A bit more on banking

So Obama is going to reform the banking system. Ahead of the publication of more details it looks like the aim will be to limit the activities of the 'traditional', commercial banks. There will be restrictions on their capacity to trade securities and invest in hedge funds. Whether separating the activities of commercial and investment banks can reduce risk in the kind of complex integrated financial markets that have emerged in the last twenty five years will be interesting to see.

Curbing the banks in some way is certainly popular. Dishing out massive bonuses is not going to endear them to the rest of us. Of course, the bankers point out that the bonus payments simply reflect the marginal value of employees who have contributed to massive profits. As a fraction of the wealth the bankers are generating the bonus payments are small. While that's true, a moment's reflection tells us that these are hardly normal circumstances. The very existence of many of these institutions today is thanks to massive amounts of public money being pumped into them. Moreover, the on-going availability of cheap credit lines and the liquidity support for the financial markets may well have had the effect of making many markets a one way bet. The rise in liquidity (and the flight to safer assets) would have had the effect of driving up the prices of certain classes of assets. Add to that the impact on equity values of the market anticipating economic recovery in the real economy and you hardly need to be a rocket scientist to make money (if the banks don't start lending more, then will that recovery in the real economy kick in without a massive burst of state pump priming as has occurred in China?). When these considerations are combined with the frustration at the apparent reluctance of banks to actually lend money to companies and individuals, you'll not find a great deal of sympathy for the bankers.

Still, I caution against too great a sense of outrage at the banks. What did we expect them to do? Even in favourable market conditions it's not as easy as I might suggest above to make money. You've got to take the positions and make sure you make the right decisions. Furthermore, surely we want the banks to accumulate profits as rapidly as possible. With all that public money in them it must make sense to see the banks rebuild their balance sheets. As for the failure of banks to step up lending, this might be down to their reluctance to risk capital when it could be more safely deployed.

Saving the banks was not the same as reforming the free market conditions in which these beasts thrive. In providing the conditions in which they can fatten themselves we should only expect one outcome.

Massachusetts

Just how big a problem will the loss of the super majority be? Things are not looking too good for healthcare. http://www.guardian.co.uk/world/2010/jan/20/republicans-massachusetts-scott-brown-obama-health

Still, he's having a crack at the bankers, http://www.guardian.co.uk/business/2010/jan/21/obama-banks-wall-street-reform

More on Haiti and evil

Here's an article from the BBC - http://news.bbc.co.uk/1/hi/magazine/8467755.stm

A classic, elegant way of addressing the problem of evil is presented by Leibniz in his Theodicy. This world - our, actual world - is the best of all possible worlds. Indeed, given an omnipotent, omniscient and benevolent God, what else could this world be? The divine mind can conceive of all the ways things could be and actualises that world - that set of states of affairs - which is best.

A difficulty with this approach arises when we begin to think about possibilities. That is, when we consider how things might be. As vile and devastating as the effects of the earthquake in Haiti have been, it is possible to imagine things being even worse. Indeed, we can think of ways in which the world could be much worse than it actually is. Or, at any rate it seems that we can. On one view of modality (possibility and necessity) to say that something is possible is to say that there is a possible world in which it exists. The dominant approach to analysing modal notions of possibility and necessity has been via the use of possible worlds. For a proposition, p, to be possible (or state of affairs, s, to be possibly the case) we may say that there is a possible world at which p is true or s the case. To be necessary is for it to be the case in all possible worlds (or when we talk of something, x, necessarily or essentially possessing some property, F, it is the case that x is F in all worlds in which there is x). Now, there is extensive discussion and controversy concerning which account is to be preferred of the semantics and metaphysical implications of modal theories. At the risk of oversimplification modal realists maintain that all possible worlds are real, but only ours is actual – with actual functioning as an indexical term. That is, when we talk of a possible world we refer to a world of spatially and temporally related objects. Any world, w, is discrete from any other world in which there are objects not related spatially or temporally to objects in w, and modal locutions are to be understood in terms of quantification over such worlds. Our actual world – the totality of everything existent in space-time – is just one of a plurality of concrete, real worlds. Each world is self-contained and complete in the sense that there are no causal connections between a world and any other, and the history of each world is determined entirely by how things are within that world. For the inhabitant of a world, that world is not only real but actual. The truth of the proposition, ‘this is the actual world’, depends on the context of utterance and it will always be true. Just as it is always true that where I stand is always ‘here’.

Now, though, we come to what has been called the ‘the modal problem of evil ’ (see, for example, Theodore Guleserian ‘God and possible worlds: the modal problem of evil ’, Nous, 17 (1983), 221–238; Laura Garcia ‘A response to the modal problem of evil ’, Faith and Philosophy, 4 (1984), 375–358). Roughly stated, this is the thesis that there is a possible world in which there is a level and kind of evil such that an omnipotent, omniscient, and benevolent God would not permit. A dilemma is generated for the theist. If such a wretched world is possible – which, following modal realism, means that such a word exists and is actual for its inhabitants – then the necessity of the divine omnipotence or benevolence is to be abandoned and so the classical conception of God must be modified. Or, one must hold that such a world is not possible, even though it seems entirely reasonable to suppose that a sufficiently vile state of affairs could
be the case.

I've taken the above from a paper discussing the tension between a commitment to divine existence and modal realism, 'Theism and modal realism' in Religious Studies 42, 315–328. You can read the whole thing at http://www.paulsheehy.net/papers_for_download/
Theism%20and%20Modal%20Realism%20Final.pdf

Populating Madagascar

In chapter 12 of On the Origin of Species, Darwin argues that the non-existence of certain animals on oceanic islands is evidence against the theory that the flora and fauna of the world were brought into existence by acts of special creation by a divine being. Here he is on frogs, toads and newts:

With respect to the absence of whole orders on oceanic islands, Bory St. Vincent long ago remarked that Batrachians (frogs, toads, newts) have never been found on any of the many islands with which the great oceans are studded...This general absence of frogs, toads, and newts on so many oceanic islands cannot be accounted for by their physical conditions; indeed it seems that islands are peculiarly well fitted for these animals; for frogs have been introduced into Madeira, the Azores, and Mauritius, and have multiplied so as to become a nuisance. But as these animals and their spawn are known to be immediately killed by sea-water, on my view we can see that there would be great difficulty in their transportal across the sea, and therefore why they do not exist on any oceanic island. But why, on the theory of creation, they should not have been created there, it would be very difficult to explain.

It is easy to make sense of their absence if islands have been populated by migrating creatures. Frogs, toads and newts can't hop over the sea or swim there, as sea-water kills them. Birds, insects and the seeds of plants can be carried by their own steam or by the wind, which is why you find them there.

But what about Madagscar? There you find mammals, notably the lemurs, who could not have swum or be blown or (clearly) flown across. There's no evidence of a now-non-existent land-bridge either over which they could have walked. Research published this week in Nature by researchers in Purdue University and Hong Kong University claims that the ancestral species of modern-day Madagascan fauna could floated there on bits of wood and, once there, evolved in isolation into the distinctive species we see now:

Here's a summary of the findings from Purdue University.

Animals and souls

In what looks like a three-part debate, The Guardian has this week posed the question of whether animals have souls to a Catholic priest (Monday) and a Buddhist (Wednesday). Both say that they don't so perhaps Friday's contributor will give succour to those who hope to see Tibbles or Rover in the afterlife.

(One of the modern pleasures of reading such articles, be they in the 'high-brow' broadsheets or the 'low-brow' tabloids, is reading the comments that follow that mix the balanced with all shades of the insane. Do resist the temptation to address every bit of craziness that you see.)

Haiti and the problem of evil (continued)

In his Fighting Words column in the on-line magazine Slate, essayist and well-known critic of religion Christopher Hitchens today gives a brief history of Haiti's woes since colonial times and argues against a divine cause to last week's earthquake.

Haiti and the problem of evil

The devastating earthquake last week in Haiti has unsurprisingly caused much discussion in the press and on the airwaves between believers and non-believers as to how such tragedies can occur if there is an omnipotent, omnibenevolent God. Comparisons have been made to the famous earthquake of 1755 in Lisbon which destroyed the city and led to the same sorts of thoughts amongst the intelligentsia of the time. Voltaire famously said that such an event in a devout Catholic country proved false the argument advanced by Leibniz, that this world must be the best of all possible worlds, since God could not have created an imperfect world.

Pat Robertson, a well-known and controversial former minister in America, who has a regular show on the Christian Broadcasting Network has managed to upset almost everyone by claiming that the earthquake was no simple natural disaster but divine retribution for a supposed pact the Haitians made with the devil two hundred years ago in return for which they would be freed from French colonial rule. He has also said that it may be a blessing in disguise:




'Shock-jock' Rush Limbaugh managed to annoy the White House and quite a few others by also saying that Americans already are giving money to Haiti in the form of their income tax and that Obama was using the disaster to enhance his image with the 'light-skinned and dark-skinned black community' in America. MSNBC newscaster Keith Olberman was moved to make this response: