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The Price of Delaying the Bailout September 30, 2008

Posted by sliceof in American Politics, Economics.
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There are two types of people that are going to be DIRECTLY affected by the failing financial market.

1. People with much of their wealth invested in the market.  These people are going to suffer some loss, but as long as they don’t pull out of the market, they will be fine.  The market will go back up and their money will be there.  Their loss will end up being the loss of interest and gain on their investment.

2. People who lose their jobs.  Well, if workers in any sector are going to lose their jobs, the workers in the financial sector is probably the most apt to handle it
a. They already have incomes well over the cost of living.  Without a 300k job, they are going struggle making payments on pricey houses and cars, but it is highly unlikely that they are going to struggle to eat.
b. Most of those in the investment sector are well educated.  Other sectors of the economy will be able to absorb their skills much easier than if a toothpaste factory shut down.  Again, they may not be making the same quarter of a million they were making on wall street, but it is probably not going to be devastating.

Cut backs for people on Wall Street are going to be less Starbucks and switching from Taxi’s to the subway.   I pulled that directly from ths BBC interview in this post:

The Hardships of Being a Wall Street Employee

The extent of this market failure depends on the passing of a bailout.  Waiting a week isn’t going to do irreversible damage.  Waiting a month may leave scars and may push the money of the world into other financial markets with more “socialistic” governments.

I am thankful for the discussion and the tug of war in the congress, but something needs to pass or the effects of this failure are going to reach much farther then Wall Street.

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The Great Stock Market Crash of Ought Eight September 30, 2008

Posted by sliceof in Economics.
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Today, the House of Representatives voted against the Bailout Bill for the banks.  Although it was Bush who introduced the bill, it was mainly Republicans that shot it down.

Today, the Dow Jones Index fell 770 points.   The biggest fall of the Dow Jones in one day…even bigger than after September 11th, 2001.

Today is the start of the new Depression.

Or not…

It is probable that the House will eventually pass a bill to buy the junk mortgages and put confidence back into the investment market.  If and when the bailout is agreed upon, the market will make its way back up.

This delay may have been a good thing.  The price of stock is going to crash down.  Banks with bad debt, poor structure and  inefficient business models are being sold off or are dying out (Wachovia and the like).   The market is going to shed its fat quick and hit equilibrium hard.  So, how is this a good thing?

This may be a good thing because the economy will stabilize.  There won’t be a long, drawn out back and forth decline.  Instead of inefficient companies scurrying to eat at the Bailout buffet and folding when freebies are gone, these failed corporations will fold or be sold off to better, fitter banks.  Stock prices are going to be EXTREMELY low and with the security of the Federal Government backing up the banks, there are going to be some amazing deals, and the market will start to climb up again.  AND Investors who stayed out of the mortgage mess are going to see huge returns when they start being up the cheap stocks.

The unscrupulous and irresponsible will fall and those who played it safe will rise.  It will be Herbert Spenser’s “survival of the fittest” playing out in the financial sector…the way the free market is supposed to be.

The Hardships of Being a Wall Street Employee September 26, 2008

Posted by sliceof in American Politics, Economics.
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The BBC reports that Wall Street Workers are faced with devastating hardships.

Some people have to “Cut way back on the Starbucks habit, now it is a treat.”

Other hardworking wall streeters are forced to used subways instead of taxis.

Pretty soon they will be forced to make dinner at home!

THESE PEOPLE NEED OUR HELP!

Alice in Communist Russialand September 26, 2008

Posted by sliceof in Misc.
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Alice in Underland is a short little game set in Communist Russia.  You play as Alice, a good little Communist fighting the evils of Capitalism.   While following the Western Rabiit, you encounter the likes of the Capitalpillar and the evil Queen of Democracy.  Don’t be tempted by the owners of production to “adopt a system of mixed government, where economic transactions are mostly deregulated with the exception of education, healthcare, and social security.”   It is a trap!

The Capitalpillar wants to hide the true nature of social relations

The Capitalpillar wants to hide the true nature of social relations

Get it here http://forums.tigsource.com/index.php?topic=2742.0

Forbidden Toy September 26, 2008

Posted by sliceof in Political Psychology.
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I am studying political psychology right now and I have been forced to review alot of Psychological concepts I have never encountered.

I found this famous study that was used to understand how people resolve of Cognitive Dissonance (the dissatisfaction felt when someone has two beliefs that contradict each other.)
Example:  A person that knows that smoking is unhealthy and yet has the desire to smoke has Cognitive Dissonance and may resolve this through Justification (I deserve a cigarette, I am young, one won’t kill me).

I pulled the explanation from Wikipedia because it is concise and easy to understand:

Forbidden toy study

In a later experiment Aronson and Carlsmith (1963) viewed cognitive justification to forced compliance in children.

The experimenter would question the child on a set of toys to gauge which toys the children liked the most and which they found the least tempting. The experimenter then chose a toy that the child really liked, put them in a room with it, and left the room. Upon leaving the room the experimenter told half the children that there would be a severe punishment if they played with the toy and told the other half that there would be a moderate punishment.

Later, when the punishment, whether severe or moderate, was removed, the children in the moderate punishment condition were less likely to play with the toy, even though now it had no repercussion.

When questioned, the children in the moderate condition expressed less interest in the toy than would be expected towards a toy that they had initially ranked high in interest. Alternatively, the desirability of the toy went up for the children in the severe punishment condition.

This study laid out the effect of over-justification and insufficient justification on cognition.

In over-justification, the personal beliefs and attitudes of the person do not change because they have a good external reason for their actions. The children threatened with the severe punishment had a good external reasoning for not playing with the toy because they knew that they would be badly punished for it. However, they still wanted the toy, so once the punishment was removed they were more likely to play with it. Conversely, the children who would get the moderate punishment displayed insufficient justification because they had to justify to themselves why they did not want to play with the toy since the external motivator, the degree of punishment, was not strong enough by itself. As a result, they convinced themselves that the toy was not worth playing with, which is why even when the punishment was removed they still did not play with the toy.

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In effect, moderate punishments allow individuals to develop “over-justifications.”  These over-justifications reinforce the desired behavior when the threat of punishment is not imminent.

Just something to think about.

A traditional Christian marriage September 25, 2008

Posted by sliceof in American Politics.
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I watch a bio of Sarah Palin and caught a quick mention about her marriage.

Nearly twenty years ago, Sarah and her now husband Todd secretly eloped, with no notice to family members and friends.  Two kids run off to tie the knot and finally consimate their love within the bounds of marriage.  A romantic tale of love.

However, one small detail caught my ear.  Less than eight months after the Palin’s suprise marriage, their first son Track was born.

This leaves two possibilites:

  • Track was conceived in the cheap honeymoon hotel and born more than one month early
  • Track was conceived in the cab of a Ford F150 and born a couple days early

I have no proof concerning the validity of either statement.  However, it is possible that and after missing her period and taking several pregnancy tests, Sarah eloped Todd to ensure that that Track was legitamate in the eyes of God and chruch.

I come from a big Catholic Family.  To me, Senario 2 seems more probable then possible.

Why does this matter?  Am I just fueling the tabloid politics?

Yes, Maybe.

This is important because it hightlights the problem of sex education.  Sarah Palin strongly opposes comprehensive sex education.  She says, “The explicit sex-ed programs will not find my support”(http://eagleforumalaska.blogspot.com/).  I think what she means by “explicit sex-ed programs” is “factual sex-ed programs.”

Sarah Palin supports abstinence-only programs.  Abstinence-only programs have been proven over and over again to be ineffective (http://www.washingtonpost.com/wp-dyn/content/article/2007/04/13/AR2007041301003.html).  Part of their failure may have to do with the fact that many students of abstinence-only programs in the US receive information that simply isn’t true (http://www.washingtonpost.com/wp-dyn/articles/A26623-2004Dec1.html).  Abstinence-only programs don’t prevent kids from having sex, they don’t prevent girls from getting pregnant.  I could go on about how ridiculous these programs are, but on to the main point.

The reason I bring all this up that the Palin family have benefited from a strict Abstinence-only education in the home.   The result has been a (possible) unplanned pre-marital pregnancy with Sarah and Todd and an obvious unplanned pre-marital pregnancy with their daughter. Bristol.

The problem I see here is that values get in the way of reality.  How can you continue to pretend that abstinece works when it fails statiscally and fails in your own family?
If Sarah Palin makes her decisions based on her values in spite of their effect, what else will she apply her values too?  Instead of spending time making this country better, will Palin spend her time making this country fit her values?