It looks obvious

A year ago we purchased our first house. It took us long time to calculate how much mortgage we are going to afford based on our income and once we made our decision we stood firm against persuasions to buy house that was more expensive than we planed to. The arguments were very compelling, after all a more expensive property is usually better and spreading the cost over the life time of the mortgage resulting in a smaller monthly. However, we didn’t made a clear decision not to take a loan that is beyond our means.

Today I learned that we, along with many others, were stupid. Instead of getting a better house, that we couldn’t afford, we are going to pay for someone else’s house:

WASHINGTON, Aug. 30 — President Bush, in his first response to families hit by the subprime mortgage crisis, plans to announce several steps Friday to help Americans who have credit problems meet the rising cost of their housing loans, administration officials said Thursday.

The officials said Mr. Bush would call for the Federal Housing Administration to change its federal mortgage insurance program in a way that would let an additional 80,000 homeowners with spotty credit records sign up, beyond the 160,000 likely to use it this year and next.

The administration is offering his plan, which will include what one official called jawboning of lenders to persuade them not to foreclose on some borrowers, at a time of growing attacks on Mr. Bush from Democrats who say he has remained on the sidelines amid increasing anxiety over whether millions of Americans could end up losing their homes. Other elements of the plan would need legislative action, requiring Mr. Bush to win over the Democratic leadership in Congress.

Some might jump and explain that this is done to save the entire market from collapsing, which might be true. Some will also explain that the President move actually helps the banks getting the mortgages, they so recklessly offered, secured - and they would be probably correct as well. And some will point to the fact that the risky mortgages are the results of the Federal Reserve’s policy in 2000.

However these arguments doesn’t change the fact, that taking money from those who didn’t buy houses that they can’t afford to pay for those who did, is simply immoral.

I’m reading these days an excellent book about the 30’s depression, which I’ll write about when I’ll finish. At the beginning of the book the author quoted from the "Forgotten Man", written by William Graham Sumner, which is still very relevant:   

The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C’s interests, are entirely overlooked. I call C the Forgotten Man. For once let us look him up and consider his case, for the characteristic of all social doctors is, that they fix their minds on some man or group of men whose case appeals to the sympathies and the imagination, and they plan remedies addressed to the particular trouble; they do not understand that all the parts of society hold together, and that forces which are set in action act and react throughout the whole organism, until an equilibrium is produced by a re-adjustment of all interests and rights. They therefore ignore entirely the source from which they must draw all the energy which they employ in their remedies, and they ignore all the effects on other members of society than the ones they have in view. They are always under the dominion of the superstition of government, and, forgetting that a government produces nothing at all, they leave out of sight the first fact to be remembered in all social discussion - that the State cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.

And one small remark to the NY Times reporter - those people that cannot pay the mortgage they took didn’t not get his by the subprime mortgage crisis. It isn’t a force of nature, a storm, that his them. Words have meaning, and the NY Times choice distort the reality.

It is August 31st again and it is Blog Day.  Writing, and mostly reading, blogs offer me a wider access for ideas and knowledge bypassing the traditional gatekeepers and editors. Therefore I’m finding it nice to dedicate a day in the year to recommend and compliment some of those blogs that made my world richer.

• Coyote Blog - I stumble upon this blog a while ago, looking for serious writing about the global warming and I found a real gem. The Coyote Blog covers variety of issues with sharp observation and in a way that making even complicated issues much clearer. 
• Cafe Hayek - My favorite economy blog, and not only because of the name. The writers,  Two George Mason University professors, prove that economy can make sense.
• Deep Space - This is a new blog written by a very dear friend. Catherine is a very talented writer who decided to try the blog format as a way to publish here wonderful writing. I’m anxious to see how this blog will develop, and I hope that many other will enjoy it as well.
• Ben Hammersley - Simply because his photography is like a beautiful poetry.
• PrezVid - The Presidential campaign as it is being run on YouTube. It is very interesting to see the increasing effort of the candidates to harness the Internet, and the new horizons the new tools open for political discussion.  

The Hebrew list will include, this year, the following:

• Zoolish - This blog, and its writer, are a proof that you can be very smart and yet wrong (or is it the other way around? ). I like reading Zoolish observations and analysis, although not agreeing with the conclusions sometimes.
• Friends of George - although I tried to avoid A-listing bloggers this is an obvious exceptions. This blog is written in a very charismatic way and with a rare intellectual honesty, which make it pleasure to read, even when I disagree with its observation or conclusions.
• Micro-Cosmos - Usually I have very little patience to young people, for many reasons, but this is an obvious exception. The blog offers a window that allow us to follow the development of a bright young man, and it is an interesting journey.
• The armchair school - a mix of technology, alcohol reviews and observation about life and politic. Well written.
• The true and shocking story of - Culture review the culture review should be.

The Club of Growth links to site that provides an index of the Internet activity of each of the Presidential candidate:

The Spartan Internet Political Performance (SIPP) Index is the first quantitative metric to measure the Internet-wide performance of each Presidential candidate for the 2008 election. The Index is comprised of over 650 quantitative factors measuring the level of support and how well each candidate is connecting with individuals across the Internet.
The score for each candidate represents their overall Internet market share.

The site provides plenty of graphs and different views based on, I assume, sophisticated algorithm that shows online activity, trends and other factor. Visitor of this site can dissect the data in many ways and have plenty of different views. However the index is lacking one simple factor - how these numbers correlate to the general population. Because, if the intention is to build a useful tool, the only use of such index should be its ability to help predicting the elections results. Simply put, if the index cannot demonstrate some correlation to the election and provides some predicting usefulness for the actual results - it is a meaningless index.

A proud product of our public schools system… 

In December 1987 I was a young officer in a battalion that was called to participate in putting down what was later known as the Palestinian uprising. One of the forms of the uprising was the attempt to make the Israeli authority irrelevant by not relaying on it and not use its services. One of the counter method the geniuses in the Civil Authorities ( A euphemism for the occupation administration) enforce licensing on almost everything, including horse’s carts and donkeys. It was pretty useful method to force the people to engage with the authorities, although it didn’t help in reducing the hate for them.

Reading the survey of Reason Foundation on the occupational licensing in the different states in the US raise the feeling that this is also a method of exercising power for sake of power, to force people to depend on the government for no good reason. One doesn’t have to be as extremist as me, arguing that the only license one needs is the willingness of people to use one’s services, to be bother with the extent of occupations that require licensing:

Do you want to be a fortune teller in Maryland? Your future better include a license from the state. How about being a hair braider in Mississippi? You’ll need 300 to 1,500 hours of training and government permission. Want to sell flowers in Louisiana? Only licensed florists can do that. And almost every state requires certification if you want to move furniture and hang art while calling yourself an interior designer.

I was fascinated with the William Boyd’s op-ed on the Sunday NY Times. It is fascinating because the idea that in order to sell something, in this case wine, the seller has to:

The only brutal answer for the French wine industry is the Thierry Bernard solution: simply to make less wine and make it taste better. (And to adapt, as Thierry did.) This may be harder than throwing homemade bombs — it requires skill, energy, talent and, obviously, a certain amount of luck — though I would not wish hailstorms on anyone as a motivating force. Wine drinkers’ tastes have changed, as the irresistible rise of the New World wines has proved.

But when the common tradition is of protectionism, and the idea that someone else must support your own hobbies, traditions or needs it is no wonder that many winemakers in France finding it easier to use violence, to force the government to support their failing business, than to improve the quality of the products. This approach obviously can work when limited to the French market alone, but how do the French winemakers intend to force the rest of the world to pay for their wine? 

In a comment on a pervious post Ingrid, the writer of two interesting blogs,  raised an interesting point:

what do you think of the libertarians’ approach for getting to office? I did go to one press conference/meeting for a libertarian here in TX, and I think they are more devoted to their outlook than even Republicans are. However, thinking political strategy, I do not believe that anyone will ever get voted into office if they do not try to hook up with independents. They will never get the voter’s base needed to get into office, and more so than an independent, running for very high office(s) seems to be a waste of time and money that actually undermines them. In other words, they are being looked at as ‘oh, one of those running again’ when they never win.

This is an interesting question - does a political party, or activity, only justified by the ability to be elected? The obvious answer is yes, if one unable to be elected one cannot achieve its political goal. But this rule out any ideological movement and make the political game completely irrelevant. However I argue that political influence and political games can be achieve by participation, even without winning. Ross Perot  wasn’t elected President, Ralph Nadar failing in a cycle of four years and so does the Libertarian Party - but I don’t think that we can dismiss their effect. By participating, and attracting enough support, Ideological candidates force the first tier candidates to some policy decision that will appeal to the public that support the "purist".

Liberal Democracy require endless concessions and compromises. The results of any policy are never to the satisfactory of any ideological movement, nor can they be since they are the results of a compromise and political deals, but this is the only way, that we know, to maintain a Liberal Democracy. This is also the reason why I would not be shocked, nor disappointed, when Ron Paul will not win the Republican nomination. I support Dr. Paul candidacy, I even donated a little bit money to his campaign, and I agree with large portion of his agenda. However the metric I apply to measure his success will be by how much will he be able to effect the GOP agenda, will his campaign trigger a movement that will oppose compassionate conservatism and Neoconservativism, not by winning the nomination.

It is therefore why ideological movements can’t, and shouldn’t, win general elections. But that doesn’t mean they are doomed to fail, their success is simply measured differently.

Few months ago I expressed my concerns regarding the so called Fair Tax. I argued that I see three major problems with the propose taxation system: It deals with the tax collection instead of the spending, it isn’t fair and it is open to corruption at least as much as the old system. No wonder I was pleased to read Bruce Bartlett’s criticism, debunking the actual numbers:

A 2000 estimate by Congress’s Joint Committee on Taxation found the tax-inclusive rate would have to be 36% and the tax-exclusive rate would be 57%. In 2005, the U.S. Treasury Department calculated that a tax-exclusive rate of 34% would be needed just to replace the income tax, leaving the payroll tax in place. But if evasion were high then the rate might have to rise to 49%. If the FairTax were only able to cover the limited sales tax base of a typical state, then a rate of 64% would be required (89% with high evasion).

[...]

Perhaps the biggest deception in the FairTax, however, is its promise to relieve individuals from having to file income tax returns, keep extensive financial records and potentially suffer audits. Judging by the emphasis FairTax supporters place on the idea of making April 15 just another day, this seems to be a major selling point for their proposal.

Yet all but six states now have state income taxes. So unless one lives in one of those states, this promise is an empty one indeed. In short, the FairTax is too good to be true, and voters should not take seriously any candidate who supports it.

I’m not a big supporter of taxes altogether, but I know that the idea of getting rid of most of them isn’t going to happen anytime soon. Therefore I’m supporting those who will reduce government spending and simplify its taxation, not increase it.

…and by the way, it is so much fun to say - I TOLD YOU SO!

I would oppose public education even if the budget numbers were different. But it is still shocking to learn that the budget per student in DC public schools is more than twice than the tuition I need to pay for private school. And in case you wonder, my money buys much better education…

Is the problem insufficient funding? As it happens, DCPS’s total gross budget for the last school year was upwards of one billion dollars according to its own website, and its enrollment was about 52,000 students. That means DCPS had total per pupil spending of nearly $20,000 last year, or half a million dollars per class of 25 students. You’d think that would cover books.

I’m skeptic about the voucher idea - I’m not in love with the idea of governmental forced wealth distribution. However as a practical compromise it seems like the only way that children from less fortunate families can get decent education, or at least a fair chance for one.

When someone start to lecture about the beauty of a system that is pure from the profit incentive send them to the DC public schools, or better their children…

Like many people I will never forget that horrifying day, The smoke and the fire, the people jumping down to their death and the collapse of the towers. It was not the first time I witness the results of terror attack, nor the first time I witnessed death. But the 9/11 attack caught me, and the entire world, unguarded. And in the dark moments of shock, pain and despair, when no one else was capable to take the leadership - it was Rudy Giuliani. At those critical moments he was there to restore confidence and hope.

Was it all genuine? It is completely Irrelevant. Politician and leaders are often acting, portraying a mirage of who they really are. But when the city was covered with smoke and debris, When Bush and Cheney were nowhere to be found, it was Giuliani’s shining moment.

And no, I don’t think its qualifying him to be the President, but I will always be in debt for the role he played at those days. And trying to attack him as an imposter is more than simply dirty politic, it is and attack on those things that gave us hope and confidence when we needed them. There are things that we should leave outside of the game, it simply doesn’t worth to drag them into the dirt.