"The Book That Will Save Banking From Itself"

Tell me how the banks will inevitably game the system Mervyn King proposes and I'll tell you whether it's a good idea. 

The first thing that King thinks must be done is to separate the boring bits of banking (providing a safe place to deposit money, facilitating payments) from the exciting ones (trading). There is no need, he thinks, to break up the existing institutions. Deposits and short-term loans to banks simply need to be separated from other bank assets. Against all of these boring assets, banks would be required to hold government bonds or reserves at the central bank in cash. That is, there should be zero risk that there won’t be sufficient cash on hand to repay people wanting to flee any bank at a moment’s notice -- and thus no reason for those people to flee.

The riskier assets from which banks stand most to gain (and lose) would then be vetted by the central bank, in advance of any crisis, to determine what it would be willing to lend against them in a pinch if posted as collateral. Common stocks, mortgage bonds, Australian gold mines, credit default swaps and whatever else: The banks would decide, before any crisis, which of their risky assets they would be willing to pledge to -- basically, pawn with -- the central bank. The riskier the asset, the less the central bank would be willing to lend against it.


"Real Reform for Detroit’s Kids: It’s time to break up the city’s dysfunctional school system."

Four teacher strikes in less than 25 years is enough, yes? Obama education secretary Arne Duncan calling the system "a national disgrace" is enough, yes? And then there's this:

Residents keep fleeing the city, and students keep leaving the school system. Enrollment is down to just 49,000, from 168,000 in 2000.


"Hope for Reversing Type 2 Diabetes"

This seems encouraging:

Recently, a small clinical trial in England studied the effects of a strict liquid diet on 30 people who had lived with Type 2 diabetes for up to 23 years. Nearly half of those studied had a remission that lasted six months after the diet was over. While the study was small, the finding offers hope to millions who have been told they must live with the intractable disease.


Diagnosis, analysis, and solution . . .

As Stuart Scott used to yell, "Ring the bell. School is out!" I recommend reading the three excerpted pieces in order:

Walter Russell Mead, "The State of Our Union: The biggest deficits in the United States these days are not the ones grabbing the headlines".

The state of our union can be summed up pretty easily: Democratic policy ideas don’t work, and the Republican Party is melting down. From New York state, where Democratic power brokers are beginning to be herded into prison, where so many of them belong, to Chicago, where a civil war between Democrat-run public unions and the Democratic mayor rages even as the city’s finances fall apart, to the collapsing cities of Detroit and Flint, and on out to the high-speed rail boondoggle in California, the country is covered in the ruins of decades of “progressive” governance. Take Obamacare itself, a “reform” that is already making health care more bureaucratic and less affordable. Even as premiums and deductibles rise and the provider networks shrink, special interests like labor unions, insurance companies and hospital chains seek to rewrite its rules and regulations to achieve windfalls for themselves at the public expense. They will almost certainly succeed, and over time, Obamacare like other programs will become increasingly encrusted by sweetheart deals, carve-outs and other provisions that reduce its positive qualities while making it ever more expensive and bureaucratic.

The more “Democratic” an institution is these days, on the whole the less well it is working. What institution in the United States has been under Democratic control longer and more thoroughly than the failing public school systems of major cities? Or their police departments?

Philip Wallach, "Farewell to the Administrative State?"

Because administrators style themselves as above-the-fray solvers of collective problems, it makes it very difficult for them to question their assumptions or open themselves to exchanges with critics on equal terms. Doing so would threaten their pose as “wise rulers” and show the political choices embedded in their thinking, and so their natural tendency is to hunker down—the very thing that has led to legitimacy problems over the long run, even as it fends off some short-term headaches by branding critics as “political” or as working for “special interests.” Legislatures, on the other hand, institutionally specialize in openness and the ability to find compromises even among people who remain in open political disagreement.

Glenn Reynolds, "How to make the U.S. collapse-proof".

So one answer would be for a society not to become so complex. This is easier said than done, of course. Human nature being what it is, bureaucrats want to expand their empires, politicians want to employ their constituencies on the taxpayers’ dime and various groups are always trying to mobilize the state’s resources on their own behalf. . . .

So one thing you’d want would be to limit the growth of this web. That means smaller government, government that’s less involved in administering the things that special interests care about, and one that provides more opportunities for citizens and groups who want to do things to break the web somehow. . . . 

Of course, in describing a limited federal government, ruling over a nation made up of semi-sovereign states, subject to the rule of law and judicial review I’m not describing anything shocking or new: That’s precisely the kind of government we in the United States are supposed to have under our Constitution.


What's up with Americans in 2016? Jodie Foster offers us a clue . . . .

At the end of an interview Ms. Foster states that these days she finds it difficult to listen to the news. Hear, hear! But then Ms. Foster is quoted as saying this:

“How do these people have all the time to know the things that they know?” She searched for the answer to her own question, and smiled. “I think I’m just not . . . I’m not a fact person. I don’t really care about facts. I don’t even really retain them and I find them anxious-making. I like ideas.” 

With all due respect to Ms. Foster, in most realms--at least outside of Hollywood--ideas without facts are pretty useless and can even be counterproductive. 


"'There Are Dumpster Fires In My Town More Popular' Than Clinton or Trump, Complains Nebraska Sen. Ben Sasse"

I like a good part of when Senator Sasse has had to say. For instance, I agree with this:

"Washington isn’t competent to micromanage the lives of free people," writes Sasse. Our next president should instead commit to "focusing on 3 or 4 big national problems," such as national security, budgeting and entitlement reform, "empowering states and local governments to improve K-12 education," and "retiring career politicians by ending all the incumbency protections, special rules, and revolving door opportunities." 


"Why Many College Students Never Learn How to Write Sentences"

Sad, very sad.

How badly can a student write in his third year of university attendance? This badly:

The largest controversy within the Waco case was where the fire originated from, claiming that the tear gas is not powerful enough to create one. Assumptions were undergoing the process that the Davidians set fire to themselves inside the ranch, due to the fact that the ATF and FBI assured the weapons capability were not powerful enough to do so.

That’s what we get in the third year of university?