More about the mortgage side of the crisis...

Andrew Sullivan had a recent question to his audience: Who Caused the Financial Collapse. His audience responds with a number of articles, the most significant of which comes from Mike Konical at Rortybom:

The GSEs had a serious corruption problem and were flawed in design - Jeff Madrick and Frank Partnoy had a good column about the GSEs in the NYRB recently that you should check out about all this – but they were not the culprits of the bubble.

Andrew originally reached this provisional conclusion:

By creating major incentives and pressure to sell homes to the poor, the feds prompted (but didn't force) the banks to sell and insure dodgy mortgages in ways that disseminated the risks across the entire global financial system via credit default swaps and the like. The banks somehow believed that this dissemination of risk removed risk, and structured the loans so they would only work in a real estate market that never faltered. When it did falter, the insurance mechanisms metastasized a real estate crisis in one country into a financial crises across the entire world economy. At some point, the bankers knew they were peddling crap and some tried to sell it deceptively to clients. ... I don't see how the government forced these practices into being. And I don't see how government encouragement of selling homes to the poor forces the kinds of reckless loans the bank made or the even more reckless and sometimes fraudulent ways in which those risks were made to look invisible.

It's a fairly strong provisional conclusion, and after listening to his audience respond to it, he emphasizes:

Fannie and Freddie played at best a marginal role in the crisis, largely by belatedly following the private sector's reckless innovations in the sub-prime market, from 2006 onwards.

This pretty much aligns itself with everything I've read about the crisis from both the Wall Street and "mortgage innovators" sides of the equation.

One thing I do disgree with Andrew on is the line "At some point..." As LJ user Candide pointed out earlier this week, from the very beginning the number-crunchers knew something was wrong, but the traders, who saw how awesome the money was, ordered them to keep quiet. There's a term for this: institutional corruption aka fraud.

This is why I reject the assertion that somehow the GSEs were to blame. To claim that congressmen who were in the minority from 1995 through 2006 are somehow not only to blame for what happened but are criminally liable is not only irresponsible but reprehensible. Newt Gingrich's call to have Barney Frank and Chris Dodd thrown in jail is an ass-naked power play on behalf of Gingrich's corporate owners that inadvertently slipped out of his big mouth. It is an attempt to distract from the issue at hand: the regulatory landscape is in the hands of those with short-sighted, profit-oriented goals detrimental to the general well-being of the American Republic and its citizens.

The bleeding edge maketh me bleed...

I've spent all day working with Zombie and Vows and Coffeescript, only to be stuck by one tiny problem. Dear Javascript Developers: "undefined" and "false" are not the same thing. There are javascript environments (see: node.js) that will crap a brick if you try to dereference the undereferencable.

I had to "fix" both FileUploader.js and WebFonts.js to define their namespaces, because Javascript's namespace "discovery" mechanisms suck. (Bless Coffeescript's @module pattern for fixing at least a tiny segment of the problem on browsers.)

Once I got that done, I started hacking my way through the vows problem. It kept crashing. At first, I thought it was the (now believed to be brilliant) Vows/Zombie/Capybara Hack (not to be confused with the Capybara/Zombie runner), but no, it's a bug it JSDom, the DOM library that Zombie runs on top of: it turns out that it's implementation of document.write is broken, and can't handle adding things like dynamic fonts. So despite my fix for WebFonts.js, I won't be running tests with it in-line.

That's okay, so far as it goes, fonts aren't part of the Behavior-driven mindset, but geez, does actually writing a test harness have to be so friggin' difficult?

Oh, as if that weren't trouble enough, this works:

coffee library_load_test.coffee

and this always returns success, even when the above fails:

vows library_load_test.coffee

[Edit: No, the vows version works fine, as long as you delete any compiled versions of your test runner. It privileges compiled copies of your test runner over source copies, even if you specify the source as being more recent! That's freakin' broken behavior and It. Must. Stop.]

Grrr... Sorry, just had to vent.

The Coyne/Haught Talk: I can understand the pearl-clutching!

So those of you who don't have regular access to the Evil Atheist Conspiracy (our motto: "What Black Helicopters?") have probably not heard about the great Jerry Coyne / John Haught kerfluffle. Haught is a famous theologian who has made his reputation by arguing for (that's important) the validity of evolution, but then turning around and arguing that philosophical naturalism (the premise that there is nothing "supernatural" with interest in our universe or with the capacity to meddle in it) is a limited point of view. He argued for the plaintiffs (i.e. against the so-called "intelligent design" proponents) in the infamous Dover Board of Education case, the one that ruled "intelligent design" to be a religious belief and not a valid topic for public [school] funding.

Jerry Coyne, on the other hand, is a well-known evolutionary biologist with more than a dozen books on the topic, as well as the various peer-reviewed papers and popular magazine articles by the score. He, too, argued on behalf of the plaintiffs in Dover.

Coyne and Haught agreed to have a debate (it was more like two lectures side-by-side, in which each knew in advance the position the other was going to take) on the validity of religion.

Haught's half hour is, well, to my untrained ear, blather. It's new-age blather about ultimate truths (which you can't know), and levels of reality, and the excuse that a dog can't understand a book, but a child can understand the words and narrative, and an adult can understand theme and nuance, and Haught makes the point that maybe (maybe!) there's more to reality than we can understand.

After the video was taken (wait, I hear you say, what about Coyne? I'm getting to that.), Haught refused to release it. After a loud protest from the interwebs, Haught relented, but not before saying,

I’m still in shock at how your presentation ended up. I was so offended both personally and as an academic by the vulgarity of it all that I did not want other people to have to share what I witnessed that night in October. Rather than answering my point that scientism is logically incoherent–which is really the main issue–and instead of addressing my argument that the encounter with religious truth requires personal transformation, or for that matter instead of responding to any of the other points I made, you were content to use most of your time to ridicule several isolated quotes from my books. I was absolutely astounded by your woeful lack of insight into, or willingness to grapple with, the real meaning of these passages.

That's some grade-a clutching of the pearls, and I can understand why.

Because Coyne didn't come with an acceptance of Haught's premises. He was "pugnacious" but hardly vulgar. I think the closest he came to a vulgarity all night was "whit." Instead, he starts out with two premises of his own: first, In religion, faith is a virtue. In science, faith is a vice., and second, When one method of discerning reality does not work and has never worked, and another not only consistently works but extends your grasp, you tend to favor one over the other. Philosophical naturalism, Coyne argues, is the logical outcome of the efficacy of methodological naturalism. Coyne makes points about the incompatibility of faith and science, and yes, they can have a monologue-- faith can sit there and listen to science tell it time and time again how it gets things wrong, but faith can't point to anything concrete and say, "Here's where I get things right that you can't grasp."

Basically, Coyne walked in as a scientist into a lecture that was supposed to be between theologians. They have different standards. For theological debates, you can disagree about particulars, but you never, ever attack the premises. Coyne showed that Haught's premises depend upon what he's trying to say and when he's saying them. Haught has no intellectual honesty behind his words. Of course he's horrified. Coyne vilified him in the public square, called him a liar to his face-- albeit politely.

Watch for yourself. You'll see what I mean.

I'm only half joking that the bad things good for us are bad for us...

The other day I jokingly said, "It's not true that Herman Cain is particularly dumb. Intellectually, he's probably on par with Bill Clinton or Richard Nixon. It's just that we've all gotten so much smarter, Cain seems dumb compared to our dim memories of those guys."

The gist (and link) of the joke was the book Everything Bad Is Good For You, in which author Steven Johnson argues that as television has become fractured it has also become complicated. Starting with Hill Street Blues (SF geeks would argue Babylon 5 as a better starting point), television shows began to make demands of the viewers. We had to track more, and know more, and get smarter just to keep track. My mother complains that she can't understand movies anymore and doesn't go to them. She loved a good caper, but the intellectual demands of a modern caper film (like any of the Mission Impossible franchise, the later Bond movies, or, Gods help her, Inception) are far more than they were in the 1970s and earlier.

If we are much smarter than we used to be, if we can process that much more that much faster, then we're intellectually at the same problem point we are physically with respect to aristocracy. I can't remember if it was Charles Stross or Niamh @CrookedTimber who made the point that one of the reasons we have no respect for aristocracy is because they don't look like celebrity. Four centuries ago, the aristocracy were taller, and stronger, and smarter-- they had the luxuries of a high-calorie diet and good education. These days, we all have that.

Which made me realize that my joke was only half joking. Because, you know, if we really are all intellectually capable, if not necessarily desirous, of keeping up with the average presidential candidate, then there is now nothing except force & money separating those in power from those without.

No wonder the oligarchy is working as fast as it can to secure power. It has to. Because if it doesn't... well.

"Historically, a story about people inside impressive buildings ignoring or even taunting people standing outside shouting at them turns out to be a story with an unhappy ending." -- Lemony Snicket. Snicket doesn't say for whom.