WHY THE DEMS DON’T GET IT

Unfortunately, in light of recent domestic policy directions, I think the Dems have it all wrong.

Health care reform is an idea left over from 1991. The only reason the Dems want to push it through now is because they have the votes to pass the bills they didn’t get passed in the first session of the first term of the Clinton Presidency.

But is this a good reason to pass a law, because you proposed it before and you’ve been trying to pass it for so long?

Universal Health Care is an idea born of POST-DEPRESSION affluence–it’s a fringe benefit to be offered to a population that’s already employed, that already has a guaranteed vacation, a guaranteed pension, and has guaranteed housing. In short, guaranteed health care is the LAST welfare benefit that should be federalized.

In addition, and this is a revision from my original post, according to a recent article posted in a respected publication, the health uninsured are not universally distributed throughout the United States.

In point of fact, less than 3% of Massachusetts residents lack health insurance, thanks to the state law health care coverage efforts of people like Gov. Mike Dukakis and his successors in office. The fact that Massachusetts has nearly universal health care coverage proves that this is a STATE problem and not a FEDERAL problem.

Looking more nationally, the Midwest and Northeast have fewer than ten per cent uninsured as to health care.

It is the South and the West that have 15-25% health uninsured rates; the highest being the state of Texas.

You don’t have to be a statistics major to know that Texas also is a non-union state, has a large number of illegal immigrant resident aliens, and that these conditions are pretty much true throughout the Sunbelt, where the problem of lack of health care coverage is an issue of non-union shops and illegal immigrants competing for jobs, which drives down the employers’ incentives to provide health care benefits.

Consequently, why is this a federal problem? This seems instead to be either an immigration problem, a union/labor law problem, or a combination of the two (as Janis Joplin and Big Brother used to sing). (She was from Texas, by the way, before she got out the San Francisco).

Moreover, if Texas wants to solve their own problems, why not let them experiment? They’ve already reformed tort law to make it much harder to sue MDs–welcome relief to the medical profession, which has flocked in droves to practice in Texas, now considered a medical mecca.

Obama wants to ruin all this. His health care proposal, according to reports, would result in a massive transfer of wealth from the largely democratic and already overtaxed midwest and northeast, and transfer it to the sunbelt states, the south and west, in order to mainly put on federal health coverage, non-union workers who are scabs (union busters) and illegal immigrants (also scabs and union busters).

Do we really want to spend our tax dollars paying for health benefits for strikebreaking scabs and unionbusting immigrant labor? And for illegal aliens to get health care?

Also, additionally, Obama’s health proposal will cause deep cuts in the current level of medicaid, medicare and drugs provided to the elderly under medicare.

In short, the proposal will triage the old and deprive them of expensive end of life care, and let them die more quickly, in order to provide basic health care to young, healthy labor that is non-union, largely hispanic, and living in the sunbelt.

The demographic implications of this over the long run will be a much younger, more hispanic united States, even more concentrated in the sunbelt than it already is, and will likely lead eventually to a bilingual nation that speaks Spanish and English, as well as to the ultimate downfall of unions, since one of the major arguments for unions is that they provide their members with health care and pension benefits during job and contract negotiations.

If unions are deprived of health care as a benefit to negotiate for, fewer workers will opt into unions. Obama and the democrats, paradoxically, are going to drive the death nail into the coffin of the union movement in this country. They haven’t thought through clearly the implications of what they are doing.

In short, this is a regional problem, and a union/immigration problem, and not a national problem. National mandates for the states would probably fix this, along with a public/private partnership with some insurance companies that could work with some of the southern and western states.

Part II

The REAL problem today is not health care at all.

The real problem today is that people don’t have jobs and they’re losing their houses. We have lawyers, bankers, traders who have blown up, car companies laying off, people all over America losing good jobs. Everywhere you go in this country, houses are for sale or being sold off by the sheriff.

I’ve never seen so many homes for sale in my own neighborhood. Twenty-Two years i’ve lived here, and three houses were a lot to be for sale here; now we have 25 and none are selling. There is a glut on the market where two years ago there was a boom in the market. The bottom has fallen out of the real estate market and no end of the downward spiral is in sight.

People’s equity in their homes, the main source of wealth for most Americans, has vanished, and the federal government has done NOTHING about it.

Except, of course, to bail out the rich fat cat bankers, and appoint a salary czar to oversee their million bazillion dollar bonuses.

Is this for real? Federally funded trickle down? If Reagan had done this, there would have been riots in the streets.

What we need precisely is a sort of FDIC, but instead of guaranteeing your banking deposits against banking failure, you would be guaranteed your home’s equity value, an FDIC for home equity, that will guarantee up to $1,000,000 of value in your home’s equity value against falling home prices, that is either automatic through fannie mae or freddie mac, or that you can purchase as insurance, for a small sum of money.

Now isn’t THAT a SENSIBLE idea?

Second, everyone with negative home equity should be forgiven their loans in excess of 80% of their debt loads immediately, and the banks commanded to write that debt off immediately.

Third, anyone who files for bankruptcy should be able to modify his or her mortgage under sections 1322 of the Code or anywhere else as pertinent, or under a Chapter 11 Plan, and cram it down the bank’s throat against their wishes if the bank’s loan exceed’s 80% of the value of the home and there is a negative equity spiral, the debtor should be able to eliminate all but 80% of the loan.

My point is, what good is free health care if you have no job and no house? It’s like serving gelato to a man who is homeless and has no money and hasn’t eaten in days–health care is like dessert.

Back in the 90s, when everyone had a job, it was ok to talk about health care–it was the LAST thing we needed. But now we’re back to square one–we need to talk about guaranteeing incomes, jobs and housing. We’re back to FDR and Truman and LBJ.

This administration just doesn’t get it.

Paradoxically, I think the right Republican approach might get it and win back the white house if it’s sufficiently populist in nature and goes after the big banks, which the democrats appear to be, pardon the expression, in bed with.

The Democrats need to examine an NRA-style national Jobs Program that will put everyone in the United States to work. Second, the Draft needs to be re-instituted. Kids that are in the army will be employed. Third, we need to nationalize the universities and make education free of charge. Fourth, we need to nationalize the cable companies and make the internet free of charge to the poor and to the rich equally, as well as making basic cable tv a free resource to everyone.

Fifth, for anyone that’s not employed, a Guranteed Annual Income or GAI must be mandated and paid by the Government, along with a negative income tax to avoid work related disincentives. The welfare reform measures of the Clinton era will have to be undone for the time being, because right now, middle class families are starving and in danger of homelessness, and THEY need welfare. The program needs to be federal, and the income level to be guaranteed needs to be large, around $15,000-20,000 annually, and adjusted for children and circumstances.

Sixth, the government has to embark on a massive program of propping up the housing market, investing in public housing, investing in Section 8, expanding the HUD budget, and so forth.

Seventh, we need to start investing in having one spouse stay home and take care of the kids. I know this is controversial, but two wage earners has destroyed many marriages and the american way of life.

Eighth, we need to reform the real estate brokerage business so that commissions from family homes are much less than for commission from commercial real estate. Instead of six points, let brokers earn only one point. This way, brokers won’t churn real estate and people won’t use their homes as profit tools.

Ninth, reform the tax code so that people have to pay MORE income tax on the sale of their primary homes, e.g. remove the exemption entirely, unless they stay in them a minimum of five years, unless they have to move for cause, such as a job-related transfer to another city, or medical reasons. This would stop people from buying and selling homes constantly and churning the market.

Tenth, more closely regulate lenders, brokers and sellers of real estate. Let people buy and sell and profiteer on second homes, commercial real estate and so forth, but those parcels will be taxed, etc.

I think this is the approach we need.

This is what the democrats are ignoring.

They’re going to raise taxes and bring down the house as it were on average joe while they raise up false idols like the bankers.

We badly need a new prophet in the land, and i’m not talking about Rush Limbaugh here.

–art kyriazis, philly/south jersey
home of the world champion philliesght

Cap and Trade – A Horrible Idea – Let’s Abolish Cars and Build a Real Rail System Instead

Cap and Trade Is a very bad idea, right now.

First, a history lesson. President Clinton’s first term was a disaster, in large part, because he spent most of his first two years pursuing three very liberal ideas—gays in the military, universal health care, and a federal tax on BTU usage.

These three ideas were, at the time, in 1993-1995, so controversial, that they not only threatened to sink President Clinton after only one term, but resulted in 1994 in the largest shift in a mid-term election in the House of Representatives and the U.S. Senate in United States History.

The House lost more than fifty Democratic seats and went Republican for the first time in a long time; and the Senate also suffered huge democratic losses; all due to Newt Gingrich and the Contract with America, which was a direct and overwhelming refutation of Clinton’s liberal agenda.

Much the same thing happened in the first two years of Jimmy Carter’s term; Carter pardoned all of the draft-dodging Vietnam protesters hiding out in Canada, and virtually declared war on the CIA and all of the US military operations around the world, which led to terror operations and revolutions around the world intensifying, culminating in the Iranianian Revolution and the taking of the U.S. Embassy in Teheran and the holding of 52 U.S. hostages for over a year, a spectacle so embarassing to the United States, repeated night after night on national TV as it was, that virtually every Democrat in office lost his seat by 1980, and the Republicans and Ronald Reagan were swept into power, with a whole new agenda of re-arming America and restoring her lost prestige abroad.

Getting back to Clinton, the BTU Tax was an idea very similar to the current notion of Cap and Trade. Cap and Trade, like the BTU Tax, is essentially a tax on carbon usage. The idea is, if we tax carbon-based fossil fuels enough, and make them costly enough, it will force everyone, including consumers and energy companies, to seek non-carbon based alternatives.

There are three basic problems with cap and trade (actually, there are many more, but I will discuss three here) that make it a bad idea for now. First, we are in a recession that is actually more of a depression. Cap and Trade is a large TAX INCREASE that will suck spending power out of the hands of consumers. Consequently, it will kill the marginal propensity of consumer demand, and attack the very object of the Stimulus Bill.

I don’t have to be a doctor to know, that you don’t give a man a sleeping pill, just when you’ve given him a shot to wake him up, while he’s still groggy and coming around.

Right now, the American economy is like a man who can’t wake up. Cap and Trade would be like a sleeping pill to that man. The Stimulus Bill was like a cup of coffee or a shot of epinephrine—a stimulant to wake him.

Cap and Trade is like a sleeping pill that would suck away his vital energy.

Second, in order to invest in, and build, energy alternatives, there has to be a venture capital and investment banking, and regular banking systems, in place. Today, those systems are impaired, crippled or functioning at about half capacity. Consequently, Cap and Trade can’t work under today’s economic conditions. Consequently, no infrastructure would develop under Cap and Trade to produce renewable energy alternatives until the banking and lending systems come back on line.

All we’ll have is a tax that makes oil and gas and coal more expensive, but no alternatives will develop for many years yet, due to the impairments of the banking, VC and R & D systems.

Third, even if the banking, VC and R & D systems were perfect, there is no energy alternative that could come on line sooner than ten years from today to replace current oil, gas and coal based consumption.

Wind and solar currently provide less than 1% of current energy needs; energy needs keep GROWING at an exponential rate, if you include the third world, and none of the so-called renewable energy forms are anywhere close to being ready to assume more than a micro-share of the energy load, whether we’re talking about wind, solar, geothermal, capturing energy from ocean waves, and so forth.

It’s been fifty plus years since the hydrogen bomb, but no one has yet developed and sustained a fusion reaction that can last and power an energy generating plant. That technology seems as remote as the so-called “WARP” engines on the starship Enterprise on STAR TREK.

That leaves us with one, and only one realistic alternative, and that is nuclear power plants. They are tanned, rested and ready, and the newest generation of nukes have much higher capacity factors and higher safety factors than ever before.

The problem with nukes is, you still need about two billion dollars to build a single plant, about 3-4 years to get the necessary permits to build a plant in the U.S. and another 3-4 years to build the plant and get it on line.

That’s 6-8 years and two billion dollars to get each plant on line, and most of the two billion dollars will have to be absorbed by the consumer in electricity costs. Let’s figure that we build fifty of those plants—that’s a hundred billion dollars in construction costs alone that have to be absorbed back again by means of utility bills to the consumer over the next ten-twenty years. That’s on top of the cap and trade tax costs.

In short, it’s a very expensive proposition to jettison oil, gas and coal.

It’s too bad that the United States didn’t commit to a nukes policy back in 1955, when nuclear power was cheap and we could have covered the US with nuclear power plants for a fraction of the cost of today.

If we had committed to such a policy then, we could have been completely independent of Middle Eastern Oil as of 1970.

Even as late as 1975, we still could have committed to nukes for a fraction of today’s costs, and been independent of Middle Eastern Oil by the 1990s.

However, the wacky left and particularly eco-wacky californians, continuously opposed nuclear power in this country for decades. Nuclear power could have given us full independence from the Middle East a long, long time ago, and spared us these last two wars in Iraq and Kuwait.

The problems we face today are a consequence of our leaders living life as if we can’t shape the future. But we can and must shape the future.

The future is not shaped by dice rolling or by random events. The future is shaped by decisions we make and by policies we need to hew to in order to shape the probabilities and likelihoods of the future outcomes to be.

A responsible United States Government would have made us one hundred percent reliant on nuclear energy for our power production as soon as humanly possible, once we unlocked the secrets of the atom, back in the 1950s.

Our failures to do so may have been the result of many causes, and I won’t speculate here on the role of the oil and gas companies, the so-called, Seven Sisters, and their multinational interests linked to Middle Eastern oil producing states, but clearly nuclear energy would have a lot cheaper over the last sixty years than two wars fought directly by the US in the Middle East, and five wars fought by proxy between Israel and the oil-producing states.

Had we eliminated oil dependence early by committing to the atom, we would have changed history decisively and for the better.

Cap and Trade is not the answer.

A federally-sponsored program of accelerated conversion to Nuclear Powered electric generation, followed by a fifty to one hundred year phase in of solar, wind and fusion power, is the answer.

All electric companies should be abolished in favor of one company modeled and based on the Tennessee Valley Authority, that will erect Nukes until the United States is 100% nuclear based electric power, and zero percent coal or oil.

Combing this with a program of converting all cars to electric power would also solve another problem as well. This is clearly doable in the next five-ten years.

This is the kind of program that would involve spending money on a specific problem, creating jobs, and stimulating the economy. It’s better than cap and trade because it puts dollars into the economy instead of taking them out. Also, it federalizes the utilities, which do a horrible job.

Finally, the electric grid needs to be updated using superconductors and the latest electric technologies, including quantum conductors and new metals to conduct electricity. With superconductors, electricity can be sent from location to location without any loss of power or current. This would eliminate the need for transformers and high voltage lines, etc. Again, a vast federal program committed to upgrading the grid is needed.

These steps would be much better than cap and trade.

A final note about cars–Why do Obama and the Democrats want to prop up the car industry if they are truly worried about Global Warming? Cars contribute more than 50% of the hydrocarbon emissions in the US that contribute to global warming.

Instead of paying consumers a $4,000 tax credit to buy new cars with high gas mileage, wouldn’t it make more sense to get people to STOP DRIVING CARS AND TAKE MASS TRANSIT?

In short,

1) Let the U.S. Auto Industry DIE.

2) Put an enormous carbon tax on all car purchases. Make any new car cost around $50,000 to buy.

3) Apply that tax backwards to used cars as well.

4) Massively subsidize AMTRAK and all local mass transit across the nation, and let people ride the trains and Mass Transit free for the next five years. Yes, I said it, FREE OF CHARGE for the next five years. Why? To get them used to doing it. The massive federal stimulus bill to build rail, subway, light rail throughout the US would be in the TRILLIONS of dollars, as well as to subsidize AMTRAK everywhere so it’s FREE OF CHARGE. That would be a net STIMULUS to the economy and create the world’s finest light and heavy rail systems. We could also finally build HIGH SPEED RAIL SYSTEMS modeled on France, England and Japan to cover longer distances that could go 300-400 miles per hour, that could eliminate many shorter airplane routes, unclogging the skies of needless plane flight. This is a win, win, win plan. We get rid of filthy autos and planes and replace them with electric trains. And net net net create jobs.

5) Starting in 2014, you can slowly re-introduce fees again for Mass Transit and AMTRAK once we’ve started to eliminate all of the automobiles.

6) Start reclaiming the inner cities by closing roads and creating pedestrian zones and mass-transit zones, and creating more and more parks in which no cars can come into the city, until finally, all cities will have no cars or trucks at all.

7) The goal would be to eliminate cars and trucks by 2025, and convert everyone to mass transit and rail.

8) Electric cars only would be allowed eventually, powered by the nuclear grid. These would be cheap and affordable.

This is a far reaching and thoughtful plan. Abolish the internal combustion engine as we know it and force all americans out of their cars and onto trains, buses, subways and light rail.

This is the true path to ending global warming and reaching a green economy.

Art Kyriazis
Philly/South Jersey
Home of the World Champion Phillies
up

The Stimulus Bill

Was and Is a good idea.

The economy is in a major recession.

The current rate of interest based on prices overall is negative two percent (-2%) and some sectors of the economy are falling far faster than that (car prices and car sales, home prices and home sales, etc.). Home prices in particular are in a death spiral of approximately minus twenty percent annually (-20%). That fact is causing a lot of overly leveraged homeowners (and second homeowners) to rationally walk away from their mortgages as their falling home prices eradicate their equity and cause their loan payoff figures to exceed whatever they could rationally expect to recover on the market in a real estate sale; in many cases, the summary sheet would show a net balance owed to the mortgage company.

This, in turn, is killing the banks.

I needn’t point out at this stage that this particular deflationary spiral of home prices was also a key component of bank failures and economic depression during the Great Depression of 1929-1939 in the United States; so much so, that it was constantly referred to by many of my professors in many of my classes, in both undergrad and grad school.

In short, that was the CLASSIC example of deflationary spiral, falling real estate prices during the 1930s. That was also the focus of specific New Deal programs at the time of the 1930s.

Consequently, it’s fair to characterize the current economy as in a demand-starved recessionary/deflationary spiral that would probably respond best to Keynesian style medicine, that is to say, 1) fiscal policy targeted to drive the demand function back up, e.g. deficit spending on a large scale and 2) monetary policy targeted to counteract the negative interest spiral. And, also, specific programs to help homeowners fix their mortgages, which the administration has also wisely proposed, again copying the 1930s New Deal.

I’m not going to work out the econometrics here. Most people live their lives based on the notion that you can’t predict the future. Economists and market analysts aren’t like that, and neither is the government. The entire history of economics, and particularly econometrics, is grounded on probability and statistics, and more generally, logic and the theory of sets, as well as computer-based calculations and iterative theories of what can and cannot be calculated by a machine, e.g. a Turing Machine or computer, given certain data and an appropriate algorithm.

The fact is, we can see into the future, and if we do the appropriate policies, we can change the future. For more than seventy years now, countercyclical financial manipulations using fiscal and monetary policies at the macro- and micro- economic levels has been discussed in detail in many different academic and scholarly journals, all flowing from the theoretical framework of Keynes and Friedman, as well as the careful study of business cycles by the National Bureau of Economic Research at Harvard (“NBER”), where many prominent economists have labored in the academic vineyards.

The fact remains that just as we can shape our own futures by educating ourselves, working hard, showing up on time and having the right friends, we can obviously shape the economic future of the land by taking appropriate economic actions.

This is not like the fall of the market, which is stochastic, governed by a random walk, and essentially would have to happen at some point. If you’re not sure about this, look up the Gambler’s Ruin problem on Google or in one of your old textbooks. If you gamble long enough for large enough sums, eventually there’s the chance that you will lose everything. The market is no exception to the problem of the Gambler’s Ruin and the random walk that crosses the point of no returns.

However, even in the case of the ruin of the market, countercyclical fiscal and monetary policies could have cushioned the fall much better and more wisely, had the last administration not been so committed to laissez faire policies reminiscent of the 1920s.

Instead of pumping up the boom, the government should have acted to mute it, so that when the crash came, it was not so violent or abrupt.

A tax increase during the boom would have been wise, especially a surtax to finance the war in Iraq, and to suck some wind out of the sails of the almost inflationary boom during 2005-2007.

That would have been wise, but the last administration chose not to do it for political reasons, and because they were married to a laissez-faire doctrine of not taxing under any circumstances.

This was an ill-considered doctrine, because countercyclical management of the economy requires taxation as part of reasonable fiscal and monetary management of the business cycle.

What is even more ill-considered is that the Republican Party continues to advocate this same laissez-faire approach now in opposition to the stimulus bill, when it is obvious that government action is required.

Turning to the current stimulus bill, the Republican right wing response of opposing the stimulus bill, and instead continuing to advocate smaller government and laissez-faire is not only wrong, but historically wrong, since it just repeats the criticisms of the New Deal made in the 1930s by the Republican party, which history shows us were wrong.

The New Deal was right, Glass-Steagall and securities regulation were right, and government interventionism as well as vast government spending to pull us out of the Depression were the correct government policies.

Moreover, the last administration bloated the government with cronyism and friendly contracts to private contractors, both in the Iraqi war sector and in Homeland Security, hardly shrinking the government, and laissez-faire only meant no new taxes—the government was activist on a range of issues important to corporations, especially environmental issues.

Moreover, the value of the stimulus bill has been shown to be historically valuable by the New Deal, and also not only in the 1930s in the U.S., but in 1930s Germany, where vast rearmaments spending and central government spending pulled Germany out of the depression, but also in 1930s Italy, where central government spending ended the depression, and also in 1930s England and 1930s France, the same, and so forth. 1930s Japan also revived itself with Government spending on armaments.

Probability, econometrics and policy at some point merge into the ability to shape the future. One can debate about policies, their merits and demerits, but at some point one has to commit to one policy direction or another, and what is refreshing about the current administration is that they have committed to a certain policy direction. Their economic advisers are experienced and knowledgeable, and probably have worked out the future impact of these policies on Cray Supercomputers several times over by now. I hesitate to say this, but in all likelihood, the Government probably knows better in this case what to do than we do.

The past administration distinguished itself by twisting slowly, slowly in the wind while the economy disintegrated, sticking not to laissez-faire, but to a lot of deficit spending on the Iraq War which mainly went to government contractors with connections to the government in power. The same could be said for the enormously bloated Homeland Security budget contracts, which were exposed in part as fraudulent by incidents such as Hurricane Katrina.

There are many specific problems with the stimulus bill, but overall it’s the right direction.

Art Kyriazis
Philly/South Jersey
Home of the World Champion Phillies

HAPPY EASTER AND PASSOVER TO ALL

I wanted to wish a Happy Easter and a Happy Passover to all.

There’s an old joke, that goes something like this. A liberal is arguing with a conservative about the death penalty. Finally, exasperated, the conservative says to the liberal, “of course I’m in favor of the death penalty–without the death penalty, there’d be no Easter and no Easter Bunny!”

While this is an awful joke, it does remain true that in the two major capital punishment trials that we know about in history, Socrates and Jesus, as best we know, both were wrongfully convicted and sentenced to death. I won’t even get to the OJ trial, although as we all know, the glove didn’t fit and they had to acquit.

Obviously Socrates and Jesus could have used Johnny Cochran as their lawyer.

Socrates on dying, was reputed to have said something like, I die, you live, god knows who is going to the better place. Those of us who are religious of course believe that death brings us closer to a better place indeed, but Socrates provides a flash of insight that this short life is not the only one, that there is a spiritual and inner life that transcends death. Religion ministers to the soul, or at least to our conception of the soul, and consequently it is a vital part of our lives.

The Passover story about Moses leading the chosen people out of bondage and out of Egypt is a great story, as well as being an integral part of the old testament. “Exodus” is actually ancient greek for “Exothos” or “Exit” or “Leaving”. It’s the title of the book from the Ancient Greek Septuagint. The entire point of Exodus is the story of the Chosen People Leaving, “Exothos”, from Egypt and their bondage. God frees them from slavery and bondage through Moses and a series of miracles, each one greater than the last, which are celebrated each and every Passover.

It is such an important story because it gives hope to every oppressed peoples that God will redeem every one in bondage, free them and lead them to their own Promised Land. When Martin Luther King spoke of reaching the Promised Land, it was the Passover Story he was referring to. He didn’t need to explain that to his listeners, many of whom were careful Bible readers. The African-Americans of this country understood about bondage, redemption, and being led out of bondage and to the Promised Land.

On this Passover, we should think about these matters in considering President Obama, a man who has the potential to unite many different elements of society, and perhaps finally lead a people to the Promised Land. All oppressed peoples the world over hearken to the story of Exodus.

I’ve always had a strong faith in God and I don’t doubt God’s existence. Recently there’s been a spate of books and articles by respected scholars advocating atheism and the non-existence of God. I find this to be an awful waste of scholarly time, and especially of taxpayer and endowment money. Isn’t there something important these guys should be doing on our nickel?

Richard Dawkins, who once wrote a book called “The Selfish Gene,” is one of these. He used to teach at Harvard, now teaches in England, and appears to enjoy bashing God and religion in his books. Dawkins used to be a capable biologist. In his old age, he’s turned into a menacing crank who hates old ladies who go to church and pray to the saints and God for the memories of their dead husbands.

How mean can you possible get?

You might call him “The Selfish Dean” because he really seems only to care about himself. Is this what tenure breeds? Idiotic books about atheism? Pushed on us by editors and publishing houses?

Belief in God is a personal matter, but it also means a commitment to others, and to doing things for others, without considering the personal benefit to yourself. Sitting around the table at Easter, at Seder, at any family gathering, we give thanks to our creator and Lord for family, for health, for happiness. I can’t imagine a life without God or without prayer, a life without church or without friends from church or the church community.

I’ve looked at Dawkins’ books on atheism. They are poorly written, poorly argued, and basically are rants.

It’s not a careful argument.

A careful argument, for example, would be Aquinas’ Summa Contra Gentiles, or Martin Luther’s 95 Theses against the Catholic Church, or John Calvin’s immense work of theology criticizing the Roman Catholic Church and setting forth the tenets of Calvinism.

Those are careful and thoughtful books, which make their cases carefully, point by point.

Dawkins’ books by contrast are awful and poorly researched and poorly written. It’s embarassing to see a professor publish such awful work. Especially when he was able while younger to write such a good book on biology as “The Selfish Gene.” It’s readily apparent Dawkins’ writing and intellectual skills have sharply declined with age.

But assuming that Dawkins (and any of these other atheists) has/have any rational or reasonable points to make, I’d like to refute them with Pascal’s Wager, for one. I think Dawkins is already refuted by the Transcendental a priori arguments of Kant for God’s existence, but Blaise Pascal made a classic probability argument which is, in fact, irrefutable on mathematical and utility grounds, for God’s existence.

Pascal said you should believe in God, because if you did, even if there was only a 1 in a million chance of his existence, the benefits would be eternal salvation, whereas if you denied Him, the possible harm would be eternal damnation.

Consequently, it’s a lot like the nuclear calculus–the benefits are so great, that even if there’s only a slight chance of God existing, it’s worth going all in on God. If you win, you get eternal salvation forever. (the nukes argument goes like, if there’s a one in a million chance of starting World War III, the harm is so great, you have to avoid it, because it’s nuclear winter and the death of mankind, so the policy can’t be adopted).

If you lose the wager, you burn in hell forever. I kind of envision Dawkins burning in a really hot part of hell, by the way. The part where they keep Bernie Madoff, child molesters, child molesting catholic priests and every single convicted defendant whose story was the real basis for the plot line of a LAW AND ORDER:SVU episode. Those stories are really pretty awful. This is a digression, but it’s hard to believe that’s Jayne Mansfield’s daughter in that show, by the way. Mariska Hargitay, emmy winning actress, now approximately in her mid-40s, and still very beautiful, is the daughter of Mickey Hargitay (a former Mr. Universe) and Jayne Mansfield, the 1950s starlet/sex bomb. I think you’d have to say that Mariska Hargitay has really had a solid acting career.

As for all of those who doubt God’s existence or lack faith in God, I give you an extended discusion of Pascal’s Wager from the Stanford Encylopaedia of Philosophy.

Pascal’s Wager
By Alan Hajek, Stanford Encyclopedia of Philosophy

“Pascal’s Wager” is the name given to an argument due to Blaise Pascal for believing, or for at least taking steps to believe, in God. The name is somewhat misleading, for in a single paragraph of his Pensées, Pascal apparently presents at least three such arguments, each of which might be called a ‘wager’ — it is only the final of these that is traditionally referred to as “Pascal’s Wager”. We find in it the extraordinary confluence of several strands in intellectual thought: the justification of theism; probability theory and decision theory, used here for almost the first time in history; pragmatism; voluntarism (the thesis that belief is a matter of the will); and the use of the concept of infinity.

We will begin with some brief stage-setting: some historical background, some of the basics of decision theory, and some of the exegetical problems that the Pensées pose. Then we will follow the text to extract three main arguments. The bulk of the literature addresses the third of these arguments, as will the bulk of our discussion here. Some of the more technical and scholarly aspects of our discussion will be relegated to lengthy footnotes, to which there are links for the interested reader. All quotations are from §233 of Pensées (1910, Trotter translation), the ‘thought’ whose heading is “Infinite—nothing”.
• 1. Background
• 2. The Argument from Superdominance
• 3. The Argument from Expectation
• 4. The Argument from Generalized Expectations: “Pascal’s Wager”
• 5. Objections to Pascal’s Wager
• Bibliography
• Other Internet Resources
• Related Entries

1. Background
It is important to contrast Pascal’s argument with various putative ‘proofs’ of the existence of God that had come before it. Anselm’s ontological argument, Aquinas’ ‘five ways’, Descartes’ ontological and cosmological arguments, and so on, purport to give a priori demonstrations that God exists. Pascal is apparently unimpressed by such attempted justifications of theism: “Endeavour … to convince yourself, not by increase of proofs of God…” Indeed, he concedes that “we do not know if He is …”. Pascal’s project, then, is radically different: he seeks to provide prudential reasons for believing in God. To put it crudely, we should wager that God exists because it is the best bet. Ryan 1994 finds precursors to this line of reasoning in the writings of Plato, Arnobius, Lactantius, and others; we might add Ghazali to his list — see Palacios 1920. But what is distinctive is Pascal’s explicitly decision theoretic formulation of the reasoning. In fact, Hacking 1975 describes the Wager as “the first well-understood contribution to decision theory” (viii). Thus, we should pause briefly to review some of the basics of that theory.

In any decision problem, the way the world is, and what an agent does, together determine an outcome for the agent. We may assign utilities to such outcomes, numbers that represent the degree to which the agent values them. It is typical to present these numbers in a decision matrix, with the columns corresponding to the various relevant states of the world, and the rows corresponding to the various possible actions that the agent can perform.

In decisions under uncertainty, nothing more is given — in particular, the agent does not assign subjective probabilities to the states of the world. Still, sometimes rationality dictates a unique decision nonetheless. Consider, for example, a case that will be particularly relevant here. Suppose that you have two possible actions, A1 and A2, and the worst outcome associated with A1 is at least as good as the best outcome associated with A2; suppose also that in at least one state of the world, A1′s outcome is strictly better than A2′s. Let us say in that case that A1 superdominates A2. Then rationality surely requires you to perform A1.

In decisions under risk, the agent assigns subjective probabilities to the various states of the world. Assume that the states of the world are independent of what the agent does. A figure of merit called the expected utility, or the expectation of a given action can be calculated by a simple formula: for each state, multiply the utility that the action produces in that state by the state’s probability; then, add these numbers. According to decision theory, rationality requires you to perform the action of maximum expected utility (if there is one).

Example. Suppose that the utility of money is linear in number of dollars: you value money at exactly its face value. Suppose that you have the option of paying a dollar to play a game in which there is an equal chance of returning nothing, and returning three dollars. The expectation of the game itself is

0*(1/2) + 3*(1/2) = 1.5,

so the expectation of paying a dollar for certain, then playing, is

-1 + 1.5 = 0.5.

This exceeds the expectation of not playing (namely 0), so you should play. On the other hand, if the game gave an equal chance of returning nothing, and returning two dollars, then its expectation would be:

0*(1/2) + 2*(1/2) = 1.

Then consistent with decision theory, you could either pay the dollar to play, or refuse to

play, for either way your overall expectation would be 0.

Considerations such as these will play a crucial role in Pascal’s arguments. It should be admitted that there are certain exegetical problems in presenting these arguments. Pascal never finished the Pensées, but rather left them in the form of notes of various sizes pinned together. Hacking 1972 describes the “Infinite—nothing” as consisting of “two pieces of paper covered on both sides by handwriting going in all directions, full of erasures, corrections, insertions, and afterthoughts” (24).[1] This may explain why certain passages are notoriously difficult to interpret, as we will see. Furthermore, our formulation of the arguments in the parlance of modern Bayesian decision theory might appear somewhat anachronistic. For example, Pascal did not distinguish between what we would now call objective and subjective probability, although it is clear that it is the latter that is relevant to his arguments. To some extent, “Pascal’s Wager” now has a life of its own, and our presentation of it here is perfectly standard. Still, we will closely follow Pascal’s text, supporting our reading of his arguments as much as possible.

There is the further problem of dividing the Infinite-nothing into separate arguments. We will locate three arguments that each conclude that rationality requires you to wager for God, although they interleave in the text.[2] Finally, there is some disagreement over just what “wagering for God” involves — is it believing in God, or merely trying to? We will conclude with a discussion of what Pascal meant by this.

2. The Argument from Superdominance
Pascal maintains that we are incapable of knowing whether God exists or not, yet we must “wager” one way or the other. Reason cannot settle which way we should incline, but a consideration of the relevant outcomes supposedly can. Here is the first key passage:

“God is, or He is not.”

But to which side shall we incline? Reason can decide nothing here. There is an infinite chaos which separated us. A game is being played at the extremity of this infinite distance where heads or tails will turn up… Which will you choose then? Let us see. Since you must choose, let us see which interests you least. You have two things to lose, the true and the good; and two things to stake, your reason and your will, you knowledge and your happiness; and your nature has two things to shun, error and misery. Your reason is no more shocked in choosing one rather than the other, since you must of necessity choose… But your happiness? Let us weigh the gain and the loss in wagering that God is… If you gain, you gain all; if you lose, you lose nothing. Wager, then, without hesitation that He is.

There are exegetical problems already here, partly because Pascal appears to contradict himself. He speaks of “the true” as something that you can “lose”, and “error” as something “to shun”. Yet he goes on to claim that if you lose the wager that God is, then “you lose nothing”. Surely in that case you “lose the true”, which is just to say that you have made an error. Pascal believes, of course, that the existence of God is “the true” — but that is not something that he can appeal to in this argument. Moreover, it is not because “you must of necessity choose” that “your reason is no more shocked in choosing one rather than the other”. Rather, by Pascal’s own account, it is because “[r]eason can decide nothing here”. (If it could, then it might well be shocked — namely, if you chose in a way contrary to it.)

Following McClennen 1994, Pascal’s argument seems to be best captured as presenting the following decision matrix:
God exists God does not exist
Wager for God Gain all Status quo
Wager against God Misery Status quo

Wagering for God superdominates wagering against God: the worst outcome associated with wagering for God (status quo) is at least as good as the best outcome associated with wagering against God (status quo); and if God exists, the result of wagering for God is strictly better that the result of wagering against God.

(The fact that the result is much better does not matter yet.) Pascal draws the conclusion at this point that rationality requires you to wager for God.

Without any assumption about your probability assignment to God’s existence, the argument is invalid. Rationality does not require you to wager for God if you assign probability 0 to God existing. And Pascal does not explicitly rule this possibility out until a later passage, when he assumes that you assign positive probability to God’s existence; yet this argument is presented as if it is self-contained. His claim that “[r]eason can decide nothing here” may suggest that Pascal regards this as a decision under uncertainty, which is to assume that you do not assign probability at all to God’s existence. If that is a further premise, then the argument is valid; but that premise contradicts his subsequent assumption that you assign positive probability. See McClennen for a reading of this argument as a decision under uncertainty.

Pascal appears to be aware of a further objection to this argument, for he immediately imagines an opponent replying:

“That is very fine. Yes, I must wager; but I may perhaps wager too much.”

The thought seems to be that if I wager for God, and God does not exist, then I really do lose something. In fact, Pascal himself speaks of staking something when one wagers for God, which presumably one loses if God does not exist. (We have already mentioned ‘the true’ as one such thing; Pascal also seems to regard one’s worldly life as another.) In other words, the matrix is mistaken in presenting the two outcomes under ‘God does not exist’ as if they were the same, and we do not have a case of superdominance after all.
Pascal addresses this at once in his second argument, which we will discuss only briefly, as it can be thought of as just a prelude to the main argument.

3. The Argument From Expectation
He continues:

Let us see. Since there is an equal risk of gain and of loss, if you had only to gain two lives, instead of one, you might still wager. But if there were three lives to gain, you would have to play (since you are under the necessity of playing), and you would be imprudent, when you are forced to play, not to chance your life to gain three at a game where there is an equal risk of loss and gain. But there is an eternity of life and happiness.

His hypothetically speaking of “two lives” and “three lives” may strike one as odd. It is helpful to bear in mind Pascal’s interest in gambling (which after all provided the initial motivation for his study of probability) and to take the gambling model quite seriously here. Recall our calculation of the expectations of the two dollar and three dollar gambles. Pascal apparently assumes now that utility is linear in number of lives, that wagering for God costs “one life”, and then reasons analogously to the way we did! This is, as it were, a warm-up. Since wagering for God is rationally required even in the hypothetical case in which one of the prizes is three lives, then all the more it is rationally required in the actual case, in which one of the prizes is eternal life (salvation).

So Pascal has now made two striking assumptions:

(1) The probability of God’s existence is 1/2.

(2) Wagering for God brings infinite reward if God exists.

Morris 1994 is sympathetic to (1), while Hacking 1972 finds it “a monstrous premiss”. It apparently derives from the classical interpretation of probability, according to which all possibilities are given equal weight. Of course, unless more is said, the interpretation yields implausible, and even contradictory results. (You have a one-in-a-million chance of winning the lottery; but either you win the lottery or you don’t, so each of these possibilities has probability 1/2?!) Pascal’s best argument for (1) is presumably that “[r]eason can decide nothing here”. (In the lottery ticket case, reason can decide something.) But it is not clear that complete ignorance should be modeled as sharp indifference. In any case, it is clear that there are people in Pascal’s audience who do not assign probability 1/2 to God’s existence. This argument, then, does not speak to them.
However, Pascal realizes that the value of 1/2 actually plays no real role in the argument, thanks to (2). This brings us to the third, and by far the most important, of his arguments.

4. The Argument From Generalized Expectations: “Pascal’s Wager”
We continue the quotation.

But there is an eternity of life and happiness. And this being so, if there were an infinity of chances, of which one only would be for you, you would still be right in wagering one to win two, and you would act stupidly, being obliged to play, by refusing to stake one life against three at a game in which out of an infinity of chances there is one for you, if there were an infinity of an infinitely happy life to gain. But there is here an infinity of an infinitely happy life to gain, a chance of gain against a finite number of chances of loss, and what you stake is finite. It is all divided; wherever the infinite is and there is not an infinity of chances of loss against that of gain, there is no time to hesitate, you must give all…

Again this passage is difficult to understand completely. Pascal’s talk of winning two, or three, lives is at best misleading. By his own decision theoretic lights, you would not act stupidly “by refusing to stake one life against three at a game in which out of an infinity of chances there is one for you”—in fact, you should not stake more than an infinitesimal amount in that case (an amount that is bigger than 0, but smaller than every positive real number). The point, rather, is that the prospective prize is “an infinity of an infinitely happy life”.

In short, if God exists, then wagering for God results in infinite utility.

What about the utilities for the other possible outcomes? There is some dispute over the utility of “misery”. Hacking interprets this as “damnation”, and Pascal does later speak of “hell” as the outcome in this case. Martin 1983 among others assigns this a value of negative infinity. Sobel 1996, on the other hand, is one author who takes this value to be finite. There is some textual support for this reading: “The justice of God must be vast like His compassion. Now justice to the outcast is less vast … than mercy towards the elect”.

As for the utilities of the outcomes associated with God’s non-existence, Pascal tells us that “what you stake is finite”. This suggests that whatever these values are, they are finite.
Pascal’s guiding insight is that the argument from expectation goes through equally well whatever your probability for God’s existence is, provided that it is non-zero and finite (non-infinitesimal) — “a chance of gain against a finite number of chances of loss”.[3]

With Pascal’s assumptions about utilities and probabilities in place, he is now in a position to calculate the relevant expectations. He explains how the calculations should proceed:
… the uncertainty of the gain is proportioned to the certainty of the stake according to the proportion of the chances of gain and loss… [4]

Let us now gather together all of these points into a single argument. We can think of Pascal’s Wager as having three premises: the first concerns the decision matrix of rewards, the second concerns the probability that you should give to God’s existence, and the third is a maxim about rational decision-making. Specifically:
1. Either God exists or God does not exist, and you can either wager for God or wager against God. The utilities of the relevant possible outcomes are as follows, where f1, f2, and f3 are numbers whose values are not specified beyond the requirement that they be finite:

God exists God does not exist
Wager for God ∞ f1
Wager against God f2 f3

2. Rationality requires the probability that you assign to God existing to be positive, and not infinitesimal.

3. Rationality requires you to perform the act of maximum expected utility (when there is one).

4. Conclusion 1. Rationality requires you to wager for God.

5. Conclusion 2. You should wager for God.

We have a decision under risk, with probabilities assigned to the relevant ways the world could be, and utilities assigned to the relevant outcomes. The conclusion seems straightforwardly to follow from the usual calculations of expected utility (where p is your positive, non-infinitesimal probability for God’s existence):

E(wager for God) = ∞*p + f1*(1 − p) = ∞

That is, your expected utility of belief in God is infinite — as Pascal puts it, “our proposition is of infinite force”. On the other hand, your expected utility of wagering against God is

E(wager against God) = f2*p + f3*(1 − p)

This is finite.[5] By premise 3, rationality requires you to perform the act of maximum expected utility.

Therefore, rationality requires you to wager for God.

We now survey some of the main objections to the argument.

5. Objections to Pascal’s Wager
Premise 1: The Decision Matrix
Here the objections are manifold. Most of them can be stated quickly, but we will give special attention to what has generally been regarded as the most important of them, ‘the many Gods objection’ (see also the link to footnote 7).

1. Different matrices for different people.
The argument assumes that the same decision matrix applies to everybody. However, perhaps the relevant rewards are different for different people. Perhaps, for example, there is a predestined infinite reward for the Chosen, whatever they do, and finite utility for the rest, as Mackie 1982 suggests. Or maybe the prospect of salvation appeals more to some people than to others, as Swinburne 1969 has noted.
Even granting that a single 2 x 2 matrix applies to everybody, one might dispute the values that enter into it. This brings us to the next two objections.

2. The utility of salvation could not be infinite.
One might argue that the very notion of infinite utility is suspect — see for example Jeffrey 1983 and McClennen 1994.[6] Hence, the objection continues, whatever the utility of salvation might be, it must be finite. Strict finitists, who are chary of the notion of infinity in general, will agree — see Dummett 1978 and Wright 1987. Or perhaps the notion of infinite utility makes sense, but an infinite reward could only be finitely appreciated by a human being.

3. There should be more than one infinity in the matrix.
There are also critics of the Wager who, far from objecting to infinite utilities, want to see more of them in the matrix. For example, it might be thought that a forgiving God would bestow infinite utility upon wagerers-for and wagerers-against alike — Rescher 1985 is one author who entertains this possibility. Or it might be thought that, on the contrary, wagering against an existent God results in negative infinite utility. (As we have noted, some authors read Pascal himself as saying as much.) Either way, f2 is not really finite at all, but ∞ or -∞ as the case may be. And perhaps f1 and f3 could be ∞ or -∞. Suppose, for instance, that God does not exist, but that we are reincarnated ad infinitum, and that the total utility we receive is an infinite sum that does not converge.

4. The matrix should have more rows.
Perhaps there is more than one way to wager for God, and the rewards that God bestows vary accordingly. For instance, God might not reward infinitely those who strive to believe in Him only for the very mercenary reasons that Pascal gives, as James 1956 has observed. One could also imagine distinguishing belief based on faith from belief based on evidential reasons, and posit different rewards in each case.

6. The matrix should have more columns: the many Gods objection.
If Pascal is really right that reason can decide nothing here, then it would seem that various other theistic hypotheses are also live options. Pascal presumably had in mind the Catholic conception of God — let us suppose that this is the God who either ‘exists’ or ‘does not exist’. By excluded middle, this is a partition. The objection, then, is that the partition is not sufficiently fine-grained, and the ‘(Catholic) God does not exist’ column really subdivides into various other theistic hypotheses. The objection could equally run that Pascal’s argument ‘proves too much’: by parallel reasoning we can ‘show’ that rationality requires believing in various incompatible theistic hypotheses. As Diderot 1875-77 puts the point: “An Imam could reason just as well this way”.[7]

Since then, the point has been represented and refined in various ways. Mackie 1982 writes, “the church within which alone salvation is to be found is not necessarily the Church of Rome, but perhaps that of the Anabaptists or the Mormons or the Muslim Sunnis or the worshippers of Kali or of Odin” (203). Cargile 1966 shows just how easy it is to multiply theistic hypotheses: for each real number x, consider the God who prefers contemplating x more than any other activity. It seems, then, that such ‘alternative gods’ are a dime a dozen — or aleph one, for that matter.

Premise 2: The Probability Assigned to God’s Existence
There are four sorts of problem for this premise. The first two are straightforward; the second two are more technical, and can be found by following the link to footnote 8.
1. Undefined probability for God’s existence. Premise 1 presupposes that you should have a probability for God’s existence in the first place. However, perhaps you could rationally fail to assign it a probability — your probability that God exists could remain undefined. We cannot enter here into the thorny issues concerning the attribution of probabilities to agents. But there is some support for this response even in Pascal’s own text, again at the pivotal claim that “[r]eason can decide nothing here. There is an infinite chaos which separated us. A game is being played at the extremity of this infinite distance where heads or tails will turn up…” The thought could be that any probability assignment is inconsistent with a state of “epistemic nullity” (in Morris’ 1986 phrase): to assign a probability at all — even 1/2 — to God’s existence is to feign having evidence that one in fact totally lacks. For unlike a coin that we know to be fair, this metaphorical ‘coin’ is ‘infinitely far’ from us, hence apparently completely unknown to us. Perhaps, then, rationality actually requires us to refrain from assigning a probability to God’s existence (in which case at least the Argument from Superdominance would be valid). Or perhaps rationality does not require it, but at least permits it. Either way, the Wager would not even get off the ground.

2. Zero probability for God’s existence. Strict atheists may insist on the rationality of a probability assignment of 0, as Oppy 1990 among others points out. For example, they may contend that reason alone can settle that God does not exist, perhaps by arguing that the very notion of an omniscient, omnipotent, omnibenevolent being is contradictory. Or a Bayesian might hold that rationality places no constraint on probabilistic judgments beyond coherence (or conformity to the probability calculus). Then as long as the strict atheist assigns probability 1 to God’s non-existence alongside his or her assignment of 0 to God’s existence, no norm of rationality has been violated.
Furthermore, an assignment of p = 0 would clearly block the route to Pascal’s conclusion. For then the expectation calculations become:

E(wager for God) = ∞*0 + f1*(1 − 0) = f1

E(wager against God) = f2*0 + f3*(1 − 0) = f3

And nothing in the argument implies that f1 > f3. (Indeed, this inequality is questionable, as even Pascal seems to allow.) In short, Pascal’s wager has no pull on strict atheists.[8]

Premise 3: Rationality Requires Maximizing Expected Etility
Finally, one could question Pascal’s decision theoretic assumption that rationality requires one to perform the act of maximum expected utility (when there is one). Now perhaps this is an analytic truth, in which case we could grant it to Pascal without further discussion — perhaps it is constitutive of rationality to maximize expectation, as some might say. But this premise has met serious objections. The Allais 1953 and Ellsberg 1961 paradoxes, for example, are said to show that maximizing expectation can lead one to perform intuitively sub-optimal actions. So too the St. Petersburg paradox, in which it is supposedly absurd that one should be prepared to pay any finite amount to play a game with infinite expectation. (That paradox is particularly apposite here.)[9]

Finally, one might distinguish between practical rationality and theoretical rationality. One could then concede that practical rationality requires you to maximize expected utility, while insisting that theoretical rationality might require something else of you — say, proportioning belief to the amount of evidence available. This objection is especially relevant, since Pascal admits that perhaps you “must renounce reason” in order to follow his advice. But when these two sides of rationality pull in opposite directions, as they apparently can here, it is not obvious that practical rationality should take precedence. (For a discussion of pragmatic, as opposed to theoretical, reasons for belief, see Foley 1994.)

Is the Argument Valid?

A number of authors who have been otherwise critical of the Wager have explicitly conceded that the Wager is valid — e.g. Mackie 1982, Rescher 1985, Mougin and Sober 1994, and most emphatically, Hacking 1972. That is, these authors agree with Pascal that wagering for God really is rationally mandated by Pascal’s decision matrix in tandem with positive probability for God’s existence, and the decision theoretic account of rational action.

However, Duff 1986 and Hájek 2001 argue that the argument is in fact invalid. Their point is that there are strategies besides wagering for God that also have infinite expectation — namely, mixed strategies, whereby you do not wager for or against God outright, but rather choose which of these actions to perform on the basis of the outcome of some chance device. Consider the mixed strategy: “Toss a fair coin: heads, you wager for God; tails, you wager against God”. By Pascal’s lights, with probability 1/2 your expectation will be infinite, and with probability 1/2 it will be finite. The expectation of the entire strategy is:

1/2*∞ + 1/2[f2*p + f3*(1 − p)] = ∞

That is, the ‘coin toss’ strategy has the same expectation as outright wagering for God. But the probability 1/2 was incidental to the result. Any mixed strategy that gives positive and finite probability to wagering for God will likewise have infinite expectation: “wager for God iff a fair die lands 6″, “wager for God iff your lottery ticket wins”, “wager for God iff a meteor quantum tunnels its way through the side of your house”, and so on.

The problem is still worse than this, though, for there is a sense in which anything that you do might be regarded as a mixed strategy between wagering for God, and wagering against God, with suitable probability weights given to each. Suppose that you choose to ignore the Wager, and to go and have a hamburger instead. Still, you may well assign positive and finite probability to your winding up wagering for God nonetheless; and this probability multiplied by infinity again gives infinity. So ignoring the Wager and having a hamburger has the same expectation as outright wagering for God. Even worse, suppose that you focus all your energy into avoiding belief in God. Still, you may well assign positive and finite probability to your efforts failing, with the result that you wager for God nonetheless. In that case again, your expectation is infinite again. So even if rationality requires you to perform the act of maximum expected utility when there is one, here there isn’t one. Rather, there is a many-way tie for first place, as it were.[10]

Moral Objections to Wagering for God

Let us grant Pascal’s conclusion for the sake of the argument: rationality requires you to wager for God. It still does not obviously follow that you should wager for God. All that we have granted is that one norm — the norm of rationality — prescribes wagering for God. For all that has been said, some other norm might prescribe wagering against God. And unless we can show that the rationality norm trumps the others, we have not settled what we should actually do.

There are several arguments to the effect that morality requires you to wager against God. Pascal himself appears to be aware of one such argument. He admits that if you do not believe in God, his recommended course of action will “deaden your acuteness.” One way of putting the argument is that wagering for God may require you to corrupt yourself, thus violating a Kantian duty to yourself. Clifford 1986 argues that an individual’s believing something on insufficient evidence harms society by promoting credulity. Penelhum 1971 contends that the putative divine plan is itself immoral, condemning as it does honest non-believers to loss of eternal happiness, when such unbelief is in no way culpable; and that to adopt the relevant belief is to be complicit to this immoral plan. See Quinn 1994 for replies to these arguments. For example, against Penelhum he argues that as long as God treats non-believers justly, there is nothing immoral about him bestowing special favor on believers, more perhaps than they deserve. (Note, however, that Pascal leaves open in the Wager whether the payoff for non-believers is just, even though as far as his argument goes, it may be extremely poor.)

Finally, Voltaire protests that there is something unseemly about the whole Wager. He suggests that Pascal’s calculations, and his appeal to self-interest, are unworthy of the gravity of the subject of theistic belief. This does not so much support wagering against God, as dismissing all talk of ‘wagerings’ altogether.

What Does It Mean to “Wager for God”?

Let us now grant Pascal that, all things considered (rationality and morality included), you should wager for God. What exactly does this involve?

A number of authors read Pascal as arguing that you should believe in God — see e.g. Quinn 1994, and Jordan 1994a. But perhaps one cannot simply believe in God at will; and rationality cannot require the impossible. Pascal is well aware of this objection: “[I] am so made that I cannot believe. What, then, would you have me do?”, says his imaginary interlocutor. However, he contends that one can take steps to cultivate such belief:

You would like to attain faith, and do not know the way; you would like to cure yourself of unbelief, and ask the remedy for it. Learn of those who have been bound like you, and who now stake all their possessions. These are people who know the way which you would follow, and who are cured of an ill of which you would be cured. Follow the way by which they began; by acting as if they believed, taking the holy water, having masses said, etc…

But to show you that this leads you there, it is this which will lessen the passions, which are your stumbling-blocks.

We find two main pieces of advice to the non-believer here: act like a believer, and suppress those passions that are obstacles to becoming a believer. And these are actions that one can perform at will.
Believing in God is presumably one way to wager for God. This passage suggests that even the non-believer can wager for God, by striving to become a believer. Critics may question the psychology of belief formation that Pascal presupposes, pointing out that one could strive to believe (perhaps by following exactly Pascal’s prescription), yet fail. To this, a follower of Pascal might reply that the act of genuine striving already displays a pureness of heart that God would fully reward; or even that genuine striving in this case is itself a form of believing.

Pascal’s Wager vies with Anselm’s Ontological Argument for being the most famous argument in the philosophy of religion. As we have seen, it is also a great deal more besides.

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• Flew, Anthony. 1960. “Is Pascal’s Wager the Only Safe Bet?”, The Rationalist Annual, 76: 21-25.
• Foley, Richard. 1994. “Pragmatic Reasons for Belief”, in Jordan 1994b.
• Hacking, Ian. 1972. “The Logic of Pascal’s Wager”, American Philosophical Quarterly 9/2, 186-92. Reprinted in Jordan 1994b.
• Hacking, Ian. 1975. The Emergence of Probability, Cambridge University Press.
• Hájek, Alan. 1997a. “Review of Gambling on God” (Jordan 1994b), Australasian Journal of Philosophy, Vol. 75, No. 1, March 1997, 119-122.
• Hájek, Alan. 1997b. “The Illogic of Pascal’s Wager”, Proceedings of the 10th Logica International Symposium, Liblice, ed. T. Childers et al, 239-249.
• Hájek, Alan. 2000. “Objecting Vaguely to Pascal’s Wager”, Philosophical Studies, vol. 82.
• Hájek, Alan. 2001. “Waging War on Pascal’s Wager: Infinite Decision Theory and Belief in God”, manuscript.
• Jackson, Frank, Peter Menzies and Graham Oppy. 1994. “The Two Envelope ‘Paradox’”, Analysis 54: 46-49.
• James, William. 1956. “The Will to Believe”, in The Will to Believe and Other Essays in Popular Philosophy, Dover Publications.
• Jeffrey, Richard C.. 1983. The Logic of Decision, 2nd edition, University of Chicago Press.
• Jordan, Jeff. 1994a. “The Many Gods Objection”, in Jordan 1994b.
• Jordan, Jeff, ed.. 1994b. Gambling on God: Essays on Pascal’s Wager, Rowman & Littlefield.
• Lewis, David. 1981. “Causal Decision Theory”, Australasian Journal of Philosophy 59, 5-30; reprinted in Philosophical Papers, Volume II, Oxford University Press, 1986.
• Lindstrom, Tom. 1988. “Invitation to Non-Standard Analysis”, in Cutland 1988.
• Mackie, J. L.. 1982. The Miracle of Theism, Oxford.
• Martin, Michael. 1983. “Pascal’s Wager as an Argument for Not Believing in God”, Religious Studies 19: 57-64.
• Martin, Michael. 1990. Atheism: a Philosophical Justification, Temple University Press.
• McClennen, Edward. 1994. “Finite Decision Theory”, in Jordan 1994b.
• Morris, T. V. 1986. “Pascalian Wagering”, Canadian Journal of Philosophy 16, 437-54.
• Morris, Thomas V. 1994. “Wagering and the Evidence”, in Jordan 1994b.
• Mougin, Gregory, and Elliot Sober. 1994. “Betting Against Pascal’s Wager”, Nous XXVIII: 382-395.
• Nalebuff, B. 1989. “Puzzles: The Other Person’s Envelope is Always Greener”, Journal of Economic Perspectives 3: 171-91.
• Nelson, Edward. 1987. Radically Elementary Probability Theory, Annals of Mathematics Studies, Princeton University Press.
• Nelson, Mark T.. 1991. “Utilitarian Eschatology”, American Philosophical Quarterly, 339-347.
• Ng, Yew-Kwang. 1995. “Infinite Utility and Van Liedekerke’s Impossibility: A Solution”, Australasian Journal of Philosophy, 73: 408-411.
• Oppy, Graham. 1990. “On Rescher on Pascal’s Wager”, International Journal for Philosophy of Religion, 30: 159-68.
• Palacios, M. Asin. 1920. “Los Precedentes Musulmanes del ‘Pari’ de Pascal”, Santander.
• Pascal, Blaise. 1910. Pascal’s Pensées, translated by W. F. Trotter.
• Penelhum, Terence. 1971. Religion and Rationality, Random House.
• Rescher, Nicholas. 1985. Pascal’s Wager, Notre Dame.
• Robinson, Abraham. 1966. Non-Standard Analysis, North Holland.
• Ryan, John. 1945. “The Wager in Pascal and Others”, New Scholasticism 19/3, 233-50. Reprinted in Jordan 1994 b.
• Quinn, Philip L. 1994. “Moral Objections to Pascalian Wagering”, in Jordan 1994b.
• Schlesinger, George. 1994. “A Central Theistic Argument”, in Jordan 1994b.
• Skalia, H. J.. 1975. Non-Archimedean Utility Theory, D. Reidel.
• Sobel, Howard. 1994. “Two Envelopes”, Theory and Decision, 69-96.
• Sobel, Howard. 1996. “Pascalian Wagers”, Synthese 108: 11-61.
• Sorensen, Roy. 1994. “Infinite Decision Theory”, in Jordan 1994b.
• Swinburne, R. G.. 1969. “The Christian Wager”, Religious Studies 4: 217-28.
• Vallentyne, Peter. 1993. “Utilitarianism and Infinite Utility”, Australasian Journal of Philosophy 71: 212-217.
• Vallentyne, Peter. 1995. “Infinite Utility: Anonymity and Person-Centredness”, Australasian Journal of Philosophy 73: 413-420.
• Vallentyne, Peter and Shelly Kagan. 1997. “Infinite Value and Finitely Additive Value Theory”, The Journal of Philosophy, Vol. XCIV, 1: 5-27
• Van Liedekerke, Luc. 1995. “Should Utilitarians Be Cautious About an Infinite Future?”, Australasian Journal of Philosophy, Vol. 73, No. 3, 405-407.
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• Wright, Crispin. 1987. “Strict Finitism”, in Realism, Meaning and Truth, Blackwell.

Copyright © 1998, 2001
Alan Hájek
ahajek@hss.caltech.edu

Stanford Encyclopedia of Philosophy

See also, Stephen R. Welch’s page on Pascal’s Wager
old

THE KINKED SUPPLY DEMAND CURVE

In an astonishing demonstration that the bad economy is driving people to do almost anything to keep their lifestyles afloat, the Philadelphia Daily News of Monday March 23, 2009 at pp. 8 & 28 reports an AP story by Karen Hawkins, “In Hard Times Sex Does the Trick: Porn, Adult Clubs doing well…and hiring”, in which it is stated that:

“The tough job market is prompting a growing number of women across the country to dance in strip clubs, appear in adult movies or pose for magazines like Hustler. Employers across the adult entertainment industry say they they’re seeing an influx of applications from women who…are attracted by the promise of flexible schedules and fast cash. Many have college degrees and held white-collar jobs until the economy soured. ‘You’re seeing a lot more beautiful women who are eligible to do so many other things,’ said Gus Poulos, general manager of New York City’s Sin City gentleman’s club.

According to the article, stripping dancers at a club like upscales Rick’s Cabaret in Miami or NYC can “make $100,000 to $300,000 a year in cash.” In Rhode Island, a club called “Foxy Lady” held a job fair to fill 35 positions, and was swamped with more than 150 job applicants, according to co-owner Tom Tsoumas.

To be fair, on the one hand, one supposes it’s great that women have the opportunity to earn this kind of money on the free market.

On the other hand, it seems kind of horrible that women would go from doing white collar jobs to stripping off their clothes for drunken strangers in a bar, or worse, to getting ravaged repeatedly by viagra-driven male pornstars in front of multiple cameras for megabucks just to maintain their cushy standard of living.

Is this what the dreadful recession of 2008-09 has wrought? Or are stripping and porn just respectable mainstream occupations nowadays, which is probably the more likely conclusion. For a long time, the left wing and the right wing used to be able to agree that porn was one thing they all hated, because the right wing fundamentalists were against it, and so were the left wing feminists and activists.

For all the brouhaha rained down upon them by the feminists, and I had friends who used to go on night raids to spray paint ads for penthouse in Manhattan back in the day, the adult entertainment sectors continue to be the fastest growing and most viable sectors of the internet economy and the real economy.

These industries have obliterated their moral and legal opposition in both the right and left wings, it would seem to me. Moreover, they are openly accepted in many other corners of the world, and I need not list the cities or countries in which this is true, notwithstanding AIDS and a host of other reasons to regulate such behaviors.

Nonetheless, I wouldn’t want my daughter to work in such an industry, and I’m certain you wouldn’t want yours to either. I think when you frame the question that way, you see what is essentially wrong with this industry. It’s come a long way from Hugh Hefner publishing elegant centerfolds of Marilyn Monroe back in the 1950s.

And of course, we have that infamous Supreme Court Justice, I can’t remember which one it was, who said of obscenity, “I know it when I see it.” That’s a classic line.

The Supreme Court used to watch every single minute of every single dirty movie that came before them before ruling. That was itself singular and odd. There was one justice who didn’t watch them because he thought they were all protected by the first amendment, but I can’t remember which one it was.

There’s an old rumour that a famous Philadelphia DA used to screen all the allegedly obscene movies down in the DA’s office back in the 60s and 70s for all the DAs, or maybe it was back in the 1950s. A lot of the people involved are now judges and bigshots, so no one wants the rumor repeated much anymore today, but it’s just an unsubstantiated rumor. But it’s a good one.

John Kennedy and Bobby Kennedy were each president of the “Smokers Club” at Harvard back in the 1930s. It’s listed on their freshman and senior yearbooks and facebooks. That could have been about smoking, but “smokers” also meant, back in the 1930s, illicit pornographic films. Given JFK’s and RFK’s collective predilections for women, it’s possible they were in charge of getting the “good films” for their classmates. Again, this is an unsubstantiated rumor, or subject to interpretation. You decide. JFK had a hot affair with the 40s filmstar Gene Tierney, around 1945-46 when he got out of the navy, so probably JFK didn’t need to study film to know what he was doing.

Anyway, to summarize, guess this is what they meant when they taught us about the kinked supply & demand curve back in freshman economics.

Art Kyriazis Philly/South Jersey
Home of the World Champion Phillies

NO MORE NEWS THAT’S FIT TO PRINT; THE END OF NEWSPAPERS IN AMERICA

It probably isn’t news to anyone currently breathing that every newspaper owning corporation in the United States is currently in bankruptcy Chapter 11 proceedings. Here in Philadelphia, after sinking more that 500 million bucks to take the Philadelphia Inquirer and the Philly Daily News off the hands of the guys who bought them from Knight Ridder, the purchasing group headed by Brian Tierney et al. ended more than eleven months of negotiations with creditors by filing for Chapter 11 protection with the United States Bankruptcy Court, meaning reorganization and possible liquidation. There are serious rumors that only one of the two newspapers will survive, probably the Inquirer.

In a way, this is strange, because there was a time in Philadelphia, and I don’t mean going back to Ben Franklin, when it was obvious that the Inquirer was the worst and most pitiful newspaper in town. The Philadelphia Public Ledger was the newspaper of record (its building still stands at 6th & Chestnut) for many decades, while the Philadelphia Bulletin was clearly the better of the two papers while the Bulletin and Inquirer were the two main papers in the second half of the 20th century.

Of course, the Public Ledger went under in the Great Depression; it died in a court-ordered liquidation in 1941 or 1942. This may just be history repeating itself. The Public Ledger was owned jointly by the owners of the NY Times, incidentally.

For a complete list of ALL newspapers ever printed in Philadelphia, go to this website pdf of newspapers held by the free library of philadelphia;

http://libwww.freelibrary.org/faq/guides/FLP-NEWSPAPER-HOLDINGS-BY-DECADE.pdf

you’ll be shocked and amazed how many newspapers there have been and how many small ones there still are other than the inquirer and daily news even now.

But then again, the Philadelphia Athletics won five world series and too many pennants to count between 1901 and 1953, and were the main baseball team in Philadelphia for more than fifty years. No one gave a fig about the Phillies. It was only after Connie Mack died and the A’s moved away that the Phillies finally developed a fan base, and even then not really until the 1964 pennant run with Dick Allen and Jim Bunning did they really draw any fans. But who remembers the A’s today in Philly? Where are they today? No one in Philadelphia remembers them at all.

There’s a small museum in one of the counties, and a small bronze plaque at the new ballpark. That’s about it for the team that in the first half of the 20th century was the second best ballclub in the American League, and by far the best professional sports team in Philadelphia.

Getting back to newspapers, the point is that you can’t understand history by looking at it now. If you looked around now and saw humans, you’d never know that dinosaurs once ruled the earth. Likewise, looking around and seeing the Inquirer being the main newspaper, you’d never know that once there was a Public Ledger, a Bulletin, and probably a dozen other papers. Even the Saturday Evening Post, the nation’s number one women’s magazine, was published right here in Philadelphia, but it died too. That building is still around also. We have seen the end of magazines like Life, the Saturday Evening Post, and most recently, U.S. News & World Report, in the past forty years. Now newspapers are dying as well.

There were a lot of great movies about newspapers. The best movie of all time is about newspapers. Here I refer to Citizen Kane (1941), which is a thinly veiled biopic of William Randolph Hearst and his media empire.

There’s also Meet John Doe (1936) and let’s not forget All the President’s Men (1974).

I’d throw in Broadcast News (1980s) as well, even though it’s really a TV movie, just because it’s flat out hysterically funny and not at all dated, and because Brooks is one of my favorite comics in the world other than Mike Reiss. Just looking at Brooks makes you laugh.

But history does repeat itself. The Hearst media empire was bankrupted by the Great Depression—so much so that Hearst himself, so rich that he could build the Heart mansion—the famous “Xanadu” in the Kane movie—in San Simeon, California—now a famous museum—actually lost all his money to his creditors in bankruptcy proceedings and lost control of his newspaper holdings. No one today has heard of the New York newspapers that Hearst made his fortune from.

Now, we are going through another serious economic dislocation which is again severely affecting media badly. As badly as Hearst was affected by the Depression and War years, that’s how badly newspapers and old media will be affected this time around. Add to that the free news which is available on the internet, and on every persons’ telephone, and one would be silly to expend money for a newspaper.

It’s quite obvious that within another twenty years, there will be no more magazines or newspapers in print at all, that everything will be delivered right to your computer, tv or phone via internet. Maybe (and I often futurize about this) the convergence of nanotechnology and biotechnology will eventuate in a chip being implanted in your brain or neural net, so that you can visualize the images yourself without a machine mediating at all. Perhaps we’ll all be connected to the internet and to each other one day in such a fashion. It’s difficult to make radical predictions, but then again, in 1910, no one could have predicted that baseball, then a deadball sport based on bunting, stealing and pitching, would in the 1920s and thereafter become a sport of sitting around waiting for someone to hit a three run home run.

I will miss the Philadelphia Daily News. For the last forty years, it’s been the best sports paper in the country, and I’ve read all the other papers around, including the Boston Globe, the Chicago, the LA, the NY and SF papers. NY has tabloids basically and no good writing at all; the Boston Globe for a long time had great writers, but they’ve all gone to ESPN or national outlets where the money really is; and no other city really had good sports writing. Philly might be the last town in which there’s been good beat writing and sports writing for a long time now.

If the Daily News goes, that will probably be the end of it, though it may survive on line since there’s an online edition of the daily news that’s pretty good, and even better, available nationally to all former philly residents who follow their teams. So when they throw the last daily news into the fire and you see the sled burning with the name “rosebud,” remember you read it here—this was all a story about Charley Foster Kane, who wanted to be the world’s greatest newspaperman, and succeeded all too well.

By the way, I mentioned in a prior post that GE was way off about Jimmy Fallon? GE stock is now trading at five dollars a share. That’s right, five dollars a share. they made a big deal about this on one of the network news shows while i was working out on the elliptical at the gym. whoa nellie! The stock apparently has completely crashed.

Jack and Suzy Welch, would you buy this company’s stock? It was trading at $40 just last year. And now it’s down to $5 a share and dropping like a rock. Pretty soon it will be worth, say, 1923 German deutsche marks, which is to say, nothing.

Oh yes I would says the Wizard of OZ. You can get a thousand shares in this company now for the price of a song. Heck, the only place the stock can go is a little down, or a lot up.

I said they should have bumped Leno three years ago. While I recognize most of their problems are with GE Capital, entertainment is the division that’s always recession proof.

If you’re not sure about that, check out the fact that 1930s and 1970s are the greatest eras of film history.

Jimmy Fallon had another great show–Jon Bon Jovi did a duet with one of his fans, while Tina Fey sat and rooted the two of them on. I think it was the girls’ dream moment of her life, all caught on camera. You can bet that will be on youtube.

Art Kyriazis
Philly/South Jersey
Home of the World Champion Philadelphia Phillies
You can

SALARY LIMITS FOR BANKERS AND WALL STREET EXECS

In the recent legislation from DC, salary limits have been enacted limiting executive salaries for bankers and executives of companies taking federal aid from TARP and the other programs which will be propping up the banking, investment banking, business and auto communities.

Some commentators are already criticizing these limits, including noted professors, including this story in the Chicago Tribune dated February 17, 2009 by noted famous economics professor Steven Kaplan:

http://www.chicagotribune.com/news/chi-oped0217payfeb17,0,3623866.story

On limits, I would argue twofold. First, wage and price controls were used successfully during the great depression, during World War II, and also during the Nixon era, all periods when we were having economic distress of the magnitude we are experiencing now.

This is not the time to argue for deregulation and laissez-faire. To the contrary, deregulation and laissez-faire are what got us into this quagmire. What is needed at this point is MORE regulation and plenty of it.

Second, Kaplan’s own studies on executive compensation, particularly a study he did on investment banking compensation, demonstrate that investment bankers have been pulling down way too much money compared to the rest of the working force in the United States. This is the paper he did with Rauh, “Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?” (july 2007) (cite below).

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=931280

This was an NBER paper and highly quantified, and if anything, is an elegant argument for limiting the compensation of well-paid investment bankers.

I’d probably go farther and say it’s an argument for enacting some kind of tax measure that would retroactively confiscate some of their ill-gotten gains from the last thirty years through some kind of tax on wealth or assessment taxation on all luxury goods, and accumulated wealth. That, along with a highly focused program of IRS audits targeted at persons who have filed returns of $1 million income and higher the last ten years or so, and re-assessing their tax due to much higher levels, should bring in a lot of extra revenue the government needs, which can then be redistributed to the consumer classes which need the money to spend on consumer goods in a keynesian sense.

Finally, I will say right now, if any executive is unwilling, unable or simply refuses to accept a limit on their salary, I am prepared to take over their position, effective immediately.

While not a WASP, I am a golf-playing prep school grad, a harvard and wharton product, and am willing to work mere bankers hours.

I promise to be aloof, boring and devoted to the interests of our depositors.

In addition, I promise to wear only blue, grey and dark suits, and white shirts. I only shop at brooks brothers and polo as it is, but with the recession, I’m willing to start going to Todays Man as necessary.

I drive an old car, I have a paid up house, and I lead a boring but highly satisfying family life with kids.

In short, i believe I’d make the ideal banker.

Moreover, whatever you’re paying the other guy, I’ll take 20% less.

And donate it to charities for the poor. Publicly and loudly. Think of the PR for your bank.

I want no raises and I don’t want any big offices. I’ll bring my beat-up harvard chair with me.

Everything I do will be for the bank.

Also, since I was a lawyer for fifteeen years (did I mention that?) doing corporate, banking and bankruptcy work, I will be able to be in full compliance with any and all Sarbanes-Oxley, Garn-St. Germain and consumer and general banking regulatory legislation that applies without skipping an eyelash–and also I am friends with a couple of super-lawyers who are experts at that stuff who will I’m sure cut their fees to meet new federal regs.

So you can fire your regulatory team as well, since I can cover that as well as do the banking job. Looks like some efficiency savings there.

Also, for what it’s worth, I actually know and have met Professors Elizabeth Warren and Lawrence Summers who are running TARP and the other bailout programs, so if there is a problem affecting your bank, my calls will get returned. We’re all harvard alums, part of the big club, dontcha’ know.

This is about getting your bank back on track. Not about me not about you and not about that greedy guy who won’t accept pay cuts.

Did I mention my house is paid for?

This offer is good for any and all banks needed top level or mid-level management in the united states that would be capped as to salary and have to face a lot of TARP and other regulation.

very truly yours,

Dr. Arthur Kyriazis, M.Sc.E. Penn Engineering (submatriculation Wharton)
philadelphia/south jersey
home of the world champion philadelphia phillies

http://www.linkedin.com/in/kyriazis

TIME’S “ITS NOW OR NEVER FOR LARRY SUMMERS”

In the Feb 9 2009 issue of Time Magazine, at pp. 29-32, there is a long article on Chief Economic Advisor Prof. Lawrence Summers, claiming that due to the poor state of the economy, “it’s now or never for Larry Summers.”

Let’s examine that statement for a moment. Let’s assume you, the reader have studied first and second year economics. This subject is commonly subdivided into two sections, microeconomics and macroeconomics.

Parenthetically, I would point out that much of this confusion raised by the Time Magazine article was well-answered by President Obama in his press conference last night regarding the economic stimulus package and the TARP I and TARP II packages.

Basically, this is where we are at economically: We are at a point in our economy where all of the major macroeconomic indicators suggest that we are going through a period of downward economic velocity equivalent to the downward spiral the United States experienced from 1929-1940, known as the Great Depression.

The policy responses should be the same as before. TARP is equivalent to the NRA of the 1930s; the NRA bailed out many banks and businesses and kept them from failing, TARP I and II will do the same. FDR used a package of programs to deficit spend and enhance a stimulus package guided by what were then novel Keynesian notions from his “brain trust”; we need to do the same now. Spending was down then; spending is down now. We need to increase the marginal propensity to consume. Banking and investment speculation became rampant and unregulated in the 1920s leading up to the crash of 1929; the same occurred leading up to 2009 due to interstate banking, poor SEC regulation and loose real estate lending (all similar to the 1920s, incidentally); the response of FDR were the Securities Acts of 1933 and 1934 and the Glass-Stegall Act. Similar legislation needs to be passed now reforming securities regulation and also reforming bank regulation. I personally would like to see us go back to banning interstate banking.

The President last nite was very clear that a great deal of legislation is still on the way, and that we are mired deep in a very bad economic crisis. the macroeconomic indicators suggest he is correct, and he cited Summers and Treasury Secretary Geithner by name during the press conference.

We will now discuss macroeconomics.

Consequently, as part of macroeconomics, we will now review and discuss the subject of fiscal and monetary policy LAG. As we all know, there is a LAG or DELAY between the time that fiscal and monetary policies are IMPLEMENTED and the time that the effects of such policies are actually SEEN or FELT in the economy at large, in terms of macroeconomic signs or indicators such as GDP, jobs, corporate earnings, and the like.

Generally speaking, the lag time for fiscal and monetary policy can be as long as eighteen months, or as short as six months. It takes a while for investment money to work its way into the economy in the case of monetary policy, and it takes even longer for the multiplier effect to work its way into the economy in the case of fiscal policy. Also, people’s marginal propensity to consume declines sharply during pronounced recession, so the fiscal stimulus must be greater than normal to get people to increase their marginal propensity to consume.

Now this brings us back to “now or never.” Assuming that President Obama and Chief Economic Adviser Summers and Treasury Secretary Geithner get EVERYTHING they want from the Congress in the way of a fiscal stimulus package, and also in the way of TARP II, III IV etc, and anything else they want, by June of 2009, it will still take up to eighteen months to see some viable difference, due to LAG effects of fiscal and economic policy implementation.

Therefore, the earliest we will see any results from the current round of government policies will be the summer of 2010 from the monetary policies of Bernanke, and the winter of 2010-2011 from the fiscal policies of Obama-Summers-Geithner.

This is, incidentally, completely consistent with the length of time it took the Regan administration under Paul Volcker to get results from their tax cuts and tight money policies; their fiscal and monetary policy implementations of early 1981 did not have real results until about eighteen (18) months later, in 1983, when the economy began to heat up in a hurry, and took off on the longest economic expansion in post-wwII history.

Again, the lesson is clear—fiscal and monetary policy have a pronounced lag period.

Now or never makes for good journalism, but lousy economics. Give Prof. Summers a couple of summers, and then we’ll give him his final grade.

I was not very enthusiastic about Obama during the campaign, but his transition team management and his actions since taking office, along with his masterful press conference last night, have really brought me around to seeing that Presidence Obama, as opposed to candidate Obama, is a force to be reckoned with. President Obama is knowledgeable and articulate, and is not interested in poll numbers, but in doing the right things to dig the country out of crisis.

Also, it is plainly evident that he listens to his economic and foreign policy advisers closely, and can repeat what they say verbatim. President Obama functions at a high intellectual level.

We are fortunate to have a leader that can lead in times of crisis. I say this as a non-partisan statement. For now, so long as the country is in crisis, I believe we should lay all partisanship aside and support the President in his efforts to bring the economy around. the us and world banking systems are on the brink of collapse unless we respond appropriately.

There is an old saying that “those who can, do, and those who can’t, teach.” However, in the modern world, that has become, “those who can, do, and those who can’t, write bitter journalistic screeds about the smart guys that can tearing them to shreds (mainly because of jealousy over their ability to work hard and get results).”

What we have with the endless article about Professor and Chief Economic Adviser Lawrence Summers and the endless stream of articles about him, is just that–a stream of articles from journalists who are fascinated and somewhat jealous of the fact that Prof. Summers has a great deal of ability, and has worked hard all his life to capitalize on his ability.

With his service to President Obama, Prof. Summers has now served Presidents Reagan, Clinton and Obama–three different administrations from both parties–has served as president of the World Bank and president of Harvard University–as well as advanced economics professor at MIT and Harvard. Prof. Summers has also served as an economics advisers to several Presidential candidates as well. He seems unafraid of the press, unintimidated by the competition and jockeying of campaigns and administrations, and doesn’t mind taking paycuts to be in public service.

It’s time we thanked people like Prof. Summers who are willing to serve the public instead of putting them under the journalistic microscope.

I could name you ten economics professors that are at least as skilled and able as Prof. Summers, who have never ventured forth to serve their President or their country or their university in any capacity. Summers has given willingly of himself and his time to serve his nation over and over again when he has been called upon. Prof. Summers is morally suprerior to his colleagues in that he is willing to serve his country over and over and over again.

President Harry Truman said, if you can’t stand the heat, get out of the kitchen. Prof. Summers has been in the kitchen so long, he doesn’t know what the temperature is.

I say, god bless Larry Summers, and god bless the President, for being willing to tackle the difficult issues of the day. I’m certain they’re much too difficult for me, and I’m a fairly skilled individual who works hard, but I wouldn’t measure up to Prof. Summers or President Obama. I feel certain of that, and because of that, I feel that the country is in good hands.

–art kyriazis, philly/south jersey
home of the world champion phillies