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So the Administration is happy that TARP is going to be less costly than planned, and expects to not have to spend $200 billion of it (but it will, on beer goggle research – see prior post). But I just learned that “Treasury expects the bailout to cost $200 billion less than expected, and that it should be able to recover all but $42 billion of the $370 billion it has lent to financial firms.”

Losing $42 billion on a $370 billion investment is a loss of 11.4%. I guess the clowns will argue that this is the “price” of avoiding the Great Depression. We’ll never know – and for now, only losing $42 billion goes down in history as one of the greatest successes for the financial wizards in Washington.

2 Responses to “I Must Be Bad at Math”

  1. Harry says:

    Putting on my green eyeshade, these figures make me gag.

    I have never been an owner of a business where I have delegated others removed from me to experience a personal loss, but I have been an stockholder of public companies. A loss of 11% is alarming, but not so bad if you own a company that is subject to the business cycle. I’ve owned stock in companies that made better than $42 billion, only all I care is how much they made per share of my dollar invested, and whether they would reinvest their retained earnings better than I.

    But Mike, our government behaves as if it is an investor in everybody’s enterprise. It and other governments take a 38% percent of polluter Exxon’s profits, which does not count the owner of the gas station, who pays real estate taxes to pay the Lord, who employs his own tax collector.

    My bet is that the whole $370 billion will go down a rathole, as will the $800 billion “stimulus” and the Bush/Pelosi $180 billion stimulus of 2008, and all the other money, plus or minus a trillion.

    I would never doubt the esteemed Wintercow’s math.

  2. Harry says:

    I do not like to stray from your subject, but since you raised the subject of math, which includes the tools to understand physics, chemistry, and therefore philosophy, Id like to ask some rhetorical questions, never answered to my satisfaction:

    1) It is my understanding that CO2 is roughly .037 percent of our atmosphere, plus or minus .004 percent, which I assume was measured some time, maybe in Cambridge and simultaneously at Harvard. Am I correct in stipulating that, assuming that we have no measurements of that in Kiowa, Kansas, or anywhere on the other side of the world, and if we did, when, how, and to what degree of accuracy?

    2) That brings us to the question of accuracy. A hundred years ago there were many thermometers. Some of them were read by scientists at the Lowell observatory, and I am sure they were read by their colleagues at Amherst and Trinity. To what degree of accuracy, and if some were accurate to a half degree, how many?

    Remember that air travel began in the thirties, when it was important to measure the barometric pressure and temperature. We have many readings from the tarmac from then until today, but not from even Kiowa, Kansas, or even from Alva, Oklahoma, its nearest airport, not today or yesterday. When you took off in your plane it was unimportant to a half degree. Same for LaGuardia, fifty years ago.

    So who is predicting the weather will be x.xx degrees ten years from now, globally? Is not the honest answer, “We do not know, but we guess it will be X plus or minus two degrees”? That’s the same thing as saying, “I do not know.”

    3. It is argued that if we increase the concentration of CO2 from .038 percent to whatever, we will have a catastrophe. How come CO2, is just .038 percent of the atmosphere, after all these years.

    Biologists and chemists have an answer to this question. Plants feed on CO2. The rain washes CO2 into the ocean, feeding plants.

    I have read about studies about how plants grow more robustly in the presence of greater concentrations of CO2.

    4. Just how many therms do CO2 trap, relative to how many those molecules allow in? (This requires someone using scientific notation, using a theoretical model which may be based on particle physics.) I do not doubt that CO2 has some greenhouse gas effect, but let’s quantify it, even theoretically. After you have done that, how does it compare to all the other (observantly significant) influences, including water vapor?

    These are among the subjects of an elementary seminar that mere neophytes would discuss, even if some of them had not yet done a real physics or chemistry lab.

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