Obama is a winner

I was shocked to hear the news today that Obama won the Nobel Peace Prize. I thought it was a joke at first, maybe something from the Borowitz Report, or the Onion. Nope. It really happened. I am happy that an American won it, and that Obama is the first sitting President to win since Woodrow Wilson, who won it in 1919 for creating the League of Nations and negotiating the disasterous Treaty of Versailles.

The fact is that Obama has made a terrific start on his foreign policy agenda (not so much his domestic agenda), probably in part due to Hillary Clinton's efforts among others. As an expat living in London, I can assure you that he has had an astonishing impact on world opinion of the US. He has also inspired people around the world, most notably Kenyans (but not all Nigerians apparently!). Add to that his improvement in US relations in the Middle East, his building of real coalitions to oppose nuclear weapons proliferation, his improvement in anti-terrorism outcomes (as opposed to rhetoric), and his shelving of the useless Star Wars program.

However, I am bewildered at the timing of this award. Obama was nominated less than 2 weeks after being sworn in. Though he has gotten a very good start on policies that could lead to peace, little has actually come to fruition yet. Add to that his aggressive stance on Afganistan, and the risk that he will escalate that war a la LBJ in Vietnam. I think it is too early to consider him for this award, and think that the Nobel Committee could have waited a couple of years.

That said, let's not fool ourselves into thinking that the Nobel Peace Prize is given to the current paragon of peace. It has always been highly political. For example:

1989 HH Dalai Lama

I am a big fan and follower of His Holiness. He could win it every year, as far as I am concerned. However, it can not be denied that he won in '89 as a punishment of China for Tiananman Square.

1994 Yasser Arafat, Shimon Perez, Yitzhak Rabin

What really came from their peace talks? Not much. They were not really men of peace. This prize was awarded in the HOPE that they would do something to lead to peace. It was driving the Nobel agenda. Full points for effort.

2002 Jimmy Carter and 2005 Mohamed El Barradei

Both were worthy recipients IMO, but one must recognize that these were meant as a slap in the face to Dubya.

2007 Al Gore

I like Al, and I think his work on climate change is extremely important. However, this was also for Dubya.

So, I conclude that this award was meant not only as a last swing at Dubya, but an attempt to influence Obama. I can't see why else they would give this award so early in Obama's term, rather than waiting until he has actually seen positive results from his efforts. While I agree with that motivation, I am not sure it is helpful. Conservatives in the US are already having a field day with this. It remains to be seen if they will manage to turn it against Obama, as they have the loss of the Olympics in Chicago.

Say NO! to circumcision!

There has been a lot of news floating around about the supposed benefits of circumcision.  Research has shown that it is effective in reducing rates of infection for a variety of sexually transmitted diseases, and is generally considered a more hygienic way of being.  However, it turns out that much of this research has been poorly conducted, and are likely WRONG. It is a classic case of scientists not controlling variables, and having confounded data as a result. For example, they compared circumcised (Jewish) with uncircumcised (gentile), and found lower infection rates.  It turns out that Jews and gentiles behave differently (who knew?).  Jews were less promiscuous than the gentiles, and this screwed the data (so to speak).

Perhaps we should adopt a general approach to questions like this.  If having a foreskin was actually harmful, shouldn't evolution have done something about it?  From now on, let's agree that anything that exists in nature, from mosquitos to e. coli, must serve some purpose in the ecosystem as a whole, and should not be dispensed with offhand. Just sayin'

Back to circumcision.  Now there is another reason to keep the mohel away from your boys.  It turns out that the prepuce (another word for the foreskin), is incredibly valuable.  Unlike any other piece of skin, the prepuce can be stretched almost infinitely, and used to replace the damaged skin of burn victims.  When taken from an infant, before the immune system kicks in and makes transplants difficult, the prepuce can be stretched to the size of several football fields by growing the cells on a polymer fabric in a nutrient solution. If you don't believe me, here is the article.

So, rather than just hacking off this part of our most vulnerable males, perhaps we should leave things as nature intended.

Long time, no see! Who?

A quick apology to the legions of readers secretly following my blog.  I have been exceedingly busy.  First of all, my school robotics team is kicking butt and taking names.  You should add their website to your bookmarks, since they will soon be rocking Annapolis at the Chesapeake Bay FIRST Robotics Regional competition.  Anyway, from Jan. 3 to Feb 17, we were working every day after school until 8pm and on Saturday!  You know what they say about school on Saturday?  NO CLASS.

Speaking of Saturday, the last one SUUUUCCCCKKKKEEEEDDDD.  Majorly.  I presented at the ECIS Technology Conference with some colleagues involved in the robotics team.  This is a conference designed for techie nerds like me (and worse).  Still, only three people attended my talk on FIRST Lego League, and exactly one came for my FIRST Robotics talk.  ONE FUCKING PERSON!  That is called a waste of time.  I gotta change my approach, I think.

So,  I need to go to bed now, but I promise all of you that I will write something about economics soon.  Promise...

Should we trust Warren Buffett?

So, it would seem that the one person both Barack Obama and John McCain would like to be Treasury Secretary is Warren Buffett, the Sage of Omaha. Warren Buffett is the CEO of Berkshire Hathaway, the outrageously successful insurance company that has appreciated in value at an outrageous rate of 21.4% a year since 1965. To put the power of that compounding appreciation in perspective, the stock was $4 in 1965, and is now worth $120,000, having fallen 20% during the financial crisis from its high of $150,000. If my father had bought me ten shares when I was born, it would be worth a million dollars today! This is an astounding record of achievement by any measure, and has earned Buffett the admiration of conservatives and liberals alike, though conservatives were devastated when Buffett endorsed Obama.

Would Buffett make a good Treasury Secretary?  Undoubtedly yes.  His insight into the markets, and his grounding in the real world make him an ideal choice.  Buffett famously decided to give away the bulk of his wealth to the Bill and Melinda Gates Foundation, rather than leave his children idly rich.  He is all too aware of the Third Generation syndrome, which leads to trainwrecks like George Bush, Paris Hilton, and the like.  

Buffett has made his fortune buying value-priced companies, and holding on to them.  He never bought into the tech bubble of the 90's, preferring stalwart investments that yield dividends and moderate growth. I can't imagine another person on Earth that understands the world economy like him.

Would he want the job? His biographer, Alice Schroeder, says no.  He doesn't like meetings, and would hate the job.  I am not so sure.  At age 78, what better way to cap off an incredible career than saving the world?  The financial system teeters on the edge of oblivion, and Buffett stands up to shape the new economy in his own image.  It is a play for immortality if I have ever heard one.  Buffett himself refused to comment on it, but I believe he would take the job if it was offered, assuming he was guaranteed a free hand in making sweeping changes.

However, should we really trust him? In the midst of this speculation following the 2nd Presidential Debate, when both candidates named him first on their short lists, Buffett has written an Op-Ed for the New York Times, in which he advises everybody to invest in stocks now:

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I’ve been buying American stocks. 

His explanation is persuasive.  It is the timeless contrarian argument:

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

So, Buffett shares that his personal wealth is now 100% in US equities, and he warns people who are hunkering down in cash (like me), that we will miss the boat before the signals are clear for a recovery.  He gives historical examples from the Great Depression and WWII to show that people brave enough to invest after the crash make out like bandits:

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

So, given this airtight logic, why would I doubt him?  Because he has a conflict of interest.  First of all, his beloved BRK-A stock has dropped $30,000 since December. Berkshire Hathaway is basically a giant holding company, and the tide brings down all ships.  For the sake of his investors, and his own holdings, he wants it to get back on track.  However, this is in everybody's interests, so that's OK, right?  So far so good.

It becomes a bit more tricky given his $5 Billion investment in Goldman Sachs. One of the two surviving investment banks, Goldman Sachs wields incredible power around the world, but especially in the US.  Clinton's Treasury Secretary, Robert Rubin, was Goldman Sachs President, as was Henry Paulson.  Josh Bolton, Bush's Chief of Staff, is a Goldman veteran.  The 35 year old now running the $700 Billion bailout was one of Paulson's proteges at Goldman Sachs.  The bank profited mightily from this bailout, as well as the Mexican bailout in 1994. 

Worse than this opportunism are the allegations that Goldman Sachs is partially responsible for the current meltdown, and prolonged the Great Depression by encouraging the failed policies of Herbert Hoover. Naked short selling and speculation by Goldman hedge funds in the derivatives market could have started the dominos falling in the current crisis.  Goldman Sachs stands to make billions more when the economy recovers, and they stand alone with JP Morgan as the pre-eminent investment banks.

Now, taking off my tinfoil hat for a moment, I must say that I don't really buy into this assessment of Buffett's motives.  The man has more money than he could ever spend, and he has never shown much interest in spending it anyway. He clearly has no plans to leave it to his kids either, so nepotism is out as well.  We could hypothesize that he wants to increase his estate to benefit his philanthropic enterprises, but that is a stretch.   Perhaps he really believes what he is saying...

John Cleese has it exactly right on Palin