On the Use and Abuse of the Constitution for Life

Annoying but popular Wall Street Journal op-ed piece on how our next census will be unconstitutional because it's going to count illegal aliens. http://online.wsj.com/article/SB20001424052970204908604574332950796281832.html

My letter to the Wall Street Journal that's never going to be printed regarding an obvious problem with the viewpoint:

Mr. Baker's and Mr. Stonecipher's conclusory statement that Congressional representation based on a census of non-citizens is unconstitutional runs afoul the of the Constitution as originally written. The original Constitution explicitly provided for proportional congressional representation based, in part, on a census of non-citizens. That is precisely what the infamous "three fifths clause" provided for by allowing the southern slave states to count three fifths of their slave populations towards their representation in the House of Representatives. And as Chief Justice Roger Taney made clear in his decision in Dred Scott, slaves were not entitled to the rights of citizenship and were considered mere chattel. While I agree in principle that only citizens should be counted when it comes to congressional representation, it is far from clear to me that counting non-citizens towards representation is unconstitutional when the original constitution allowed for representation based on a tally of what was then considered property.

Religion is the Ultimate Materialism

When was the last time you saw a priest going hungry? Or lacking a roof over his/not her head? Just what exactly is the net worth of the Catholic Church? Or the net income produced by the Haj and the revenue stream generated by the merchants of Mecca since before Islam even existed (back when Mecca was a pagan pilgrimage site)? When was the last time you saw a destitute religious leader?

Yet a major critique by theists of atheism is that it leads to materialism. Ignoring for a moment that this doesn't logically follow because I can easily think of a couple of non-materialist philosophies that are consistent with atheism such as solipsism or Cartesian dualism, my response is essentially that the pot is calling the kettle black here. Religion is the ultimate form of materialism. That's why its so obsessed with controlling matters on earth. Why, if we are alive but a fleeting moment in relation to the eternity of heavenly reward promised true believers, are so many true believers fanatical about controlling those who do not share their beliefs? After all, according to the dominate religion in my part of the world, I'm going to burn in agony forever once I die because I'm an unbeliever.

I think the answer is a simple one: what the true believer is really trying to advance is their own material interest under the guise of some ethereal moral order that conveniently meets their earthly interests. This is why religion is also a form of hypocrisy. It cloaks its real concerns under an unverifiable, unquestionable, amorphous absolute that advances its material goals. It says it hates materialism when really that's the name of its game.

Finally, just what exactly is wrong with materialism? It feeds my family and adds value to my community as I pay my taxes, contribute to charity, improve my property and the like. Spiritualism feeds no one and is open to attack as a form of self indulgent hedonistic solipsism. And don't even get me started on the intellectual vacuity of the view that without God there is no morality, spirituality or "meaning." But that's another discussion.

Tortured Logic

What exactly could the Torture Memo authors be criminally charged with?  The New York Times makes it seems like criminally charging them is an option, but nowhere mentions a possible basis for a criminal indictment.  Criminal charges based on speech are extremely circumscribed in our society, as well they should be given our emphasis on freedom of expression.  Outside certain speech acts such as conspiracy, or fraud laws (which usually require more than just speech by requiring reliance by a listener on the fraudulent speech) there really isn't much of a hook to prosecute anyone for expressing their opinions.  I thought the Torture Memos were legal phlogiston when I first read them, but are they criminal?  No, just reprehensible and poorly reasoned and researched.  Failing to cite cases where the action you are analyzing was prosecuted by our government is sloppy and would get me fired in my job.  But let's take a deep breath before we criminally condemn people for expressing their opinion lest we start sliding down the slippery slope.

Toast

The reason Obama is smacking the auto industry (bye bye Wagoner) and not the financial industry is plain.  Dismantling the bomb derivatives created is not easy and re-engineering the auto industry is by comparison.  So off with their heads in Detroit, because at least we  understand cars. 

But They Said it Couldn't Be Done!

"So, before going any further let me emphasize that no serious danger of a derivatives-induced

financial collapse really exists."  Economics Nobel Laureate Merton H. Miller (University of Chicago) October 17, 1994.  

Good Toxic Assets Primer

Good collection of stories and graphics on Bloomberg giving background on the current financial mess.

What a Difference a Day Makes!

Boy did the markets save Geithner's ass today.  How long they will kiss it remains an open question.

There are two poles to this "toxic trash" debate: those who believe the trash is worthless (Krugman) and those who think it undervalued (Geithner).  I side with Geithner and hope his plan works.  The worthless camp ignores the fact that the "subprime" CDOs  et al. are securitized by real property.  Surely this real property hasn't lost all it's value?   Granted, the underlying assets (homes) have dramatically dropped in value.  But they haven't dropped 100%.  And even in the case of CDOs with foreclosured mortgages  the  CDO owners generally are in the front of the line when it comes to disbursement of foreclosure proceeds.  Furthermore, the default rate in the bundles of mortgages (hundreds even thousands) that make up CDO's  is nowhere near 100%.  That means that CDOs still have some sort of revenue stream; it's just the uncertainty surrounding the future default rate that makes the CDO's  untradeable.     The level of uncertainty surrounding the return on any given CDO prevents investment.  Thus you are left with a CDO that has physical and monetary value but no price.  This is largely a problem of faith, and is not one necesarily rooted in the lack of any value in the securitized assets comprising the CDO.  

What Geithner has that Krugman lacks is faith in the ability of the market to work out the value of the underlying securitized assets.  Krugman thinks that the market cannot work out the value of CDOs even though they are securitized by physical property and revenue streams from current mortgages.  It is impossible for Krugman for there to be a market solution to the market's crash.  For Krugman derivative trading is discredited.  I disagree.  Properly regulated derivatives like CDO's are useful because they ameliorate risk and free up capital.  This crash is like most others, a product of excess and not the result of some innate flaw in derivatives.  No one blames the 1929 crash on innate flaws in the concept of stock shares.  While I don't know if Geithner's plan will pan out, I do think Geithner's right to have faith in capitalism's ability to scavenge itself.  Capitalism is first a predator but second a scavenger.