Thursday, October 16, 2008

Obama Pre-Presidency

Even when he was in law school, some classmates saw Barack Obama as "presidential" (or pre-presidential). His entire adult life has been geared in that direction: his community service work, his teaching constitutional law, his daring run against a strong incumbent after being beaten in one political race, his sponsorship of bills in certain key areas, and--most of all--his practiced eloquence and composure.

But why did he choose to pursue the presidency so hard now at the wee age of 48 rather than wait his appropriate turn four or eight or sixteen or more years from now? It is because he aspires not just to being president, but to being a GREAT president--one who faces and overcomes historic challenges, as George Washington, Abraham Lincoln, and Franklin Delano Roosevelt did.

Now, in another few weeks, he will be elected president, and a few short months after that he will take office. To greet him the U.S. faces a series of historic challenges.

(1) The U.S. is involved in two wars--one intractable in Iraq and one spiraling downhill in Afghanistan. (The "War on Drugs" and the "War on Terror" are fictitious political charades; hopefully Obama will decommission those "wars" and start to heal some of their hideous sociological consequences.)

(2) The U.S. will also be facing the greatest financial (and potentially broad economic) disaster since the Great Depression, and federal tax code and deficit challenges of tremendous proportions.

(3) Approaches to energy dependence and global climate change have been politically stifled until they, too, are now at crisis turning points.

(4) Weak education efforts and anti-scientism must be reversed urgently or else the U.S. will lose its world-leadership role in science and engineering, and related technology and business adventurism.

(5) Pig-headed and bullying "cowboy" diplomacy of the past eight years has ruined the U.S.'s international reputation and ability to wield a moral sword, as well as economic and political ones.

These are exciting times. We have a brilliant, charismatic young man about to take the White House--one who has the tools and aspirations to be a GREAT president--and his presidential plate is full of historic challenges.

Monday, October 13, 2008

Credit Default Swaps

Do you know about "credit default swaps"? They sound like a financial mega-disaster waiting to happen.

Essentially, I take out an insurance policy on your house (or something else I don't own) so I get paid if it burns down, except that I know the company who sold me the policy can't afford to pay on it so, if it happens, I go merrily to court and sue everybody in sight.

Mostly they're used to insure bonds. They're unregulated and non-transparent; most of them do not appear on institutional balance sheets since they have no definable value (you can't mark them to market since there's no market). In fact, nobody really knows how many of them there are but it is estimated at over $50 TRILLION. Can you imagine what happens when a couple of those big companies (like Lehman Bros. and AIG) go belly up, default on their bonds, and the CDSs start to fall like a row of dominoes? Even the mighty U.S. Government isn't big enough to guarantee them--the entire U.S. GDP is only about $15 trillion; in fact the whole world's GWP is in the same range as these babies.

This may be the final straw of deregulation and big-boyism that breaks the international-financial-system camel's back. When Obama takes office, it had better be one of his urgent priorities to shut this shit down.

Here are my proposed remedies:

(1) You can't insure something you don't own (where the hell did that come from anyway? If you don't own it, you've got no risk.)

(1a) That sort of includes--it ain't legal to double up (and triple up...). I don't think it's legal to have six redundant policies on your house, is it? (Much less on MY house.) If it is legal, it shouldn't be; it's an invitation to fraud.

(2) They all need to be registered. Sure, that increases the cost--so what? If you're worried about the asset, insure it.

(3) They all need to be carried on the books. But how to value them? How about the cost of the premium? That's what the insurer thinks they're worth--not really much of a brain teaser there.

(4) The insurer has to keep a reasonable capital margin. I don't know if that's 2% or 1% or 0.25%, but it sure ain't 0%.

Sunday, October 12, 2008

The Anthropic Principle

The so-called "anthropic principle" in cosmology (or in the philosophy of human existence) seems devilishly clever and subtle, worthy of careful consideration and great respect. In fact, it is not--it is stupidly simple. Basically it says that any theory or way of looking at things that doesn't allow, as one conclusion, that human beings exist is wrong.

Evidence in science is sometimes hard to come by. But, yup, here we are; human beings exist (and the rest of biology, and houses, and oceans, and stars, too). So if whatever theory you're promulgating doesn't really allow for that, you'd better take it back to the drawing board.

In 1946 Fred Hoyle was working out the details of an elaborate theory called stellar nucleosynthesis. Basically it said that you can start with hydrogen, the simplest element with ONE proton. Hydrogen was spewed around the Universe when it was created in the Big Bang some 13.7 billion years ago. Little by little gravity pulled that together into clouds of gas. But gravity kept working and gradually pulled the hydrogen into tighter and tighter packages until the hydrogen was so compressed it mashed together into helium, the second smallest element--it has TWO protons. Basically, two hydrogens make a helium plus releasing a helluva lot of energy, so the star lit up, a sort of ongoing hydrogen bomb. When there got to be a lot of helium, gravity kept squishing it together and it made beryllium, the element that has FOUR protons (get it? Two plus two makes four). That rattled around, mashed up with another helium, and made a carbon atom--SIX protons. Mash that with another helium and you get oxygen--EIGHT protons. All this synthesis of atomic nuclei ("nucleosynthesis") is going on in the hot insides of stars ("stellar nucleosynthesis").

As these heavier elements are knocking around, things get kind of messy with bigger and bigger elements mashing into one another (and into leftover small elements, too). Also, this nuclear soup gets so hot and unstable and a lot of times it goes BOOM! A supernova. And the goodies it's been making are spewed all over the heavens. Where, once again, the slow but inexorable pull of gravity goes to work and gradually pulls them together into clouds and stars. But these stars are very different from the first series of stars--they've got a lot of weird elements in them like carbon and oxygen. This secondary star stuff is suitable for forming planets, like Earth, and life, like us.

So the theory of stellar nucleosynthesis says that when the first series of stars mashes hydrogen (from the Big Bang) together, that's how heavier elements like carbon and oxygen get produced. And then supernovae spew them around the heavens for second-series stars, like our Sun, and its planets, like Earth, to get made with the strange mixture of heavy elements needed for life.

It's a nifty theory. A lot of experimental observations fit right together nicely (like the characteristics of atomic hydrogen, and helium, and beryllium, and carbon, and oxygen, for example). But it has some problems, too. For one thing, there isn't much beryllium around and there's a lot of carbon, but the theory says you've got to go through beryllium to get carbon. Now beryllium, when you study it in the laboratory, is very unstable (it has a half-life of 10^-17 seconds). So how come you happen to get enough beryllium hanging around to mash up with helium to make carbon (because it sure does take a lot of carbon to make life possible)?

Fred Hoyle proposed that it just wouldn't happen--there just wouldn't be enough carbon around (via the process of stellar nucleosynthesis)--unless there was an energy level that was just right so that when it did happen to happen, the resulting atomic nucleus, carbon, sort of fell into an energy hole and was quite stable. Essentially Hoyle figured out that for the theory of stellar nucleosynthesis to work (and it had a lot of observations going for it) and to wind up with enough carbon to make us, the carbon nucleus must have an excited energy state (a sort of hole waiting to be filled) at 7.6 million electron volts. He said, "Look for it, boys." And they did. And there it was. And that's considered one of the great proofs of the anthropic principle.

To untangle the string of logic, Hoyle said essentially that since we humans are here, the element carbon must have an excited-energy hole at 7.6 million electron volts. Or else what? Or else the elaborate theory of stellar nucleosynthesis (with all its satisfying mathematics and validating experiments) wasn't right--at least, it couldn't explain how there got to be enough carbon around to make us.

In other words, "human beings exist" is a pretty strong position to argue from. That's the "anthropic principle."

Friday, October 10, 2008

An Interesting Election

Isn't this an interesting presidential election?

First, there are several big issues on the table. A few weeks before election day we find ourselves in the most severe financial crisis in 75 years. Pollution and global weather change seem to be at a tipping point; to rescue the planet, something substantial must be done soon. International diplomacy has deteriorated to the point where the U.S. is held in contempt, even hated, throughout much of the world. Two complex and expensive wars threaten our economy, our self-image, our international diplomatic skills, and our military administrative structure. And managing while facilitating the scientific, technological storm that grows wider, more diverse, and more powerful year by year demands urgent rethinking and retooling of civilized government.

Second, there are two fascinating candidates. Each has his own compelling personal history--one an imprisoned war hero and cancer survivor; the other an interracial child of a broken marriage who lifted himself, like Lincoln, by his own bootstraps. Each is an impressive crowd-pleaser. While Obama is more intelligent, better educated, more eloquent and charismatic, younger and healthier, with more stable and mature judgment, and with stronger administrative and organizational skills, McCain is a grand old man, a "true American hero," with long experience, and with more claims than many to ethical lionhood.

At first it seemed that both were determined to have a high-tone campaign contest and to debate the issues without mud-slinging. But as the tide of public opinion turned inexorably against McCain, he decided to try a traditional, dirty route. He chose Sarah Palin, a beautifully charming but uneducated, unsophisticated, inexperienced--in general, dreadfully unqualified--V.P. running mate. He developed a series of untruthful personal attacks against Obama. And he steered away from the issues (which he apparently does not understand and certainly cannot debate effectively with Obama) to platitudes, vitriolic attacks, lies, and otherwise business-as-usual politics which has won elections so often in the past.

Next Obama, seeing that this dirty-politics approach was working--it was tipping the opinion polls back towards McCain--was willing to strike back in kind. He developed counter-smears of McCain and even began to espouse some derogatory (though not deceitful) distortions of McCain's positions.

Obama will almost certainly win. Moreover he will almost certainly have veto-proof majorities in the legislature. And it will be fascinating to see him handle the complicated and severe challenges that lie ahead. But isn't this an interesting presidential election?

Saturday, October 4, 2008

The Bradley Effect

I was 11 in 1948 when the U.S. went to bed having elected Tom Dewey president, and awoke to find Harry Truman had been surprisingly reelected after all. I don't remember much about my early years, but I remember when World War II ended (I was 8) and I discovered that my parents had been frightened--had been looking up for German bombers--my whole life, and they weren't any more. And I remember that strange November night in 1948 when Truman defeated Dewey.

Public opinion polling has greatly improved since then. For one thing, the egg they got on their faces that night made them significantly more humble--they ran scared for decades. And social science and statistical mathematics have improved greatly. In addition, computers and ubiquitous telephones have changed the polling landscape. We simply will never see again the kind of polling and reporting errors that characterized that election in 1948.

However, there is the "Bradley Effect." In 1982 Tom Bradley was comfortably in the lead over the Republican candidate, George Deukmejian, in the California governor's race. But, all polling (including exit-polling) notwithstanding, he lost. The myth is that both white and non-white voters are inclined to tell pollsters they favor a non-white candidate over a white one, and then, in the moment of truth, to pull the white candidate's lever. However, in the case of Bradley's defeat this was not the real story. Bradley was probably defeated by two other relatively silent factors. One was an unpopular gun control initiative; the other, an aggressive Republican absentee ballot program that generated hundreds of thousands of Republican votes no pollster anticipated.

The so-called "Bradley effect," unpollable racism, may have reared its head again the Virginia gubernatorial race in 1989 (and is occasionally therefore called the "Wilder Effect") and the election of David Dinkin for mayor of New York City over Rudi Guliani in 1989 (the "Dinkin Effect').

Will it affect Barack Obama's victory over John McCain next month? Probably not significantly.