Imagine we bailed out homeowners

There would be huge uproar if the United States bought out the distressed mortgages in the country and just let the people who had trouble with their loans remain in the house, just wiped the slate clean. Yet that is what the bank bail-out will do, if the U.S. buys up all the bad debt banks hold while leaving the healthy banks “unclogged” (to use President Bush’s plaque-in-the-veins metaphor of this evening) and ready to operate profitably, again.

Make no mistake, helping taxpayers recover the value lost on that “toxic paper” would be the lowest priority on Wall Street.

On the other hand, if the U.S. government bought up all the bad mortgages, foreclosed on them and, then, let the people who defaulted live in those homes on rental terms, eventually providing programs to buy homes back from the government, that would be considered a fair treatment by many voters. The assets seized would offset the cost of the mortgage losses and provide the basis for recovering the losses later by selling the property. We’d be tangibly helpful to distressed families, giving them a roof over their heads while opening the door to their repaying the cost of the home in rent and, ultimately, new mortgages.

Why is the U.S. not taking the same approach as it did to AIG when it failed last week? The U.S. government now owns about 80 percent of the company in exchange for the cash it needed to stay afloat. There are already investors interested in buying that equity at a profit to the government.

Wall Street should be sold off to the government, just as mortgage-holders in default would find their homes repossessed, and the companies receiving money from the public held responsible to the taxpayers as shareholders, because without that public money, they will be out of business. Surely, if the crisis is resolved, the assets will be worth more, but so too would there be viable economic reasons to buy those assets back from the government at a profit.

If the bail-out goes ahead based on the U.S. buying “toxic paper” the banks, for all intents and purposes of analogy between these scenarios, will end up owning their homes and mortgage-free. The U.S. government will be left holding the paper that representeds inflated values of assets held by others — no collateral and, therefore, unlikely to be treated as a pressing debt to be paid by responsible people who want to own their property.

I don’t doubt we need to do something about the credit crisis–I just think we should treat the recipients of the largesse of the U.S. taxpayers like any business would treat someone asking it for value: Ask for security that the debt will be repaid. Then, the bankers can keep their banking houses and learn to run their businesses responsibly before buying out their saviours, the American people.  We could even cap the premium the government demands to make sure that, once the industry is able to profit honestly, it could become a truly private concern. – Flu Pandemic Could Cost U.S. Economy $675 Billion – Flu Pandemic Could Cost U.S. Economy $675 Billion:

A pandemic caused by a mutated form of the avian-flu virus could cause a $675 billion hit to the U.S. economy, the Congressional Budget Office reported Thursday.

“A nearly $700 billion hit to the economy — almost half of which is brought on by fear and confusion — gives us every reason to begin preparing a prescription and implementing a course of action,” Senate Majority Leader Bill Frist, a Republican from Tennessee, said in a speech unveiling the report.

As I estimated a while back, this is a trillion-dollar problem (the $675 billion is U.S.-only) that we need to be spending much more aggressively to address. Being ready for any pandemic is necessary, let’s use this one as the foundation for a global solution. The Bush Administration has under-invested in global participation.

As Reuters reports, the U.S. is not preparing, but trying to figure out how poorly prepared it is: Global Coverage Article |

The White House on Wednesday planned an exercise to see just how poorly prepared the country is to cope with a avian flu pandemic, even as lawmakers in Congress debated how much to spend for U.S. preparations.

Technorati Tags: , ,

How I got a key to my house after five years

I’ve lived in an unlocked house since 2000, but I got a key last night and the doors are locked. Here’s what happened.

On Saturday night, my wife went out to the mall to reserve a copy of a new album she wanted (System of a Down’s Hypnotize—my wife rocks). She went to Sam Goody, where there’s a guy who really knows his music. The next day, an idiot angry at his girlfriend and, by extension, the world, opened fire on people in the mall, using the Sam Goody and its employees as a hideout complete with hostages until he gave up after three-and-a-half hours.

Tacoma, Washington, is a strange place to live, because this kind of shit happens. A few years ago, it was some Special Forces guys in a running gun battle with gang members on the South Hill. The DC sniper came from Tacoma. I remember Ted Bundy’s brother being called out of a drafting class in high school—he just sort of appeared from nowhere, having hidden like a ghost until that moment, when the intercom called for him—he had to go to the office to learn that his brother had been captured by the police for, I think, the last time. In Tacoma, everyone seems to know someone touched by a maniac. But I’d kept the doors at home unlocked.

My wife recently lost a friend to domestic violence, when another alienated boyfriend set the friend on fire while she slept. A week ago, she went out to the garage at night and interrupted two people rifling through my car. A few weeks ago, a serial rapist’s path ran through the area. I have a brother-in-law who steals prescription drugs from the house, too. Ever since my mother-in-law moved in a couple years back, the doors get locked a lot more, but I’ve managed to live without a key, coming and going with the assumption that the doors will open when I get home.

So, last night when my wife went out to get the CD at Sam Goody’s, I went along. Two guys were selling crack in the parking lot, ten paces from the substantially increased yet still indifferent security services at the mall entrance. Inside the mall, there was the mobile phone storelet (one of those mid-mall stands) where the guy started shooting. The Disney Store’s windows, which had been shot out, were replaced. The place was largely deserted. And Sam Goody’s was open.

It was strange how much of the story I’d absorbed from the news and radio. I could trace the steps the gunman took and, based on his apparent unwillingness to shoot people he actually spoke to (he turned away from the guy who offered him a free phone to start shooting and never pointed the gun at his hostages) judge that he wasn’t schizophrenic and detached from his moral reality, just stupidly angry.

The girl at the counter was uneasy when asked about the store having reopened, she’d been one of the hostages. There was an awkward exchange about the fact that everyone was okay—Kiera is preternaturally friendly and makes friends everywhere, so she was checking on the guy who gives her music recommendations (the Joe Hudson who called the Associated Press)—and the girl apologized for not having called about the CD coming in (“We’ve been kind of busy,” she said with something between a smile and tearfulness).

I started to play the XBox 360 demo near the counter, but turned it off when I realized it was making gunfire noises identical to those that had actually happened there a few days before. It made me feel a little sick. There was much relief exchanged in a few moments, and we left. Kiera wants never to go to the mall again.

On the way home, we stopped at Lowe’s and got four copies of the key to the house. The doors are locked now, because it makes my family feel safe. I feel lonelier.

NPR : There is No God (a headline so provocative on so many levels that it can’t be intentional)

Penn Gillette on NPR’s This I Believe : There is No God:

I believe that there is no God. I’m beyond Atheism. Atheism is not believing in God. Not believing in God is easy — you can’t prove a negative, so there’s no work to do. You can’t prove that there isn’t an elephant inside the trunk of my car. You sure? How about now? Maybe he was just hiding before. Check again. Did I mention that my personal heartfelt definition of the word “elephant” includes mystery, order, goodness, love and a spare tire?

So, anyone with a love for truth outside of herself has to start with no belief in God and then look for evidence of God.

One of the best explanations of what I believe isn’t the case (think about it). Read the whole thing and then you can damn me point by point, if you believe that way….

Technorati Tags:

We have nothing to fear, because we might medicate fear itself

Scientists find fear gene – Yahoo! News:

Learned fear develops after conditioning — as when a person is stung by a wasp and fears the insects afterward. These memories are formed in the amygdala.

“This is the first time it has been shown that the protein called stathmin — the product of the stathmin gene — is linked to fear conditioning pathways,” said Vadim Bolshakov, director of the Cellular Neurobiology Laboratory at Harvard University’s McLean Hospital, who also worked on the study.

Also, the mice showed unusual behavior. Mice instinctively avoid open spaces, but the stathmin-free mice showed no fear and often explored more open areas than normal mice, the researchers found.

So the gene may control both learned and innate fear, the researchers said.

Another fascinating day in science. Amazing. By the time a 30-year-old alive today dies, they may be completely possessed of their mental faculties in their 120s because of such advances. I can’t even begin to predict accurately what the life-span and lifestyle of a baby born today might be. We live in a time when wild speculation is routinely outdone by science.

Now, let me ask a hypothetical that is no longer so hypothetical: Which is more immoral, using embryonic stem cells for research or condition soldiers to be fearless and, therefore, more reckless and likely to be killed in action? Is it ethical for an athlete, say a gymnast or figure skater, to dope themselves to eliminate fear so that they can perform more extreme moves to win a competition?

Technorati Tags: ,

If Einstein was wrong, we get sucked into a space-time vortex….

NASA – Space-time Vortex:

We’ll soon know the answer: A NASA/Stanford physics experiment called Gravity Probe B (GP-B) recently finished a year of gathering science data in Earth orbit. The results, which will take another year to analyze, should reveal the shape of space-time around Earth–and, possibly, the vortex.

Time and space, according to Einstein’s theories of relativity, are woven together, forming a four-dimensional fabric called “space-time.” The tremendous mass of Earth dimples this fabric, much like a heavy person sitting in the middle of a trampoline. Gravity, says Einstein, is simply the motion of objects following the curvaceous lines of the dimple.

Cool. Just cross your fingers that this is the existential Catch-22 that, once solved, ends time and space as we know it. Douglas Adams would enjoy these times.

Technorati Tags: