Another Downturn Another BuyOut

Bureau of Economics

Americans love capitalism.  We love to tell the government to stay out of the business of business.  “That which governs least governs best” and all that hoo ha.  This holds true until something goes wrong.  The World Trade Center and Pentagon are attacked: let’s change our way of life.  The mortage industry fails to properly regulate itself, and now it appears that the government will come to the rescue of Fanny Mae and Freddy Mac.

Given the circumstances I don’t see any recourse but to bail out these two pseudo-corporations, but wuoldn’t it have been more cost effective to employ some amount of regulation to avert the need for the U.S. tax payer to step in – again?  Let’s recall the last fiasco in the 1980s where the savings and loan industry all but collapsed and the Resolution Trust Corporation was formed to recover the mess.

Instead of paying through the nose at the end, perhaps a little LESS liquidity would have done nicely.  For instance, debt was sold from one bank to another like candy without any notion of the risk.  What if the bank that issued the note had to hold it?  At that point the risk is the bank’s and the bank’s alone.  Perhaps this is also an argument for a higher reserve ratio for subprime mortages.  Another approach would similarly require a ration of prime to subprime loans so that there is a maximum risk portfolio.

One of the reasons this isn’t done is that people say that the market should sort itself out.  And that works up until a certain point, after which Americans who are not delinquent foot the bill.

The President Is Not A King

July 24th, was the 34th anniversary of United States v. Nixon, in which the Court told the President that he was not above the law, no matter what executive powers he claimed.  Thank goodness they did, because we now know what a whacked out weirdo Nixon was.  Written by the Chief Justice, Amazingly that decision was uanimous where the majority were Republicans.  Watergate was notorious for the abuses of power President Nixon thought he could get away with, and for the way our constitutional system performed.  It took a Republican stalwart the likes of Barry Goldwater to tell President Nixon that he had to go.

Why didn’t this happen with the tremendous abuses of power the current administration has committed?  One answer is that removal from office is an inherent political act, and intentionally difficult.  Put another way, the Democrats are chicken.  They are fearful that the public will shift against them.  It is because they are afraid to lead.  No Democrat is more fearful than my own Congresswoman, Nancy Pelosi.

While it may be the case that President Bush would not be convicted, we will never know.  Too much information has been hidden.  One could not imagine the current Court showing the courage the Burger court showed in 1974.  The current Court has demonstrated a willingness to show such deference to this administration as to anoint this president King George.

War or no war, if we do not protect our civil liberties and protect against fascism, we will lose our freedom.  That has been the major accomplishment of this adminsitration: to strip individuals of their freedom.  To think that the previous president was impeached for a considerably lesser charge while that this one has gone untouched is just shameful.

Perhaps I Was Right, Long Ago

Source: Computer History Museum

We are running out of addresses for the current version of the Internet Protocol, IPv4.  That protocol allows us to have 2^32 devices (about 4 billion systems minus the overhead used to aggregate devices into networks) connected to the network simultaneously, plus whatever other systems are connected via network address translators (NATs).  In practical terms it means that the United States, Europe, and certain other countries have been able to all but saturate their markets with the Internet while developing countries have been left out in the cold.

Long ago we recognized that we would eventually run out of IP addresses.  The Internet Engineering Task Force (IETF) began discussing this problem as far back as 1990.  The results of those discussions was a standardization that brought us IP version 6.  IPv6 quadrupled the address size so that there is for all practical purposes an infinite amount of space.  The problem is IPv6’s acceptance remains very low.

While IPv6 is deployed in Japan, Korea, and China, its acceptance in the U.S., Europe, and elsewhere has been very poor.  It is not the perfect standard.  ALL it does is create a larger address space.  It does not fix routing scalability problems and it does not make our networks more secure.  No packet format would fix either of those problems.

One of the reasons that IPv6 is not well accepted is that it requires an upgrade to the infrastructure.  Anything that uses an IPv4 address must be taught to use an IPv6 address.  That is an expensive proposition.  IP addresses exist not only in the computer you’re using right now, but in the router that connects your computer, perhaps in your iPhone (if you are a Believer), in power distribution systems, medical systems, your DMV, and in military systems, just to name a few.  Changing all of that is a pain.

Back around 1990, I had posited a different approach.  Within IPv4 there is an address block 240.0.0.0/4 (16 /8 blocks).  What if one could continue to use normal IPv4 address space, but when needed, if the first four bytes of the IPv4 address space contained addresses from that reserved block, one would read the next four bytes as address as well?  View that block, if you will, as an area code, and everyone would have one.  That would mean that you would only need it if you were contacting someone not in your area code.  It would also mean that eventually we would have increased the address space by the size of a factor of 2^28.  That’s a big number, and it probably would have sufficed.

Even after these addresses became prevelant, since devices would only need to use them if they were communicating outside their area code, it would mean they could be upgraded at a much slower pace.

The problem that people had with the idea the time was that the cost to implement this version of variable length addressing would have been high from a performance factor.  Today, routers used fixed length addresses and can parse them very quickly because of that.  But today that is only because they have been optomized for today’s world.  It might have been possible to optomized for this alternate reality, had it come to pass.

You Say Tomato, I say Tomato. Let’s call the whole thing off.

Switzerland is one of the sticklers for the Doha round of World Trade Organization talks on agriculture subsidies.  We have mountains here, and a good way up some of those mountains are farm animals.  It costs a fair amount of money to bring those products to market.  Wherever those animals are, farm products are carefully inspected before going to market.  Salmonella has not been an issue here. NPR had a story on this back in 2005.

In the meantime it’s tomato season back in New Jersey and elsewhere in the States, and it has been marred once again by a Salmonella scare.  Official warnings have been canceled as of July 21, but a new warning has been issued regarding jalapeño peppers.  Here we go again.  U.S. farming practices remain a disaster.  Thanks to lax regulation of the food supply we have had repeated scares.  Last year it was spinach, with a bunch of pigs having taken a romp in a California field.  What will it be next?  People often mention the food supply as a potential terrorist target.  I don’t see why they should bother.  The farmers are doing a fine job of poisoning Americans without additional help.

Here is why the WTO is so important in this discussion.  The Swiss pay a premium to protect their food supply through tighter inspection regimes and a higher standard of farm practice.  Americans do not pay that premium.  If the Swiss authorities deregulated their agriculture, they would in effect be reducing their standards for food quality.  Perhaps instead Americans should  consider raising their standards so that fewer people get sick.

“Law Enforcement” Stupidity Harms People

People who are in the country illegally take many risks.  They risk being deported and not allowed back into the country.  They risk not being able to take advantage of many aspects of the financial market for fear of being deported.  They often risk their lives to get into America in the first place.  And while it may seem reasonable for them to be arrested because they have entered the country illegally, that doesn’t mean they should be mistreated by the government while in detention.  Such was the case with Juana Villegas, as the New York Times reported.

While in custody she went into labor, and was not permitted to see her husband in the delivery room.  After the birth she was not permitted to breast feed her child or to have a breast pump.  It is generally believed that breast fed babies are able to retain their mothers’ immunities longer than those who use formula.  Many branches of our own government encourage breast feeding.  And so by unnecessarily separating the mother from the child, the police effectively harmed the child, who is an American citizen and is eligible for social assistance.  The child having already become sick once, is now costing Tennessee taxpayers.

This is all as a result of a program called 287G that turns police officers into immigration agents.  The behavior of the police in Tennessee is precisely the result of design and desire of the Bush Administration.  This is sad, because although this president has many flaws, one of his supposed bright spots was to be immigration reform.  Unfortunately even there matters have gotten worse, as a fence is erected along the California border, and children suffer because of stupid policies such as that of this town in Tennesee.

One of the many remarkably stupid things in Mrs. Villegas’ case was the absurd statement made by the corrections official that they routinely bar medical equipment like a breast pump from a jail.  It demonstrates either ignorance of the benefits, incompetence at being able to service inmates’ medical needs, blindness to the fact that an illegal immigrant is not the sort that is going to turn a breast pump into a bong, or all of the above.  I wonder if they keep walking sticks away from the blind.