foreclosure math

Via Google, estimates on total number of US homes current foreclosed or being foreclosed vary between 1M and 2M. Let us assume an upper bound of 2M homes.

Median US home prices are freefall, currently around $175,000, down from a peak of over $300,000 in 2006. Of course, in foreclosed areas like Cleveland, the real value is basically $0.

So, let's try to determine the sum total of wealth lost by these "toxic assets", assuming 50% of foreclosed home are worth effectively $0 and half are worth the current median.

(1M homes) x ($300,000 lost) + (1M homes) x ($300,000 - $175,000 lost) = $425 billion

So, $425 billion to keep 2 million families in their homes, make it easier for those families to hold on to jobs and to keep working, to prop up the all the credit default swaps, etc, that are collapsing because these mortgages aren't being repaid, and to ensure that banks don't collapse due to unpaid loans.

Why are we pouring the money into the banks directly rather than protecting tax payers? Oh, because doing this would reward a bunch of predatory lenders?

First, which is more important: keeping people in homes as we enter a second great depression or punish those who took advantage of lax regulations to cause it?

Second, and more importantly, the act of repaying these loans would enable a process of identifying the top 20% of most egregious loans, allowing those who broke the law to be prosecuted.

OK, I'm not an expert, but given the astronomical sums we're talking about, keeping a sizable percentage of the workforce in homes plus propping up the umpteen trillions of dollars leveraged against those mortgages, $425 billion is starting to look pretty reasonable.

mission accomplished

Some very astute thoughts on the current war in Gaza by Reza Aslan over at the Daily Beast:
"Mission Accomplished: He was Right"
"Which One's the Terrorist?"

You've probably heard of Reza through his book "No god but God" -- which you should read! -- or his always brilliant appearances on the Daily Show. I met Reza in 2007 at the US-Islamic Forum in Doha, Qatar, where we proceeded to get into a 3 day debate about faith and belief. While that debate continues, I think Reza has remarkably insight on the geopolitics and history of the Middle East and these articles are well worth the read.

the heroic choice

A couple days ago on NPR, Daniel Shore made the comment:

The democrats never miss an opportunity to miss an opportunity

I'm starting to wonder if it is the democratic party or Hillary Clinton this best applies to.

Senator Clinton is an intelligent and capable person with an enviable lifetime of accomplishments, but what exactly is she hoping to gain by staying in the race? If we assume she is staying in the race for the best of reasons -- that she honestly believes she is the right person to lead the United States out of the quagmire President Bush has created -- it still requires her to have some hope of being elected President.

Is that at all likely at this point?

Mainstream reporting aside, Barack Obama continues to extend his delegate lead. Even in his supposedly disastrous week, he still ended up winning Texas and only lost 4 delegates, which he more than made up yesterday. While neither candidate is likely to reach the Democratic National Convention with enough delegates to secure the nomination, Obama is certain to have a lead.

So, Clinton’s only chance to be the nominee is to wage a scorched earth campaign to minimize Obama’s lead and cut enough back room deals to get the super delegates to defy the electorate and go her way. To do this she would have to use her considerable resources to convince the super delegates that Obama would lose to McCain by assaulting his experience, his leadership, and his readiness to be President.

But if this works, the results would be destroy to her chances in the general election. First, it would have alienated the broad base of Democratic support that Obama has generated. Even though he would support Clinton, is it so hard to imagine the traditionally disenfranchised, non-voting groups he mobilized returning to form and not turning out? Moreover, how many of us would choose not to support someone who spent every last penny destroying a candidate we feel is one of us?

As Bush-Gore-Nader proved in 2000, people are quite capable of cutting off their nose to spite their face.

Second, the angle Clinton has chosen to attack Obama – experience – is one where she looks pathetic compared to McCain. If Washington knowledge, foreign policy expertise, and military experience are the determining factors, McCain trounces Clinton. Her anti-Obama playbook becomes McCain’s anti-Clinton playbook.

Unfortunately, what is even more likely is that Obama will be the nominee despite everything Clinton does, but that he will face a far more difficult race against McCain because Clinton will have handed McCain attack add after attack add, Obama will have to continue to campaign against Clinton rather than McCain, voters will have been alienated by a bitter primary, and McCain will have had a long head start on the general campaign.

The tragic punch line is that if Clinton were to take the high road, to drop out on her own terms and to throw her considerable support behind Obama, she would be a hero. Moreover, she would be in the position of having nearly infinite soft power within the Democratic party and Washington. Rather than squandering the tremendous capital both she and Bill Clinton posses trying to block the future, she could be helping to drive the transition, focus on the many Congressional races the Democratic Party could win, and know that she made the right choice. The brave choice.

The heroic choice.

both sides of the conversation

Last week I posted about a Washington Post Second Life story that wasn't fully thought through. James Au over at New World Notes commented on my post, but disagreed with my comments about Second Life and anti-jihadist narratives, making the argument that Second Life could hurt US-Islamic relations by giving those already disposed to extremism more fodder.

It is an interesting point. I was going to post that while SL may expose people to content they find offensive, unlike other media forms, virtual worlds allow individuals from various communities to reach across boundaries in ways they would be unlikely to in the real world. In addition, virtual worlds make it difficult to remain insulated from outside influence, because individuals literally bump into each other.

However, now I don't need to write that post! James just wrote about the Second Life component of the US-Islamic forum. It sounds like it will be a wonderful event and anything Salman gets involved with is worth attending. More than that, the reasons for the event are almost exactly the points I was going to raise.

Give it a read.

snow!

Thanks to my APOC class, nearly every Monday I fly down to LA. This week was a little different because I had an unexpected consulting opportunity in New York City, so last night I caught the redeye, did 8 hours of meetings, and am now waiting at JFK airport for the flight to LA. I got snowed on, which was an unexpected bonus. Plus, I got to read all the Superbowl coverage in local NY papers -- hey, they beat my Packers, so I had to root for them in the big one!

In a second bonus, the "Yes We Can" video I linked to is playing on CNN right now -- I wonder how many people will see it before tomorrow?

yes we can

This is an impressive video. Wow. Ever get the feeling that we are just scratching the surface of how people will communicate? How we'll share ideas? Yes, one could view it is simply as a beautiful edit of strong words. But when some words are worth repeating, worth sharing, flexibility in how those words are shared is as important as the words themselves. Thank you for the link, Peter!

Yes we can.

memo to the president elect

Just finished Madeleine Albright's new book, "Memo to the President Elect," which I purchased after hearing her speak to the Commonwealth Club a couple of weeks ago. I've had the pleasure of meeting Secretary Albright twice at Aspen Institute events, and have been impressed. She isn't always on -- I once heard her give a speech where she did a bad job synopsizing "Madame Secretary" -- but when she's on her game she 's both a fabulously gifted speaker and insightful thinker. So, I found "Memo" to an interesting and troubling read.

Per the title, "Memo" runs with the idea of leaving a memo for the President elect that attempts to explain two broad topics: how the White House foreign policy apparatus operates and what foreign policy challenges await the next President. The chapters describing how power and responsibilities are balanced -- and fought over -- between the Secretary of State, Secretary of Defense, and National Security Adviser are a fascinating blend of history and Secretary Albright's personal experiences. It also provides a perfect opportunity to show off her sense of humor:

Al Haig, Reagan's first Secretary of State, drafted a twenty-one-page memo designating himself "vicar" of U.S. foreign policy. The memo, which was promptly leaked by the White House, soon disappeared -- as did Haig.

In her speech to the Commonwealth Club, Albright reiterated her support for Hilary Clinton's candidacy. What I found interesting was that she wrapped part of her support in the argument that the next President will face so many critical challenges -- more on those in a moment -- that a President who can hit the ground running -- who knows where the levers and dials are to run the White House and West Wing -- will be an asset to recovering the United States' position in the world. After reading her book, I can see her point -- even if I don't believe that positive is enough to overcome some negative policy choices of Senator Clinton's. The history of the Byzantine and bizarre interactions of various Presidents' most senior advisers makes for sobering reading.

It is especially sobering given the very real threats of the next few decades. Albright lists the following:

1. Terrorism
2. Nuclear proliferation
3. Doubts about the value of diplomacy
4. Fear of globilzation
5. Climate change

She gives primacy to the first four threats, with climate change and energy a fairly distant fifth. Each threat receives at least a chapter's worth of attention, followed by sections that pull together multiple threads that blend issues -- Lebanon and Palestine, for example. These sections are well written and provide concrete suggestions for making progress:

The moment has come to remind ourselves who "we" are and what Europeans and Americans can accomplish together. The quartet of Euro-Atlantic leaders -- Merkel, Brown, Sarkozy, and you -- can create a new foundation for global progress through the restoration of mutual trust and implementation of cooperative projects. For inspiration, I encourage you to cite the Berlin airlift -- because I fear that tale has been forgotten and because it, too, will have a sixtieth anniversary during your first year.

Unfortunately, what worries me about Albright's book is how little attention it pays to technology, particularly to communications technology. The last decade has provided numerous examples of how to effectively leverage the Net and virtual worlds in:

• Education, training, and learning
• Cultural sharing and immersion
• Creation of markets and opportunities
• Roll playing of useful real-world skills
• Community formation and awareness
• Peer production and crowd sourcing

Each of these could be brought to bear on Albright's list. Doing so could provide some of the most cost effective and rapid opportunities to foster collaboration and understanding between diverse communities available. Moreover, as more of the world economy shifts into mass customization, hyperlocal, and information, connecting distant cultures becomes a business opportunity, worth investing in and supporting.

More importantly, nations -- leaders of nations -- must practice in order to build expertise wielding national power through modern tools because extremists of all types have demonstrated that they will. For the United States, with our image more tarnished than at any point in history, technology must be part of the strategy for responding to extremism, strengthening our alliances, and rebuilding our connections to the rest of the world.

the dnc should stop huffing glue

The Democratic National Committee seems determined to make the 2008 Presidential election as close as possible. That is rather sporting of them and the Republican candidates must be pleased. US voters had already sent an amazingly clear message to Washington about their preferences in the 2006 mid-term elections. The Democratic Congressional leadership ignored that message, but despite that, a strong set of Democratic candidates seem well positioned to win the Presidency this fall. To do that -- if the past few elections are any indication -- two critical states will be Michigan and Florida. Two states where Democratic candidates will use the primaries to get their messages out to independent and moderate voters.

Wait a minute.

The DNC stripped both Florida and Michigan of their electoral delegates because they moved their primaries up. As a result, the Democratic candidates chose not to campaign in Michigan and Florida. For the last several months, independent and moderate Republican voters received a barrage of advertising from the Republican candidates without the normal simultaneous info spam form the Democrats. Staff on the ground will not have been actively running a campaign, building the expertise and toughness needed for the general election.

I wonder what impact on opinions that will have. Whether appeasing Iowa and New Hampshire will have been worth it.

myspace and age verification

MySpace announced yesterday that they were working with attorney generals from 49 states in a "landmark partnership" to "protect children , purge predators and expunge inappropriate content including pornography." The New York Times story I linked to points out the obvious flaws in this approach, including the ease with which people can get new email addresses, etc.

Connecticut’s attorney general, Richard Blumenthal, seems to be generating most of the quotes. A bit of Googling also reveals that he has been attempting to get similar concepts put into legislation. I wonder who his technical advisers are, because they could be leading him astray. After all, what happens when MySpace still has problems despite Bluementhal's statements?

The next question is how other online services will respond. Will they implement similar approaches? MySpace is going to hire a contractor to scan their content, which could be an incredibly expensive proposition.

glossy poster goodness

On Tuesday, I challenged Ian's claim that he could generate poster-sized images form classic game scenes. Of course, it ain't braggin' if you can do it, so Ian responded by creating the Atari Adventure Easter Egg Poster! Very cool. Now I just need a real job so that I can have a wall to hang one of these on.

In separate news, Ian just posted about the impending release of Fatworld, a game about the politics of obesity by Persuasive Games.

wow

No, not World of Warcraft. Wow. As in "Wow! Barack Obama won the Iowa caucuses!" Now, before we get overly giddy, the 340,000 people who caucused represented less than 12% of the population of Iowa and Iowa represents less than 1% of the US population. So 0.1% of the US population has driven Brian Williams of NBC News to say "Iowa has changed the course of American politics in ways we're just now coming to grips with." Please.

The biggest problem with this hyperkinetic spin is that it makes it easy to lose sight of some very real events. Obama won! I haven't met him, but I have met many of his advisers and they are some very smart, very dedicated people.

People I'd want to hire. Yeah, that good. A bit of giddiness is warranted!

Have you read his technology document? I was planning to sign onto to it, but unfortunately events outside my control hit just when they announced it. Better late than never, so let me state here that his tech position is the best I've seen out of any of the candidates.

Is it perfect? No, as others have pointed out. I have particular concerns about proper balance of a CTO versus the mostly unfunded Office of Technology Assessment, balance of inward and outward focus, and insufficient focus on the connections between learning and innovation.

But these are quibbles. The other guy who won in Iowa doesn't believe in evolution.

I'll take the slightly flawed technology plan, please.

We -- as a community, a nation, a species -- exist in a world of accelerating technological and scientific progress. The rest of the world is moving ahead along the exponential curves defined by productivity and per capita GDP growth. Curves defined by innovation. By knowledge.

By science.

Curves that leave you very far behind if you don't keep up. 25 years ago, South Korea's per capita GDP was less than 2/3 of Mexico's. Just two decades of compounded growth later, Korea is over twice Mexico's. And pulling away.

We've had 8 years of political meddling in science and technology. I'm thrilled that a few Iowans decided it has to stop. Let's see what New Hampshire does.