[FoRK] Then there's this...

Stephen Williams sdw at lig.net
Fri Feb 27 18:54:19 PST 2009

Jeff Bone wrote:
> On Feb 27, 2009, at 3:57 PM, Stephen D. Williams wrote:
>> Seems like a minor point.
> It's not.  It's right at the heart of the matter.
>> Assume that more revenue must be collected
> No, less must be done.
You mean less must be spent.  Sure, that's one avenue.  What is the 
proper sacred cows to cut?  There are plenty who would decimate the 
military.  What else could really be cut?  Education? (That's the most 
crazy.)  R&D?  (Next on the crazy list.)  Social security / Medicaid?  
(What lobby group is more diffuse and more powerful than everyone's 
parents, plus everyone over 40?)

Good luck with that.  IMHO, things need to be more efficient.  You don't 
make anything more efficient by neglecting it.
>> Don't complain unless you have a better alternative.
> I do.  Less is more.  More than that:  less is *absolutely essential.*
I think I will call this the "Neglect breeds efficiency" theory.
> The bottom line is that we can't afford the *prior* level of 
> government, much less this massive increase.
> We have to reduce expectations *dramatically* and then start cutting 
> until we get to a level that we *can* afford, sustainably.
Reducing expectations is not capitalist.  And it is not going to happen 
in any general sense.  I find it an odd thing to advocate for, unless 
you mean it in some some very narrow sense such as: "Very few people 
should have an expectation to have as much money as me."
>> Some core reasons that the housing bubble happened were easy credit, 
>> good tax writeoffs, etc., i.e.: huge mortgages were affordable.
> No, the ENTIRE reason the current problem exists is because 
> government-created "moral hazard" completely foobar'd the mortgage 
> market, creating a *small* but critical amount of totally toxic 
> mortgages.  That coupled with a *lack* of regulation and 
> exchange-listing of CDS is the ENTIRE root cause, period, end of story.
Whatever.  Very little mention of the government in there.  Less 
government didn't work so well, although I'm not saying that "more 
government" is strictly good.  Clearly, there was a combination of 
"don't rock the boat" and idiot managers not listening to the quants 
properly.  And a form of reverse CYA Security.  (A concept I've long 
seen, but will now use Schneier's name since his article on it.)  That 
RCYAS was that anyone who seriously tried to put the brakes on would 
have been vilified for creating a disaster.  In other words, if someone 
had stepped up and put a stop to the madness, perhaps saving 50% of the 
carnage, there would have been no way for them to prove that they saved 
anything.  Everyone would have blamed them for the 50% that did happen.  
Let's call that the "Regulator's Dilemma".  Those that tried to sound 
the alarm seem to have been replaced quickly with proper yes men when 
they weren't just ignored.  So, the only ones blame free were those 
brave souls that tried to stand naked in front of the firehose of money.

So, I fail to see that it can be solely put down to a 
"government-created moral hazard".

> jb

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