Daily Archives: September 14, 2008

Even Alan Greenspan Realizes We Have A Problem

Follow this link to the story on Bloomberg about Alan Greenspan’s latest thoughts.

Let me try a few quotes to see if I can scare the pants off of you.

“There’s no question that this is in the process of outstripping anything I’ve seen, and it is still not resolved,”

“This is a once in a half century, probably once in a century type of event,”

The former Fed chairman also said he’s “fearful” the federal takeover of Fannie Mae and Freddie Mac may be “extraordinarily expensive.”

Follow this link to another Bloomberg report on Alan Greenspan.

Greenspan, a lifelong Republican and longtime friend of McCain, said today on Bloomberg Television’s “Political Capital With Al Hunt” that “I’m not in favor of financing tax cuts with borrowed money.”

Here is another exerpt from the story:

Greenspan said the widening income disparity among Americans is a “very serious” issue, and requires both raising the pay of lower-income workers and reducing higher incomes. “The best way of doing that is to remove what is essentially protectionism for those skilled workers in the United States who are helped by keeping out their competition,” he said, referring to the issue of “skilled immigration.”

The U.S. education system is “critical” to help “cutting-edge technologies”replace older industries that will be phased out over time, Greenspan said.

Does this sound like stuff that McCain/Palin understands?  Of course Greenspan’s remarks about “skilled immigration” have nothing to do with the really wealthy.  Most of the people he is talking about make considrerably less than Obama’s $250,000 per year income cutoff for tax relief.

Why The Bush Foreign Policy Fails 1

The Bush foreign policy of retaliating against our adversaries may feel satisfying to the more forceful and aggressive folk in our country, but it is still not a wise policy in the end.  I am thinking of situations involving Hugo Chavez in Venezuela, Vladimir Putin in Russia, Mahmoud Ahmadinejad in Iran, and Sadam Hussein in Iraq.  Do not get me wrong, I am not defending the strategies of our adversaries. They are making the same mistake we are.

Follow this link to a Wikipedia discussion of the Tit for tat strategy which is the one we seem to be using in the above mentioned situations. The article starts off by saying “Tit for tat is a highly effective strategy in game theory for the iterated prisoner’s dilemma.”  If you follow the link in the Wikipedia article to The Evolution of Cooperation, you find what I think is a more succinct and complete definition of the whole Tit for Tat strategy.

No matter which definition you read, when you get to the section on Problems in the original article you see why the strategy starts to fall down in exactly the situations we find ourselves.

A one-time, single-bit error in either player’s interpretation of events can lead to an unending “death spiral”. In this symmetric situation, each side perceives itself as preferring to cooperate, if only the other side would. But each is forced by the strategy into repeatedly punishing an opponent who continues to attack despite being punished in every game cycle. Both sides come to think of themselves as innocent and acting in self-defense, and their opponent as either evil or too stupid to learn to cooperate.

With so much published about how to conduct yourself in these situations, one could wish for more intelligent players on our side.  Here is where I connect to current politics.  I think that Barack Obama and Joe Biden are the intelligent actors that could take advantage of this research.  I also think it is clear that John McCain and Sarah Palin will never find enlightenment so that they will be able to follow a more winning strategy.

Obama/Biden represent our chance for a more peaceful world.  McCain/Palin represent our chance for more war.

I  credit ChuckS for getting me to research this topic. He mentioned this research in a conversation or two that we have had over the years.