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3-18-98 Dennis Prager criticized the growing concentration of banks. Then he rejoiced at the news that Southern California need fear less about the region's supposed earthquake deficit. One scientist felt chagrined. He had to retract many things he had said publically. Prager rejoiced at the moral strength of the scientists being able to say they were wrong. DP wished that folks in the liberal arts would be as open about their mistakes, such as poverty causing crime. Mark Wylie replied on the Prager List: "The problem is, of course, that it is not a "mistake" to describe poverty as a cause of crime.Dennis Prager is fond of saying that poverty doesn't cause crime because not all poor people are criminals and because crime was allegedly low during the Great Depression (such a claim appears in TAST). The first statement commits the monocausality fallacy. To say that poverty is a cause of crime is *not* to say that every poor person will bcome a criminal, and to assume that the first implies the second is sloppy thinking. Dennis' second statement is factually false. Crime was not low in the Great Depression, it was high. The 1930's were the last period of US history when criminals were glamorized as heroic outlaws in popular culture--think of people like Pretty boy Floyd, eulogized in one of Woody Guthrie's greatest ballads. The murder rate in the United States reached a historical peak in the early 1930's, the very nadir of the Depression. So it is Dennis Prager who needs to admit a mistake."
Today's LA TIMES: Wednesday, March 18, 1998 Washington Mutual announced plans Tuesday to buy the owner of Home Savings of America for more than $10 billion, a stunning move that would result in the loss of up to 3,500 jobs and the closure of as many as 170 branch offices, most of them in the Southland. Seattle-based Washington Mutual, already the biggest thrift in the nation because of a spree of recent acquisitions, said it would acquire Irwindale-based H.F. Ahmanson through an exchange of stock valued at $10.1 billion based on Tuesday's closing market prices. The merger would create California's second-largest financial institution and the nation's seventh-largest. The purchase of Home Savings, itself the nation's biggest savings and loan for many years, would give Washington Mutual $150 billion in assets and 2,000 branches. It would enable Washington Mutual to supplant Wells Fargo & Co. as the main rival in the West to BankAmerica Corp. LA TIMES business columnist James Flanigan differed with Prager on bank mergers.
Washington Mutual's proposed acquisition of H.F. Ahmanson sends another loud signal that it may be time to retire the notion that small is always beautiful in business. The big bank that results from this merger-$150 billion in assets-may well contradict conventional wisdom by benefiting consumers even as it brings competitive pressure on smaller lenders. It will bring that pressure, if it can get its costs in line, by offering lower rates on mortgages and free checking accounts. What's going on in the financial services industry in California is an evolutionary battle for survival. Washington Mutual, or WAMU as it's known, for the letters of its ticker symbol, is a survivor because it adapted sooner to changed mortgage markets and because it aggressively went out and acquired other thrifts across the U.S. In Southern California, the Ahmanson deal will complete a sweep of the once-great institutions that built this region. Last year, WAMU won Great Western Bank in a competition with Ahmanson, which hesitated and blundered in its acquisition attempt. WAMU acquired American Savings two years ago, and it will acquire Coast Federal Savings & Loan in the deal with Ahmanson. That doesn't mean it has a clear field in the thrifts' traditional business of making home loans. On the contrary, WAMU's new size will enable it to compete only with the state's leading mortgage lenders-Calabasas-based Countrywide Credit Industries, San Francisco-based Bank of America and Norwest of Minneapolis. Prager rejoiced at the following: Wednesday, March 18, 1998 Southland's Quake Danger Forecast Is Cut New research has many scientists rejecting a concept that in recent years has injected a heightened sense of foreboding into forecasts of Southern California's earthquake danger. By ROBERT LEE HOTZ, Times Science Writer BOULDER, Colo.-The earthquake hazard facing Southern California may be substantially less severe than scientists had calculated, according to researchers who say that they have dispelled the notion of an earthquake deficit that would trigger a stream of catastrophic temblors in the next few decades. Based on a new analysis of the region's previous earthquakes, researchers from the U.S. Geological Survey, USC and UCLA now have cut the predicated rate of severe earthquakes in half based on a new and more accurate model of regional seismic activity. Nor is it as likely that Southern California will ever experience a truly mammoth earthquake of magnitude 8.0 or higher, as has been recently theorized, the researchers agreed. "The word on Southern California is good now," said Thomas Henyey, director of the Southern California Earthquake Center, which organized and helped formulate a 1995 assessment that formally brought the earthquake deficit to the public's attention. Together, the two research teams have "effectively squashed the deficit to some extent, if not entirely."
DP says that your chance of being hurt by a human being are far greater than your chance of being hurt by nature. DP says that he did believe that a big earthquake would hit LA, but he was not willing to leave the city because of that possibility. He loves the quality of his life here too much. Everything is a balancing act. DP says that the next thing he wants to be is a musher on a dog sled. Prager received a D in Geology in college and he regrets it. He now wants to understand geology and earthquakes. Dennis mentioned how a good friend of his almost died two years ago (Rabbi Joseph Telushkin - diabetes) and how every time he thinks about it, he cries. The Rabbi was most concerned about his three kids (girls). DP says he knew people who left LA after the last earthquake. He believes that such folks want a risk free future. Wednesday, March 18, 1998 Dennis began today's show discussing the big bank deal in which Home Savings, which just a few month ago bought out Coast Federal Bank, was bought out by the Ahmanson group, which owns Washington Mutual, which owns Great Western Bank along with several other banks. It was announced that thousands of people will be losing their jobs and 170 Home Savings branches will be closing. Dennis was sarcastic about how we have too good a service these days; too many branches, too quick a service, no standing in lines, too much intimacy because the tellers all know us. He said we need fewer branches. He had a pretty good sarcastic laugh going for a while. Dennis said he is into free enterprise but he does not follow Ayen Rand. He said he is not a libertarian.
Dennis said that the problem with a citizen revolt is that if people don't like the service at the bigger banks and they move their accounts to the smaller banks, then the smaller banks will acquire so many accounts that they will be ripe for being taken over by the bigger banks. He noted that the free enterprise system is great for stock holders but not consumers.
As an example, he noted how the non-regulated airlines provide such cramped seat space in their coach fares. He also said that without competition the airlines do not feel the need to provide excellence. For example, he said that the only airline available to Detroit from Los Angeles is Northwest Airlines. They have a special arrangement so that no other airline can take you to Detroit. Dennis said that this was not good for travelers.
During the second hour Dennis discussed an article which appeared in today's Los Angeles Times which noted that scientists now claim they erred in predicting a powerful earthquake in California's near future. The hazard may be substantially less severe than originally predicted for the next few decades. It also said that California may never experience the mammoth earthquake, 8.2 or higher, as originally theorized. Dennis said that he liked the fact that the scientists are willing to say they were wrong. Dennis asked his audience if they can imagine people in the liberal arts saying that their theories were wrong? He said that he can't imagine them saying that they were wrong about poverty being a factor in whether or not people rape and murder. They won't state that poverty causes crime was an overstatement. Dennis said that we don't hear that, because people are wedded to theories and that data and evidence are not that important for many professors, certainly not all, outside of the sciences.
In the third hour Dennis noted how this latest refutation by the scientists in regard to the big California earthquake touches on so many rich subjects including how you react to earthquakes and where you choose to live. Dennis noted that people are generally hurt by other people, not natural disasters. Dennis said that there are obvious reasons not to like earthquakes, hurricanes, tornadoes, but that your chances of being hurt by a human being are so much greater than you being hurt by nature. He laughed that this may also be an argument to leave Los Angeles but that this is sad if you really love this place because your chances of being a victim of a crime is still minimal. Dennis said that he has prepared his house for an earthquake and he lives each day among his dear friends, his work that he loves, etc. There is no reason to leave a rich life he said, out of fear of an unknown natural disaster.
A caller reminded Dennis that although terribly tragic for the victims and their loved ones, there were relatively few deaths in the San Francisco earthquake of 1906, the Sylmar earthquake of 1972 and the Northridge earthquake in 1994. Dennis reminded people that there really is no state you can go to avoid natural disasters and that you should choose your residence based on where you will have the richest life (not monetarily) surrounded by loved ones and meaningful work.
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