rowyn

Reporting on the US federal gov't's deficit always talks about the raw numbers: ($1.35 trillion!) Sometimes it mentions percentage of GDP (9.2%!)

It hardly ever talks about government income.

I get the feeling that government income generally goes up and down in a way that has very little to do with raising or lowering taxes, and a great deal to do with whether or not the economy is booming. But I don't really know, because 'how much money does the government receive?' isn't a question reporters are interested in answering. v.v Maybe I'll dig through the CBO's website and see if they can tell me.

Ooooh, nifty!

This link is via shadesong, and it may seem like an odd thing for someone who often likes libertarian ideas to be interested in:

The idea is simple: The payment of a basic monthly income, funded with tax revenues, of 100 Namibia dollars, or about €9 ($13), for each citizen. There are no conditions, and nothing is expected in return. The money comes from various organizations, including AIDS foundations, the Friedrich Ebert Foundation and Protestant churches in Germany's Rhineland and Westphalia regions.

This paragraph is a bit perplexing, because it starts with "funded by tax revenue" and concludes with "the money comes from charity". From reading the rest of the article, it looks like the experimental version is funded by charity, with the hope of expanding it nationwide to an taxpayer-funded entitlement. I admit I generally have a bias in favor of charitable endeavors, because I prefer people to help other people voluntarily, rather than force being used to coerce a group of people to give up funds and then spending those funds to help people.

But the thing that really intrigues me is the "no conditions" part. Some years ago, I wrote about Charles Murray's book, "In Our Hands" (available as free download here), which posited replacing all existing social programs with a flat $10,000 annual income grant to all citizens over 21.

The thing that intrigues me about Murray's proposal is that it doesn't offer incentives against earning money of your own. Traditional assistance programs phase out if the person earns money outside the program: "we give assistanct to those who need it, so if you don't seem to need it we stop". Which makes sense on the surface, but it has the unintended consequence of offering people an incentive (aid funds) for not doing something you'd like them to do (earn money). Now, of course what people decide to do or not do is by no means based solely on specific economic incentives. Still, making economic incentives line up with desired results is generally a good thing. The economic incentives under Murray's plan still line up; granted, you might not need to work in order to eat and house yourself, but you will not lose any existing benefits by working, either.

And I've long thought it would be neat to try out his plan as an experiment, to see what would happen. Would people really stop working because their basic necessities were already seen to? Or would the lure of additional money be compelling enough to keep the economy strong enough to fund the entitlement? But the cost of running such an experiment for a town in the US is prohibitively high for a charity to tackle.

But the cost of a living stipend is much lower in Namibia! And look, some people are actually trying it! How cool is that? I will totally be following this to see how it goes long-term. I hope they're able to extend beyond the two-year original plan -- two years isn't really enough time to gauge the full effect either way.

I've been reading here and there about the economic stimulus bill in Congress, but not very much about it in LJ. Which made me curious what my friends think of it. Hence, a quickie poll!

[Poll #1346426]

Also, if any of you are so inclined, I'd be happy to hear your thoughts in detail. :)

I haven't written much about politics this year. Those who know me could guess that I'd vote for McCain, and I did. I voted mostly libertarian candidates otherwise, because I still believe that a smaller and less interventionist government would be better for America.

Despite this, I'm not upset that Mr. Obama won, or that Democrats control the House and the Senate. I'm kind of happy, in fact. Mostly because the people who voted for Mr. Obama voted for him. In 2004, few people voted for either presidential candidate. They voted against Bush, or they voted against Kerry, and no one would have been happy no matter who won. They were, at best, not as unhappy as they would have been if the other guy won. This year, half or so of America is pleased with the winner, and I'm happy for them. Plus, they might be right and I might be wrong, which is a pleasant prospect for me when I look to the future.

Best Case Scenario: Mr. Obama gets to implement the economic and foreign policies that he campaigned on, and it all works. People with high incomes pay more taxes, people with middle incomes pay lower taxes, people with low incomes pay no tax at all and get subsidies from the government. This moves the US closer to income equality with no other side effects. The expansion of federal programs and public-works projects causes unemployment to fall, and these programs are run altruistically and efficiently, to the benefit of the public they're to serve. Protectionist policies succeed in making companies employ more Americans and allow American companies to sell more goods in America and eliminate the trade deficit. Tax hikes on individuals with high incomes and successful corporations raise the federal government's income and balance the budget. Negotiations with dictators and governments that support terrorism persuade them to see issues our way and moves them away from totalitarianism and terrorism. Mandates for health insurance provide healthcare to all in a manner that's efficient, cost-effective, and maximizes the benefits to everyone.

Alternative* Scenario: Mr. Obama gets to implement the economic and foreign policies that he campaigned on, and it all fails decisively enough that no one ever tries to do it again. Raising taxes on successful businesses and people with high incomes and subsidizing people with low incomes disincentivizes workers and companies alike from working hard: productivity falls, unemployment rises. Expanded federal programs and public-works projects are rife with ineffiiencies and corruption and cause a massive waste of money and resources. Protectionist policies result in higher prices for consumers and cause retaliatory policies in other countries that make American goods uncompetitive abroad. Government control of health care disincentivizes private research and causes a decline in the development of new treatments and techniques; funneling tax dollars into research cannot make up the gap because government-administered policies do not offer effective incentives and result in massive waste. Government revenues fall sharply despite the increased percentage of GDP that taxes make up, because the economy tanks further and GDP shrinks dramatically. Negotiations with dictators and governments that support terrorism emboldens them; American diplomats make more and more concessions to those regimes in the hopes of reciprocation that never comes.

If you know me, you know that I think the second scenario is more likely than the first. But do not mistake me: I'm not rooting for the second scenario. I'd be much happier to live in the America of my "best case scenario". Just because I don't think it'll work doesn't mean I don't want it to work. Of course, I don't want to try things that I think will fail. But if we're going to try it anyway, I would much prefer for it to succeed. Given a choice between saying "I told you so" amidst the wreckage, or saying "I was wrong" amidst prosperity and success -- hey, saying "I was wrong" isn't that hard.

But the truth is, I don't think either of the scenarios above will come to pass in the next two to four years. This is my actual expectation:

Likely Scenario: Mr. Obama implements some of his policies but not all of them. Some good things and some bad things happen in the economy and around the world. The Republicans take credit for any good things, saying they're the result of the Republican legacy, and blame any problems on whatever the Democrats have done. At the same time, the Democrats take credit for any good things, saying they're the result of their policies, and ascribe any problems to the Republican legacy and/or compromise with Republicans and/or Republican action to block legislation. No one can demonstrate to the satisfaction of anyone not already on their side whether any given policy is working or failing. America muddles along as she always has, doing more good than harm because the system, by the grace of God, works. Because the system that we all like to rail against for preventing real change, is also the thing that checks some of the worst impulses and propagates some of the best ideas of every side. It pleases no one, but America's been led alternately by Republicans and Democrats for a long time, and she's the world's only superpower and has had one of the strongest economies in the world for many decades. She's probably doing something right, and I think she still will be for the next four years. Maybe because of the people running her, and maybe in spite of them, and whichever is it I doubt I'll ever know for sure. But I'm grateful for it, nonetheless.

* I started out calling this my "second-best" case scenario, but when I think about the level of carnage it would take to make the vast majority believe it was the result of new policies ... well, it's not the *worst* case, which is "carnage happens anyway but with no consensus as to why". But it's still low on my list of possible scenarios.

I am not an expert on financial matters, but I've been following financial news for the last ten years or so. I read it because I find the workings of the market and businesses ... fun. Some people like to read about politics or international incidents or local crime; me, I like hearing about why companies are succeeding or failing, why they're making the decisions they do. Business, at its root, is all about the things people do every day; maybe that's why it interests me.

It's been an interesting time for business news recently, in the Chinese proverb sense. Some of this raises the kind of passion in me that most people reserve for political issues like abortion.

So just to warn you: this is a rant. I am ranting about mortgage lending, which is very topical if not normally considered the subject of ranting. I will endeavor to give some useful information and not be boring, but my biases will color my presentation. But I do know that Fannie Mae and Freddie Mac didn't really eat babies, kick puppies, cause global warming, or single-handedly destroy the global financial system. Honest.

*

Nine or ten years ago, when I was still new to banking, my boss talked to me about Baby Bank's plan to hire a new loan officer. "He's going to make mortgage loans for us to sell on the secondary market."

"Oh? How's that work?" Baby Bank did very few home loans, and I'd always wondered why not.

"We find borrowers who want loans against homes, and make them loans according to Fannie Mae's standards. Then we sell them to another bank, who pays us a fee. Then that bank sells them to Fannie Mae, who pays a fee to that bank to service the loans, and packages the loan together with other loans and sells them to investors as securitized investments ... bonds, basically."

"Investors ... like ... banks?" I said. "Like us?"

"Yes."

"Doesn't this sound ... unnecessarily complicated to you? Why don't we just lend the borrower the money ourselves and keep the loan?"

"They offer much better rates than we can. Twenty or third points better. We can't match their rates, so the only way for us to do these kinds of loans is to offer their rates and sell them the loans."

"Which are paying fee slices to two other parties and making a profit for Fannie Mae too? How do they do that?"

"I have no idea."

Thus began my distrust of the FMs. I learned more about them over the years, none of which made me like them any better. After we hired the new loan officer, I went to a seminar with him on how to make loans that met their guidelines. This would've been in '98 or '99. They touted products for customers with high credit scores that required downpayments of only 5% of the sale price and waived requirements to provide proof of income and other documentation they deemed superfluous.

Fannie Mae and Freddie Mac are, or rather, were, government-chartered institutions with a mandate to increase home ownership through loans to American home buyers and owners. However, they were not government-owned nor government-guaranteed. They were a private company. ("Private" here in the sense of "not government owned". They're publicly traded on the stock market, like Microsoft or Lehman Brothers.) When they made money, their stockholders benefited. If they lost money, their stockholders, in theory, lost money.

Except that no one ever expected the latter to happen. The FMs offered rock-bottom rates for their loans to consumers. Those who bought the securitized investments received commeasurately low rates for the investments. Because everyone, and I mean everyone, thought that if those investments ever nose-dived the Feds would bail out the FMs.

Meanwhile, the FMs worked at gobbling up the market, which is easy to do when you're offering the best rate in town. They doled out tens of millions of dollars lobbying Congress for less oversight and extensions to their charter. They wanted to raise the cap on the size of loans they could make, and lower their standards for the quality of loans they could make.

They are, as a result, huge. They own or guarantee roughly half the housing market in US. That's about six trillion dollars. Not billion. Trillion. 6,000,000,000,000. Fun comparison: the entire United States debt is a bit under ten trillion. But bear in mind that this six trillion is not money owed *by* the FMs -- it's money owed *to* them or to the investors they've sold it to. The money gets funneled around every which way. Also, $6 trillion is the face value; a substantial fraction of that portfolio is severely devalued as the result of the mortgage market meltdown. How much of it? No one knows yet. That's part of the problem. This isn't because the FMs are evil and trying to hide their losses, incidentally. It's because the market is still melting down and no one knows when it will stabilize or where.

However, the FMs, like everyone other lending institution in the world, is leveraged. The right analogy isn't "I took $10,000 out of my savings account and lent it to Bob, who didn't pay me back and now I'm out the money, wah." The analogy is closer to "I borrowed $10,000 from my bank and lent it to Bob, who didn't pay it back and now I have to file for bankruptcy." But it's more complicated than that, because the investors have varying levels of recourse. So: "I took $100 from my savings account, had Mary chip in $8000 that she'd only get paid back if Bob paid me back in full, had David chip in $1000 on the condition that he'd get paid back by Bob first, and borrowed $900 from a bank myself, and lent $10,000 to Bob" is a little more accurate. I am both simplifying and making up the ratios; I don't know the exact details of Fannie or Freddie's tens of millions of deals.

And of course, having all those extra people involved makes the chain a disaster when it unwinds, because at every step of the way someone will look for someone else to blame. Everyone's looking at the paperwork for loopholes, and if they find anything, they sue. The investors sue FM, FM sues the loan servicer, the loan servicer sues the broker. Also, since every loan is owned by a pool of investors and this complex chain of intervening layers, no one actually has the authority to renegotiate with a struggling borrower. The complexity of the chain forces foreclosure even when foreclosure is a lousy option, because the contract allows no other possibility. This problem is endemic to the mortgage market, not unique to the FMs, but it's still one of their problems.

Now, our problem with the FMs is multifold. Arguably, they never should have been chartered. Having been chartered, they should have been stuck with their original mission of increasing home ownership among low-income citizens, and not allowed to expand in every direction. Having been allowed to expand in every direction, they should have been subject to a whole pile more scrutiny. Congress made this problem, and Congress had a multitude of chances to rein it in and chose not to. Anyone who looked could see that the FMs were a disaster waiting to happen. The Wall Street Journal has been preaching against them for years. But the FMs were allowed to sail on. Their meltdown was their own doing: they're the ones who provided the financing for the run-up in housing prices in the first place.

I hate -- and unless you have been watching these people steal business from your bank for years based on lies and political incest, you cannot understand the depth and passion of my hatred -- I hate that the Feds bailed them out. Because, of course, that's the whole reason they had this giant competitive advantage over the rest of the industry; that's the way they drove the rest of the industry into increasingly risky ventures in a vain effort to compete. Because everyone always knew that they'd get bailed out. The feds wouldn't let them fail.

But, even more depressingly, I know that at this stage of the game it's much too late for the feds to do anything else but bail them out. The FMs can't be allowed to simply fail and force all their stockholders and all those buyers of securitized investments to take a bath. Because that's everyone. Everybody holds those investments. They're considered almost as stable as Treasury bonds (because, you know, everyone "knew" the US gov't would guarantee them in the end -- and look! they were right! *FUME*) As bad as the whole premise of the FMs was and as much as they deserved to fail, their collapse would take down the global market. It wouldn't be quite as bad as the US federal government defaulting on its debt (that would be TEOTWAWKI), but it'd be close.

So the US taxpayer will bail them out, because the US taxpayer was already going to get screwed one way or the other and this way is cheaper than another Great Depression would be.

Not that I'm not bitter.

In conclusion:

The FMs are an example of "private profit, public risk". For decades, the FMs raked in the cash for their shareholders and investors. Now that their bets have finally soured, the US taxpayer is going to pay for their risks. This is not a failure of the free market, because the free market didn't make the FMs: Congress did. The FMs represented the worst aspects of the market and government; it didn't even have the benefit of a nationalized institution where at least the taxpayer makes money when the agency.

I'm not saying that everything driving prices in the market down right now is the fault of the FMs. Lehman Bros. filing for bankruptcy is pretty much the result of normal free market forces. But this rant is long enough already. If I muster up the energy I'll write more about that later.

A couple of weeks ago, gender differences were all over LJ. I had some things I wanted to say about the topic, and didn't. Maybe because it didn't seem worth the trouble of writing down, maybe because everyone else seemed to have said it all, already.

Except that I never did read some of the things I most wanted to say, so maybe it hadn't all been said.

Some of what I saw a few weeks ago felt like it was aimed at making men feel ashamed for being male.

That bothered me. A lot.

I've always considered myself a feminist, in the sense of thinking "all humans are created equal and should be treated accordingly by law and society". In the sense that biology is not destiny, and that individuals should be judged by their abilities and actions, not their gender. That's what "feminist" meant to me as a kid: that women and men are equals. Maybe not "identical", but generally worth treating similarly in the absence of any other distinguishing information.

I don't know what "feminist" means to other people. To some it seems to mean "one who believes that women are victims of male oppression" or "one who thinks there's an evil conspiracy by the patriarchy to dominate women" or "one who thinks women are better than men". I don't think any of those things. (At least, not about modern American society. In some other cultures "male oppression" is a lot more applicable.) If that's what you think feminist means, then I'm not one.

I don't feel oppressed. I don't feel like a victim. I never have.

I'm not saying prejudice isn't out there, or that it doesn't affect other women in negative ways. Or even that it hasn't affected me. I don't feel it and I don't think about it, and that makes it less real to me but not less real.

At the bank where I work, at least 90% of the employees are female. At my branch, out of about twenty-five people, two are male. My department is loan operations; we do all the back-office support for loans -- preparing documents, processing payments and advances, booking loans, etc. There isn't a single man in loan operations, out of twenty-plus people. Among the sixteen loan officers, who are substantially better paid than loan ops, one is a woman. She works in collections and has no lending authority.

I don't think this is an accident, or coincidence. I don't think gender has nothing to do with it.

But I don't think it's because the bank won't hire women as loan officers, or men as loan processors. I don't think it's because men are trying to keep us down, to maintain "male privelege". I'm not even sure it is privilege, because being a loan officer is a sucky high-pressure job. The bank couldn't pay me enough to do it, and even if they did I'd be terrible at it.

I don't know what exactly causes the disparity, whether it's subtle cues lingering in the way we treat each other, or part of genetic propensity or what. But one thing I'm pretty sure of: it's not a male conspiracy against women. It's not men saying "women are too stupid/weak/incompetent" to do this job. I don't even think it's men at all, not anymore. Women are also complicit in accepting what's expected of their role. Men are complicit in accepting their roles, too.

These roles aren't imposed for the benefit of either gender above the other.

If I'd been born a man, I think I'd be a computer programmer now instead of a bank employee with an English degree. If koogrr had been born a woman, I think she'd be an artist now instead of an engineer. I think I'm happier as a bank employee and a wannabe author than I'd be programming computers. I think Koogrr would be happier as a starving artist. That's where gender roles got us. Is it a privilege? For which?

Am I privileged to have been encouraged to place my happiness and the people I love before my career and material wealth? Is he privileged to have been encouraged to pursue material wealth and judge his worth based on his financial success?

I don't like gender roles. I don't like one-size solutions. But I don't dislike them because they screw my gender. I dislike them because they screw people. Men and women. Anyone who doesn't fit in the right box gets shafted. Stay-at-home fathers and career women, male kindergartner teachers and female loan officers. Women who don't want children and men who cry when they're upset. Women who dress for comfort and men who want to be beautiful. It doesn't matter how you don't fit in, all that matters is you're swimming against a current of expectations. Silly expectations.

haikujaguar wrote a good post on comparative pain -- the point being, it does not compare. I don't know if she was thinking about this when she wrote it, but I was when I read it.

That men get falsely accused of rape does not compare to women being raped. That women get locked out of high-pressure jobs does not compare to men dying young from the stress of high-pressure jobs. That men get judged by the size of their wallets does not compare to women being judged by the size of their chest. The one does not justify the other. It is not okay.

People seldom want to hear about the problems of others when they are weighted down by their own. Don't tell me my problems aren't real. Don't tell me they're insignificant compared to yours, or someone else's. Don't tell me it's all in my head. Don't tell me the things I see can't be real just because you don't see them. It's real to me.

Our problems are real to all of us, and we're all in this together, doing the best we can to rise above them. That's the important thing.

I'm rambing. What I want to say is this:

Most of my friends are male. This isn't because I like men better than women. I just happen to like a lot of male-dominated hobbies so I mostly meet men.

I do not feel patronized by men, or devalued, or objectified, or looked down upon. I can't imagine thinking such things as characteristics of my friends. My friends generally have more respect for my intelligence than I do. It pisses me off to see people write these things about half of the human race, about my friends, to look at men as if they need to apologize for being male, for existing, for having gotten stuck with a gender role they never asked for.

I didn't ask for my gender role either, but you know what? Mostly I'm grateful for it. I'm glad I can cry when I'm unhappy and hug my friends and say "That's a nice dress" and be sexy when I want to and all the other things I got with the Female Package Deal. When I look at the kinds of problems men have to deal with, I think, "I'm so glad that's not me."

I'm sure it works fine for plenty of men, of course. It's a pretty roomy box in America and it fits a lot of men fine.

Still.

I just want to say, to all my friends, that your gender isn't anything you need to apologize for.

I've never liked the idea of "hate crime" legislation. Of course, that's not because I think it's okay to beat someone up for being gay or Muslim or transgendered or whatever. It's that I don't see it as worse to beat someone up because of the group they belong to than it is to beat them up "because I felt like it".

"No, I'm an equal opportunity thug. I just like maiming people."

"Oh, well, that's better than doing it because of the group they represent. We won't punish you as harshly as we would someone who only did that to transvestites."

...

The motive in a crime does matter; it's one of the elements that predicts how dangerous the criminal is likely to be in the future. And maybe hate criminals really are worse than other kinds of criminals, that they poison society more than the actions of other kinds of sadists and thugs do. There's an argument to be made for that. People change their behavior somewhat out of fear of random crime -- not jogging alone at night, or avoiding dangerous neighbors. But people who fear persecution change their behavior a lot more, because they can predict that holding hands or kissing their SO in public will increase their chances of being physically harmed. That's much worse.

So maybe the important thing in singling out hate crimes for legislation is not that this particular criminal act is worse, per se, but that it has such a poisonous effect on society that it's more important that it be stamped out than that random crime be stopped.

I do know there's another category of crime that does bother me more than other sorts, but that no one ever suggests legislating. Call it a "violation of trust" crime. The kind where criminals wait by the side of a highway, pretending their car broke down. Then when someone stops to help, they mug that person. Or people who knock on doors and ask to use the phone so they can get inside and rob the house.

Those specific ones are a lot rarer in the age of cellphones, because it's rarer that someone in trouble really wouldn't be able to call for help. But I'm sure there are other kinds that have taken their place. I hate these kinds more than burglars who rob your house while you're at work, or people who steal cars out of parking lots or whatever. Because when your house gets broken into because your lock isn't very good, you might think "maybe I should get a bolt for the door" or "maybe I should get a security system".

But when someone victimizes you because you were nice enough to offer help to a stranger, you think "maybe I shouldn't help strangers."

And I really hate the lesson that teaches.

A few thoughts on things about "sexual abuse" reporting that bugs me.

To start with, the term "sexual abuse" has no meaning whatsoever for me anymore. I'll read news reports that call it "sexual abuse" when a 20 year-old man forces a toddler to perform oral sex. I've heard the same phrase "sexual abuse" used to describe far more innocuous acts. Teachers in kindergartens don't hug their pupils any more because if the toddler happens to complain, suddenly that hug was "sexual abuse".

Now, this may just be me, but not only do I distinguish a moral difference between these two acts, but I'll go so far as to say there's a difference between a man who rapes his twelve year-old niece and threatens to beat her to a pulp if she tells anyone, and a twelve year-old girl who thinks she's in love with her thirty-something neighbor and consents to have sex with him.

Neither of the above cases are "right" or "good" in my mind. But the former is considerably weightier as a crime. The girl clearly suffers at the point of the crime and will continue to suffer afterwards. In the latter case, the girl will, very likely, suffer at some future point: she will get older, she will regret her crush, she will resent the man who took advantage of her.

But, even though children cannot give "informed consent," I still think the distinction is meaningful. Both men in both cases have committed reprehensible acts, but while I have no sympathy whatsoever for the first, I have a little for the second.

The media doesn't distinguish. I read about this "rampant pedophilia" in the Catholic Church with "hundreds of reported cases" and "multi-million dollar civil suits" and I wonder: what did these priests actually do?

And if they are serial rapists, moved from parish to parish by bishops who were concealing the evidence of their actions, well, for goodness' sake, why aren't they facing criminal prosecution? Why am I reading about lawsuits against Catholic parishes (and, last I heard, it's not entire parishes that are being accused of mass orgies with children), and not about District Attorneys pressing charges specific individuals for criminal acts, and obstruction of justice? Last I heard, rape, sodomy, and sexual assault were all crimes.

Why don't we ever prosecute people any more? Why is it always organizations? The "Catholic Church" or "Arthur Andersen, LLC" are just words. Just names. Names don't commit crimes. People do. Why aren't we prosecuting them?

I rarely talk about the things I believe in, or write about them, for that matter, unless I know there's a large area of agreement between me and my audience.
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