strike a nerve - 7/10/08

Sent by Brent on October 7th, 2008

Oh, did i strike a nerve here? You seem quite upset over this one, and I haven't even watched the video yet lol ...

You got to read both sides, and something like this is just pure propaganda.

I might say the same to you ... a quick review of what we have sent back and forth shows you've sent nothing critical of McCain. I do read both sides (admittedly more lefty) but I just don't see the fun in sending you pro-McCain articles. We both know that all sides are guilty of slandering the opposite side (for example, http://www.factcheck.org/elections-2008/dishonorable.html and http://www.factcheck.org/elections-2008/obamas_stem_cell_spinning.html) ...

The intro to the website you sent says: "The current economic crisis demands that we understand John McCain's attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late '80s and early '90s." This implies that McCain was negligent towards oversight and regulation and therefore played a very important role in the current financial crisis.

I think, rather than accusing him of "play(ing) a very important role in the current financial crisis", it demonstrates his approach to such matters and his probable approach to the current financial crisis. Again, I'm not saying that either candidate has a better approach as I haven't studied them, but that's the way I read it ...

Were you out on the motorcycle last night? I was and took a ride by your place - your Harley was gone ... good day for a ride! We still on for the debate?

keating economics - 6/10/08

From Brent on October 6th, 2008


From Buck on October 7th, 2008

You got to read both sides, and something like this is just pure propaganda. Unfortunately in politics, when you're in the game for a long time, you can sometimes get mixed up in things by mistake. McCain was cleared of involvement in the Keatings scandal and found to have the least involvement whatsoever of the 5 senators involved. Here's a little of what Obama has had his hand in his only short time in politics:


The intro to the website you sent says: "The current economic crisis demands that we understand John McCain's attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late '80s and early '90s." This implies that McCain was negligent towards oversight and regulation and therefore played a very important role in the current financial crisis.

Check this out:

and this:

and then there's this, what he actually said in 2005, 2 years before any of this started (Obama was already in the senate for this, it would be interesting to see which way he voted, I'll look it up when I have more time):



what's in a name? - "one dimension"

I have had several questions about where the name for the blog comes from - One Dimension.

A friend recently recommended the book "One-Dimensional Man" by Herbert Marcuse. In it Marcuse documents the parallel rise in forms of social repression in both contemporary capitalism and the Soviet model of communism, as well as the decline of revolutionary potential.

He argues that advanced industrial society creates false needs which integrate individuals into the system of production and consumption. The result is a 'one-dimensional' world of thought and behaviour in which aptitude and the ability for critical thought and oppositional behaviour wither away.

In this light I'm sure the purpose of the title (and the subtitle) becomes clear: the rejection of one-dimensional thought and behaviour, and the championing of critical thought with productive intent.

From Wikipedia:
"Considered by some to be the most subversive book of the twentieth century, it was severely criticized by both orthodox Marxists and academic theorists of various political and theoretical commitments."

You can check out and buy the book from Amazon here:
One-Dimensional Man: Studies in the Ideology of Advanced Industrial Society

"Failure to pass bailout threatens all Americans" - 3/10/08

From BUCK on October 3rd, 2008

Begin forwarded message:

Date: October 1, 2008
3:15:00 AM EDT
Subject: "Failure to pass bailout threatens all Americans"
Source: Economist's View
Author: Mark Thoma

Jonah Gelbach:

Failure to pass bailout threatens all Americans, by Jonah B. Gelbach, Arizona Daily
Star: The U.S. House on Monday rejected the Wall Street bailout. This mistake threatens all of us, on Main Street, Speedway, Campbell, Golf Links and Oracle.

I'll make five main points.

First, we got into this situation because ... housing prices rose too high. Banks and
other investors made bets that could pay off only if the market kept rising. Now those bets are underwater.

Second, what if we don't pass a bailout? Our financial sector is caught in a trap. No one's sure which borrowers ...[are] going belly up. Even healthy banks won't lend to other banks.

Usually, when banks can't borrow, they sell off healthy assets. But if everyone sells at once, everyone spirals into free-fall. Since all sectors of our economy depend on credit availability, massive layoffs will occur if this situation lasts much longer. It would take years to recover.

Third, the current bill is a big improvement over Treasury Secretary Henry Paulson's initial legislation. It adds oversight and seeks to limit compensation paid to the Wall Street executives who made bad bets. Most importantly, the new bill limits the bailout's cost by giving us, the taxpayers, a stake in companies that get help. The bill isn't perfect, but it's good enough.

Fourth, many are understandably outraged. After years of billion-dollar compensation for a few would-be whiz kids, financial firms now want help from ordinary working people.

But look at it this way. Imagine your child stands wrongly accused of murder. Along with a co-defendant, she faces execution. You can prove your child's innocence. But if you testify at trial, your child's co-defendant will also go free, even though you know he's guilty. Would you allow your child's execution to convict the guilty guy?

This bailout will help some who have caused the mess, but that's an unavoidable part of helping everyone else. Don't cut off your paycheck to spite a financial executive.

Fifth, this bill isn't nearly as expensive as people seem to think. First, $700 billion is less than some realize. Imagine you run a delivery business that makes $60,000
annually and your van breaks down. It will cost you $3,000 to fix it. Should
you fix the van or close down the business? That's a no-brainer.

It's also similar to the bailout, because $700 billion is 5 percent of our economy's 2007 income, $14 trillion, and we'll lose an awful lot more than $700 billion if we let the economy tank. And we'll lose it repeatedly for several years.

Moreover, we're not just going to hand over the cash. The original Paulson plan would have allowed that, but Monday's bill wouldn't. Taxpayers would get a stake in any gains from future sales of the assets the government will buy. And because the government will wait to sell these assets until financial markets have enough capital to operate healthily, these assets might be sold for more later than now. We're putting up $700 billion now, but we'll get some, all or maybe more back later.

There'll be plenty of time to hand out blame. But let's make sure we do that after banking hours — instead of in the unemployment line.
Financial markets and financial intermediaries bring together people who have an excess supply of loanable funds with those who have an excess demand. But why do those with excess demand want the money? They want it because they believe they can use it to make profit through some business venture.

They wouldn't borrow the money if the expected payoff didn't exceed the cost of the loan.

So financial markets channel money to the real economy, and that is the source of the profits you see on Wall Street (beyond the zero sum game among some traders). Loans are paid back - with interest - from the profits the borrower made with the money. Money doesn't breed, simply taking out a loan from a bank won't make you wealthy, you have to do something productive with that money, that is where you get the profits to cover the loan and interest.

So the ultimate source of profits on Wall Street is the real economy (though occasionally, i.e. when there is a bubble, the profits are based upon false valuations in the real sector). Profits come from people doing productive things with the loans that take out, and those productive things employ people and make the economy grow faster. Wall Street is a conduit to the real economy, it is not an end in and of itself, and when that conduit is not functioning properly - when money stops flowing through financial markets - productive activity is diminished and growth and employment pay the cost.


let the bailouts begin! - 3/10/08

From Brent on October 3rd, 2008


From Buck on October 3rd, 2008

Unfortunately there's a misconception that this bailout is only helping out the people that made bad choices at the expense of people who didn't.

Fortunately, that's not true.

The people that did make mistakes are going under, being taken over by the better run companies, and in some cases (as in AIG) the government is taking over the company (at a major loss for CEO's and stock holders). For AIG it's an 80% stake. Also, there's a very good chance that tax payers will actually make a profit from this bailout, as long as the bad assets are bought at market value (and not above).

The 700 billion dollars is a max that may need to be spent. The number was actually picked high enough to induce confidence that this plan would be enough. It may not all be used. A similar plan was actually used in the 80's for a similar crisis they had at that time, and in the end the government and taxpayers (like dlbuffy from the article) made a profit.

The free market is like evolution, it's a survival of the fittest type of system, problems come along and the weakest of the gene pool get weeded out, and at the same time things get changed and fixed to adjust to the new atmosphere and new threats. If this had been the 1930's we'd be in a great depression already but people, companies, and governments have learned their mistakes. There are organizations in place like the FDIC to help make the recession as smooth as possible. A lot of why this stuff happened is there were new financial systems built in the last 80 years, whose risks and benefits weren't quite understood yet. Now they're much better understood and companies and government are changing accordingly, like how I told you that Morgan Stanley and Goldman Sachs applied to be bank holding institutions which means they will be more regulated and won't be able to take as big risks, but have more access to assets. The free market didn't fail, it's working perfectly. We're in the downside of a business cycle, which, though can be painful, hypothetically should allow the bad companies to fail or at least restructure and for the good, strong, innovative companies to retrench and prepare for a more prosperous future. Many of the major companies that exist today actually were started during recessions.

in the beginning, there was wind - 24/7/08

From Buck on July 24th, 2008

The American Wind Energy Association (AWEA) announced today that the USA has overcome Germany as the biggest generator of wind energy electricity in the first half of 2008. This milestone, which was not expected until the end of 2009, comes as a result of the higher average wind speeds in the USA, since Germany is still the leader in installed capacity.

From Brent on July 24th, 2008

"...since Germany is still the leader in installed capacity."

So the U.S. is just benefitting from higher average wind speeds - which means that all along it was a very feasible and geographically ideal concept. I wonder what numbers they would be producing if they had the same installed capacity as Germany.

Point noted though.

From Buck on July 24th, 2008

To be fair though, I did say that when we were talking about it. But yeah, we're getting there. Apparently the forecast to catch up to Germany was sometime in 2009 which means we are way ahead. I can't find the original article I read it in, unfortunately, cause that's where it talked about Texas leading the way in wind.


a friendly debate

Buck and I were lucky to meet. I was working at an outdoor gear store in Toronto, Ontario, and was responsible for training new staff. Buck came from new york to study economics at the University of Toronto and was hired at the store.

We became good friends and found we had similar interests: motorcycles (check out our blog 'rubber on the road'), film, travel, the outdoors ... and debating current events.

We both approached issues from different perspectives - Buck was educated in economics and from an American, republican background, I was a visual arts student with a liberal Canadian background - but we agreed that partisanship was both counter productive and unfortunately prevalent. We began to debate what we considered important issues via email and, while it may seem like it got heated, we remained good friends and never let our debates get in the way of that. It was never anything that a couple of beers couldn't cure.

Months passed and the debates continued. Sometimes we would write multiple emails a day, sometimes we'd be busy with work and weeks would pass before we'd respond to one another, but they were always thought provoking and challenging.

After more then a year, we have amassed over 50 pages worth of debate, spanning many subjects and issues. We thought it would be nice to engage others, to incite thoughtful and productive debate.

This blog is the medium.

We will be posting our debates here, from the beginning, and we invite others to read and join the conversation. The only thing we ask is that, in the spirit of our debate, you respect each other and try to participate in a productive manner. Understand that neither of us claim to be experts or authoritative in any regard, but hope that through discussion we can understand the subject from other perspectives. We both believe that we have infinitely more to learn from someone with whom we disagree rather than from someone with whom we share a point of view, and it is with this goal in mind that we invite others to join in the discussion.

Thanks in advance for reading.