Artist assistance

The Arthouse, an Austin-based arts organization, has issued a call for donations to its emergency relief fund. The fund was set up to provide assistance to artist who have experienced some an emergency that threatens their ability to work. The wide-spread destruction from Hurricane Ike has pretty much depleted the fund's modest reserves. If you care to donate, you can do so here.

Cogent analysis

Nobel Laureate Joseph Stiglitz writes in Vanity Fair:

We are in the midst of micro-economic failure on a grand scale. Financial markets receive generous compensation—in the form of more than 30 percent of all corporate profits—presumably for performing two critical tasks: allocating savings and managing risk. But the financial markets have failed laughably at both. Hundreds of billions of dollars were allocated to home loans beyond Americans’ ability to pay. And rather than managing risk, the financial markets created more risk. The failure of our financial system to do what it is supposed to do matches in destructive grandeur the macro-economic failures of the Great Depression.

Let's take a moment to contemplate the idea that 30% of all the profits generated by corporate America goes to our financial markets. That fact alone makes Wall Street's failures utterly shameful.

He goes on to describe how blind faith in unregulated financial markets got us into this swamp -- that and the corollary belief that government is always bad. He doesn't say it in so many words, but the extremist market ideologues' argument is analogous to asserting that baseball would be a much better game if only we got rid of the umpires.

Full text is here.

Car art in the heartland

The painting as it looked on the hood of a Volvo in Wichita, KS on the night of the show's opening. It's gratifying to have it spread around like this.

Car art redux

The "Painting is Never Traveling Show" as it looked recently in the ominously named town of Fate, TX.


And a distance shot of the painting at the Newark, NJ airport.

I'm still waiting for pictures from Houston (Ike and all that), Austin, Brooklyn, and numerous points in between.

A wink is a good as...

I, for one, do not want a Vice President who winks at me.

Not being insured can kill you

Mike Herrera, a member of a noted Dallas family of restaurateurs, died the other day. He waited over 19 hours in a county hospital emergency room, suffering from severe abdominal pain, before he collapsed. Doctors were unable to revive him.

He was uninsured.

As I pointed out a little while back, a McCain health care policy adviser name of John Goodman is on record saying that emergency room care guarantees mean nobody in America is uninsured. All we need to do is change what we call people who don't buy health insurance policies:

But the numbers are misleading, said John Goodman, president of the National Center for Policy Analysis, a right-leaning Dallas-based think tank. Mr. Goodman, who helped craft Sen. John McCain's health care policy, said anyone with access to an emergency room effectively has insurance, albeit the government acts as the payer of last resort. (Hospital emergency rooms by law cannot turn away a patient in need of immediate care.)

"So I have a solution. And it will cost not one thin dime," Mr. Goodman said. "The next president of the United States should sign an executive order requiring the Census Bureau to cease and desist from describing any American – even illegal aliens – as uninsured. Instead, the bureau should categorize people according to the likely source of payment should they need care.

"So, there you have it. Voila! Problem solved."

Here's an excerpt from a Dallas Morning News article about Mike Herrera's death:

[Jimmy] Herrera praised the doctors who tried to save his brother's life.

"I want to commend those doctors for working on him so long and so hard trying to bring him back," Mr. Herrera said.

He also said he understands the reality of the wait.

"Anybody who goes to Parkland knows they are going to be there eight, 10, 14 hours if you go to the emergency," Mr. Herrera said. "If you're not dying or not a gunshot wound or a heart attack victim, you're going to be at the back of the line...

Of the long wait, Jimmy Herrera also said: "In a sense, it's the price you pay for not having private insurance."

Changing how you classify his status with the census will not change the man's fate. Mike Herrera is dead.

Arcane rules and bailout politics

I've heard snippets of discussion lately from some of the "pro-business" opponents of the financial system bailout proposal about changes to accounting rules which -- it is argued -- will help solve the crisis in our financial markets. The issue is so-called "mark-to-market" accounting, or if the speaker is economics-nerdly enough, FASB 157. Some, it seems, want to do away with it.

What hokum.

FASB is the Financial Accounting Standards Board. FASB 157 is an accounting rule that requires businesses to assess the value of any asset (commodity, equity, bond, real estate, etc.) according to what the company can sell it for at the time of a financial report. What's it worth? What can you get for it? Or in the words of the FASB:

The definition of fair value retains the exchange price notion in earlier definitions of fair value. This Statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. Therefore, the definition focuses on the price that would be received to sell the asset or paid to transfer the liability (an exit price), not the price that would be paid to acquire the asset or received to assume the liability (an entry price).

Works for me. My car was worth about what I paid for it five years ago. But I can't get that much for it today.

But suppose you're a big bank and you own baskets and buckets and truckloads of paper with names like collateralized debt obligations and other "complex financial instruments." And suppose you paid for your derivatives with real money (which you borrowed). But now the value of the stuff upon which the cost of the derivatives was originally determined has tanked (say in a burst real estate bubble), and nobody really wants to buy your paper from you anymore. What can you do?

Well you can get your friends in Congress to change the rules maybe. The argument is that the decline in real value of the underlying assets, even factoring in the huge numbers of mortgage defaults, is not so low as what the current market for mortgage-backed securities would have it.

So back in July when Merrill Lynch (remember them?) dumped CDOs that were once valued at $30 billion for about 22 cents on the dollar, that didn't really reflect their really real value. And when Merrill agreed to finance 75% of the transaction, the nickel plus on the buck they actually realized from the sale didn't really reflect the ultimate beyond all the fog truly really real value either.

The market is just spooked right now about reams of CDO paper, you see. The market value of mortgage-backed securities just doesn't reflect what they're worth. So when your quarterly report to shareholders about the health of your business comes due, you can pull valuations of unsalable "assets" out of your puckered ass to claim your tanking financials actually are just dandy. You just can't sell them to anybody for what they're worth.

This is to say that market capitalism doesn't work. Tell it to my '03 Honda Element.

The people pushing to change accounting rules like FASB 157 appear to think that saying things are better than they are will make things better than they are. Such magical thinking is of a piece with a long list of right wing ideologue nonsense ranging from "heckuva job Brownie" to McCain advisor John Goodman claiming that there are no uninsured people in America because of rules requiring emergency room assistance. They live in a pretend world full of happy, optimistic, smiling nutcases.

The stupidest aspect to all this is that a few congressmen say they'll vote for the bailout next time around if FASB 157 is suspended for a couple of years. It's just one of those troublesome regulations that get in the way of free markets.

How can the idiots even dress themselves?