The Real Brain Drain
Last week there was a lot of chatter in the economic blogosphere regarding Calvin Trillan’s theory about why Wall Street imploded. The gist of his argument is that when the smart people moved into financed the existing management structure wasn’t smart enough to understand what they were doing and the risks that were involved. Here’s a quote:
That’s when you started reading stories about the percentage of the graduating class of Harvard College who planned to go into the financial industry or go to business school so they could then go into the financial industry. That’s when you started reading about these geniuses from M.I.T. and Caltech who instead of going to graduate school in physics went to Wall Street to calculate arbitrage odds.”
[...]
When the smart guys started this business of securitizing things that didn’t even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the class! Guys who didn’t have the foggiest notion of what a credit default swap was. All our guys knew was that they were getting disgustingly rich, and they had gotten to like that.
I thought about this some and I think there’s an element of truth to this. I came to this conclusion based on my own experiences and my interaction with former colleagues and friends who went into finance and I thought I’d share a couple of these with readers.
Read more
Stuff Worth Reading
A few good reads:
- Midtowng at Economic Populist compares the mistaken belief in “free trade” and “globalization is good” to the Incan belief that virgins had to be sacrificed to appease the volcano god. This is probably the best post I’ve read in weeks. Don’t let the sound of such a silly comparison keep you away - this is a must read.
- Local blogger Charlotte Weybright has a post entitled “ Drugged Out Nation” where she presents a table showing how much money is spent on various pharmaceuticals. Truly mind-blowing.
- UMKC Professor William Black explains how the finance industry has morphed from something that was to serve society into something that causes more harm than good. I have similar thoughts that I hope to blog about later.
- Another bozo in the Obama administration who thinks they can regulate themselves out of this financial mess. Even Alan frickin’ Greenspan thinks the big banks need to be broken up. How many more times are we going to let the Clinton retreads destroy the US economy before we admit that maybe they are just fools masquerading as economists?
Mitch Daniels continues to impress…
The Governor has been forced to cancel the 10 year contract that he implemented with a private contractor to handle welfare services.
The Governor implemented this program because he felt that these services could be privatized and the services could be provided at a lower cost and maintain service.
Unfortunately this program failed. I am not sure why it failed; however, there is no doubt that this attempt at privatization failed.
Many Democrats are gleeful because they were against privatizing the program in the first place. They can and should say “I told you so…”
I continue to be impressed with Mitch Daniels. He is 100% unafraid of change and he has tried his best to change Indiana government. Everything he tried has not worked; however, that has not stopped him from trying.
We need more elected officials like Mitch Daniels.
Mike Sylvester
Some refreshing common sense from President Obama’s Administration
President Obama’s Administration is directing Federal authorities to stop harassing people who buy, sell, or use medical marijuana in states where marijuana is legal.
Thank goodness, it is about time.
I do not use marijuana nor have I ever used marijuana. That being said it should be up to each state to set their own laws regarding marijuana.
Mike Sylvester
Allen County Assessor’s office; what is going on over there?
As the readers of this blog know I purchased part of a commerical real estate building and my wife and I run a public accounting firm in that office space. We moved into the office space in December of 2007.
I got my assessment from the Allen County Assessor’s office earlier this week. My old assessment was for March 1st, 2008; this assessment is for March 1st, 2009.
They must really think that the value of commerical real estate has skyrocketed on the north side of Fort Wayne. My buiilding assessment increased by 28.52%.
You have got to be kidding me…
Commercial real estate prices are dropping like a rock and they increased my assessment by 28.52%
More amazing yet is the reason given; “annual adjustment.”
I think this may mean that they increased the assessment of all of the commercial properties in my area by this amount…
Good grief…
Mike Sylvester
Mayor Henry surrenders…
According to WOWO the City of Fort Wayne has agreed to a one year extenion of the trash contract with National Serv-all…
I have not seen any other verification of this. I checked the City of Fort Wayne website and several local media sources.
Mike Sylvester
Mitch Daniels is right!
As the readers of this blog know I have not liked everything that Mitch Daniels has done as Indiana Governor.
That being said he is by far the best Governor that we have had in a long time.
He has repeatedly worked to reduce government spending.
“A Local Newspaper” Slams Mayor Henry
I couldn’t agree more with what I read in Sunday’s paper regarding
the secrecy behind the Henry Administration:
Today, access to city records is strictly limited; the administration is less than forthcoming about far too many aspects of government; and even information that is clearly a matter of public record can be difficult to see.
[...]
I’ve covered four mayoral administrations while working at The Journal Gazette, and the Henry administration is without question the most secretive. This is especially disappointing coming from a populist mayor.
[...]
Not all elected officials embrace secrecy. County Commissioner Bill Brown has aggressively pushed the commissioners to be more open. Republican County Councilwoman Paula Hughes and former County Councilman Cal Miller did much to make the council more open.To varying degrees, they get it.
Henry doesn’t.
Ouch. There’s really no excuse for the lack of openness from this administration - there’s a conscious decision being made by the mayor himself to run a closed administration. The public information staff is more than capable of handling day to day inquiries yet they always get sent off to the city attorneys for review. And too often the request is “lost in the shuffle” and repeated inquiries are required to try and get the information.
This administration seems focused only on what they are legally required to provide instead of how they can best inform the public. I had a very disappointing conversation with the mayor early in his term that made me realize he was probably not going to be as open as I’d hoped for. However, a decision later occurred that led me to believe things might change but they never did - they actually got worse.
I get the feeling that the mayor is a major control freak - the Safety Academy debacle and the push to control Headwater’s Park are examples of this. I think part of his problem is he’s still listening to the wrong people inside the administration - people that are out of touch with the changes in information technology and flow and how that impacts the expectations of government. There are people in the administration who get it but they are being marginalized on key issues…
Democrat Barney Frank is a complete moron
I have posted about Barney Frank in the past; he repeatedly shows himself to be a complete moron. He is the Democratic Chairman of the House Financial Services Committee.
You really should read this New York Times story about the Federal Housing Authority. You should read it because you are going to bail them out just like you bailed out Fannie Mae and Freddie Mac.
Basically the story says that the Federal Housing Authority has made some terrible financial decisions.
Realize that during the recent financial crisis private lenders tightened their lending requirements in response to the fact that so many of their loans were going bad. The FHA instead decided to increase their number of loans and insured the people that the private lenders would not take…
President Obama somehow wins Nobel Peace Prize
It is absolutely incredible the President Obama won the Nobel Peace Prize considering that he was only in office for 12 days until the nominating window for the prize closed. In other words President Obama won the Nobel Peace Prize for his Presidential campaign and for his first 12 days in office. I have two main points about this award.
My first point is that this award shows how much a large segment of the International community (especially Europe) hates former President Bush and his policies. These people hated former President Bush so much that they have now give four different people the Nobel Peace Prize who were strong critics of former President Bush. I have to admit that the extent of the anti American sentiment has surprised me over the last few years. I have traveled to almost 20 foreign countries over the last twenty years and I have definitely noticed an increase in anti-American sentiment (especially when I traveled to France a few years ago).
This is something the United States needs to heed; much of the world no longer revere us; instead they demonize us and just want our money and our military support.
My second point is that President Obama in no way has earned this reward and the fact that he won the award further “cheapens” the Nobel Peace Prize. Consider the items that the committee claimed that President Obama won the award for:
- Making a change in the International climate. I have to agree with the committee on this one; President Obama has changed the International climate. I am not sure if the change is for the better; however, I think the United States is perceived differently with President Obama at the helm.
- Extra-ordinary efforts to strengthen International diplomoacy and cooperation. This one is basically assuming that President Obama will do these things in the future; to date he has not been successful at any International diplomatic efforts that I am aware of.
- Ridding the world of nucear weapons. Huh? There are likely more nuclear weapons today then when President Obama took office. Once again they are giving him credit for doing something that he has promised to do; however, has not done.
Good grief.
Mike Sylvester
