Academics Versu Bureaucrats

Technically, Mr. Paulson and Mr. Bernanke are bureaucrats. Their concept is getting battered by academic economists. Greg Mankiw has been on both sides, now back at Harvard. His opinion, go with the bureaucrat if they're comfortable.

That's my opinion too, based on no economics knowledge but my history in the bureaucracy. Of course, that's also why I backed the Iraq war initially. Sometimes bureaucrats are right, sometimes they have tunnel vision. You pays your money and you takes your chances.

ON Anger

John Phipps has turned against the Paulson bailout plan. He sees it as doomed because of anger at inequality, the resentment of financiers getting big bucks, then being rescued.

For some reason my thoughts turned to the late 60's, when some inner-city blacks were very angry, angry enough to riot and burn down their neighborhoods.

Treat Your Employees Like Dogs

At the cost of forever blowing any reputation I might have as a boss, let me point to this post on Amazon daily, about 10 rules on dealing with dogs. (After each rule the writer explains and amplifies.) Naturally, I thought of employees:

1. A dog is a dog
2. All dogs think in terms of packs
3. Dogs don't understand English
4. Dogs are not spiteful
5. What makes some dogs aggressive
6. Body language is a dogs primary mode of communication
   
7. You can teach an old dog new tricks
8. Bad behaviors may be natural, but they don't have to be normal
9. What is the right way to discipline a dog
10. Do dogs sense the world differently than humans

Her bottom line is essentially: put yourself in the dog's paws and look at the world through the dog's eyes in order to know how to deal with it. Good advice for people, too. Advice usually ignored by the politicians and the public when they deal with their employees--the bureaucrats, who seem to be less than dogs.

More on Obama's Transparency

Nextgov has a piece on Obama's management proposals focusing on transparency, getting reactions from the consultant/contractor community, mostly cautious and somewhat dubious, although one guy obviously saw the most recent polls.

Funny Stuff from Desperate Partisans

One reliable feature of the political season is that people on both sides will get carried away and say the dumbest things. As a Dem, I'll naturally notice the dumb things on the right. This one particularly stands out:

Via Powerline, Tony Blankley says: "[Obama] lived a mere quarter-mile from former terrorist Bill Ayers" (as part of an argument of sinister, or at least unexplored connections between the two). Both were in NYC, according to wikipedia, Obama as a student at Columbia, Ayers wasn't at Columbia, as one might think, but at the Bank Street College, getting an M.Ed. (Ayers went to Columbia apparently after Obama graduated.)

So there's no institutional link between the two during the time they both lived in NYC. And a simple check of wikipedia reveals that NYC has 27,000 people per square mile. Put Obama at the center of a circle with a radius of .25 miles and he has roughly that many people in his neighborhood.

I Don't Need This

From Pollster.com: Most interesting about the current estimates is that if we ignore the classifications and just examine which candidate has a numeric lead, the electoral votes as of today would divide in a perfect 269-269 tie.

Immigration and Housing

Back to my pet idea, the link between housing crisis and immigration. Yesterday's Post had this article:

"The number of immigrants coming to the United States slowed substantially in 2007, with the nation's foreign-born population growing by only 511,000, compared with about a million a year since 2000, according to Census figures released today. "

Say the housing industry was building 400,000 housing units for immigrants since 2000, and selling them, either to immigrants or to landlords who rented them out. All of a sudden, the demand is halved. I believe the housing market is probably inelastic--takes a big change in price to get someone to downsize or upsize. So the change in immigration probably took the pop out of the housing bubble. Once the bubble burst, the Ponzi-style nature of the securitization of debt that the smart boys on Wall Street had engineered made the consequences much worse than they should have been (as they were when the housing bubble burst back in the 80's.)

Dana Says It Better Than I Have

At The Edge of the American West, Dana writes on Pollan' Omnivore's Dilemna. As she notes, many of the health problems of our diet are lower class, while Pollan's suggestions work best for the middle. (Actually I'd say upper middle, since we have no upper class in the U.S., at least none who cook for themselves.)

Obama Is Gore II

Sen. Obama pledges to cut the ranks of middle managers. I've heard that before, from Saint Al Gore.

Forgive my sarcasm, at least he's addressing the performance assessment problem. From a comment I posted:
"If McCain, when he inveighs against waste in DC, would say he would end all problems that rate ineffective on PART it would be a start. If Congress would say the same, it would be a start. Even if OMB is able to impose some order on the executive, it doesn't mean much unless Congress and the appropriations committees buy in. And they don't. Until then, neither McCain nor Obama's promises mean much."

Calming the Waters

Erin asked questions this morning. In an attempt to calm waters, let me observe:

• it's not true this is the biggest thing since..[whatever]. Memory is fallible. I can remember Truman seizing the steel companies (and strikes in wartime). And Sputnik. And Bay of Pigs. And riots in the cities. And Nixon taking us off the gold standard, which seemed maybe the end of the world. And the stagflation of the late 70's. And the S&L crisis. Maybe 100 years from now historians will see this month as the biggest pivot point since 1929, but probably not. After all, just over 7 years ago we were saying 9/11 "changed everything". Did it?
• 700 billion is a lot of money, but I'd bet the net cost is lots lower. It's my memory of the S&L, RTC mess that the net loss was much lower than the figures tossed around earlier. [Correction: looked up RTC on wikipedia which led to this report. Bottom line is people were way off in their estimates of the problem and costs. So it's probably correct to say today we are very uncertain of the size of the problem and the cost. Of course, I'm also making the mistake of assuming the S&L parallels the subprime problems, which it doesn't.]
• Everyone has their own axe to grind. Best to let them grind away.