Davos Newbies

Willem Buiter, who writes lengthy, dense blog posts on finance, has the more entertaining Uwe Reinhardt guest blogging on the similarities between moms and government regulation. The pay-off:

Eventually news penetrated even Wall Street that millions of the dodgy mom-and-pop mortgages would be likely to default unless government came to the rescue. Once that became obvious, the CDOs directly or indirectly based on these mortgages plummeted in value, driving many heavily indebted investors in them to the brink of bankruptcy, among them some of the big banks. And thus we now hear from Wall Street the primeval scream “Mom! Mom!” – with ”Mom” being dutifully played by former Princeton colleague Ben Bernanke of the Fed and, ultimately, the U.S. taxpayer.

Alas, it is a safe bet that a year or so after the federal “Mom” will have brought succor to these swash-buckling free-enterprisers, they once again will sit in their offices, clubs and golf carts, cursing the government and its “mindless regulation.” And therein lies the essential difference between teenagers and the adults on Wall Street. Eventually teenagers learn to appreciate their Moms.

Martin Wolf provides his explanation for the difference in the comments:

The reason teenagers learn to appreciate their Moms is that, in the end, they grow up and become Moms (or at least Dads). But the swash-buckling free-enterprisers one meets in financial markets never grow up. If they did, they would have to do more than just take a 95 per cent pay cut. They would have to admit that much of what they used to do was not just useless, but dangerous. That is asking too much. So what do they do, instead? They insist that the disaster they caused was an unforeseeable accident, as in “Mom, mom, where did that fishtank come from? It got in the way of my bar bells.”

At first I thought Grant McCracken was crackers with his suggestion for solving the Florida/Michigan revote problem, but on second thought, there might be something here:

The Democratic party is acting like its 1999.  Mail-in?  Are you kidding me? American Idol manages to canvass 10s of millions of people in a two hour period with results tabulated within less than 24 hours.  You might not like the music that Idol insists on, but the show has done us all a massive favor by demonstrating how quickly and elegantly the wishes of the public can now be canvassed.

Yes, of course, there are differences.  On Idol, people can vote more than once and in the world of public representation this is, um, a wee problem.   But I cannot believe that there is not some work-around available.  With a unique identifier, it should be possible to prevent the Chicago problem of people who vote early, often, and indefinitely.

Here’s what’s strange.  In all of the thousands of words inked on this issue, I can’t find anyone talking about the digital option.  It’s as if politics is the captive of a time lock.  And 1999 is optimistic by about 50 years.  The nice thing about this opportunity is that it’s going to have to be irregular and unorthodox and a little unsatisfactory in any case.  Which is to say we have a license to try something new.

I know many of the problems, as a reader for years of Ed Felten’s Freedom to Tinker. But I’m all in favor of novel approaches. After all, if Estonia can do it, why not us?