the world that a lack of thrift, even tending to avarice is, alas, necessary to keep the wheels of commerce turning, to “create jobs” or “keep the money circulating.” They imagine that people must buy, buy, buy, or else capitalism will collapse and all of us will be impoverished. It’s the alleged paradox of thrift. Thriftiness, a Good Thing in Christianity and most certainly in Buddhism and the rest, seems able to impoverish us. We will do poorly by doing good. If we do well, we are damned. Choose: God or Mammon.

So the noneconomists think. Dorothy Sayers, who was more than a writer of mysteries, though not an economist, complained in 1942 as a Christian about “the appalling squirrel cage…in which we have been madly turning for the last three centuries…a society in which consumption has to be artificially stimulated in order to keep production going.” To tell the truth, many economists in the era of the Great Depression had reverted to this noneconomist’s way of thinking. The theory was called “stagnationism.” It was a balloon theory of capitalism, that people must keep puff-puffing or the balloon will collapse.

But since the 1940s, we economists have recovered our senses. The balloon theory has popped, and with it the paradox that sin is necessary to “keep production going.”

When More Equality Means More Differences

When men and women take personality tests, some of the old Mars-Venus stereotypes keep reappearing. On average, women are more cooperative, nurturing, cautious and emotionally responsive. Men tend to be more competitive, assertive, reckless and emotionally flat. Clear differences appear in early childhood and never disappear.

What’s not clear is the origin of these differences. Evolutionary psychologists contend that these are innate traits inherited from ancient hunters and gatherers. Another school of psychologists asserts that both sexes’ personalities have been shaped by traditional social roles, and that personality differences will shrink as women spend less time nurturing children and more time in jobs outside the home.

To test these hypotheses, a series of research teams have repeatedly analyzed personality tests taken by men and women in more than 60 countries around the world. For evolutionary psychologists, the bad news is that the size of the gender gap in personality varies among cultures. For social-role psychologists, the bad news is that the variation is going in the wrong direction. It looks as if personality differences between men and women are smaller in traditional cultures like India’s or Zimbabwe’s than in the Netherlands or the United States. A husband and a stay-at-home wife in a patriarchal Botswanan clan seem to be more alike than a working couple in Denmark or France. The more Venus and Mars have equal rights and similar jobs, the more their personalities seem to diverge.

More.

Quote of the Week: Taleb Channels Bastiat

Katrina, the devastating hurricane that hit New Orleans in 2005, got plenty of politicizing politicians on television. These legislators, moved by the images of devastation and the pictures of angry victims made homeless, made promises of “rebuilding.” It was so noble on their part to do something humanitarian, to rise above our abject selfishness.

Did they promise to do so with their own money? No. It was with public money. Consider that such funds will be taken away from somewhere else, as in the saying “You take from Peter to give to Paul.” That somewhere else will be less mediatized. It may be privately funded cancer research, or the next efforts to curb diabetes. Few seem to pay attention to the victims of cancer lying lonely in a state of untelevised depression. Not only do these cancer patients not vote (they will be dead by the next ballot), but they do not manifest themselves to our emotional system. More of them die every day than were killed by Hurricane Katrina; they are the ones who need us the most – not just our financial help, but our attention and kindness. And they may be the ones from whom the money will be taken – indirectly, perhaps even directly. Money (public or private) taken away from research might be responsible for killing them – in a crime that may remain silent.

– Nassim Nicholas Taleb, The Black Swan, p. 110.

Barack Obama was a Community Organizer Like Jesus

I wasn’t aware that Jesus was a practitioner of the Alinsky Method. Seriously, though, when one of the knocks against your candidate is that his supporters think of him as some kind of messianic figure, comparing him to Jesus is probably not a good idea.