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Shanghai Steel Fails Basic Safety Tests

In March, the English-language Shanghai Daily reported that fully half of the steel sold to construction companies in Shanghai’s wholesale markets failed basic quality tests. Nearly a quarter of the tested samples failed tension tests, meaning structures built with them would not be able to withstand earthquakes and would be more likely to decay over time.

No proof--and no belief

Imagine you had incontrovertible proof that there was no afterlife. No supernatural entities. No heaven or hell. No otherworld. No reincarnation. No forevermore.

No second chances.

Imagine there was no moral accounting after death of your actions on earth. No supreme being to judge your soul’s worth on the scale of divine justice. No reward or punishment. No appeal to omniscient authority in matters of good and evil.

There was only the endless black void at the moment death. The infinite silence. A complete surrender of your consciousness as the last pinprick of light extinguishes. All your thoughts, your feelings, your sensation, your memories… you… wiped away clean to merge with the great nothing.

"Imagine"? That's what I believe.

When there is no second life or higher power to appease; when our lives are machines — complex misunderstood machines cunningly designed to conceal the gears and pulleys behind a facade of self-delusional sublimation, but machines nonetheless — grinding and belching the choking gritty smoke of status-whoring displays in service to our microscopic puppetmasters… well, there can be only one reasonable response to it all. It makes no sense to behave any other way unless you never questioned the lies.

Does Religion Make You Nice?

Paul Bloom writes,

In his new book, Society Without God, Phil Zuckerman looks at the Danes and the Swedes—probably the most godless people on Earth. They don't go to church or pray in the privacy of their own homes; they don't believe in God or heaven or hell. But, by any reasonable standard, they're nice to one another. They have a famously expansive welfare and health care service. They have a strong commitment to social equality. And—even without belief in a God looming over them—they murder and rape one another significantly less frequently than Americans do.
Denmark and Sweden aren't exceptions. A 2005 study by Gregory Paul looking at 18 democracies found that the more atheist societies tended to have relatively low murder and suicide rates and relatively low incidence of abortion and teen pregnancy.

Yeah, but believe it or not, not everyone believes that an expansive welfare and health care service and a strong commitment to social equality are necessarily good things.

Helping the Poor?

With reference to Obama's mooted taxes:

All our wars on poverty have been lost by failing to help the poor help themselves. Higher business taxes, which ultimately can only be paid by individuals anyway, will simply export more economic activity to the world economy. Higher capital gains and income taxes will primarily reduce savings and investment at the expense of greater future productivity, which is at the heart of cross-generational reductions in poverty. A dozen countries, including the third largest economy, already have zero taxes on capital gains, and eight of them score high on the Economic Freedom Index and high in gross domestic product per capita.

I favor making all individual savings and direct investments deductible from income for tax purposes. In that world there would be no need to make any distinction between ordinary income and capital gains. By adding a negative feature to such a net consumption tax, the poor would not only receive redistribution benefit, but have an incentive to save and accumulate capital. Some poor will see this as an opportunity to help themselves.

Low voter turnout would be a good sign

Specialists in public opinion have exhaustively documented the average voter's shocking ignorance about the main issues of the day, the names of their local candidates for office, or the policies the candidates support.

The flakiest voters -- the ones least motivated to show up at the polls year in and year out -- also tend to be most poorly informed. So when turnout drops, it tends to leave the pool of remaining voters with an improved average level of political knowledge and policy know-how. If well-informed voters have a better picture of the candidate or party most likely to promote the general welfare, then especially high turnout can actually tilt an election away from the better choice, leaving everyone a bit worse off. And that's not very civic-minded.

It's a speculative bubble

As Prof. Stan J. Liebowitz of the University of Texas points out in his study, “Anatomy of a Train Wreck,” the foreclosure problems began in mid-2006 when the nation’s unemployment rate was holding steady at a mere 4.6 percent. What triggered the crisis were not layoffs but an end of the rise in home prices. By contrast, in the economic slowdown that began earlier in this decade, unemployment started rising in early 2001 and peaked at 6.3 percent in mid-2003 but resulted in only a modest uptick in foreclosures by today’s standards.

...

The data suggest that speculation was rampant among average Joes and Janes and not something primarily that high-end buyers or ‘yuppie flippers” engaged in (as a hilarious Saturday Night Live skit suggested a few weeks ago). Indeed, one thing that probably accounts for the large number of defaults in lower income and moderate income neighborhoods is that these buyers were most likely to engage in speculation, according to the data that Liebowitz has crunched. He found that speculative purchases during the current bubble were higher as a neighborhood’s average income decreased. In neighborhoods where household income was about $40,000, or about one-fifth below U.S. median family income, speculative mortgages accounted for one-third of all loans, while in census tracts where average income was nearly double the nation’s median, speculative loans accounted for well under 10 percent of all mortgages.

Is college worth it?

... a majority of the students whom colleges admit are grossly underprepared. Only 23 percent of the 1.3 million high-school graduates of 2007 who took the ACT examination were ready for college-level work in the core subjects of English, math, reading, and science.

Perhaps more surprising, even those high-school students who are fully qualified to attend college are increasingly unlikely to derive enough benefit to justify the often six-figure cost and four to six years (or more) it takes to graduate. Research suggests that more than 40 percent of freshmen at four-year institutions do not graduate in six years. Colleges trumpet the statistic that, over their lifetimes, college graduates earn more than nongraduates, but that's terribly misleading. You could lock the collegebound in a closet for four years, and they'd still go on to earn more than the pool of non-collegebound — they're brighter, more motivated, and have better family connections.

and even if they stick around, many of them don't learn anything

A 2006 study supported by the Pew Charitable Trusts found that 50 percent of college seniors scored below "proficient" levels on a test that required them to do such basic tasks as understand the arguments of newspaper editorials or compare credit-card offers. Almost 20 percent of seniors had only basic quantitative skills. The students could not estimate if their car had enough gas to get to the gas station.

Unbelievably, according to the Spellings Report, which was released in 2006 by a federal commission that examined the future of American higher education, things are getting even worse: "Over the past decade, literacy among college graduates has actually declined. … According to the most recent National Assessment of Adult Literacy, for instance, the percentage of college graduates deemed proficient in prose literacy has actually declined from 40 to 31 percent in the past decade. … Employers report repeatedly that many new graduates they hire are not prepared to work, lacking the critical thinking, writing and problem-solving skills needed in today's workplaces."

Because they like the government to control the economy

The specter of fear is everywhere, not just on Wall Street. And the scale of the government’s reaction is no less than what it was after 9/11—that is what probably scares ordinary people the most. Yet no one who believes that the government exploited fears after 9/11 to strengthen its security powers is now saying that the government is exploiting financial crisis fears in order to justify taking control of credit markets. No one who thinks that government would use fear to curtail civil liberties seems to think that government would use fear to curtail economic liberties. Why not?

No tomatoes

[The] poor who died during the night were bundled up quickly and thrown into the pit. In the morning when a large number of bodies were found in the pit, they took some earth and shovelled it down on top of them; and later others were placed on top of them and then another layer of earth, just as one makes lasagne with layers of pasta and cheese.

Marchionne di Coppo Stefani (ca. 1320-ca. 1385), on the Black Death.

Before the discovery of the New World, there was lasagne but no tomatoes. I'm just sayin'.

I like the idea, but....

For what it's worth, I like the idea of a black president, believe that Obama is an admirable person in many ways.... Nonetheless, I fear that the conjunction of an Obama victory, a strongly Democratic Congress, and a major economic crisis will produce a massive and difficult to reverse expansion of government....

greens encourage the release of radiation

By scaring people about the tiny levels of radiation emitted during the normal operation of a nuclear plant, [William Tucker, author of “Terrestrial Energy”] says, greens have effectively encouraged the construction of coal plants that actually release more radiation because of the traces of uranium in coal dust.

Why We Should Let Housing Prices Keep Falling

There is a superficial attractiveness to policies that seem to promise an end to falling housing prices, but...these policies all have the common feature of getting the government further entrenched in the operation of the housing market, and this creates all sorts of long-term market problems. I would have thought that recent events at Fannie Mae and Freddie Mac, for example, would have made Americans recognize the costs of having government-sponsored enterprises play mortgage lender to the nation. I would have hoped that the history of public housing would have made us wary about spending huge amounts of tax dollars to get into the business of public property management.

But we won't let them keep falling, I bet.

The Financial Meltdown is China's Fault

Starting in the 1990s, the flood of cheap products from China kept global inflation low, allowing central banks to operate relatively loose monetary policies. But the flip side of China's export surplus was that China had a capital surplus, too. Chinese savings sloshed into asset markets 'round the world, driving up the price of everything from Florida condos to Latin American stocks.

So let's bomb China, right? Guess again. Mallaby blames Alan Greenspan's Fed, which

chose to stand aside as asset prices rose; it preferred to deal with bubbles after they popped by cutting interest rates rather than by preventing those bubbles from inflating. After the dot-com bubble, this clean-up-later policy worked fine. With the real estate bubble, it has proved disastrous.

So the first cause of the crisis lies with the Fed, not with deregulation...

Of course, the financiers did create those piles of debt, and they certainly deserve some blame for today's crisis. But was the financiers' miscalculation caused by deregulation? Not really...

Who were the purchasers? They were by no means unregulated. U.S. investment banks, regulated by the Securities and Exchange Commission, bought piles of toxic waste. U.S. commercial banks, regulated by several agencies, including the Fed, also devoured large quantities. European banks, which faced a different and supposedly more up-to-date supervisory scheme, turn out to have been just as rash. By contrast, lightly regulated hedge funds resisted buying toxic waste for the most part -- though they are now vulnerable to the broader credit crunch because they operate with borrowed money...

If that doesn't convince you that deregulation is the wrong scapegoat, consider this: The appetite for toxic mortgages was fueled by Fannie Mae and Freddie Mac, the super-regulated housing finance companies.

We need to take personal responsibility

PALIN: One thing that Americans do at this time, also, though, is let's commit ourselves just every day American people, Joe Six Pack, hockey moms across the nation, I think we need to band together and say never again. Never will we be exploited and taken advantage of again by those who are managing our money and loaning us these dollars. We need to make sure that we demand from the federal government strict oversight of those entities in charge of our investments and our savings and we need also to not get ourselves in debt. Let's do what our parents told us before we probably even got that first credit card. Don't live outside of our means. We need to make sure that as individuals we're taking personal responsibility through all of this. It's not the American peoples fault that the economy is hurting like it is, but we have an opportunity to learn a heck of a lot of good lessons through this and say never again will we be taken advantage of.

Redistribution is unfair

IFILL: ....Sen. Biden, we want to talk about taxes, let's talk about taxes. You proposed raising taxes on people who earn over $250,000 a year. The question for you is, why is that not class warfare....

BIDEN: Well Gwen, where I come from, it's called fairness, just simple fairness. The middle class is struggling. The middle class under John McCain's tax proposal, 100 million families, middle class families, households to be precise, they got not a single change, they got not a single break in taxes. No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised whether it's their capital gains tax, their income tax, investment tax, any tax. And 95 percent of the people in the United States of America making less than $150,000 will get a tax break.

Now, that seems to me to be simple fairness. The economic engine of America is middle class. It's the people listening to this broadcast. When you do well, America does well. Even the wealthy do well. This is not punitive. John wants to add $300 million, billion in new tax cuts per year for corporate America and the very wealthy while giving virtually nothing to the middle class. We have a different value set. The middle class is the economic engine. It's fair. They deserve the tax breaks, not the super wealthy who are doing pretty well. They don't need any more tax breaks...

IFILL: Governor?

PALIN: I do take issue with some of the principle there with that redistribution of wealth principle that seems to be espoused by you. But when you talk about Barack's plan to tax increase affecting only those making $250,000 a year or more, you're forgetting millions of small businesses that are going to fit into that category. So they're going to be the ones paying higher taxes thus resulting in fewer jobs being created and less productivity.

Now you said recently that higher taxes or asking for higher taxes or paying higher taxes is patriotic. In the middle class of America which is where Todd and I have been all of our lives, that's not patriotic. Patriotic is saying, government, you know, you're not always the solution. In fact, too often you're the problem so, government, lessen the tax burden and on our families and get out of the way and let the private sector and our families grow and thrive and prosper. An increased tax formula that Barack Obama is proposing in addition to nearly a trillion dollars in new spending that he's proposing is the backwards way of trying to grow our economy.

Then after Palin responds to Ifill's question about McCain's health care plan, Biden, apparently stung by the "redistribution" charge, says,

BIDEN: Gwen, I don't know where to start. We don't call a redistribution in my neighborhood Scranton, Claymont, Wilmington, the places I grew up, to give the fair to say that not giving Exxon Mobil another $4 billion tax cut this year as John calls for and giving it to middle class people to be able to pay to get their kids to college, we don't call that redistribution. We call that fairness....

Here's a little parable for Biden (from here):

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12.

The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men --- the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).

The sixth now paid $2 instead of $3 (33%savings).

The seventh now pay $5 instead of $7 (28%savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $14 instead of $18 (22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too.

It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

4 more years

Barack Obama says a John McCain victory would amount to a third term of the Bush presidency. What he doesn’t say: an Obama victory would, too.

While both nominees love to talk about their big agendas for change, whoever wins will take office with their obligations defined and options constrained by what Bush dumps on their lap.

The focus right now – and probably for many months to come – is the bailout binge aimed at saving our financial system. All told, the government will likely put more than $1 trillion on the line (with hope the money will be recouped down the road).

Then there are the two wars, in Iraq and Afghanistan. The combined cost is fast approaching $1 trillion, too – and both will eat up the time and budgets of the next president.

Then there is also the prescription drug benefit Bush added to Medicare. It carries a projected price tag of nearly $700 billion over ten years and serves as a powerful reminder of how big – untenably big, many experts say – our entitlement programs have grown.

...

As the candidates debate the nuances of their health care plans or tax cuts, consider:

How can you cut taxes when the government is so deep in the red? The budget deficit is projected to top $400 billion – and that was before the bailout.

How can you expand health care coverage when the country is broke? The federal debt is now expected to top $11 trillion by 2010.

How can you focus on “earmarks” and “waste” when everyone knows they make up a meaningless fraction of the federal budget?

How you tackle spending without a serious discussion of serious cuts to Medicare and Social Security, which account for 43.5 percent of federal spending?

How can you focus on anything but war, when you inherit two conflicts with outcomes that are very much in doubt? (U.S commanders say the war in Afghanistan is going worse then ever and will require many more troops to win.)

A lesson of the Bush binge is the awesome weight of the choice for president. His eight years of surprises shows that you never know exactly what you’re voting for.

He ran as a compassionate conservative who promised to restrain spending and practice a humble foreign policy. Instead, he launched two big wars and oversaw the biggest expansion of federal government in history.

Monolithic party views

...[I]n recent years...partisans have come to identify with their parties in much the manner that sports fans identify with their teams. The strong views they feel on many issues do not drive their party affiliation; it is their party affiliation that drives their strong views.

...

There is a... piece of evidence that party identification rather than ideology is behind the growing polarization of the electorate: On a variety of unrelated issues -- gun control, the economy, war, same-sex marriage, abortion, the environment, the financial bailout -- the views of Republicans and Democrats have become increasingly monolithic. There is no reason someone who is against abortion should necessarily also be against gun control or for economic deregulation, but that is exactly what tends to happen among committed Republicans. Loyal Democrats have similarly monolithic views on unrelated issues.

"Party identification is part of your social identity, in the same way you relate to your religion or ethnic group or baseball team," said Gary C. Jacobson, a political scientist at the University of California at San Diego. This explains why, on a range of issues, partisans invariably feel their side can do nothing wrong and the other side can do nothing right. By contrast, moderates don't feel there is a yawning divide on issues because they don't identify with one party or another. Moderates, in other words, are like people who are uninterested in sports and roll their eyes when fans of opposing teams hurl abuse at each other.

The crisis is China's fault, too

In the United States, there were two key decisions. The first, in the 1970’s, deregulated commissions paid to stockbrokers. The second, in the 1990’s, removed the Glass-Steagall Act’s restrictions on mixing commercial and investment banking.

...

Of equal importance were the rise of China and the decline of investment in Asia following the 1997-1998 financial crisis. With China saving nearly 50% of its GNP, all that money had to go somewhere. Much of it went into US treasuries and the obligations of Fannie Mae and Freddie Mac. This propped up the dollar and reduced the cost of borrowing for US households, encouraging them to live beyond their means. It also created a more buoyant market for the securities of Freddie and Fannie, feeding the originate-and-distribute machine.

Again, these were not outright policy mistakes. Lifting a billion Chinese out of poverty is arguably the single most important event in our lifetimes. The fact that the Fed responded quickly prevented the 2001 recession from worsening. But there were unintended consequences. The failure of US regulators to tighten capital and lending standards when abundant capital inflows combined with loose Fed policies ignited a furious credit boom. The failure of China to move more quickly to encourage higher domestic spending commensurate with its higher incomes added fuel to the fire.

Where the hell was Chris Dodd?

Senator Chris Dodd — formerly ranking member and now chairman of the Senate Banking Committee, with oversight over Freddie and Fannie — recently said on Bloomberg Television: “I have a lot of questions about where was the administration over the last eight years.”

Excuse me? Just where the hell were you, Senator? Oh, right. You were standing in line at the bank in order to deposit the political contributions Fannie and Freddie were lavishing upon you. At least they got their money’s worth — until the party ended and the American people got the bill.

Members of Congress — aided and abetted by their many waterbearers in the media — wonder why their collective approval rating is about on par with colon cancer’s. The reason is simple enough: Congress is the sick man of Washington; a textbook example of the truism that institutions tend to evolve in ways that benefit their elites, at the expense of the people they were created to serve.