A Little Bit Of Truth

Atrios, Kos, and many other member of the liberal blogosphere caught this interesting exchange in one of Bush's recent town hall meetings. You know those meetings, where only supporters are let in and everyone signs a loyalty pledge; they are about as real as those late night infomercials. Well, apparently they got slightly off topic for a few moments and accidently reached a bit of truth. From the White House:

THE PRESIDENT: Let me ask you something about the Thrift Savings Plan. This is a Thrift Savings Plan that has a mix of stocks and bonds?

MS. WEBSTER: Yes, sir.

THE PRESIDENT: Now, how hard was that to learn how to do that?

MS. WEBSTER: And I chose the safe plan, government bonds. (Laughter.)

THE PRESIDENT: That's all right. Well, not so safe, unless we fix the deficit. But other than that -- (laughter). We're fixing the deficit. (Applause.)

So far we haven't seen any evidence of "we're fixing it", only "we're breaking it", but other than that...

In Support Of Bankruptcy Bill

Kevin Drum asks the same question we have all been asking, "can anyone point me to the arguments in favor of this bill?". In the comments we get directed to the Volokh Conspiracy which has arguments in favor of the bill here:

...economic theory would predict that the primary effect of the introduction of credit cars would be to shift around patterns of consumer credit use, by substituting credit card debt for other less-attractive forms of credit, such as pawn shops, personal finance companies, and retail store credit (such as from appliance and furniture stores). In fact, this is what the evidence indicates has actually happened.

and here:

This article identifies three institutional factors that can explain the observed rise in bankruptcy filings over the past several decades: (1) A change in the relative economic costs and benefits associated with filing bankruptcy; (2) A change in social norms regarding bankruptcy; and (3) Changes in the nature of consumer credit, toward more national and impersonal forms of consumer credit. It is argued that all of these factors tend to increase the incentives for filing bankruptcy or reduce the constraints imposed on filing bankruptcy. The result has been to increase the equilibrium level of bankruptcy filings in America.

Read them yourself.

Although these posts get into detailed economic theory I find myself very unimpressed. Medical emergencies are never mentioned, yet half of all bankruptcy cases involve unexpected medical bills and/or loss of work time due to medical emergencies. I don't see how the subject can even be addressed without at least considering this. Also, it never points out the theoretical reason credit card interest is so high is because the credit is non-secured and easily defaulted. That is the risk credit card companies make and they charge for that risk.

The only argument I found compelling was the fact most people who declare bankruptcy pile up the credit card debt just before declaring, leading one to believe the person clearly knows they are about to default and might as well get what freebies they can. I agree that is bad. However, the question is whether the credit card companies have the information available to recognize this situation and cancel the credit accordingly. I suspect they could do this quite easily as long as they were willing to lose some profits when accidentally overreacting. Again, that is the risk credit card companies make -- it is their choice.

UPDATE: One more thing: they imply that the increase in bankruptcy cases is a bad thing, but never even try to back up that claim. At the personal level this is obvious, but these guys are talking economic theory. Is it economically bad for the country that bankruptcy cases are increasing? I don't know. In fact, I actually doubt it is bad in any macro-economic sense. Regardless, they need to make that case, not just assume it.

Micromanagement

Another reason I'm against the bankruptcy bill is this is yet another case of legislative micromanagement that takes away power from local judges and gives that power to congress' perfect wisdom in table form. Just look up someone's income, debt, etc. and have the table tell you whether bankruptcy shall be allowed or not. Currently the system gives local judges leeway to look at the total case and make an informed decision. For example, someone in debt due to unexpected medical bills (over half of today's bankruptcy cases) is a completely different situation than someone who can't stop himself from betting on the ponies.

S256 is so bad it doesn't even cover medical cases separately from gambling, but even if it did, do you really trust congress to produce the perfect lookup table to cover ever possible consideration? Of course not. That's why we let local judges do it.

I'm fundamentally against these forms of micromanagement unless the reason is extremely clear and necessary. Whenever possible all the details should be left at the local level, as close to the problem as possible. I believe this is simply a universal truth; certainly it is true in software design and team management. This is the point I was trying to make a week ago.

For example, there are laws that prevent overfishing. That's good. These laws are absolutely necessary, without them each fisherman will simply catch as many fish as he can until the species dies out. If he doesn't someone else will! But sometimes these laws get very, very specific, to the point ships can't even come into port temporarily to avoid a storm without it impacting how many fish they can catch. That's just stupid. There was even a case recently of a ship and crew lost to a storm for just this reason. Just give a guy a license to catch so many pounds of fish -- don't micromanage.

Minimum sentencing laws are another example of micromanagement. Good sentencing laws give the judge guidelines with a fair amount of flexibility. The judge can review the entirety of the case to determine the correct sentence. Judges that ignore the guidelines should be booted out of office, but all to often the reaction to controversial sentencing is to increase the minimum allowed sentences, transferring power and decisions from the local level to perfectly calculated tables composed by those in higher powers. For some reason legislators (and voters!) think they greater wisdom, with no knowledge at all, than local judges. Let the judge do his job, don't micromanage.

Government can and should look after the big picture, but legislating details is almost always a bad idea, and laws that micromanage are almost always bad laws.

Nothing In Science Ever Proved

I often say nothing in science is ever proved, theories just survive long series of tests and observations in an attempt to disprove them. Most people, even most scientists, tend to not agree with me. At least at first. Eventually they realize I'm right but only up to a point; they claim I'm being too stringent on my definition of 'proof'. Well, I started reading Brian Greene's Elegant Universe and right there, smack on page one (ok, really page number three, but its the first page of the first chapter nonetheless) is perhaps the best example of unproved science I can think of (no link, I'm typing from the book, here):

The problem is this: There are two foundational pillars upon which modern physics rests. One is Albert Einstein's general relativity, which provides a theoretical framework for understanding the universe on the largest of scales: stars, galaxies, clusters of galaxies, and beyond to the immense expanse of the universe itself. The other is quantum mechanics, which provides a theoretical framework for understanding the universe on the smallest of scales: molecules, atoms, and all the way down to the subatomic particles like electrons and quarks. Through years of reasearch, physicists have experimentally confirmed to almost unimaginable accuracy virtually all predictions made by each of these theories. But these same theoretical tools inexorably lead to another disturbing conclusion: As they are currently formulated, general relativity and quantum mechanics cannot both be right. The two theories underlying the tremendous progress of physics during the last hundred years -- progress that has explained the expansion of the heavens and the fundamental structure of matter -- are mutually incompatible.

Proofs are the domain of math and logic, not science. Proofs require assumptions, definitions and postulates; one can think of science as that list of assumptions, definitions and postulates. Of course, sometimes science boils down to math, so some scientific papers are proofs. For example, scientists recently "proved a mathematical theorem that shows the pointer states do actually coincide with the states probed by indirect measurements of a system's environment," and thus, quantum mechanics actually is capable of producing an objective reality.

Bankruptcy

The other day a very liberal friend mentioned that half of all personal bankruptcy cases stem from medical emergencies (it turns out to be closer to 2/3). I jokingly argued from the right that this just showed the system was working. Being out of the country for the week I didn't catch on to the context of this new bankruptcy bill.

My initial blink is this bankruptcy bill is one of the most blatantly evil corporate give-away bills I've ever seen, even for this administration. But not wanting to just be a reactionary I looked around a bit more. Even Glenn Reynolds agrees:

As I say, people should have to face the consequences of their bad decisions -- but that includes their bad lending decisions, especially when the lending is, fundamentally, dishonest.

I assume that the Bush Administration is supporting this legislation, but I really don't see it as consistent with "compassionate conservatism." I see it, in fact, as consistent with the worst stereotypes about corporate-friendly Republicanism.

Not all Republicans fit the stereotype, but the crew in the White House certainly does.

Happy Birthday Cassandra!

Monday my daughter turns nine, so happy birthday Cassandra! I know it's cliché to say this, but man they grow up fast! Half way to adulthood, now that's scary.

The other night we were watching Hair! together. She and my wife just finished their year or two study of American history, with excellent History Of Us series and tons of supplemental material. Having just read about the 60's and 70's I thought Hair! would be a fun way to see what that era was like. Now, this movie has scenes with pot and psychedelic drugs in it, which some may question letting a young child see, but I think creates an great opportunity for discussion. Well, my daughter is a very bright girl and all I had to do was explain what this drugs were and she quickly points out "being against the war is good, but taking drugs is just stupid!" I told you she was bright.

Ok, one more brag. Although my wife and I learned long ago not to brag because people either don't believe us or think we are some kind of hyper-competitive, flash-card-wielding, pushy parents, but you'll just have to put up it for one more paragraph! (I shared this story at Hoagies many years ago, as well.)

Once when she was three she was looking at a triangle, circle and square and told me the triangle was "wrong". Not getting it I asked "you mean it is most different?" (She was really into figuring out what was most different at that age.) "Yea." "Why is that?" "Because it has three sides." Still not getting it I asked "well, how many sides does a circle have?" She looked at the shapes carefully, thought for a while and finally said "lots and lots of really, really small sides."

I still have no idea why the the triangle was "wrong" in her head, but I was definitely impressed with her answer. I don't think many adults would get that one correctly.

Ok, enough of bragging, back to our regularly scheduled programming....