Thursday, June 26, 2008

Energy Policy Bashing

excerpted from a question posed to a friend/fellow energy policy wonk

so newspapers and presidential candidates have been unanimously bashing the bush administration on not having an appropriate energy policy. It seems like the policy they all want is some huge increase in government spending on energy research. Jeffrey Sachs was pushing for $30 billion a year.

so, that made me think about my own role in shaping current policy. I was asked repeatedly to provide a policy to fix energy, given unlimited funds. and repeatedly, the options i handed back took this $30 billion/year big push, off the table.

mostly because people at DOE and OMB told me that there just isn't the capacity. there aren't enough projects/researchers out there to spend that money.

And heck, the president's efforts to double research spending (over 10 years) was being blocked in Congress every year anyway.

Wednesday, June 18, 2008

The upside of sub-prime loans

This American Life renewed by faith recently with their episode "The Giant Pool of Money" which is the most even and comprehensive while accessible review of the sub-prime crisis, telling the story from both sides of the loan equation--borrowers and lenders--and making international finance accessible (at least it seems to me). (TAL has disappointed of late, getting a bit tired, and making some annoyingly biased commentary on occassion)

Yet it still misses one point about the sub-prime lending that I have heard no one mention. At one level, sub-prime loans helped more people than it hurt.

So the this American Life story suggested that sub-prime loans are having default rates ranging from 10%-50% which is awful relative to the 2% typical default rate for the mortgage. But that means that 50%-90% of people got a sub-prime loan to buy a house that they otherwise wouldn't be able to. 50%-90% took one step closer to the American dream of home-ownership, which many advocates (not me necessarily) means also more stable families, less crime, higher savings, better education, etc.

Monday, June 16, 2008

The world is pro-US?

Ok, here's another political post; hopefully last for a while; still lots of random wedding/honeymoon thoughts and photos to come. But odd observation that I haven't seen noted elsewhere. Despite the record low approval ratings for the US around the world, it seems odd that in every recent election (with only one prominent exception **), the pro-US candidate has won.

From Gordon Brown in the UK, Sarkozy in Francy, Merkel in Germany, Berlusconi in Italy. Similar outcomes in South Korea and Taiwan.

Not sure how to explain this. Thoughts?

** The one exception is Spain, and that was only because a terrorist set off a bomb right before election day.

Saturday, June 14, 2008

Reply to Scott McClellen - But all presidents, nay all people, employ truthiness

A friend of mine asked me recently what I thought about Scott McClellen's recent tell all. After hearing a couple interviews of him on various npr shows, my conclusion is fair in his assertions, but wrong in his analysis. Interviewers found him to be gentle toward the president, not blaming him, so much as the culture created by the president's advisers.

And specifically, the culture was that instead of communicating with the public through truth and dialogue, instead, communication was strategic.

Joel Stein quotes David Mamet in a recent Time article, who said the key to writing, is "People say things only because they're trying to get something." That is the type of communication McClellen accuses the administration of. This type of strategic speech is against what Habermas considers moral communication. Habermas argues that only scoundrels (credit JP for this term) and economists speak strategically all the time, and instead, people should speak the truth, in an effort to build consensus.

Yet you'd think academic liberal post-modern relativists should be fine with the idea that there is no truth, only truthiness. And it is naive to think there is one truth that the White House should have been conveying.

More practically, every president lies or plays with truthiness. The one time I heard Bill Clinton speak in person as president, I was an intern, and he was spewing lies about economic policy (he was saying tax cuts are a bad idea because they overstimulate the economy, the government should spend the money instead on healthcare; the problem is that high school macro should teach you that governmening spending stimulates the economy MORE than tax cuts). They weren't so much intentional lies, as simplifications, of a valid economic argument for why healthcare spending is better policy than tax cuts, but the president decided to use a version truthiness to get his point across.

Even in times of war--going back to my US history from high school, 15 years ago, scary!--the sinking of the Lusitania was a false pretext to enter WW I, the sinking of the Maine was a false pretext to start the Spanish American War, the Mexican American war had similar sketchy beginnings, and even some accuse FDR with some shady stuff with WW II. People are so quick to forget history when they start throwing out hyperbolic accusations of Bush's perfidy.
penny power

Friday, June 13, 2008

obama and pandering on gas taxes

back from honeymoon, back to real world. sorry for the hiatus dear readers.

a quick comment on Obama and Pandering.

A friend of mine mentioned that he picked Obama in part because he didn't pander on the gas-tax issue, when McCain and Clinton both did. To his credit, he was on the right side of this issue. It was good to see Clinton get her comeuppance when George Stephanopolos asked her how she could support a policy that 100% of economists thought was a dumb idea.

But Obama gets too much credit. Because just a few weeks later, Obama started pushing for a windfall profits tax on oil companies. Another policy that 100% of economists think is a dumb idea. But of course Teflon Obama gets away with it.