Next week’s quiz will be on Chapter 10: The New Age: We’re All Fascists Now.
Author: VD
The FDIC is running out of cash
After noticing that the estimated cost of the five banks that failed yesterday accounted for a little more than 28 percent of the FDIC’s Deposit Insurance Fund, I wondered how much the FDIC could possibly have left in the DIF considering that 51 other bank failures have occurred since the last FDIC Quarterly was published. According to Table I-B. Insurance Fund Balances and Selected Indicators, the FDIC began Q1 2009 with $17,276 million in the DIF and finished it with $13,007 million after shutting down 21 banks during that time.
Since then, Calculated Risk has recorded 52 more bank failures in its ongoing Bank Failure Friday series. This morning, I went through and added up the estimated losses that the FDIC reports each time it seizes a bank. As of yesterday, the cumulative estimated cost to the Deposit Insurance Fund since the beginning of the second quarter reached $15,992 million. This suggests that the FDIC is now $2.98 billion in the red after yesterday’s bank failures and will soon be requesting a bailout by the federal government. However, it may be even worse, since the $2,232 million in estimated losses during the first quarter translated into a $4,629 million reduction in the DIF balance.

Because two bailouts totaling $25.75 billion were attempted in 1986 and 1987 before the FSLIC was shut down in 1989, I suspect at least one major bailout will be attempted before the deposit insurance system either snaps back to its 1.5 reserve ratio or collapses altogether. (Update: Calculated Risk emailed to point out that the FDIC has a $30 billion credit line with the Treasury, which will likely be quietly increased rather than risk a negative public reaction to yet another government bailout.) However, given the 150 insured depository institutions which are presently reported as having $193 billion in deposits at risk, I can only conclude that the odds tend to favor the latter. The all-time low in the reserve ratio was -0.25% in 1991, as the FDIC digested the failed FSLIC’s obligations. The reserve ratio is only -0.06% based on estimated losses so far this year, but can be expected to continue falling as more banks fail.
NB: the gap between bank numbers 59 and 65 in the graph is not a mistake. That reflects the 6 banks owned by Security Bank Corporation in Macon, Georgia, which the FDIC reported as a single cost.
Bank failures on the rise
It appears I may have significantly underestimated the amount of failed bank deposits in 2009 when I projected they would triple the 1931 level:
Missed payments by consumers, builders and small businesses pushed 72 lenders into failure this year, the most since 1992. More collapses may lie ahead as the recession causes increased defaults and swells the confidential U.S. list of “problem banks,” which stood at 305 in the first quarter….
Excluding the stress-test list, banks with nonperformers above 5 percent had combined deposits of $193 billion, according to Bloomberg data. That’s almost 15 times the size of the FDIC’s deposit insurance fund at the end of the first quarter.
$193 billion is 2.56 percent of total US bank deposits. Added to the $37 billion that have already failed this year, that would bring the 2008-2009 total to 6.26 percent, which is triple the 1930-1932 total… in fact, it would be nearly 57 percent more than the total failed bank deposits in the THREE years from 1930-1932.
The danger with the deposit insurance approach is that it keeps the bank panic problem under wraps until the FDIC runs out of money and all of the panic it was designed to prevent is unleashed at once in the ensuing chaos. If this is “recovery”, can you imagine what a “depression” would look like? Oh, and about that “guarantee”:
TITLE IX–FULL FAITH AND CREDIT OF FEDERALLY INSURED DEPOSITORY INSTITUTIONS
SEC. 901. REAFFIRMATION OF SECURITY OF FUNDS DEPOSITED IN FEDERALLY INSURED DEPOSITORY INSTITUTIONS.
(a) FINDINGS.–The Congress finds and declares that–
(1) since the 1930’s, the American people have relied upon Federal Deposit insurance to ensure the safety and security of their funds in federally insured depository institutions; and
(2) the safety security [sic] of such funds is an essential element of the American financial system.
(b) SENSE OF CONGRESS.–In view of the findings and declarations contained in subsection (a), it is the sense of the Congress that it should reaffirm that deposits up to the statutorily prescribed amount in federally insured depository institutions are backed by the full faith and credit of the United States.
I can’t help but notice that “it is the sense of the Congress that it should reaffirm” != “it is the case that”. Especially when the original affirmation was a non-binding joint resolution. (H.R. Con. Res. 290) It’s a statement of intent, not a legal guarantee.
Why smart people can’t take criticism
A PhD concocts a theory:
My theory—call it the “Oakley effect”—is that really smart people often don’t know how to accept and react constructively to criticism. (A neuroscientist might say they “have underdeveloped neurocircuitry for integrating negatively valenced stimuli.”) This is because smart people are whizzes at problems that only need one person to figure out. Indeed, people are evaluated from kindergarten through college prep SATs on the basis of such “single solver” problems. If you are often or nearly always right with these kinds of problems, your increased confidence in your own abilities would be accompanied by an inadvertent decrease in your capacity to deal with criticism. After all, your experience would have shown that your critics were usually wrong.
I think this is largely true, especially for those educated in a scholastic environment where self-esteem was given precedence over actually being correct. It also explains the rapid retreat to “consensus” on the part of those who subscribe to mainstream ideas since they have no capacity for accepting or even understanding criticism of that which they have never bothered to question themselves. Of course, the “Oakley effect” doesn’t apply to me and other contrarians in various fields because we not only expect criticism, we know that it is an inherent part of taking a position that is outside or contrary to the current groupthink.
Personally, I very much like substantial criticism, even though it really annoys me when I get something wrong because I failed to take an obvious variable into account. I only get annoyed with critics when they bring up ludicrously obvious objections that were either taken into account or have nothing to do with what I’m saying. One of the great pleasures of my discourse on TENS with Scott Hatfield was the fact that even if he didn’t always understand the specifics of certain criticisms of the theory, he fully grasped that they were not only of a different nature than the norm, but the difference between a skeptic and an opponent as well.
“So, your argument basically amounts to something like this: “Evolution, meh. It’s the best thing we’ve got, right now. I hope something better comes along, someday. I just can’t imagine partisans on either side of this debate getting that worked up over that argument.”
I would have used the word “expect” rather than hope, and said it’s “all” we’ve got rather than “the best thing” but that summary is essentially correct. After all, there’s no question that the predictive uselessness of TENS is less materially harmful to me and everyone who reads this blog than the predictive uselessness of the General Theory and its practical Neo-Keynesian offshoots.
On a tangential note, I suspect it’s probably easier for anyone who has ever had any success trading in the financial markets to be comfortable with contrarian positions for the obvious reason that taking a contrarian position at the right time is very definition of “buy low, sell high”, which is one of the most effective ways to make money short of convincing the government to give you billions of tax dollars in order to prevent the sky from fallingeconomy from collapsing. In the equity and commodity markets, uniform consensus is usually a reliable indicator that everyone is about to get seriously scalped. So, not only is “scientific consensus” not science, it tends to be inherently dubious from the perspective of those see the regular shortcomings of consensus.
The amusing thing about those who tell me that I should harbor more respect for Darwin and TENS due to its long decades of mass acceptance by the scientific community is that I am presently at work in helping overturn an errant theory or two that are older, more materially significant, and more broadly accepted than anything Darwin ever wrote about natural selection or common descent. So, I’m probably among the very last individuals to whom an Appeal to Ancient and Accepted Authority should be made. And yes, I expect truckloads of criticism, both substantive and shallow.
Judging P1: A Defense of YEC
This is an opportunity to weigh in on how you thought Bethyada did in presenting his defense of YEC.
I’ll post an update with my own thoughts on Bethyada’s post later. And if you’re voting, be sure to explain your rationale for your rating.
The Old Negro Space Program
How did Ken Burns come to bypass this inspiring tale of intrepid African-American courage in favor of national parks?
And do you know who else liked national parks? That’s right. Hitler.
Hitting the limits of demand
The stone has been squeezed dry:
Red hot auto sales under the U.S. government’s “cash for clunkers” incentive began to cool as dealer inventories tightened and showroom traffic showed signs of leveling off from its frantic pace of a week ago.
The funny thing about this reporting is that this supposedly “red hot” and “frantic” activity only drove the “best annualized rate” of car sales to a little more than half the 2002 rate. Those of you who recall what happens after the demand curve snaps back should have a pretty good idea of what is in store for auto sales this fall.
At least he’s good for a laugh
Debate-phobic PZ Myers had barely finished boldly running away when he attempted to publicly confront a creationist on the radio:
I tried to call in…. Unfortunately, the phone lines are locked up solid — you guys are all calling in, aren’t you? I got through! What a waste — he simply denied the evidence that salt levels are in a roughly steady state, and then to my vast amusement, tossed in his strongest argument: PZ Myers is an atheist. Can you say ad hominem, boys and girls?
Now, let’s consider the recent history:
1. PZ asserted that a self-determination that another individual is an Unworthy Opponent or a crank is a legitimate reason to avoid defending one’s beliefs from them in a public venue.
2. PZ also asserted that the radio is not a legitimate venue for rational debate.
3. PZ repeatedly ran away rather than defend his own beliefs about the nonexistence of gods and the scientific evidence for evolution in public against my verbal or written counterarguments.
4. PZ then attempted to confront a creationist by the name of Ken Ham on the radio.
Needless to say, this behavior has undermined every excuse that Pharyngulans produced last week to cover PZ’s very brave retreat. After all, why is PZ calling radio stations in an attempt to confront Ken Ham on the air when he should instead be publishing peer-reviewed scientific papers on those matters? Isn’t PZ attempting to polish his resume on the basis of Ken Ham’s fame? And isn’t Ken Ham’s ad hominem argument that PZ Myers is an “atheist” every bit as valid a reason to avoid addressing PZ’s criticism as PZ Myer’s ad hominem argument that I am a “crackpot” is to avoid mine?
The amusing thing is that on the basis of his previous assertions, we can safely conclude that PZ has finally discovered a Worthy Opponent in Ken Ham.
UPDATE – Almost as amusing as PZ wetting himself and running away again is the contorted illogic to which Pharyngulans resort in order to defend the coward:
Once again, Vox fails pathetically at the grasping of simple concepts and notions. The reason(s) why calling PZ an “atheist” is an ad hominem whereas calling Vox a “crackpot” isn’t, is that Ham deliberately used “atheist” as a pejorative, not to mention as a way to “discredit” PZ (if such a thing were possible), whereas Vox … actually is a crackpot, which inherently signifies he’s not worth debating and any attempt at doing so would only amount to a waste of time and energy.
So, according to this teenage boy’s quixotic concept of “ad hominem”, PZ is actually not an “atheist” and did not use the term “crackpot” as a pejorative. It’s a rather grim statement about the average intelligence of the Pharyngula readers when they not only make use of an ad hominem argument while simultaneously decrying the technique, but demonstrate that their understanding of the argument doesn’t even rise to the level of Wikipedia. It’s astonishing how the sort of half-educated cretin who insists that someone of proven high intelligence can’t grasp “simple concepts and notions” almost invariably doesn’t even know the relevant dictionary definitions.
I suppose it’s true, though. I really don’t grasp such “simple concepts”. Of course, this is only because the simpleton has an incorrect idea of what those concepts actually are.
P1: A defense of YEC
This defense of Young Earth Creationism was written by Bethyada, with suggestions from Paladin and AM. Note that PUOSU positions should not be mistaken with my own beliefs and I neither suggest nor contribute to them. Critiques should be substantive; any insubstantial perjoratives will be either ignored or deleted.
Young Earth Creationism (YEC) is multifaceted. It is a metaphysical framework; a scripturally informed philosophy of nature which includes a scientific model that seeks to evaluate and explain the world. Thus it touches a variety of topics. There are limits in what can be accomplished with a short blog post, but I think that some clarity can be brought to the debate, specifically identifying the source of the conflict and the domain in which the debate needs to occur.
Antagonism to YEC is predominantly philosophical, rooted in naturalism. Opposition to the YEC position is frequently made using suppositions antagonistic to YEC; the proof of error is therefore in the axioms not the conclusions.
YEC has a long history. It has been the predominant position throughout most of the history of the West, until the introduction of uniformitarian interpretations in the 18th and 19th century by the non-catastrophic geologists. These geologists influenced Darwin and although Darwin didn’t publish his theory till the 19th century, evolutionary-like philosophies have a much older history, somewhat similar ideas proposed by some Greek philosophers. And YECists have good company with the likes of scientists such as Kepler, Newton, Pasteur, and Maxwell. But the issue is not a tradition game or a numbers game, it is: Does YEC accurately describe reality?
The underlying reasons for specific YECist concepts are: the rules of logic as applied to the Bible and science, and the grammatical historical hermeneutic applied to the Bible. YECists take most of Genesis to be historical narrative including the creation, fall, and flood. They think that most occurrences of the word “day” in Genesis 1 mean a usual day because of contextual considerations.
YEC touches several fields including theology: hermeneutics, theodicy; philosophy: philosophy of science, logic; science: biology, genetics, palaeontology, astronomy, geology, climate, thermodynamics; information theory; archaeology; history. (Hermeneutics and logic would be better classified as fields that form YEC belief rather than result from it, as mentioned above).
I wish to cover the following about YEC
* What young earth creationists (YECists) do and do not believe;
* The nature of evidence and science; and
* A discussion focusing on a single aspect of YEC: the age of the earth.YEC can be summarised as follows:
* The universe is not eternal, it was created by God who is external to the world, self existent, and eternal
* God created the world in 6 usual days
* Nature was corrupted by the Fall of Man
* The earth is about 6000 years old
* The earth was deluged by a global flood about 4500 years ago
* The Bible is inerrant and should be interpreted in a straightforward manner (according to genre)There are several corollaries from this, though the specifics may vary. The creation model includes:
* Most of the sedimentary layers of rock and enclosed fossils that occur worldwide were formed during the Noachic Flood.
* The earth likely contained a single continent that broke up during or after the Flood
* There was a single ice-age caused by the post-Flood climate
* All land and air animals (of significant size) are descendants of the animals that were on the Ark
* Man has coexisted with all animals that have ever existed
* Natural selection (an analogue of artificial selection) occurs
* Speciation is rapid. It occurs through allelic separation, genetically induced variation, or detrimental mutation (loss of genetic information).
* There are genetic limits to the amount of speciation, diversification, adaption, or breeding that can occur
* Information content of the biosphere cannot increase. Matter cannot create information.
* Information is always the result of an intelligence
* Loss of information can mean improved fitness within a specific environment; that is, loss of function can result in improved likelihood of survival.
* Lost information cannot be recovered without reintroduction of the same information (save trivial examples) by breeding or design
* Archaeological artefacts post-date the Flood, which limits their age to a maximum of 4500 yearsThere are several accusations that are charged against YEC which proponents of YEC do not support or promote; such as
*God (or Satan) created the fossils in situ as a test of our faith
* God created things with false appearance of age (this needs qualification)
* Animals were created how they look now and no new species of animals have developed
* Entropy was a result of and did not exist before the Fall of Man
* The earth is flatOn evidence and science
While much could be written in defence of the specific YEC beliefs, discussion can be difficult if foundational issues are not identified. Modern science was originally a systematised process of categorising our observations to make further inferences and reduce our observations to consistent laws. While hypothesis testing is a usual method, data gathering to create a hypothesis was seen as legitimate. Thus, multiple measurements of the planets led to Kepler proposing elliptical orbits, which could then be further tested. Francis Bacon is frequently credited with formulating the scientific method.
Written as: observation → induction → hypothesis → test hypothesis by experiment → proof/disproof → knowledge
Popper’s falsifiability criterion has had a clarifying influence on the understanding of scientific theories. Therefore negative evidence was seen as disproving a theory whilst positive evidence is merely consistent with a theory, not proof of such.
Notice that Bacon’s definition is necessarily limited to observable phenomena. This is classic operational science (also called empirical science), which helps us infer laws about things that are demonstrable and repeatable. This is an enormously important distinction that frequently goes unrecognised. In contrast, inferences about previous events are not repeatable. This does not mean that the scientific method cannot be employed, rather that it is limited in what it can say.
Consider the science of identifying a criminal via a DNA sample. This science is not being done to discover how DNA binds to itself (i.e. hydrogen bonding), it is attempting to establish an event such as a murder. So a fragment of the DNA is identified and then matched to a specific person. The samples can be run several times and in several different ways; both the forensic sample and the suspects’ samples. And we can establish that the forensic sample and a suspect sample match. This part of the process is operational science.
However establishing a particular suspect as the murderer is not observable. We cannot do an experiment several times to show that he did indeed murder the victim. Intrinsically it is impossible; the event happened in the past. And even if we establish he is capable of murder, it doesn’t prove he committed this particular murder. This kind of science is called historical science.
It has been claimed that scientists do not discriminate this way when practising science. This may be the case. When one does historical science there is usually an element of operational science as seen in this example (though the converse is not necessarily true). But whether actual scientists discriminate like this is irrelevant to the philosophy of science, what matters
is whether this distinction exists. And it clearly exists because a methodology that relies on repeatability cannot be applied to singular past events.The reason for this discussion is to show that historical science competes with other evidences in a way that operational science does not. If I claim my house is so high, I can invite you to measure it. Testimonial evidence doesn’t play a part. We don’t ask a range of people their opinion as to what they think my house height is. Three measurements by several engineers using differing methods that all agree trump the opinion of a dozen opinions and guesses. This is not the case with historical science.
Returning to our murder investigation with DNA sampling, all we have established is that a suspect shares a DNA fingerprint with a crime scene sample. This may be because it is a limited test, say a portion of DNA with a limited number of polymorphisms. Even if we can be certain the DNA matches by performing adequate sequencing, there may be a identical twin brother we do not know about. Or the DNA may have come from the suspect, but at another time; a meeting earlier in the day. Now I am not trying to imply that DNA testing is inaccurate or inappropriate for criminal investigation, I am illustrating how its use in proving crime is intrinsically different from operational science.
Testimony of others meant little in the height of my house, but it means a great deal in identifying a murderer. Not because murder is more important that house height, but because it is not testable in the way that heights and widths of objects are. A claim that the suspect has a twin brother is a competing claim against the DNA test. A claim that the suspect was seen elsewhere at the time of the murder is a competing claim. A claim that the blood type does not match despite the DNA matching is a competing claim.
Note that competing claims against historical science can be both scientific and non-scientific (eg. testimonial).
Also note that scientific claims do not automatically trump non-scientific claims. The testimony of a thousand witnesses is not overturned by a DNA match just because the latter is scientific. We weigh several competing claims and people will be variously convinced depending on how reliable they regard each piece of evidence.
YEC is a competing claim about the history of the world. It is predominantly a competing claim to the historical sciences of biological macro-evolution, abiogenesis, stellar evolution, and uniformitarian geology.
Some of the YEC disagreement with evolutionary theory is due to consideration of non-scientific fields such as documentary evidence. However much of the disagreement is from a competing but different historical science. For example, consider the age of the earth.
How old is the earth?
YECists claim that the earth is about 6000 years old (though anything below 10000 years would fall into the same range). This is phenomenally different to the uniformitarian geological claim of 4.5 billion years. But note that any usual clock cannot calculate the time since the formation of the earth. We cannot go back, set our stop-watch, and mark off the aeons until now. We are considering a past event (or several past events). Compare this to measuring the time it takes a horse to run 1 km. We can do this measuring the starting and finishing time, and we can do this repeatedly, thus giving us the time (on average) the horse takes. For this we observe established clocks.
For past events we need to establish a historical clock, say radiometric-dating. Experiments can determine the amount of various isotopes of uranium and lead in a particular sample. One can do this part of the experiment over and over. We can satisfy ourselves to the limits of experimental accuracy that the sample contains a certain amount of uranium. This part of the investigation is operational science. All parties generally agree on the number of atoms identified in the sample and their ratio.
This ratio is then keyed into a formula based on a specific theory with a variety of assumptions to get a date for the formation of the mineral it was derived from. Now the theory is radioactive decay, which is reasonably well established, and an assumption is, say, no daughter isotope was present when the mineral formed.
The problem is that these calculations do not always give the answers that are thought to be correct (as established by other historical clocks or underlying evolutionary theory); so sub-theories are added, such as leaching of isotopes, addition of isotopes, incomplete melting at time of formation of mineral in rock. Creationists have also suggested a modification to the theory: the variation of decay half-life, though this modification is often disparaged.
Rather than discuss the merits of these sub-theories or, if you prefer, alteration of assumptions (all of which are reasonable); I would simply like to note that since radiometric dating is a historical science, there are competing claims.
There is the competing documentary claim, that the world was created 6000 years ago according to the Bible. This is a claim that YECists take seriously, much like the testimony of someone who witnessed an event. But documentary evidence is not restricted to the Bible. A variety of cultures have given an age of the earth much less than 4.5 billion years and more in keeping with the biblical figure, such as the Mayans and the Greeks. This particular competing claim is less convincing to agnostics and some theists, including some Christians. There are, however, other documentary claims and historical scientific claims that are worth mentioning.
Staying with radiometric dating, we have reliable documentary evidence for the age of some volcanic episodes. It so happens that rocks from lava flows within recent history that we know the real age of (via operational science) are consistently dated much older by radiometric dating, frequently hundreds of thousands of years or older. Explanations are offered up as to why this is the case, but the greater point is the model is reliably incorrect; it doesn’t matter how good this theory is or should be, the fact is the model doesn’t work.
If radiometric dating cannot get dates correct when we do know the true age, why should we trust it when we don’t know the true age?
We also have competing scientific claims. Radiometric dating is not the only historical clock. There are a large number of clocks. And even radiometric clocks vary depending on the isotope used. Historical clocks often give maximum ages. This does not mean that the calculated age is the actual age, rather given the most favourable assumptions this is the longest a particular process has been going on. In constructing a clock based on sodium in the ocean, a maximum age would be established by assuming no sodium in the ocean when it formed, the lowest reasonable estimate for sodium influx, the highest reasonable estimate for sodium outflux, with the current concentration identified by measurements of salinity. The maximum age identified may not equal the true age, as the ocean may have started somewhat salty for example.
Within radiometric dating we have carbon dating competing with metal dating. Pretty much all carbon containing materials that have been tested contain carbon-14. This places an upper bound on their age. This includes diamonds embedded in rock supposedly millions of years old.
Other historical clocks include: diffusion rates of helium; decay of the magnetic field; decay of DNA and protein from dead organisms; elements in the ocean; recession of the moon, starlight travel from distant stars.
Objections can be raised against these other clocks (though the carbon-14 data is hard to surmount), but this is hardly the point. The point is that there are competing claims here. Radiometric dating of metals is favoured by the evolutionists because it gives a time frame needed for
evolution. But it is one piece of historical scientific evidence. One person may find it convincing, but with so much riding against it, it is not unreasonable to weigh the other evidences heavier.Summary
YEC is a worldview. It recognises a variety of evidences. It clearly understands the difference between operational and historical science. YECists do not dispute any significant operational scientific finding. Investigating past events is philosophically distinct from investigating repeatable events and YEC views past events differently, and in a way that I think makes more sense of the data.
YEC theory on the age of the earth is more parsimonious. It is consistent with much of the documentary evidence. It is also consistent with many of the historical scientific clocks. Modifications to the starting conditions and rates give ages consistent with a young earth, including radio-carbon. Radio-dates of metals less so, but these are known to be inaccurate, and YEC proposals concerning rates of decay may resolve other well recognised difficulties of radiometric dating. Ancient earth theory is unable to easily reconcile non-radiometric clocks or even radio-carbon clocks.
Reading List
1. The Mind of the Market by Michael Shermer
2. The Lions of al-Rassan by Guy Gavriel Kay (re-reading it)
3. Air Con by Ian Wishart (likewise)
4. The Cambridge Medieval History Series vol I: The Christian Era edited by J.B. Bury
Spook Country by William Gibson: 5/10. Frankly disappointing. Gibson has a few interesting ideas, as he always does, and his prose is as clean and streamlined as ever, but the plot lies somewhere between stupid and silly. The use of a pop musician turned journalist as the protagonist seems to hint at some sort of elegy for lost fame, but Gibson does next to nothing with it. In summary, it reads like a caricature of his previous work.
The Age of Turbulence by Alan Greenspan: 8/10. Of genuine historical interest to any economist, Greenspan’s book is a glimpse into the world of real power. It is a sobering reminder that intelligence is no antidote to bad theoretical models. It’s not an apology or a case for the defense so much as it is a perspective. One comes away with the perception that the failures of 1996 and 2008 are largely rooted in the success of 1987.
Agent of the Terran Empire 1: Tiger by the Tail and Agent of the Terran Empire 2: Warriors From Nowhere! by Poul Anderson. 6/10. Fun, fluffy space opera of moderate intelligence; it’s Edward Gibbon set in space. But as is the case with so much SF/F, the dashing hero’s characterization is somewhat hampered by the fact that the author appears to have never pursued, let alone successfully seduced, a woman in his life. And more than a little stylistically amusing these days to read of a supposedly straight lothario with a mustache.