I think its like doing experiments without controls, the data looks awesome when it means whatever you want it to mean. I have been listening to a lot of On point radio shows on this and all these "experts" are saying that "on main street" (which is really condescending to me) people are going to have to tighten their belts and they borrowed too much to have a good life, etc, etc. Kind of like they are spreading the blame around to everyone. But subprime mortgages only account for about 3% of mortgages out there. Another thing, in the past decade or so worker productivity has increased 20% and but "average real income" has actually decreased. Only the top 10% of wage earners experienced an increase. So, maybe if some of these CEO or other rich wall street types had passed on some of the wealth that their workers generated they might not have been so susceptible to predatory lending. I also really like Michelle Singletary's personal finance column in the Washington post. Another random fact, the guy that authored the bill allowing for Credit default swaps (why AIG had to be bailed out) is Phill Gramm, one of McCain's top economic advisors.
I keep thinking how might this actually affect me. Obviously, NIH spending, although its already so in the toilet I can't really see it being cut. But how about HHMI and private post-doc fellowships? I wonder if they are heavily invested in this kinda stuff and will have to cut fellowships and other funding in the future. Even if they invest relatively safely like in Money markets for institutions, some of those things are going under now too. I would be interested in seeing an article about that.
Wednesday, September 24, 2008
Only one pie
Another friend writes about the current financial mess. The second paragraph in particular is interesting, as it raises two key points. First, there's the direct cost of the government spending 700 billion on this bailout that could probably be put to better purposes -- building roads, better compensating military veterans, direct stimulation of research. But then there's also the indirect costs, of various funding foundations having their bottom line hurt by their investments, which will affect sciences, the arts, higher education, poverty relief, etc. etc. No one's going to feel terribly bad if Harvard's endowment takes a hit (it is something on the order of $30 - $40 billion, currently), but multiply that by all sorts of agencies that serve the greater good, and you're talking about a real problem.
at 9:47 AM