Monday, March 31, 2008

Progressive Lending

I've been listening to some of the speeches for aggressive new regulations for the mortgage industry. The speakers find it easy to throw blame at the evil capitalists in the lending industry.

The speeches fail to recognize that many of the people engaged in creating the mortgage mess thought they were being progressive.

There is a large number of not-for-profit organizations that push home ownership on people who don't have the financial ability to own a home. There is a whole subindustry in the legal community dedicated to erasing bad credit histories. Several of these firms are located in Salt Lake.

As I am intensely interested in the non-profit sector and local community, I've spoken with a number of people in these industries. The people who were creating the mess really thought they were progressing society by extending home ownership to a new class of people.

Many of the players in the mortgage mess weren't driven by simple capitalist greed. They were driven by the buzz of putting a person, who would not otherwise afford a home, into a home.

The mortgage mess didn't happen by people plotting to defraud banks. It was driven by the ecstasy of doing good.

The people who trained home owners to think of the appreciation in their home's value as a bank account were actually following a rather standard pathway of progressive ideology where you claim to have a new way of thinking that will lead to a brighter future ... but that leads to ruin.

In many cases, the greedy conservative bankers weren't the perpetrators of the mortgage mess. They were witless victims who thought that the toxic mortgage portfolios they had purchased would behave like mortgage portfolios of the past.

Yes, there are crooks leaching off of all aspects of business and government. The really dramatic problems almost always happen when a group stomps forth and claims to have a progressive new way of thinking about an industry.

For example, the dotcom boom was driven by a progressive new think where grabbing marketshare was more important than having a business model that made profit on sales. Market values ballooned as companies undermined the market. Then the progressive new think collapsed.

In many cases, financial collapse follows a progressive new way of thinking about a financial instrument. The market fails to understand the implications of the new way of thinking and collapses when the forces of the new way of thinking undermines the market.

The mortgage mess happened because a new way of thinking about mortgages dramatically decreased the value of mortgage portfolios. Banks that bought the portfolios were undermined.

It is critical that we understand this pattern. Slapping new regulations on an industry might temporarily stabalize an industry, but the new regulations cannot change the way people think in the future.

Often the regulations simply burden an industry or create a false sense of stability. In so many cases we find the regulators setting up the next generation for a future financial collapse.

The regulations we put in place today cannot and will not prevent people a half century from now from changing their thinking about mortgages.

PS: This post slams progressivism because the central tenet of progressivism is that progressives have a new way of thinking that leads to prosperity. Progressivism is typified by the unspecific, but eloquent, call for change. More often than not, it is a call for a change in thinking.

The mortgage mess happened because there was a widespread change in thinking about mortgages.

The mortgage mess happened because their was a change in the way brokers felt about mortgages. These brokers felt the new think was progressive. Banks failed because the new think created mortgage portfolios with a high fail rate.

IMHO, this mortgage mess is a better example of the way that "new think" undermines a society than it is an example of greedy capitalists undermining society.

Think of it! Which makes more sense: "The high default rate on mortgages is the result of conservative lending practices." or "The high default rate on mortgages is the result of liberal lending practices"?

Tuesday, March 25, 2008

What is the Purpose of News?

The Newshour had an interesting bit on news coverage of Iraq.

Apparently what precipitated the report was that the official US casualty numbers for the war passed the 4000 corpse milestone. The deatheaters on the left were all geared for using the milestone in a barrage of Bush-Whacking articles, but as leftist journalist sat down to spin the milestone, there was a realization that they had lost the context for their attacks. We crossed the milestone in a time when deaths were decreasing and Iraqis were starting to feel more secure.

People who already hate Bush with every fiber of their being could take glee on learning of the important death milestone. They were able to make little hate pictures and feel self righteousness. There were all sorts of bloggers out celebrating the achievement of an important death milestone.

But, as it stands, the deatheaters celebrating the milestone already hate Bush with every fiber of their being. Celebrating the milestone might re-inforce one's hatred of Bush, but won't move the all important polls.

Even worse. Instead of being able to use the milestone in Bush attacks, the media seems to have found itself drawn into a debate about why it dramatically decreased coverage of Iraq when the troop surge was showing signs of success.

The Newshour report included some interesting squirming by folks like Marjorie Miller. Ms. Miller is one of the propagandist for the "So Called Los Angeles Times." Ms Miller seems to still be stuck in the vortex of the heady "Patreaus-Betrayed-Us Days" when leftwing propagandist thought prefixing "Troop Surge" with the snarl word "so called" would be sufficient to make the surge fail. She was pretty pathetic.

Mark Jurkowitz spat out an absurdist spin saying that journalists writing reports is a cost center. Because it is a cost center, you only write when you have something partisan to say. His view is absurd because journalism is not simply a cost center. It really is an investment. The newspapers sunk their investment money in positioning people to get the sensational news. Gathering up human interest stories and everyday news on improvements in Iraq would actually increase profits from the investment.

The most interesting commentary came from Greg Mitchell who was livid about the drop in coverage. Mr. Mitchell feels that there are all sorts of things that the media should have reported during the coverage gap that happened between the Patreaus Report and the 4000 death milestone.

Unfortunately, no-one in the debate really came out and said directly what the real problem is. Our real problem is that the press (left and right) is pre-occupied with with the partisan effects of their reports and have stopped reporting the news.

This thing where our newsagencies seem more interested in the partisan effect of the news rather than on the quality of the reporting and open discourse seems to be making each stage of the war worse than it should be.

First off, if we had better discourse in 2003, before the invasion, we might have realized that invading Iraq was not the next best step in the struggle against radical Islam. We might have realized that we needed more investment of troops to secure the country after the invasion.

Of course, it is not simply the actions of the people in news. I think our whole intellectual establishment has fallen into a partisan mode. I agree with Horowitz aht many of or problems are the result of lefist orthodoxy taking root in the schools. But the hetrodoxy that Horowitz advocates seems to be failing as well.

The rightwing media failed to report on the failings of the Iraq invasion until we were on the brink of catastrophic failure. The leftwing media failed to report on any successes for fear it might harm the partisan gains of the 2006 election.

The really sad result of the partisan reporting is that our 2008 election seems will produce an election with candidates with entrenched positions on Iraq, when what we really need is a president who will look at the situation as it exists in 2009 and who will concentrate on finding ways to extract ourselves from past mistakes with a minimal amount of damage to the Iraqis.

Saturday, March 22, 2008

Holey Work

I bought a sod coring tool and punched a large number of holes in the ground today. I did this to saving someone else from renting a big noisy, gas guzzling machine to do the same job.

In the past, I did the aerating with a turning fork. The lawn in question had become uneven through the decades. I am hoping that removing the plugs from the bumps and moving them to the dips will even things out.

Doing a little aerating decrease water consumption and improves the quality of the lawn. IMHO, the big machines poke too many holes and can end up damaging roots.

Since the market has started turning food crops into fuel, it would make sense to rip up sections of the lawn and plant a vegetable garden. It is silly that we all have resource intensive yards that aren't producing anything. Unfortunately, I am not in a position to garden this year. So, I can only live a sustainable green life through others.

BTW: Share-A-Sale lists a new company called EcoMowers is pushing push mower as a ecofriendly idea. I like the fact that a large number of companies are finding a niche in the green product area. At this point in time, anything we can do to reduce a few gallons of oil consumption is welcome.

Speaking of Holy Work ... Happy Easter.

Wednesday, March 19, 2008

The Formation of Millcreek Township

As my car is currently parked in Millcreek Township; So, I decided to crash the township information meeting at Skyline High School on 3/18/2008.

Millcreek TownshipA township is a new political entity created by HB40 a few years back.

Salt Lake County followed the traditional western settlement path. The valley was laid out with a dozen distinctive downtown areas. Small towns formed around the area. These areas grew into identifiable cities such as Murray, Midvale, Magna. Salt Lake City was the heart of the valley and the population center. The area around the established towns were administered by the county.

During the Great Leap Forward of the 60s and 70s, cities started becoming more progressive. They raised taxes and passed new restrictive zoning laws. The result is that the cities stopped growing, and the unincorporated areas boomed.

It is actually quite absurd. Most of the high density housing in the Salt Lake Valley is in unincorporated areas.

In the last 30 years, the unincorporated areas of Salt Lake County grew at a rate substantially faster than the cities in the county. Salt Lake City has a lower population than it did in 1976 when my family moved into this area. This area called Millcreek Township is Southeast of Salt Lake City. While Salt Lake City shrank, the population of the Millcreek Township area ballooned to 60,000.

The fact that people voted with their feet and fled incorpated areas should tell us something about city governments.

Anyway, in recent years, the cities in the Salt Lake County went on an annexation frenzy. To the consternation of businesses that made investments in the unincorprated areas, the various cities of Salt Lake County started annexing any property that generated tax revenues. The businesses being annexed were upset at the process. The cherry picking was likely to saddle the county with all of the people living in high density housing, but with no tax base to pay for services.

To give some breathing space, HB40 simply froze all of the city borders in the County. The unicorporated areas were declared townships. The Millcreek Township was so called after one of the neighboorhoods in the township.

Full CrowdMillcreek Township has no indentifiable downtown. Most people in the area address their mail as "Salt Lake City;" So, there is actually a very interesting dynamic: Here is a group of 60,000 people who opened the mail last week and found that they were living in a new thing called Millcreek Township, and that the township might soon become a city.

In the upcoming years, the people in this area have to decide if they want to turn Millcreek Township into Millcreek City, join other cities, or try to find a way to stay unincorporated.

One interesting proposal would be for South Salt Lake (about 20,000 people with a decent industry base) to merge with Millcreek. It is an intriguing proposal as South Salt Lake would give up its identity for a grab at the unincorporated areas. Millcreek Township would then get a little section of State Street and Main to call its own.

One voice in the crowd suggested the area merge with Salt Lake City. I doubt the people would want the big tax increase, and restrictive zoning that would follow.

I think there will be a push for the area to remain a township. However, it is absurd to have a different type of municipality in the state to serve the unincorporated areas. Simply becoming a city with no downtown is logically similar to the current township.

Regardless, it is an interesting process to watch.

Sunday, March 16, 2008

A Walk Through a Brickyard

The truth is that I am jealous. NewspaperGrl just became a part time Google Rep. Apparently she gets to wander around with a camera and a pile of brochures. She takes a picture of the store. She then goes in the store and chats with the owners. She gets paid for her picture. If the store returns the flyers to confirm the conversation, gets gets paid for that as well.

The magical thing, of course, is the name Google. People give legitimacy to Google. They are the daddy long legs of the internet.

Brickyard TowerOh well. Anyway I just labeled pictures from a walk around The Brickyard Plaza. The plaza has a nice little courtyard, but I didn't go in because most places these days tend to toss solicitors out on their haunches.

I think I will start doing write ups on city streets. When I want to stretch the legs, I will take a walk down an interesting section of a city street, take photos and write up a page. I did a page for 1300 East in Salt Lake.

As streets connect everything together and intersect with other links, it is possible to create tons of links. If I sprinkle in a few links for advertisers, the project would make a few pennies.

Wednesday, March 05, 2008

Salt Lake Art Blogs

The Utah Art's community is starting to blog!!!

I've noticed that several major art organizations in Salt Lake are slapping blogs onto their sites. I hope this trend continues. Such blogs raise awareness of the arts. Art organizations often have very interesting things to say.

I just made a new Salt Lake Arts blogs category to help them stand out.

The Utah Symphony just put up a post linking to Reviews from the blogosphere. Giving return links is a good way to encourage people to visit the symphony (Abravenal Hall Events).

IMHO, art organizations tend to be a bit aloof and are quite link stingy. I think the structure where an art organization has a separate free for all blog associated with their organization creates a structure where they can link into the local internet community while maintaining the high brow status of their main site.

Jay Heuman of the Salt Lake Arts Center seems to find this process:

"a dystopic marriage of convenience between evolving technologies and savvy marketing"

I hope that these art blogs can successfully draw people into the local arts.

Saturday, March 01, 2008

The Zookeeper's Wife

I just watched a Book TV interview with a Diane Ackerman who penned a tomed called The Zookeeper's Wife. The story is about a Zookeeper who hid Jews at the Zoo during the Nazi occupation of Poland.

The book is $15 at

In the interview, Ms. Ackerman started talking about the really bizarre spiritual environmentalism of the Nazis. They had all sorts of weird ideas built around evolution and probably would have felt more comfortable posing their smug spiritual superiority at than in ranting with the loons at the Republican Convention.

Any idea or sentiment can be perverted.

I have been a dedicated conservationist. In the past I've been properly labeled as an "eco-jabbering meadow muffin." I consider myself a full blown "cactus hugger" with a disdain for those wimps who stop at hugging thornless trees.

So here is my quandary: If all ideas, including conservation, have the potential of being radicalized and perverted, then how does one go about the process of having ideas in ways that preserve the idea from being perverted?

I believe that preserving the environment and conserving resources are both extremely important ideals. A tome on the travails of a zookeeper trying to save animals and people from the radicalism during the Nazi occupation of Poland would be an interesting and relevant read.