Thursday, May 29, 2008

The Irony, Part MMMMMDCCLXXXIII

If you opened today's Los Angeles Times Op-Ed section you'd've seen two opposing titles along the crease at the top. Just to the right was "Assessing Prop. 13," a piece advocating gutting California's Proposition 13 which passed in 1978 to prevent soaking homeowners with excessive taxation.

To the left was a pull-quote from a letter to the editor. It said, "Rome is... responsible, and Rome should pay." This was from a group of letters commenting on how the Catholic Church is finding funds to pay off its sexual abuse victims.

The irony comes in the fact that Rome is truly not just the Catholic Church, but the overarching governing body of the World System set in motion from the time Cain committed the first murder. Cain was then ordained the first governor, and by erecting a city from which to rule he instituted grand religious, political, and economic organizations to administer his prosecutorial authority over sinners.

Unfortunately shortly thereafter some men began calling on the Lord, seeking His truth and grace in all things. To keep from becoming irrelevant, Cain and his minions began provoking men to do evil. A man living by the Lord's word and guided by His wisdom cannot be taken in by his elaborate ruses.

But for those who do not seek the Lord, the racket that is the Agency of Cain is there to crack heads and pretend to offer protection from head-cracking.

How profound that this letter writer should utter the words "Rome is responsible." That it should pay is amplified by the op-ed about how homeowners need to get with it and start paying more.

Paying more for what?

Essentially it shakes down this way.

Cain (as spoken through those unabashed about making The Institution their lord): "We need more taxes. This will provide ample funding all the things government has to fund."

Observer: "What are those things?"

Cain: "You know, education, police, fire, health services, governance, public services, you know, good things like that."

Observer: "But doesn't much of that just enable the rotten behavior of the populace."

Cain: "Of course, but if we're responsible, we should pay. And if people get sucked into our provocations then they're the ones willingly paying for us to pay."

Observer: "True enough. But this sure seems horrible. It just feels like a body of death."

Cain: "So? It's my job. Don't like it, get out."

Get out? What does that mean? Get in a rocket ship and blast off outta here? Move to the woods and live in a tent?

Nah. How about this.

Just trust in Christ and live in the Kingdom.

Sunday, May 25, 2008

Making a Law Against Adverse Selection

One of the books I'm reading now is The Logic of Life by Tim Harford, one of the latest in a string of Freakanomics-type breezy treatises on what the subject of economics is really about. I enjoy them, and I admit there are some nifty insights to be gleaned from someone looking at life from a key principle Harford addresses.

It is a point that I've made before, but one which I believe most people chafe at. That point is

Everything anyone does is rational.

Yes, that's right. Harford says it in pretty basic econ terms: People make a decision when the benefits derived from that decision equal or exceed the costs required. Even the looniest decisions are made this way.

Another point Harford makes is that it is very difficult to value things, a fact that was a linchpin of my webzine's latest home page piece.

The reason I bring up these two laws of economics is because this week George Bush signed into law a bill passed overwhelmingly by Congress called the Genetic Information Nondiscrimination Act. It prohibits any discrimination in providing services or employment based on knowledge of an individual's genetic history.

It pretty much shakes down like this. You have a family history of early heart disease--every one of your ancestors, from dad and mom to the great grandpas and grandmas died early and had truckloads of medical bills. An insurance company now cannot refuse you a policy for fear you'll break their bank, and a firm cannot use your genetic history as a reason to deny you a job because the years they would've invested in you won't pay off in the long run.

The problem here comes with one of the more advanced economic laws, and makes compliance with this federal law quite difficult. It is the law of adverse selection, the idea that we generally do not willingly select options that are very costly when it is likely the benefits will be minimal. Insurance companies only insure people because statistically they can afford to make huge payouts to some customers but not all, and if they knew they were going to pay out too much to too many, they'll just make the decision not to do it at all for anyone.

After all, the law of opportunity cost says an individual always has another option, an option that always pays more when the thing he is doing now becomes too costly.

Now, could an insurance company simply charge way more for the premium of a very risky client? If so then there should be no problem economically. It gets dicey whenever government gets involved, and that's not necessarily a bad thing. If the government forces others to pay for the premiums of risky and costly beneficiaries, then okay, fine. Most people, in fact, are resigned to do that.

Thing is, the significant corollary to the Everything someone does is rational rule is this:

Not all things, however, are righteous.

It is very good that we care for those who are less fortunate, and that includes people with unfavorable genetic histories. This does not mean, though, that we must enable them by dismissing behavior that aggravates risk. This also means something else that is critical in this.

Congress and the President and whatever other coercive World institution can rationally force people to be nice and help out. This still does not solve the cost-benefit problem of adverse selection.

What does help it out is increasing the size of the benefit, and the only way the benefit can equal or exceed the cost is for a large enough group of people--a community? Perhaps even a nation?--to actually truly really

Love the genetically risky.

And God has made it quite clear. The only way they can do that is through the Son.

"Perfect love drives out fear."

That perfect love was demonstrated by Christ on the cross. Those who allow themselves to be crucified with Christ as holy and living sacrifices will go bananas providing for the genetically risky. What's more, they'll do it with a hundred times more resources than the World has.

I like Harford's book, and all the others I've peeked at that talk insightfully about economic matters. When someone brings the only really meaningful Answer to all the issues brought up by those pesky economic laws, then I'll really like them.

Monday, May 19, 2008

Shortselling People

One of the items I left out of the most recent home page piece on my webzine was a note about how John Paulson got his boffo paycheck. Paulson, if you remember, was the hedge fund manager who took home $3.7 billion last year. It'd've been nice to squeeze it in there, but it wasn't necessary. Again, as I pointed out in my last blog entry, I'm not making these notes to pout about someone else looking richer than I do. I just want to point out things that just aren't being pointed out, and I think there may be a few who are interested, that's all.

I share it also because it does parallel a recent current event that some are opining about. That in a moment.

First, Paulson got his take mostly on the strength of deft shortselling in the housing market. He took advantage of dip in home values by shorting those infamous collateralized debt obligations, or mortgages-turned-into-bonds. It's a bit complicated how he did it, at its core having to do with the concept of short selling. Essentially, though, it worked like this.

A bunch of homeowners thought the value of their homes would go up. Some ravished investors thought so too, and enabled their optimism by buying their loans. Paulson said, "Nah-ah," and after watching them gleefully bet on those increases by paying more than they should have, Paulson did his shortselling thing.

Shazam. That perception of value increase was now in Paulson's pocket. It's as if I think a house is going to be worth $500,000 and I pay that, but then it goes down to $300,000. Where'd that $200,000 go? I lost it at the housing blackjack table, and Paulson won it. As the World says,

"Losers weepers finder keepers."

The current event that relates is the recent ruling by California's Supreme Court that same-sex marriages are okay in the state. A zillion different things can be said about it, and many people have indeed said a lot and a lot more will be said. What on earth could this, however, have to do with hedge fund value confiscation?

John Paulson and State Supreme Court Chief Justice Ronald George are not much different actually.

Shortselling people is their job.

Every individual who insists he or she is a homosexual was tremendously shortsold. Certainly each one of them will shrug that they are dignified, respectable human beings who choose wisely and are just regular people except for their natural and perfectly harmless sexual proclivity.

But the fact is sex is a beautiful gift from God and anything outside of that gift exchanged between a committed adult male and a committed adult female makes both of those who would otherwise exchange it

Less than human.

Yes, indeed.

It is nothing other than yet another form of human sacrifice.

I'm not trying to be moralistic or judgmental or mean-spirited. To say a thing is bad is not my call. The law is already there for that, and heaven forbid I should be a condemnor.

I just want to lay on the table the possibility of this one thing, simply that these people are subjected to a unique form of value extraction, and that they may see that if they look closely at what the World has convinced them to believe.

I also pray there are some reconcilers out there who'll truly engage them with God's grace. Truth too, of course. But truth that is true, and that truth includes healthy grace and care and concern.

I'm sorry, but from my perspective those committed to grafted churches--501c3 incorporations--just don't do that very well. These people pretty much fall into one of two camps. One seethes at them and hollers about them, and the other joins in throwing the rice after the ceremony.

Where are the ones who love?

Some other forms of human sacrifice are here. How churches are impotent to truly minister to victims of human sacrifice is here.

Friday, May 09, 2008

What Does Go Well with Fava Beans and a Nice Chianti?

After writing the latest home page piece in my webzine "The Catholicist Nation," I thought I had offered a pretty good anecdotal example of what it is like for the highest ranking value extractors to do their thing. Money managers are so obsessed with hacking out the souls of spiritually dead people, I likened them to the hordes coming to worship the propped-up remains of a popular 20th century Catholic saint.

Wow. I feel so behind on things. Turns out a few years ago a mortgage dealer actually did use dead people in a scam to defraud investors.

This year in my webzine I'd been focusing on the economic conditions that arise from those committed to human sacrifice in some form. Sometimes an act of sacrificing another on the altar of the World may take place with a simple unkind word, other times it may be widely and intractably institutionalized, such as that which occurs in the financial markets. Words and markets are in an of themselves of no matter, they become a part of good or evil from what someone does with them.

Much of what I've shared is nothing new. The grandest machinations of powerful people are seen and have been seen everywhere, throughout history. I wonder at times whether the reader may see me "playing the class card." That is, am I seen as complaining that some have so much while others have so little and whine whine whine? Ugh, may it never be. Forgive me, please.

What I want to do is highlight the things people don't seem to pay much attention to. A few of the significant ones include

- When people exploit they are doing human sacrifice, and it is a completely spiritual endeavor, the poor doing it just as much as the rich.

- People without Christ must do human sacrifice, "those who have the Son have life, those who do not have the Son do not have life"--it cannot be more succinct.

- Many who claim to be Christ's still do human sacrifice by tying themselves to the World through W-4's, 501c3's, SS#'s, and a myriad other contractual entanglements that belie their claims and have them running around with wolves who they just can't see are wolves through the sheep outfits.

One thing I considered adding to all of this was an explanantion about that idea of "surplus value," really the concept that we can produce more than we can individually when we are duly inspired, genuinely incentivized, and vibrantly work with community. The note was about the fact that Karl Marx spent a great deal of time speaking of this, how the powerful exploiters -- ooo, that dratted bourgeoisie -- routinely steal that value from the poor victimized workers.

Am I on Marx' side in all of this and playing that class card by decrying the way people are sacrificed? Well, I am writing about the reality of exploitation, but the key difference is that Marx and all the Radical Selfists who follow him endorse a course of action quite common actually: Rebel against the tyrannical exploiter. Commercial exploiter, political exploiter, whoever. From the World's megaphone (sometimes just whispering in your ear): "Rage, rage, rage against them all..."

The result is always the same: Exploiters will replace other exploiters wearing different-looking sheep outfits. The Marx plan is really to have his exploiter take over and schlurp up the surplus value the exploitee lays on the chopping block for him. I guess it is better to have someone you like hack off your soul. At least it feels good to be in the club and have people say nice things about you while they are doing it.

Funny, today in the Economics class I teach, the very last class of the day actually, while we were talking about banks and inflation and some of those kinds of macro things, I found myself asking my students a question I'd never asked any class of students ever before. If you know about banks and what inflation really is you may be able to see how I can come around to asking this question--and I address it a bit in that latest home page piece on my webzine.

Here is what I asked them.

"What would you rather know about, what everyone thinks is the value of things, or the real value of things?"

Naturally all the students, about 15 young bright-eyed 17 year-olds (it was a small class), all nodded and muttered firmly in favor of the latter. Who wouldn't?

Later driving home from work it came to me. The most critical part of getting at that is the answer to this question:

How are they going to know that?

The only way is by some transcendent value assessor.

You know Who that is.

Otherwise you're left with the World. The people in it have all kinds of boffo ideas of what's valued, some of them even waving their handpuppet Jesuses in your face.

They'd just like a little of you to go along with the fava beans and a nice chianti...