Futures and Options

It’s official.  Actual electricity usage data prove that the much-hyped “Earth Hour” had no measurable effect on energy usage.  Even better, the “environmentally-friendly” things people do to avoid using electricity (lighting candles, using fireplaces, etc) actually cause more carbon emissions than their electric equivalents.  And then there’s the number of glow sticks consumed at Earth Hour parties around the globe.  We all know glow sticks, those wonderful luminescent tubes, made from energy-intensive hydrocarbon-based plastics and containing chemicals that are environmentally hazardous (albeit claimed to be “low-level” hazards).  Seems that those are very far from being environmentally friendly.  Turning off your lights to protest energy usage and then celebrating by wearing several glow sticks is like buying organic milk to avoid cruelty to cows and then eating veal cutlets.  You’re just not doing as much as you think you are.

So, if the net result of this “protest” is that we’re making any measurable reduction in electricity use, we’re increasing demand for hydrocarbon-based tubes filled with toxic chemicals, and we’re actually increasing the net carbon emissions by using candles instead of more efficient electric lights, then why should we bother with such things?  Well, according to Kim Carstensen, the director of the World Wildlife Fund’s global climate initiative, “People want politicians to take action and solve the problem.“  Ahh.  There it is.  We want politicians to solve the problem.  We don’t want to solve it ourselves.  That makes sense.  I mean, if we wanted to solve it ourselves, we’d be reducing our energy usage year-round rather than simply making highly visible but functionally-ineffective gestures like Earth Hour.  If we wanted to solve it ourselves, we’d care that the consumption of glow sticks and candles during Earth Hour celebrations negated any reduction in electricity-related carbon emissions (and may even have been worse).

But everyone’s happy.  The environmentalists got to have their little party and act responsible, even if the reality is that they made things worse.  People like me get to enjoy pointing out their hypocrisy.  Everyone wins.  Unless the politicians actually try to do something.  Then we’re probably screwed.  Hey, at least those carbon-emitting candles are pretty though.

I would like to officially welcome Futures and Options’ newest contributor, Strix Nebulosa.  I have known Strix for a long time, but don’t hold that against him.  He’s a very bright guy and I’m glad to have him on board.  His first posting has already been published and I look forward to many more.

A hearty thanks to Zenmervolt for inviting me to join his site as an occasional contributor.  I can say, without irony or exaggeration, that it is a privilege to share space with such a thoughtful writer.

My virgin blog post (yes, first-ever, anywhere! you saw it here!) concerns a panel discussion I watched today, sponsored by the local student chapter of the Federalist Society.  They asked the school’s four professors who teach introductory constitutional law to propose a “makeover” for the Supreme Court–a change (no matter how wildly fanciful) in the appointment process or case-decision process that would produce beneficial results.  The discussion was lively and excellent all around, and I’ll report a few of the most interesting ideas here.

John McGinnis proposed a constitutional amendment requiring a 60-vote threshold for Senate confirmation of Supreme Court nominees.  Supermajority requirements tend to produce “better” results, he argued, which in this case means nominees of higher quality that are less likely to be radical (on either side of the political spectrum).  In the long run, that’s a good thing for the rule of law, promoting more respect for the Court as it produces fewer decisions likely to enrage a significant portion of the citizenry.

Lee Epstein noted the increasing “professionalization” of the federal judiciary:  US attorneys beget district court judges beget appellate court judges beget Supreme Court justices.  For the first time in history, all nine current justices were federal appellate judges before they were promoted to the Court.  Epstein argued for greater diversity of backgrounds on the Court; diversity of input leads to stronger output.  She backed this up with empirical evidence of the cost of a monolithic court.  One problem is that justices tend to have too much loyalty to their mother circuit.  Justice Breyer, for example, affirms the good old First Circuit 70% of the time, but the other circuits only 30%.  And with four former judges now on the Court, the D.C. Circuit is enjoying a historically low reversal rate.  Interesting to note that George Bush made similar arguments when he nominated Harriet Miers.

Steve Calabresi threw out seven different proposals, the most novel of which, I thought, was to move the Supreme Court out of Washington.  He thought the justices were exposed to too many lunches with Senators, galas with diplomats, and even hunting trips with Vice Presidents (Calabresi’s allowed to poke a little fun at Scalia; he clerked for him twenty years ago).  All this mingling with the political elites is bad for the separation of powers, and it leads to the justices being out of touch with the people.  Justices with too much personal investment in the enlightened East Coast establishment will be trying to impress the wrong people when they decide cases and write opinions.  Personally, I like this idea a lot; we could even take it a step further and move the seat of the Court around every four years, Olympic-style, and cities would compete to determine who would win each four-year term.  Such a system would dramatically increase voter interest in the goings-on at the Supreme Court.  And better yet, the justices themselves would vote on where they wanted to go next:  Mobile, Toledo, Duluth, Topeka, Boise…?  Where would YOU choose?

Recently I passed out of my “mid-20’s” and officially entered my “late-20’s”.  Since marking arbitrary transitions in age is something that our society does well, I actually spent a decent amount of time deciding what I wanted to do.  In the end, it was a simple evening at home with some friends, a calzone (cleverly skirting the fact that I had given up pizza for Lent), and a movie.  Specifically, Twilight.  Yes, I admit that I willingly watched a movie aimed at teen girls.  Call it a train wreck response.  I simply couldn’t resist the chance to see if Flash Gordon might finally have a legitimate competitor.

I was not disappointed.  In the realm of flat dialogue, stunted characterizations, and forced symbolism, Twilight has few peers.

I know what you’re thinking.  Yet another anti-Twilight blogger.  You probably think I’m going to make fun of the fifth-grade attempt at symbolism when Bella arrives in Forks, clutching her little cactus as though the blunt declaration in earlier dialogue that she “always hated Forks” wasn’t already as subtle as a sledgehammer.  Or maybe you think I’ll take pot-shots at lines like, “This is the skin of a killer!” or, “your scent, it’s like a drug to me”.  Or perhaps you think I’ll lament the fact that the best acting in the film (Billy Burke) is wasted by deliberate editing choices that consistently thwart Burke’s attempts at clawing his way out of the one-dimensional “emotionally-absent and overprotective father” stereotype.  Those are all legitimate criticisms, but they aren’t really what I want to talk about.  I won’t even get into the debate about Bella’s frankly dangerous inability to function without Edward.

No, I’m not interested in those criticisms.  I’m interested in the response that the criticisms have received.  The more cogent responses point out (rightly) that these books (and, by extension, the movie) are “junk food”.  And, these responses continue, because the books (and movie) are junk food, and the fans know they are junk food, the criticisms above don’t matter.  Fair enough.  Concerns that these books promote abusive/controlling relationships are certainly overblown.  Women have fantasized over far more controlling characters after all (I know very few women who have not, at some point, at least wondered what it would have been like to be with Heathcliff).  The defenders also point out that these books at least get teens to read when they may otherwise not be inclined to do so, under the theory being that any reading at all is a good thing.  This too is reasonable.

But to these responses, I offer further criticism.  The issue is not so much that the Twilight series is junk food, but rather that it is bad junk food.  There’s a difference between a circus peanut and a bar of Lindt chocolate.  Both are technically junk food, but anyone who has tried both can tell you that there’s a world of difference between the two.  The Harry Potter series are junk food too, but they are reasonably well-written junk food, with characters who have actual flaws and who manage to struggle through relationships without excessive melodrama.  Yes, in Rowling’s books the whole Harry/Ginny relationship is a side plot, but it’s still handled with more depth and believeability than Meyer’s portrayal of Edward and Bella.

It’s all well and good to say that Twilight is at least encouraging teens to read, but suggesting that as a merit seems to me akin to feeding a starving man nothing but those aforementioned circus peanuts and then saying, “well, at least he’s eating”.  “But,” the defenders say, “teens won’t stop with just Twilight, they’ll hunger for more literature; we can use Twilight as a gateway book.”  This is wishful thinking; an example of hope overcoming experience where otherwise intelligent people prefer to delude themselves into believing that non-readers will “graduate” from Twilight to more substantial food rather than to face the reality that non-readers will instead cling to books that embrace Twilight’s purple prose and simplistic constructions.  (Somewhere, someone is saying that you can’t have both purple prose and simplistic construction.  I can only reply that simply adding a barrage of multisyllabic thesaurus-nuggets does not a complex sentence make; to be sure, such a style can help to increase the reader’s vocabulary, but it does nothing to enhance his or her ability to form a coherent sentence that properly expresses a complex idea.)

I can see the last response to my criticisms coming:  “If the Twilight series were as bad as you believe it is, then there’s no way it would be as popular as it is.  You’re just another literary elietist who wants to scoff at anything that is modern and popular.”  This is where I drop the bomb.  I like Twilight.  I think that the idea behind it could make for a most exceptional series.  I think that the characters have the potential to show great depth and humanity.  In the hands of a competent author, it could be an incredible fantasy series.  Instead, we get Stephanie Meyer and the whole thing falls flat.  That’s the problem.

“There Ain’t No Such Thing As A Free Lunch”

People who know me know that I’m not one to miss an opportunity to praise Robert Heinlein, but his recognition and popularization of this basic fact strikes me now as one of the more prescient aspects of his writing.

Our obsessive pursuit of a free lunch is, in my mind, the chief cause of the current problems with the world economy.  Yes, many are blaming simple greed, but there’s more to it than that.  Greed, simple avarice, while distasteful, is distinct from the more toxic desire for a “free lunch”.  Greed in and of itself is simply a desire for more.  Left un-checked greed alone can ruin a life, sure, but it’s possible to be greedy without the domino effect that we have observed in the past year.  It’s possible to be avaricious without desiring to acquire possessions undeservedly; greed can drive push a person to improve himself and to earn those things which are desired.  To be sure, such a life is ultimately unfulfilling and there is no final satisfaction in it, but it won’t necessarily drag everyone else down.

No, the disaster comes when greed is accompanied by sloth and we seek possessions the easy way.  When we believe that we can get something for nothing we delude ourselves.  Sometimes we merely postpone payment (with interest), sometimes we force that payment on others, and sometimes, worst of all, we do both.  It is convenient to blame banks and CEOs and “speculators” (a vague grouping at best), but the fact is that most of us bear at least some of the burden ourselves.  When I first started working, during the boom period of 2004/2005, I looked into  the possibility of buying a small house as opposed to renting.  Fresh out of college, $2,000 in the bank, two months of work experience in a “real” job.  The bank told me they could approve me for a $250,000 mortgage.  I told them they were insane and that I was looking for, at most, a 75,000 mortgage.

The result of my search was that I remained in an apartment; unlike the area in which I grew up it wasn’t possible to find solid $50,000 to $75,000 houses where I was working.  But that’s not the point.  The point here is that a lot of people believed their bank when they were told that things would be fine and that they could refinance later when the value of the house had gone up (because it was certain that house prices would continue to climb).  To be sure, banks should not have been willing to lend as much as they did; I am by no means absolving the banks which were out after their own free lunch.  However, I’m simply astounded that more people didn’t realize that they needed to reign in their spending and stop relying on credit.

We willingly buy into the idea that credit spending is acceptable and then are shocked when the bill comes due.  On Sunday, there was a story on the news about a man who had been making over $750,000 a year as a Hedge Fund manager who had lost his job and was now delivering pizzas for $7.50 an hour to make ends meet.  The news story took the populist slant and there was a sort of “wink wink, nudge nudge” implication that this was in some sense the deserved comeuppance for one of the “fat cats” who caused the current mess.  That angle didn’t work for me.  Instead, I came away wondering why no-one questioned how a man earning $750,000 a year lacked any significant savings.  I’m simply baffled by the apparent expectation that we’re all living paycheck to paycheck regardless of how much we make.  That a person who made $750,000 a year had no significant savings to fall back on is absolutely baffling to me.

When it all comes down to it, we have all made this bed and we all have to lie in it.  Maybe good will come out of this yet.  Maybe we’ll learn something and start saving again.  And maybe I’ll strike oil in my backyard.  But hey, I can still hope.

“What is the mind like if it’s not occupied with plans and schemes, and fears that the plans and schemes will fail? What if your unexamined beliefs were to fall away and you were to live without them, and also to live without the thought that you had given anything up?”
- John Tarrant

It’s the weekend, and a beautiful day at that.  Not a day for politics.  Well, for the moment anyway.

I decided to take advantage of being in PA over the weekend and drove down to Gettysburg.  Maybe it’s just because I want it to be, but Gettysburg is still a powerful place; there’s a lot of cultural memory attached to those woods and fields.  The sheer desperation of the men involved is evident when one looks at the lay of the land and sees how the lines maneuvered.  The scene for Pickett’s Charge is particularly moving.  A line of men over a mile wide were marched, uphill, across open fields for 3/4 of a mile towards a well-fortified Union position.  This was, of course, a disaster.  It’s one thing to read about, but quite another to actually see the land in person.  To attempt such an advance with the technology available at the time would require desperation.  It’s sobering to think that men obediently marched into that sort of situation.

I was proud to find that some Ohio boys were involved too, at least in the initial skirmishes on Culp’s Hill.  My home state was still frontier country back then, and removed from the immediate fight over State’s Rights.  Yet some still fought and died for a cause in which they believed.

People are jumping all over this quote from President Obama like it matters.  Let me be perfectly blunt:  It doesn’t.

Who among us hasn’t been in a situation where we realize too late that a casual remark was in poor taste?  Yes, the President tends to be held to a higher standard.  Yes, the President should have chosen his wording more carefully.  Yes, some people are going to get their panties in a twist over this.  But this isn’t “news”.  It doesn’t represent President Obama’s actual views.  It’s just an unfortunate choice of words.  Anyone who uses this quote to bash Obama is shamelessly bowing to political expediency.

Let’s all be the bigger person and let this go, shall we?

Really Fox News?  This is some big criticism that is worthy of being repeated every 30 minutes or so on TV?  There are legitimate criticisms of Obama, just as there are for any politician, regardless of party.  What’s the purpose of trying to use a tongue-in-cheek comment as a means of impugning a politician?  Krzyzewski was being flippant, nothing more.  Other media outlets understand this, why do you insist on using the remarks disingenuously?

Honestly.

A couple of days ago I speculated that any retroactive tax would be an ex post facto law.  It turns out that the US Supreme Court may disagree with me.  In United States v. Carlton, the court decided that tax regulations can be retroactive provided that such regulations are used to “correct a ‘mistake’ in the original legislation that would have resulted in significant and anticipated revenue losses through ‘essentially sham transactions’.” The court supported a retroactive tax regulation on the basis that the regulation was, “neither illegitimate nor arbitrary”, and it, “acted promptly and established only a modest period of retroactivity.”

Whether the retroactive changes to “correct” the AIG bonuses are covered under this decision, however, is open to debate.

• Does US v. Carlton apply if the new tax regulations are correcting a “mistake” in something other than the tax code?
• Can bonus payments that were contractually-established well before AIG took any governmental money be considered in any way to be “essentially sham transactions”?
• Do these bonuses truly constitute a “significant and anticipated revenue loss” when the government did not have any anticipation of revenue from the bailout?

And that’s not even getting into the issue of whether the tax regulations would be a bill of attainder, though that too seems to be up for debate as I cannot find a court case that seems directly applicable.

Still, given the generalized death threats received by AIG, it’s entirely possible that any punitive legislation will remain unchallenged simply because the plaintiff in such a case would likely be risking his or her life.

I do have to wonder though, just how much it will cost the IRS to accommodate any new regulations.  It’s certainly less than the bonuses, but I have enough experience with implementing business processes and software to know that it’s going to be a few hundred thousand dollars by the time it’s all said and done.