The Chorography

Pierre Lacerte and the Protocols of the Elders of Outremont

2011-06-22T09:21:00.001-07:00

Here's the story. The Hasidic synagogue Gate David in Outremont wanted to expand their synagogue to accomodate their growing numbers. Reasonably, this proposal was put to a community vote. Reasonably, the vote failed, and the congregation will not be allowed at this point to expand their building.

Unreasonable is the man who led the "fight" against the synagogue, one Pierre Lacerte (link to his blog.) According to the story, he has been closely monitoring activities of members of the Hasidic community in Outremont, recording "everything from unkempt properties to alleged political influence on elected officials." MacLean's a couple months ago characterized him somewhat more harshly (and to me, at least, more fairly) as a man who "rarely leaves his house without a sense of righteous indignation, and never without his point-and-shoot camera holstered on his belt," meaning to record the smallest violations he claims have been committed by Hasidic community members.

So, what's his blog look like? Pretty fucking blatantly anti-Semitic. He brings up cases, like the alleged sentencing of a dog to stoning by a Jerusalem court (that story, as you might suspect, is false, and the originals have been taken down by the likes of the BBC) which, even had it been true, would be completely fucking irrelevant to the activities of Outremont's Hassids unless you think they're all the same, which he certainly seems to. Take this excerpt:

D'ailleurs, je ne sais pas si vous avez remarqué, mais la synagogue du 5363 Hutchison n'est pas l'exception vermoulue qui confirme la règle. Presque partout où les intégristes hassidiques installent leurs lieux de culte dans le Mile-End et à Outremont, les immeubles se transforment en cambuses aux allures sinistres et sordides.

Des exemples? Pensons au 5815 Jeanne-Mance , au 5555-5571 Hutchison , au 5843 Hutchison , 6082 Parc , à l'ancien restaurant La Mère Poule et la très célèbre synagogue des Rosenberg (cliquer sur les adresses pour accéder aux musées des horreurs) .

Now, I'm not in Montreal right now, so I can't go take pictures of the many quite nice Hasidic synagogues restaurants, and homes throughout the city. But that's OK. As long as you cherry-pick your examples from a large enough sample size, you can prove your point well enough, and if you can weave together some sort of narrative that makes it sound like it's not the individuals involved who are making front lawns look bad, but rather some sort of city-wide conspiracy to make Montreal neighbourhoods unattractive, all the better.

Newsflash, asshole. There are a lot of Hasids in Montreal. There are going to be a lot more. When you have a population of people, some of them are going to be slobs. If I went out every day with a camera in order to take pictures of every sub-optimal thing you did throughout the day, you'd look like a pretty shitty neighbour too.

Those of you who know me will know that I myself am not a great fan of most Hasidic communities. Like many religious groups, they discriminate against women, they can be intolerant of their own members who no longer wish to follow the lifestyle, etc. etc. Notice, however, that I don't single out the Hasids for no reason. It's oh-so-easy to make a group look like shits with the right attitude and a Wordpress account.

2011-04-29T19:55:00.000-07:00

My absentee ballot hasn't arrived. I'm hearing from other expat friends that theirs haven't either. Son. Of. A. Bitch.

At least my riding is going Liberal. But seriously, man. Fuck.

Please don't hate me, all of you. Hate the postal service.

Rewrite

2011-04-19T18:47:00.000-07:00

If you have to ask, the regression has taken seven days. From the blissful detachment of the internet deprived, it has taken me all but a week to forget that more important things in life do exist beyond those things that I read about on the news but cannot change and to get back to fuming over what the latest A1 New York Times article seems to imply:

The United States has long had a sterling credit report from ratings agencies because of the global preference for the dollar. But the latest deficit gridlock in Washington may have taken some of the luster off the reputation of the world’s largest economy and its currency.
On Monday, the ratings firm Standard & Poor’s lowered its outlook on the United States rating to negative. Although the agency did not actually lower its highest AAA rating on the country’s debt, it was the first time since the S.& P. started assigning outlooks in 1989 that the country was given an outlook that was something other than stable.
While it had not been completely unexpected, the S.& P. decision shifted the nation’s deficit debate out of the political arena — at least for the day — and thrust it on Wall Street. The action spooked investors, sending the three main stock indexes down more than 1 percent.
Treasury yields, or the interest rate that the country pays on its debt, spiked immediately after the announcement. Since the United States owes more than $9 trillion in outstanding debt to the public, even a one-tenth of a percent increase could potentially add billions to the deficit over time.

There are a number of things wrong with these introductory paragraphs--namely those last two. In fact, those last two paragraphs are so flawed, I've decided to just rewrite them. You will find my corrections below in italics:

While it had not been completely unexpected, the S.& P. decision shifted the nation’s deficit debate out of the political arena — at least for the day — and thrust it on Wall Street. That isn't necessarily to say that the rating agencies should to be seen as apolitical, or, most importantly, as qualified and competent to actually offer trustworthy ratings. I mean really, after spending the first half of the aughts telling everyone that U.S. mortgage-backed anything constituted prime investment-grade material, who on earth would pay any degree of credence to anything they say? I mean, you'd really have to be an idiot to put any faith in these companies. This is particularly true when it comes to their assessments of government, as opposed to corporate, debt where the rating agencies have access to just as much relevant information as the general public and so there really is no other way to see this but as a guess which is supported by, at best, nothing at all and, at worst, mindless ideology. The action spooked investors, sending the three main stock indexes down more than 1 percent. Though obviously it's difficult to say whether the stock market was spooked because they actually feared a U.S. government default (an opinion they'd evidently not held or realized they'd held until S.&P. published its own), higher interest rates resulting from market fears of U.S. government default, future austerity measures imposed by the government responding to assumed market fears of U.S. government default, or something else entirely, like higher oil prices or Japan or Portugal or whatever.

Treasury yields, or the interest rate that the country pays on its debt, spiked immediately after the announcement. And by "spike immediately," I mean rose slightly from one historic low to another historic low before actually finishing the day lower than it started. Which is to say, I am completely making shit up at this point, but nevermind, you probably won't read past the jump to the business section anyway and you definitely won't bother looking up the April 18th figures from online sources that are readily accessible. Since the United States owes more than $9 trillion in outstanding debt to the public, even a one-tenth of a percent increase could potentially add billions to the deficit over time. Paul Ryan Paul Ryan PAUL RYAN!

Get out yo ruler.

2011-04-04T19:01:00.000-07:00

Now here is some science I can get behind thank you Cory Doctorow from BoingBoing.
Men's taint-size correlated with fertility

thoughts for the season of buying shit

2010-12-23T00:27:00.000-08:00

"Un artiste est un scarabée qui trouve, dans les excréments mêmes de la société, les aliments nécessaires pour produire les œuvres qui fascinent et bouleversent ses semblables. L’artiste, tel un scarabée, se nourrit de la merde du monde pour lequel il œuvre, et de cette nourriture abjecte il parvient, parfois, à faire jaillir la beauté."

-wajdi mouawad

parfois!

Today I found the ugliest assortment of Christmas bulbs ever manufactured, hand-blown in India for Old Navy (really), "Targét," and some other unnamed temple to misguided consumption, overpaid marketers, and underpaid producers. I reflected on the bulbs (and for that matter, in them, but that is a different story), both because the holidays sometimes provide ample reason to remain in musty basements longer than needed, and because I found in these hideous artifacts some twisted commentary on our collective idea of value.

We are all taught a simple formula - value, or rather, price, is a relation between scarcity and demand. Demand may be elastic or inelastic, but this itself is a function of relative value. Inelastic demand comes from objects that satisfy basic needs, or that are priced so low that any modest increase would not impact the decision to purchase. In other words, it relates to the things we need the most, and the things that seem to impact our financial lives the least. But what does it mean to "need" something, and how is value affected when cost becomes meaningless?

There're many answers, both varied and valid, but this is the one I came across that struck me the most.

http://www.slate.com/id/2083452/

Because often, when price is meaningless, the need is abstract. In this case, meaning, whatever the Sotheby assessment, is a matter of narrative significance. The article undersells the enormously decadent saltshaker by implying it could be replaced by a four-dollar table set from Target - a short trip to the smelter could turn that irreplaceable, irreplicable piece of Western cultural history (a true monument to décadence) into several thousand dollars worth of bullion. Inevitably, though, we would say that it had lost "value." But what do we lament, the entropic loss of Cellini's virtuosic craftsmanship, or the gaping hole in our archeological record - the dissolution of an artifact into specious accounts and unremarkable specie. Both of course, but while the one has disappeared permanently, the figurative loss remains: a debit against the past that cannot be repaid.

And so, in the spirit of Christmas, we remember that it's "the thought that counts," but that thought is fear. This fear of being without the hard stuff, the bullion, the proof takes on a ritualistic quality come the holiday season. Who wants to be the one without a gift? The social capital invested in the wrapped whatever-it-is has far more value than the item itself. This is not the same as spontaneous giving. We all know which gifts we may have bought each other anyway, out of pure consideration (though the cynic would suggest that they all fall in the category of items with meaningless cost). We also know the season creates certain holes that must be filled, lest our stories and our cultural memory slip into "the" abyss. Otherwise, there may be empty spots on your Christmas tree.

That's why we buy cheap ornaments when the tree's about to go up, even if some poor Bangledeshi uttered an ancient curse on the miserable designer when she had committed another day to blowing his nauseating glass balls. The fear of losing meaning at this highly meaningful time compels some people, including my precious mother, to buy these absurdities even when quaint and perfectly lovely orbs sit below piles of other trucs (there is no real translation for "stuff").

That's why I took them to the garbage and smashed them individually. And go figure, there was nothing inside.

(sauf, peut-être, une histoire).

also, on spending time in the basement alone: http://www.youtube.com/watch?v=39UJuPogwiY

Let's blame the new generation

2010-12-05T20:01:00.001-08:00

This is a response to the New Yorker article Sarah posted on Facebook, "Small Change," written about two months before this moronic cartoon character anti-child abuse campaign* started, but certainly applicable. It's an interesting piece, and all its points about the futility and idiocy of making a change to one's ephemeral online persona in order to support an activist cause are generally good. Unfortunately, however, it strikes me, like so many New Yorker pieces do, as thoroughly patronizing and extremely unself-aware. I know this is a literary piece and not a scientific study, but the points the author makes are based on comparison of "internet-age" activism and civil-rights era activism, and the things he's comparing are simply not comparable.

The author's point, like most people who complain about these things (including myself), is that the internet and social media are lowering the standards of activism so that someone can feel warm and fuzzy about helping abused children without actually having done jack shit - "slactivism" is the incredibly annoying neologism I've read a few times to describe this phenomenon. As anyone arguing about the activism (or lack thereof) of young people today must do, Gladwell brings up the rightly legendary sacrifices of the civil rights protestors, marchers, etc. And hey, maybe a little shame would get some people (again, including myself) off their asses and out to an actual protest. But, it's really not a good argument he's making.

Gladwell is essentially saying that we can compare the 500 million users of Facebook (and OK, not all of them are students) to the tens of thousands of student activists who did so much in the fight for civil rights. Can anyone spot the problem here? He's taken the top couple percent of the 50's and 60's student population in terms of activism and is claiming that since more people than live in the United States are not doing the same work that they did, the internet must be making us soft.

Now, by saying what I'm about to say, I am being equally non-evidence-based as Gladwell was, but I'm going to say it anyway. I would put my money on the internet and social media in fact increasing rates of activism among young people - if we look at the number of students today who are active comparably to the civil rights activists. The problem here isn't that it's so easy to do something meaningless - it's ALWAYS been easy to do something meaningless. The problem is that those meaningless things are so much more visible now. For every civil rights activist - and anti-civil rights activist - in the 50's and 60's, there were lots of people who didn't do anything - just like changing your profile picture doesn't do anything. The problem is that no one knew they weren't doing anything, because there wasn't a global platform for them to not do anything on!

Anyway. Sorry this is so badly written, I have been working non-stop for the past week and my brain is rather tired. Also, since Dave and Ben are both unlikely to have blog access for the next little while, I guess it's just me, Sarah, and Lion (and maybe Dan) on this one.

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* I would like to point out that my profile picture has been Milhouse since October 22, and that changing it from a cartoon character to something else to avoid the campaign would simply be giving in to the moronism.

A Wave of Cold Water

2010-10-21T01:00:00.000-07:00

Much is being said around the blogosphere recently about this revitalizing nugget of Charlie Cook wisdom concerning wave elections:

The one sobering thought that veteran Republican consultants are already contemplating is that the larger the wave this year, the more difficult it will be to hold onto some of these seats in 2012 and 2014 in the House and 2016 in the Senate.

The bigger the wave, the weaker the class and the harder it will be to hold onto those seats. Democrats only have to look at their 2006 and 2008 classes for plenty of examples.

What this means is that we will likely have our third wave election in a row this year, and the bigger this one is, the more likely that there will be a countervailing wave in either 2012 or 2014.

I'll admit, when I first read the article, I was encouraged. On its face, it seems logical. If the Republicans make big gains this year, they will come in regions that are demographically trending blue, they look to be relying on depressed democratic turnout, and of course this crop of Republican candidates is particularly insane. It's somewhat cold comfort for those of us who had hoped for a continued legislative agenda that wasn't bogged down by fishing expeditions and threats of government shutdown, but this kind of analysis offers, dare I say it, hope. All we need to do is tough it out for two years, and we'll be okay again. The Republicans will stretch themselves too far, far beyond the actual geographic contours of their party, and a large correction will follow. At that point, assuming the economy doesn't crash groin-first into a cactus again, Obama keeps the presidency and gets back to work passing more desperately needed legislation.

Well, as much as I'd like to leave it there, that's not the way it crumbles, cookie-wise. As Matthew Yglesias points out, Republican gains this year are going to be coming out of a very large Democratic majority. The current breakdown is 255-177; just to reach parity, the Republicans need to pick up 40 or so seats. The Democrats are the ones that are already stretched way beyond their bounds, holding seats in all kinds of places they just never would have without George Bush's help. Many of these seats were picked up by the much-maligned Blue Dog democrats, most of which are now trapped in "who's the most conservative conservative" style battles with well-financed and typically crazy Tea Partiers. If there's ever a "natural" state to party control, these are "naturally" Republican areas, now matter how the demographics may slowly be trending. In other words, this election is the countervailing wave, and only if it's a wave of such a magnitude to tip into traditionally blue districts (a 70+ seat wave) could we reasonably expect another wave to come.*

Cook also has this to say:

Should the Senate end up with a 9-seat net gain for Republicans, or even eight, there will be immediate speculation about what Sens. Ben Nelson, D-Neb., and Joe Lieberman, I/D-Conn., do. Both are up for re-election in 2012 and neither is likely to be oblivious to the fact that Democrats have twice as many seats at risk in 2012 and 2014 as Republicans. Whether the GOP captures a Senate majority this year or not, the odds are pretty good that they will have one in either two or four years. That kind of exposure is enormously important, particularly given the rarefied circumstances in which Democrats won some of those seats in 2006 and 2008.

So even if there is a countervailing wave, and somehow the House returns to Democratic control, the GOP is still going to have two more decent shots to take the Senate, where the real action is. And it's the Senate which has caused progressives the most grief in the last two years, slowing up every confirmation or bill that so much as looked at them funny. Worse yet, Senate control may lie in the hands of Ben Nelson and Joe Lieberman, two crabby old "moderates", in the worst possible sense of the word.**

So, cold water. Of course, it's possible that the Republican Party somehow deviates from its current strategy (though unlikely, considering both how much success they've had with obstructionism and how many Tea Partiers will soon be in Congress), or that legislative procedural reform is passed (also unlikely, as the Democrats will be happy to pick up those tools once used against them), and then Obama is once again capable of passing large, ambitious, and vital legislation. It's much more probable, though, that the next 4-6 years are a blur of frivolous congressional investigations, hyperbolic showdowns, and maybe even an impeachment or two.

* And keep in mind that the natural breakdown of voting constituencies has always resulted in a lopsided congressional map towards the Republicans. Democratic voters tend to cluster in higher concentrations (urban areas) than Republican voters do, so even if the congressional vote is 50-50, you'll have a Republican majority due to the way the districts are laid out.

** I wrote about this way back, but these guys get away with murder under the guise of being "independent". Remember the Cornhusker Kickback? Or, say, anything Joe Lieberman has ever done? They possess enormous power simply because they've positioned themselves at the ideological fulcrum of the Senate.

Always Be Foreclosing

2010-10-20T06:04:00.000-07:00

Maybe you've heard it called the "foreclosure mess." Or, from those who can somehow still affix the suffix with a straight face, maybe it was "foreclosure-gate." And then there are the few hand-wringing bloggers, finding both "mess" and "gate" too trivial, who warn that we are already confronting with all-to-familiar obliviousness the beginnings of a full-blown "Foreclosure Crisis." But I suspect that the majority of people are calling it nothing at all, having never heard of any of this.

So much the better, according to the editorial board of the Wall Street Journal. As they see things all this hysteria--the foreclosure moratorium, the fighting words from the politicians, the bloggers, always hysteria from the bloggers--is all over a legal glitch. A minor, albeit oft-repeated, technical error. Nothing to get all riled up and frothy about, Comrade.

Talk about a financial scandal. A consumer borrows money to buy a house, doesn't make the mortgage payments, and then loses the house in foreclosure—only to learn that the wrong guy at the bank signed the foreclosure paperwork. Can you imagine? The affidavit was supposed to be signed by the nameless, faceless employee in the back office who reviewed the file, not the other nameless, faceless employee who sits in the front.

The result is the same, but politicians understand the pain that results when the anonymous paper pusher who kicks you out of your home is not the anonymous paper pusher who is supposed to kick you out of your home. Welcome to Washington's financial crisis of the week. (WSJ)

Totez. Leave it to the libs to make such a big deal out of something as trivial as property rights and contract law.

Here's the story:

Remember the housing crisis? Remember all of those complicated financial arrangements that bankers devised to make lending absurd sums of money to Guatemalan cleaning ladies a riskless proposition? The details don't really matter--only this general point: the dizzying tangle of unnecessary complexity that now connects a single mortgage payer to a single beneficiary of that payment is sufficiently labyrinthine to make even Jareth the Goblin King, codpiece and all, feel a little inferior.

Now with so many borrowers unable or otherwise unwilling to pay their mortgage debt, their homes (the collateral on those loans) are being seized by debt servicers (located either in the bank or outsourced to Knee-Breakers Corp.) and sold off, the proceeds going, minus fees, to investors. Hence, the Gregorian knot of mortgage payments is traced backwards to its source where it is unceremoniously cut.*

But now that process has stalled and most fingers initially pointed at "robo-signers." When a servicer forecloses upon a home, it must provide to the court (in states where foreclosures are passed through the court) a number of necessary documents--most notably, the actual mortgage note (the IOU)--along with a sworn affidavit that says something like, yes, it would seem that we actually have the right to take this person's house away.

But, alas, it was discovered that employees within a number of banks (GMAC, JP Morgan Chase, and Bank of America most notably) were processing these files at a rate of about a case per minute. That's a case examined and deemed to be in order, another foreclosure approved by the bank, every sixty seconds.

Now, here's the debate:

Is the problem simply that that the robo-pens are flying a little too quick for regulatory comfort, that the underpaid schlub in the front office was signing at the dotted line instead of the underpaid schlub working in the back? Is it, to paraphrase the Wall Street Journal editorial, that the servicers aren't certifying their right to foreclose on a property in exactly the proper way? Or is it that, in a number of cases, the servicers just don't have the right to foreclose, period?

Maybe, as many are suggesting, the servicers don't have all the necessary documentation. As the New York Times reported on October 2nd, one of the countries largest title insurers has suspended insuring sales on homes foreclosed by either JP Morgan Chase or GMAC until "the objectionable issues have been resolved." An explanation:

In every sale, a title insurance company insures that the title is free –and clear —that the prospective buyer is in fact buying a properly vetted house, with its title issues all in order. Title insurance companies stopped providing their service [to servicers trying to sell foreclosed-upon properties] because—of course—they didn’t want to expose themselves to the risk that the chain of title had been broken, and that the bank had illegally foreclosed on the previous owner. (The Big Picture)

In other words, these independent private insurers are refusing to sign-off on what the minute-men robots had. And while it's impossible to know exactly what those "objectionable issues" are (the author of the blurb above seems certain, but who knows?), they're obviously serious enough to raise questions over the legality of a given foreclosure.

Recall the housing boom. The business model of most mortgage originators (initial lenders) was originate-to-sell: lend money, sell the debt to a big bank on Wall Street, repeat. This process was, it goes without saying, under-regulated and the poor standards employed by the originators are evidenced by the last three years of financial history. Further up that food chain, mortgages notes (the IOUs) were often traded 18 separate times while claims on their payments were sliced and diced and repackaged down to the cent. Given all that, it certainly seems possible that some of those notes were misplaced--or at the very least, transferred from one party to the next incompletely or improperly. To avoid this, most banks began submitting these notes to a central registry, MERS. But it turns out that the folks at MERS sucked just as bad at their jobs as everyone else in the industry. A worrying statistic:

A 2008 study by the University of Iowa showed that mortgage servicers, most often than not, were neglectful in their storage of original documents that will support foreclosure. The study showed that out of the 1,700 cases of bankruptcy due to home foreclosures, 40 percent have missing original mortgage notes and other required documents. (Real Estate Pro Articles)

Now understand that within the under-regulated complex of industries called Modern Finance, the debt servicing sector stands out as one of its least regulated cogs. With little supervision, the incentives facing servicers are largely skewed towards foreclosure. An example: when homeowners stop making their payments, all existing financial arrangements pertaining to that debt enter a kind of legal limbo. Investors owning securities backed by the mortgages are entitled to their monthly payments and property taxes and insurance must be paid on the property after the first 90 days of delinquency. The servicer must cover these costs until the property is sold. Furthermore, most servicers are paid additional fixed fees to cover default and foreclosure expenses. With so many reasons to foreclose, it would thus appear that the assembly-lines lenders like Countrywide adopted during the housing boom are being re-assembled--in reverse.

And with the attempt to constantly churn out as many foreclosures as possible, like the attempt three years ago to constantly churn out as many mortgages as possible, comes the predictable fraud. Meet the new crisis, same as the old crisis:

Last year, the Department of Housing and Urban Development (HUD) received nearly 2,500 complaints about servicers, a 379 percent increase over 2007. In the first 10 months of 2009, consumers filed about 1,000 legal complaints against 10 of the largest servicers for illegal foreclosures and other predatory practices...A federal class-action suit against Ocwen asserts that it has hiked mortgage payments without fair notice, forced borrowers to buy unnecessary insurance, and intentionally processed payments late. (Mother Jones)

Unmentioned here (and on the editorial pages of the Wall Street Journal and on CNBC) is the wide-spread assertion that, in the absence of valid documentation, many servicers working on behalf of banks or bank-managed trusts simply filled in the blanks. As in, they would just make shit up. Exhibits 1, 2, and 3.

So here's the up-shot:

There has been a systemic breakdown in the national foreclosure process. What some are still trying to call a series of technical errors in actuality represents the untethering of an entire subsection of American Finance from the rule of law and property rights. Blatant fraud aside, many foreclosures seem be taking place based not on legal contract, but on the word of the servicer and the complacency and legal ignorance of the borrower. Shoddy paperwork becomes much more than just shoddy paper work when you are discussing the institution of property rights as it pertains to a 2.6 trillion dollar industry. State attorney generals and major investors are only waking up to that fact now. That is the crisis.

On one end of the broken chain of title sits a class-action law suit waiting to happen in every former homeowner who might have reason to believe that a single detail on their mortgage note was violated, plus a growing army of angry borrowers grinding the foreclosure process to a halt.

On the other end of the chain, sit the investors. Imagine this: back in '05 or '06' or '07, an investor buys a financial product offering a certain amount of cash, sliced off from a thousand different mortgage payments from a thousand different counties around the country. With the meltdown, most of those mortgage payments stopped coming. Now, as the investor waits for foreclosure to squeeze the last dollars out from a disappointing stream of payments, that investor learns that the trust that sold him the security never legally owned the underlying mortgage notes. Hell, maybe those notes were sold simultaneously to three separate banks! So now the investor, and every one of his/her counterparts, wants the principle investment back--right now and with interest too.

So what does the trustee say? We can't be entirely sure in all cases, but the blog Rortybomb gives the following real-world example of a contract between the original underwriting of a pool of mortgages (in this case Goldman Sachs) and the company that bought the pool to slice and dice for investors (in this case Deutsche Bank):

In connection with the transfer and assignment of each Mortgage Loan, the Depositor has delivered or caused to be delivered to the Trustee for the benefit of the Certificateholders the following documents or instruments with respect to each Mortgage Loan so assigned:

(i) the original Mortgage Note (except for up to 0.01% of the Mortgage Notes for which there is a lost note affidavit and the copy of the Mortgage Note) bearing all intervening endorsements showing a complete chain of endorsement from the originator to the last endorsee...In the event, with respect to any Mortgage Loan, that such original or copy of any document submitted for recordation to the appropriate public recording office is not so delivered to the Trustee within 180 days of the applicable Original Purchase Date as specified in the Purchase Agreement, the Trustee shall notify the Depositor and the Depositor shall take or cause to be taken such remedial actions under the Purchase Agreement as may be permitted to be taken thereunder, including without limitation, if applicable, the repurchase by the Responsible Party of such Mortgage Loan. (Rortybomb; emphasis his)

Get that? If any more than one in ten-thousand of the underlying mortgages notes is missing or improperly endorsed, the second bank can force the first to buy everything back. And the originator can't go back and fill in the blanks now, assuming it would be able to do so, because it had 180 days after the purchase date to do that. So all those banks with all those toxic assets sitting on their balance sheets? They might soon find themselves having to make bit more room.

This isn't solely a theoretical possibility. Just before writing this, I found this via Ezra Klein:

The Federal Reserve Bank of New York has joined a group of investors demanding that Bank of America buy back billions of dollars worth of mortgage securities that are plagued with shoddy documentation and lending standards, according to people familiar with the matter...If Bank of America refuses to comply, these investors could end up suing, a person familiar with the matter said.(Washington Post)

And never fear an insufficient number of reasons to feel fear, Felix Salmon has identified a related clusterfuck-in-the-making. This one involves investment banks potentially withholding material information from investors to whom they were selling these mortgage backed monstrosities. Which aside from not being a very gentlemanly thing to do constitutes insider trading and could serve as a solid basis for litigation--either from the SEC or any number of pissed-off investors. Or both. Oy.

With the sins of the mid-oughts potentially coming back to wreak havoc upon the balance sheets of the big banks, a number of people are predicting another full-fledged financial crisis. And this time around, it's hard to imagine any policy maker with the stomach for TARP II. For no particular reason though, I doubt things will get that apocalyptic. Maybe I'm just having a hard time imagining the big banks not finding a way to legally or politically slither out of another existential crisis. What I don't doubt is that with major financial interests opposing the banks on the so-called "buy-side," this problem isn't going away anytime soon. A month or two or three from now, if we're calling it anything, I'm guessing that we will no longer be calling this the Foreclosure Mess (or gate or crisis), but something more along the lines of Pissed-Off Investor-Gate or the There Aren't Enough Lawyers in Hell to Deal with All These Lawsuits Crisis.

But down at the ground level, I suspect that maybe a few high profile cases will bring down a particularly flagrant servicer or two--and with it, the entire foreclosure fraud issue as a publicly recognized scandal. Unless the poor paperwork was so bad as to actually invalidate existing debt (which is not going to happen and if it did would open a whole other can of worms), I have a hard time believing that the servicing and foreclosure system will suffer much more than a few aftershocks. Without regulation, the sector will remain in the shadows. And all those deadbeat defaulters that nobody cares about, without the indignation of a defrauded mutual fund or national government to back them up, will remain deadbeat defaulters, even when they aren't. In the meantime, let's all pray to Saint Elizabeth Warren.

*It is worth mentioning that in all the chatter about fraud and abuse, few are questioning the economic logic of foreclosing at all. Rortybomb has a great post on this.

New Age idiots kill people, puzzle over declining business

2010-10-19T10:10:00.000-07:00

So, a New Age guru who charges 10 grand for people to go to Sedona, sit near crystals, and sweat to the oldies (by which I mean made up, poorly documented, and twisted beyond recognition Native American oldies) is being charged with manslaughter after three people (customers? visitors? pilgrims?) died and numerous others were rushed to hospital following a sweat lodge disaster. Take a look at the response from some other Sedonians:

“It was a very unfortunate and sad situation that could have happened anywhere,” said Janelle Sparkman, president of the Sedona Metaphysical Spiritual Association, who attributes the woes that New Age practitioners are experiencing to the lack of disposable income tourists have for spiritual needs and not what happened that awful afternoon. “It was not indicative of Sedona or Sedona’s practitioners at all.”

Uh... what? Three people could have died in a sweat lodge anywhere? I mean, I guess that's technically true. I mean, I don't think that the physical location of the sweat lodge made it more dangerous. If this asshole was charging 10 grand to sit in a sweat lodge in downtown Baltimore, they could have died there, too. But how the fuck is this not indicative of Sedona? Have you seen the Wikipedia page? It has a separate heading for vortices. Seems to me that, given the amount of bullshit that comes out of that corner of Arizona on a daily basis, it's probably a lot more likely that it would happen in Sedona. And for fuck's sake, one of Sedona's most well-known practitioners killed three people. If that doesn't say anything about Sedona's practitioners... Well, it does.

“Initially, I didn’t think it was going to affect business and, a year later, I know I was wrong,” said Deidre Madsen, who runs a New Age travel company in Sedona and a Web site devoted to inner growth. “I’m shocked at the impact. My business is down 20 percent.”

You're shocked at the impact. Of three people dying. You're shocked. You know, just because you believe that those three people are going to be reincarnated as rainbow dolphin angel faerie babies doesn't mean that everyone does. When people die doing something, other people don't want to do it anymore.

“We do not want an energy that we’re sitting on a graveyard,” said Amayra Hamilton, co-founder of Angel Valley. “This is about learning and appreciating life. That means expanding our understanding of life and death.”

Guess what? If you didn't want that "energy," you shouldn't have killed three people. You could have listened to the people warning about the dangers of sweat lodges, but you didn't. You went ahead, because you are goddamn greedy fucking vultures,* irregardless of whether or not you believe in the shit you peddle. Yes, IRregardless. I'm so fucking pissed I added a syllable.

Now, to end on a lighter note, here are the first couple paragraphs from the article:

SEDONA, Ariz. — There is negative energy in the air here, which the channelers, mystics, healers, psychics and other New Age practitioners of Sedona are grappling to identify and snuff out. It has to do with the recent dearth of visitors to this spiritual mecca in search of help.

Nobody is sure exactly what is keeping people away from Sedona’s four vortexes, those swirling energy sources emanating from the earth, but the effects are clear: far fewer crystals are being purchased, spiritual tours taken and treatments — from aura cleansings to Chakra balancings — ordered.

So deliciously sardonic. Kudos to you, Marc Lacey.

* Ray refused to refund his customers' money after he canceled the retreat following the deaths.

Vote on my Vote

2010-10-15T08:20:00.000-07:00

I'm facing a dilemma. If I were the dramatic type, I might even call it a moral crisis. But not being the dramatic type, I've decided to write a blog post about it and ask for comments.

Here's the issue:
I have a ballot. It's an absentee ballot. I got it in the mail. There are ten pages and I have completed them all. From the federal level all the way down to the city, I filled-in the requisite number of broken arrows such that my infinitesimally marginal voice will be projected as loud as it can be projected. I have researched those judges looking to represent my municipal district despite an absolute dearth of relevant googleable information. I have dug deep into the comment sections of San Francisco's alternative weeklies and unearthed dirt on local school board candidates. I have figured out what an Assessor-Recorder does. But one vote remains.

Well, technically two. California state propositions 20 and 27 are opposing measures on the same issue. The issue is redistricting. The text of Prop 20 reads as follows:

Removes elected representatives from process of establishing congressional districts and transfers that authority to recently-authorized 14-member redistricting commission comprised of Democrats, Republicans, and representatives of neither party.

Prop 27 reads (allow me to paraphrase): makes Prop 20 go away, no tag-backs.

If both props carry a majority (I wouldn't put it past the California electorate), the one with the most votes wins.

As far as my principles go, I'd really prefer to vote for 20 and against 27 (that is, for the redistricting commission). As far as I can tell, gerrymandering doesn't serve any social function other than to keep incumbents in power. Also, its a fantastically effective tool to disenfranchise any residentially-concentrated minority community (see: the Spanish-speaking half of the state). Allowing a commission (selected to fit the above mentioned criteria by three state auditors, a Democrat, a Republican, and an independent, all three of whom have already been selected, also randomly) to redraw congressional districts is obviously less democratic in a direct sense, but strikes me as a little more fair and a little more legitimate.

So why do I hesitate? This is what I wrote to my mom about the same issue late last night:

But, on the other hand, why should a consistently Democratic state be diced up by a panel divided equally along partisan lines? And do we really want to take redistricting power away from our elected representatives, however noble we happen to think the idea is, when OUR elected representatives are predominantly Democratic? Do we want to be unilaterally principled when our votes are competing with (gasp!) TEXANS?!? Have you ever seen a map of Texas, district-by-district? Most people don't know this: it's a pixel portrait of Tom Delay's face.

A number of people in the pro-27 camp make the argument that while reforming the redistricting process is a worthy goal, it really ought to be done on a federal level. Otherwise, all those states most open to transparency and electoral reform (can I fairly assume these to be disproportionately blue?) will vote themselves into an electoral disadvantage against those that hold out against reform.

But can we ever really expect a law so hostile to incumbency to pass through Congress?

So what do you guys think? Imagine you're from California and then imagine that your vote makes the slightest difference. Do you vote on your principles or your partisan pragmatism?

Interesting things!

2010-10-12T21:36:00.000-07:00

I don't have a job anymore! Nor do I have LSATs! That makes me somewhat able to post on the blog again, even if only to do a link round-up.

1. This is a great article on the process of acquiring medical marijuana in America's most competent state. Basically, it's easier to find a fake doctor to prescribe weed to you for your fake problems than it is to get a real doctor to agree to do the same for real problems.

2. NYT Review of Books on the drug war in Mexico. I don't have a lot of "value-added" commentary here, other than to say that this only reinforces the argument I am constantly making about the moral costs of cocaine use by Americans, Canadians, and Europeans. Also, while this is an incredibly dark and disturbing article, there are repeated references to a criminal death cult, which means that Cobra was a much more prescient movie than I am willing to admit.

3. A new language! Well, not new, but not known academically. It's also interesting because linguists aren't really sure how Koro has survived so long, considering there is no place where it is the dominant language.

4. An interview with Steve Rattner, the dude Obama czar-ified to help work out the auto industry bailouts. I confess I didn't really understand this portion of TARP, nor did I pay a lot of attention to it, but, as with the rest of the bailouts, it seems to have gone smoothly. What is most interesting about the interview, though, is the volume of spleen-venting Rattner does over Congress. He even makes two criticisms which have been around in the liberal blogosphere at least as long as Obama's been in the White House (and with which I happen to agree): one, that the presidency is weaker than the media perceives or portrays it to be (at least in domestic affairs), and that as a result negative attention that should rightly be cast towards congress is cast towards Obama, and two, that the congressional appointment system is totally screwed, to the point where even a Nobel Prize-winning economist can be kept out of the Fed.

Just a quick thought

2010-10-10T21:03:00.000-07:00

I'd like to know what you all think about this. First, a little background (and if you're bored to tears by the first sentence feel free to skip down the actual question).

Scott and I often discuss the ethical implications of robots. Perhaps surprisingly given our respec-tive poli-tics (try to guess who's who!), we actually agree on a lot of it. We both think that a computer brain that is indistinguishable from a human brain without cutting into it (i.e. a computer that can pass the Turing Test as consistently as a human can) must receive the full legal protection afforded to humans, since it would be impossible to state confidently that such a computer did not possess something that is equivalent to how we define human consciousness.* From this perspective we've had several quite enjoyable conversations on the topic.

Anyway, I was absently thinking about this last night (or Friday maybe) and it occurred to me that the Three Laws from Isaac Asimov's universe, which are by law written into all code in robot brains and have actually become a sort of standard among real-world roboticists working on robot AI, can perhaps be thought of as being analogous to implanting human brains with devices that block certain thoughts - i.e. complete mental censorship. If the robot can't even imagine harming a human, its mind is irreversibly handicapped by censor.

I found that idea abhorrent. To me, there can be absolutely no situation in which any body, individual or government, can have the right to restrict thought, by which I don't mean "ideas" or anything like that, but rather the actual thoughts that live in our heads. That is, the government has no right to tell a Klansman that he can not dream about lynching a black man, nor a rapist from fantasizing about rape, nor a pedophile about sex with minors. Obviously the government has every right and obligation to tell them that they are not allowed to do those things, and perhaps even that they are not allowed to speak about it in certain contexts (such as a Klan rally). But anyone is always and forever free to think whatever they want. To give a real world connection to this, I am adamantly opposed to mandatory chemical castration for sex offenders for just this reason (as California decided it would do in 1997 - several other states have since followed suit). It's a wonderful thing that chemical castration is possible, so that the "good" pedophiles,** who are aware of their attraction to children but are also aware that it would is morally abhorrent to act on their urges, can find relief. But I can simply not agree with mandatory castration on the grounds that it artificially restricts one's freedom to one's own mind.

So that brings me to my question:

Do you fellas and lady believe the same way I do that people have an eternal and inalienable right to think whatever they want within the confines of their own head?

And, of course, if you want to comment on any of the robot stuff, go right ahead.

* Incidentally, I also think that certain animals (probably some whales and dolphins, and possibly [though it's a stretch] some of the more advanced cephalopods) deserve similar protection, but the data to back that up is far from conclusive, so I reserve my moral outrage at killing them to the "but they're so cute!" stance. Well, not the cephalopods.

** And, of course, "good" rapists, who are aware that they are aroused by the thought of non-consensual sex but know it is morally abhorrent, and "good" other sex offenders. It's just a lot harder to write the phrase "good rapist" even with scare quotes then it is to write "good pedophile," because a rapist is someone who's already raped, whereas a pedophile (by my own definition, at least, I might be wrong) could just be someone sexually attracted to children, regardless of whether they've acted on that before.

Decisions, Decisions

2010-09-17T22:22:00.001-07:00

This morning, I sat down and read a book, which would be more impressive if it wasn't a piece of pop-academia called Predictably Irrational, but as much as I have a psycho-somatic reaction to social-psychology, this was a fun, well-structured addition to my morning.

Over the past six months of deciding "What To Do With My Life and How To Make the Right Choice," I've been obsessively "self-aware," trying to factor into my decisions not only the apparent utility and costs of each option, but also the various subconscious assumptions and social pressures that have led me to evaluate each pro as a pro and con as a con. All the time I have comforted myself with the behavoiral economic/social psycological/consumer ideological assumption that the more I struggle to make the choice, the more I will subconsciously justify it in the end, releasing endorphins, creating happy receptors, and probably moving me one step closer to the Buddha.

However, if I have learnt one thing over the last year or so since graduation, it's that the worst choice one can make is none. On days when I haven't left the house, I have spent hours being anxious about all of the things that I could/should/would otherwise be doing, while failing even to finish mundane tasks such as laundry or email-responding, for fear that they might keep me homebound. Wasn't I pleased to learn that this phenome-not is being throughly studied at MIT and, most particularly, the RSA:

"The Paradox of Choice" - Rene Salecl

If you don't have half an hour to burn, Salecl's basic premise is that when faced with an abundance of choices, we imagine the costs of each choice to be much higher, become anxious about choosing anything, and fall into a state of capitalism-induced passivity.

It seems to me the paradox goes one step further - we justify what we have chosen to self-satisfaction only if we do not recognize the other options. That is, we are comfortable having spent $300 on the X-box so long as we don't think about how many textbooks we could have bought with that money (4), or meals for starving orphans in Birundi (700). On the other hand, if someone challenges our choices by presenting such options (sorry), we will often over-justify (radicalize) or refuse to make a choice in the future, depending on...(if protons were people the Bomb would work only on sunny days ending with q).

Salecl continues: under Capitalist systems, people refuse to organize or take real action themselves, and are prone to leaders who seem unduly confident (which is usually a symptom of mild to acute psychosis).

Which brings me to Mr. Glenn Beck.

"In his interview with Newsmax, Beck reveals his worst fear: that a “Reichstag moment” — a catastrophic event may soon take place so that the powers that be in Washington can end the Republic and our cherished Constitution." (glowing book review here)

"First they went for the Tea Party Protestors, and I was silent..."

On better days, I believe that Beck actually sees the similarities between American Libertarians and the Communist Party before Hitler and Stalin. On the worst days, I fear he doesn't realize the difference.

The key irony of Soviet-style countries was that the state got stronger instead of dissolving. It could never dissolve. By teaming up with the Tea Party, the Libertarian movement (distinct from the Libertarian Party) found itself a strong, popular base. (Read Jane Mayer's account in the New Yorker - brilliant despite its air of conspiracy theory). However, this base demands social legislation (abortion and gay marriage being the most prominent) that conflicts with the very principle of an unregulated society. By supporting a vague social ideology, as opposed to an overwrought Socialist (economic) one, the Tea Partisans are following their vanguard back to a Gilded Age of poverty, horrible injustice, and classical economics.

I have to laugh (having considered the other options), and hope this all blows itself apart. If it weren't for all this Captialist-passivity, I'd be at the next Tea Party rally with the rest of the psycho-Patriots, waving my sign promoting kitchen abortions, bald eagle spearing and forced sodomy (privately funded, of course).

The Fed Isn't Dead

2010-09-01T07:42:00.000-07:00

As the purse strings of the federal government seem to be, with every Republican primary, with every youtube hit of Alan Simpson urinating on himself, with each anxious revolution of the corpse of Martin Luther King Jr., securely fastened, at least for the decade being, those who bother to talk about such things are beginning to talk about the Federal Reserve again. If we can't stimulate private investment directly with any more substantial spending (even if we ought to be), surely the central bank can try inundating the country in cash, shoveling out so many freshly-printed presidents that we all re-adopt the spending patterns of our golden yesteryears, if only so that we can find the living room floor again.

But wait a minute, you might be saying if this interested you in the slightest, isn't the Federal Reserve out of gas? Haven't they done all that they can do? Having pushed down short-term interest rates on government debt about as low as it will or can go and having, in the meantime, swelled its balance sheet to an unprecedented level, isn't it's proverbial powder all soggied-up (or shot out, whatever you think is more appropriate to the context)?

I don't know, but Paul Krugman and a bunch of other people are mad. In fact, they're basically calling Ben Bernanke a pussy. So what's a central banker to do?

The most traditional approach would be to simply re-start what the Fed already did last year; to expand the range of assets the Fed will buy or otherwise deal with (from longer term U.S. government debt all the way out to financial toxic waste) and to re-open a lot of those fancy lending and asset buying facilities. There are an alphabet soup's worth of them, and they aren't really worth getting into because, fundamentally, they all serve the same purpose. Either through loans on rediculously easy terms or through the purchase of somewhat riskier assets, the Fed hands over to the banks (and a few other bankish things) a lot of cash. And if these banks have more cash, so the logic goes, they'll be less likely to sit on it and more likely to lend it out for, one can hope, productive, economically stimulating, purposes. Or they'll just use it all to lend back to the federal government which will in turn be prevented from spending it by Congress. But who's counting?

But, according to Nick Rowe, the particular menu of assets that the Fed decides to start devouring is not just about range, (i.e. how much more stuff it buys or how much risk it's willing to take on), but whether the particular assets in question are "pro-cyclical" (i.e. people tend to want and buy them when the economy is doing well and not so much when the economy is not so much doing well--think most stocks and, particularly this time around, houses, and, on a personal level, filet mignon) or "counter-cyclical" (think U.S. government debt, maybe gold, and McDonald's). Right now and traditionally, the Fed focuses on buying the most counter-cyclical of all counter-cyclical assets, short-term U.S. government debt. It's considered safe and it's ubiquitous as all hell--that's why the Fed deals in it. But, according to Rowe, that's exactly the wrong kind of asset to be buying now.

Suppose the Fed buys a counter-cyclical asset. If the price rises, people may interpret that rise as a sign that monetary policy is having the desired effect. Or they may interpret it as a sign the economy is getting weaker. Depending on how people interpret the rise in price of the counter-cyclical asset, and the relative strengths of the direct causal effect...the net effect on the economy is ambiguous....Suppose the Fed buys a pro-cyclical asset. If the price rises, people will interpret that as a sign that monetary policy is having the desired effect. Or they may interpret it as a sign the economy is getting stronger. Both effects work in the same, desired, direction. Also, if people thought that monetary policy was having the desired effect, and was not impotent, any increased optimism about the future path of the economy would tend to raise the price of the pro-cyclical asset still further, which would tend to make monetary policy look more effective, and reinforce that optimism. (Worthwhile Canadian Initiative)

A bit more interesting to me, and a whole lot less likely, is the suggestion of junking and then rebuilding the entire way way in which monetary policy is conducted. As I mentioned before, all the money that the central bank hopes to push into the economy through an expansive policy is funneled through the banking system. In short: federal reserve gives cash to/buy something from a national bank, and then the bank feels a little bit freer to do the same to you and me. The obvious catch, however, is that it doesn't matter how much cash a bank has, the 0% return offered by cash (or the slightly higher yield offered by a loan to the U.S. government) beats the hell out of the expected return from you and me, because you and me are both unemployed and over-indebted. I mentioned this back in January.

Also, to the extent that Rowe and others talk about the influence of higher asset prices on inflation expectation (i.e. how people respond in their spending and investment behavior to an increase in prices), the respective directions of the financial markets and of the economy at large seem prone enough to dramatic divergence (at least for longish periods of time). Which is to say, even if stocks are up, that doesn't mean we all get our jobs back.

So here's an idea from Interfluidity: rather than relying on the financial sector to serve as a conduit, why not approximate Milton Freidman's helicopter drop by simply depositing chunks of cash in the bank accounts of citizens across the country. Yeah, just like that. Give money away. For free.

That is, rather than trying to fine-tune wages, asset prices, or credit, central banks should be in the business of fine tuning a rate of transfers from the bank to the public. During depressions and disinflations, the Fed should be depositing funds directly in bank accounts at a fast clip. During booms, the rate of transfers should slow to a trickle. We could reach the “zero bound”, but a different zero bound than today’s zero interest rate bugaboo. At the point at which the Fed is making no transfers yet inflation still threatens, the central bank would have to coordinate with Congress to do “fiscal policy” in the form of negative transfers, a.k.a. taxes.(Interfluidity)

How would ensure an equal distribution of transfers? Would this create accounting issues for the Federal Reserve? What would be the optimal amount and how would we prevent people from abusing the system? The blogger, Steve Waldman, tries to address the practical questions, as if anyone would really humor the idea, or, more likely, just for the coherency the argument; it's a thought experiment for its own sake.

Which, for the time being, is what all of this is. In his last speech (which I didn't read; I'm boring, but not that boring), the Chairman Ben himself claimed that should the economy need additional help, the Fed would be willing to provide it. What that assistance would look like (and more pressingly, what an economy in need of help looks like the Fed) is, of course, just a matter of speculation.

In lieu of something substantive

2010-08-20T06:50:00.001-07:00

I love you, Canada.

Saskatchewan should keep the bullshit on the wheat fields*

2010-08-11T08:12:00.000-07:00

Those of us in Canada (is that really only Sarah and I, and myself only for four more days?) may have noticed a few recent articles in the Globe concerning Saskatchewan Premier Brad Wall's decision to finance clinical trials of the so-called Liberation Therapy, a treatment for multiple sclerosis that has been proposed by Italian researcher Paolo Zamboni (yes, really) which claims that some stuff about veins that none of us useless arts kids understand is the main cause of MS and the disease can therefore be treated with an ol' run-of-the-mill angioplasty (which is surgery to widen a blocked or narrow vein.) I've been waiting for a long time to post something about this, actually, but now one of my favourite pseudoscience-bustin' blogs Science-Based Medicine has just done a post about it, so I actually have confirmation on my original suspicion from a real live MD, Steven Novella (who you'll know if you took my advice and started listening to The Skeptic's Guide to the Universe podcast):

Zamboni is also getting attention from neurologists and MS specialists, who remain skeptical because Zamboni’s claims run contrary to years of research and thousands of studies pointing to the current model of MS as an autoimmune disease.

Novella also points out that it's possible the vein stuff is merely a symptom of the disease which could itself lead to a worsening of the other symptoms. However, the vast majority of the research (19 studies, "a pittance") comes from Zamboni's research team himself. Of the four published studies by other researchers that have tried to replicate his theory that MS sufferers have venal blockage, only one has found a significant difference between the veins of MS sufferers and non-MS sufferers.

The stories in the Globe are basically a collection of anecdotes from MS sufferers who usually "know someone" who underwent the therapy and felt a lot better after:

“I still have patches of numbness, those things won’t go away,” said Duncan Thornton, a Winnipeg resident who travelled to Poland for the surgery in March. “But I have more energy than I’ve had for 20 years. I can play with my kids, I can stand up and do dishes, I can live life like a normal parent.”

or sufferers who feel that the government is keeping a promising therapy from being offered to them:

“It’s our bodies. The government should let us see for ourselves if it works,” she said at a small gathering with other MS sufferers. “They want us to wait a few years, but this illness won’t wait. We see this as a way out, the only way out."

MS is, of course, a terrible disease, and all hearts go out to its sufferers. Unfortunately, there's a reason that there are people who go through four years of school and four years of training: it's because, contrary to popular belief, your average person doesn't know what's best for their body. Doctors do. Luckily, the Globe stories have done a fairly good job of keeping Big Pharma conspiracy theories off the pages, but this opinion piece (and a quick Googling) show that they are, of course, alive and well.

Unfortunately, none of these things are in any way scientific justification for the course of action Mr. Wall has steadfastly dedicated himself to: for fuck's sake, look at this quote from Mr. Wall in a July 28 story:

“I heard some stories in church,” he said from a caucus gathering in Saskatoon. “One member shared some stories of a spouse struggling with it and it really stuck with me.”

Um, excuse me? You heard some stories? In church?? This is how you make important decisions about healthcare? Mr. Wall has been framing his decision in many of the terms that purveyors of quackery use: the therapy is giving people "hope," the procedure is "controversial," people "deserve answers." None of this means anything, of course, because the way to give people hope and answers when it comes to controversial therapy is to follow the scientific method. The basic proof-of-concept that underlies rigorously funded clinical trials isn't even close to being there - Zamboni's results have been replicated (in reputable scientific journals, that is) by only one other researcher and three have failed. I'll leave it to Novella to close out:

My open plea to the MS community, especially those who are going down the rabbit hole of conspiracy theories, is to keep this discussion about the scientific evidence. This is not the place for cheap conspiracy theories. I fear my plea will fall on deaf ears, but it never hurts to ask.

* OK, that title might be a little harsh, but I just woke up and it was the only mildly clever thing I could think of.

Links links links

2010-08-09T08:15:00.000-07:00

Three things:

1. Ben sent round a previous episode of this RSA Animate series. I know that there are varying degrees of Zizek love amongst us (I myself am not always enamored), but this is certainly a thought-provoking lecture, if maybe a little overboard at the end.

2. I would guess you had all read this by now, but if not, George Packer's article on the American senate and its utter collapse is real good. It's a topic we all often pull our hair out about, but on top of all that Packer is just a really good writer and I have linked to articles of his before.

3. Ezra Klein just linked to this, and it is hell of dry, but if you like your explanations of the roles of the President's economic advisors like you like your martinis, then this is worth reading. The most informative part is the hypothetical NEC Gas Tax meeting, which does a good job of explaining a) who the heck all these people are and b) what the heck they're all doing in the White House.

That's it. I wanted to share, but I don't have much to add, so there.

On Freedom and its Composing Parts

2010-08-07T21:24:00.000-07:00

Not to pull a Sol here, but this:

The silly controversy over the downtown mosque is excellent evidence that the conservative movement has become obsessed to the point of derangement with a right-wing version of identity politics that sees everything through the lens of the assumption that American identity is under seige. The modus operandi of the populist right is patriotic semiotics gone wild. 9/11 was a Great Awakening and Ground Zero is a sacred scar representing the sacrifice of those thousands who died in fire in order to shake the rest of us into recognition of the great existential threat to the American Way of Life. To refuse to resist the placement of a mosque next to the grave of those martyred in the Great Awakening is to fail to have heard the call, to fail to understand the battle now underway, to complacently acquiesce to the forces slowly transforming America into something else, into something unAmerican, a place for some other kind of people, a place not worth fighting for. It is to, as they say, “let the terrorists win.”

As Wilkinson notes, this mosque debate (which I assume we are all at least somewhat aware of) is more revealing of Culture War pathologies than it is informative or rationally constructed. More than any other part of the Culture Wars of the last two decades, except maybe the Prop 8 battle, the whole uproar shows that modern American conservatism is much more an identity than an ideology, an identity that worships and fears for a romanticized idea of American liberty. The tenets of religious liberty and property ownership are supposedly uncontroversial parts of American civic thinking, but to conservatives they are actually subservient to this concept. Liberals see these things as fundamental building blocks, without which American freedom doesn't exist, and therefore as important as the "freedom" itself. Conservatives are much more concerned with American freedom as a thing under attack, that needs defending, that cannot possibly flourish without vigilance, the kind of vigilance that may actually require subversion of those underlying principles. While someone who saw religious freedom as a core part of American liberty would be forced to cede that, even if they found Muslims repellent, they simply could not deny them a right to pray where they want, there is no such deference to principles within mainstream conservatism on this issue. Instead, it is the thing itself that is of utmost importance, not the things necessary to make and sustain it.

The same principle is in play in the gay marriage debate. Individual liberty and the right to pursue one's happiness are fundamental building blocks of the American system. The right to marry who you love, especially when it won't affect any other person in your community, is in accordance with these principles. But gay marriage seems to strike at a fundamental part of Americanness, as identified by social conservatives, this thing which is perpetually under assault.

What's truly frustrating, to me, is that opponents of either Lower Manhattan-based mosques or of gay marriage must then reach out to logically incoherent arguments to put some window dressing on their otherwise emotional reactions. I had dinner a few nights back with some folks, just after Prop 8 was overturned, and one of the people there said she opposed the repeal because she expected a future in which churches would be routinely sued by gay couples for refusing to marry them. When I pointed out to her that, like straight people, gay people probably don't want to force someone to marry them, and would rather have a nice, voluntary set-up, she told me that "Americans sue over everything", like "hot coffee on their laps", and that this would be no different. Now, I don't know how conservative she may be in all things, and we didn't really go far enough in the conversation, but there really isn't a lot of sense in this point. Churches that are hostile to gay people are highly unlikely to have gay people in them. I know that were I gay, I wouldn't want my officiant to sulk through the whole proceeding, under threat of lawsuit. Alternatively, the implication may have been that conniving heterosexual people could manipulate their rights to squeeze money out of churches that don't want to marry them, but there's a good chance that they would just be married anyway, and their elaborate plan would backfire.

I realize that, as a liberal person, it's very tempting for me to dismiss opposing arguments as pathological, or emotional, rather than rational. I usually try to avoid that kind of thing because it can just as easily be leveled at me: I know and like Muslims, I know and like gay people, and I want them to have the freedoms I have. But it's been hard, in the last, oh, let's say 7 years, to look at the Culture War and not come away profoundly cynical about the depth and philosophical rigour of social conservatism. Everything always boils down to a variation on the same theme: Here's America, here's freedom, here's a threat, and here's how we must defend freedom from itself. No matter that the threat itself is a feature, not a bug or a foreign virus, of the democratic system, and no matter that by considering it a threat, you're actually being threatened by what you seek to protect.

At Their Discretion

2010-07-22T06:22:00.000-07:00

Signed, sealed, and delivered. There we have it: the most radical financial regulatory bill to pass Congress since the 1930s. Well, it's the biggest anyway. 2319 pages make a wide brush. And so, on a blog that has dedicated so much of its profanity-laced verbiage to the myriad depravities of modern finance, it seems only right that with this most recent effort to address (or avoid addressing) those same depravities, just bit more unnecessary verbosity is in order. As you can tell, I'm off to a good start.

Essentially, I've been trying to figure out what's actually in this bill and what it will all mean. Indirectly, of course. That is, I'm only assessing the assessments. It's not like I get paid for this. So anyway, here is my tremendously unsatisfying analysis: it is impossible to know what it will all mean.

If you've read any other commentaries on the bill so far, you've probably come across this same conclusion. By and large, what the bill sets about to do is to repair, tweak, and lubricate the American financial regulatory machine. Congress, it can be said, has given the bureaucracy a whole new set of fancy tools. What the bill does not really specify in most cases is how (or even whether) those tools get used.

So how does one interpret this? One could very easily don the rose-colored glasses and imagine a future in which this regulatory machine is manned (or in a particular news-grabby case, womaned) by those who both know and want to run it at full capacity. Or one can with, unfortunately, a much tamer imagination, don the glasses of recent history (which are certainly not rose, but beige, and flecked with the crystallized salt streaks of teary disappointment), and imagine a not so different future in which regulators ignore all the buttons upon their re-vamped console except for the one labeled "auto-pilot."

So here are some specifics (the sources I used are all at the bottom):

First of all, and probably most consequentially, a new panel (the Financial Services Oversight Council) will be set up to figure out exactly which financial institutions fall under the new regulations and which do not (that is, which are "systematically important"). It will also review the overall stability of the global financial system. Presumably this crack team of top regulators will be able to identify problems as they arise and then act upon them in some such way. Kind of the like the Fed was always expected to.
New regulations on capital levels (the quantity and quality of readily accessible "cash" banks have to hold on hand for a rainy, or panicky, day) are going to be implemented, the bill assures us. They will be drawn up by a panel of regulators who will presumably know what it is they're doing. No absolute numbers included, but current levels are set as a floor (and interestingly, the levels, the new law states, should expand and contract with economic activity.)
Banks with government guarantees are restricted in the degree to which they can invest their own money for the financial return of the bank itself (this is the Volker rule); that is, acting like a hedge fund. The restriction is fairly liberal though (so I've read anyway), so the effect might be minimal.
A new set of head-slappingly obvious but (maybe necessarily) vague restrictions are placed on the mortgage industry (e.g. you can't lend someone money if you aren't reasonably convinced he or she can pay you back).
The ability of the government to seize, chop up, and liquidate problem institutions will be expanded to include non-banks. Which non-banks? Presumably companies like AIG and Lehman Brothers were in mind when this provision was put in, but I'm not sure. I've tried to figure it out. Either way, in the event that a "systematically important financial institution" has to get seized, the pool of money required to pay off their debts is not pre-funded, but may be borrowed from the Treasury, to be repaid subsequently by the financial industry as a whole with one-off, retroactive tax. Kablamo.
A Consumer Financial Protection Agency is set-up. How much it does and how effectively it does it all depends on who the regulators are. It's potential authority seems broad, as far as I can tell though. A Tea Party's Czar to end all Tea Party Czars.
Securitization is rationalized slightly. Any bank that tries to pawn off that hottest new pool of mortgages has to keep 5% of the thing on its books. This could potentially be a pretty big deal, though a major exemption exists for "qualified residential mortgages." Who makes the determination? The ever-watchful regulators, obviously.
Rating Agencies, rather than being allowed to issue their ratings as opinions and thus under the protection of the 1st Amendment, are made liable. In other words, they might actually have to start doing their jobs. There are already some aftershocks on this one.
Any firm that enters into a derivative contract will be forced to set aside some collateral and extra case, "just in case." Standard derivatives will be forced through clearinghouses (where an independent body makes sure both sides of each deal have their ducks in order) and then (as far as I can tell) onto an exchange of some sort (where the price of each standardized contract will be public to anyone. As for the riskier types of derivatives, regulated banks and non-banks will not be able to hold them directly. Instead, the interested party will have to set up a separate (isolated, funding, financial and legal liability wise) corporation, which it must nestle upon a pillow of "just in case" cash. All in all, this could be pretty good except for the fact that key terms such as "risky," "standard," "independent," and "appropriate collateral" will all be determined by...you guessed it...regulators.

Sources: (1) Lexology, summary, (2) Lexology, derivatives, (3) The Atlantic

So to re-articulate: the new regulatory order really has both the potential to surprise and to disappoint. And yet I worry. Finger-wagging ever impatient libs who seem only too eager to knit-pick Congress' latest Obama-approved watered-down compromise, Matthew Yglesias reminds us that "this regulatory setup, like all regulatory setups, only works if the regulators want it to work and that only happens if politicians want the regulators to want it to work."

Sure. A law only gets enforced if the cop wants it enforced. But why leave so much discretion to the cop?

Less-than-stale-toast

2010-07-20T18:49:00.001-07:00

While they might not be very good at financial reform, healthcare reform, energy reform, or trapping John Boehner in a crystal pyramid until time itself howls and then is forever silenced, the Democrats have managed--with the help of the state of Maine--to prolong unemployment benefits. With the plug yet to be pulled on the American economy, the GOP will have to work that much harder to herd Congress's infamous liberal extremists into cattle cars come November.

On My Fears Upon Returning from Asia

2010-07-09T20:14:00.000-07:00

The times they are a'changing. From the New York Times:

The increasing emphasis on more advanced skills raises policy questions about how to help low-skilled job seekers who are being turned away at the factory door and increasingly becoming the long-term unemployed. This week, the Senate reconsidered but declined to extend unemployment benefits, after earlier extensions raised the maximum to 99 weeks.
The Obama administration has advocated further stimulus measures, which the Senate rejected, and has allocated more money for training. Still, officials say more robust job creation is the real solution.
But a number of manufacturers say that even if demand surges, they will never bring back many of the lower-skilled jobs, and that training is not yet delivering the skilled employees they need.

In other words, the changes in the U.S. labor market are structural and long-term. The miss-match between what the majority of companies want out of their workers and what the majority of workers can offer isn't going to resolve itself in a hurry.

From some economist on some blog:

There is long-run structural change going on in the US economy - including a shift from manufacturing to services, and a shift in demand from low-skilled to high-skilled labor. We're all aware, I think, of the increase in the wage gap that developed 30 or so years ago between college-educated workers and those with less education. The housing boom masked some of what was going on, as it absorbed a lot of low-skilled workers. With the collapse in housing construction, we're stuck with the fallout - what some would call structural unemployment - which is making the unemployment rate higher than it would otherwise be.

And higher than it would otherwise be is probably where it will stay for the next decade or two.

These

2010-07-07T13:56:00.001-07:00

This and then this.

America's Hat Also Has a Stupid Senate

2010-07-05T03:36:00.000-07:00

Looks like you dirty Yankees aren't the only ones with a phenomenally screwy legislative process:

The Senate is working quickly through many of the bills that were passed by the House of Commons in recent weeks but one controversial piece of legislation seems to be stalled.

Bill C-311, drafted by NDP MP Bruce Hyer, would require the government to cut greenhouse gas emissions to 25 per cent below 1990 levels by 2020 and 80 per cent by 2050. It was supported in the Senate by Liberal Senator Grant Mitchell and has been read twice but has since been adjourned in the name of Conservative Senator Richard Neufeld. The legislation cannot move forward until he speaks to it.... Mr. Neufeld said on Wednesday that there has been no organized effort to keep the bill from being passed into law. If it is not addressed before the Senate rises, probably next week, it can always be raised in the fall, he said. “Our chamber has been pretty busy,” said Mr. Neufeld.

But the Liberals say they fear that the Conservatives are stalling until they obtain an absolute majority of Senate seats and can unilaterally kill the legislation - something that is likely to occur in November.

And Mr. Hyer said he has been told by Conservatives that the government has decreed that the bill cannot be passed into law.

“There are a number of Conservative senators who I have met with, who I am not going to identify, who are very sympathetic,” he said, “but they say they are getting tremendous pressure - they are being whipped.”

And guess what? It's been lazing around Ottawa since 2006!

The Climate Change Accountability Act was originally tabled in October 2006 in the Canadian House of Commons as Bill C-377 by Jack Layton, Leader of the New Democratic Party of Canada. It passed 3rd reading in that House with the support of caucuses of the Liberal Party of Canada, the Bloc Québécois and the NDP (the Conservative Party of Canada, led by Prime Minister Stephen Harper, voted against it). However, due to the 2008 Canadian federal election ending the parliamentary session prematurely, the bill did not achieve royal assent despite reaching the Senate. C-377 therefore died when the election was called.

The parallels here between the 110th Congress and our situation are obvious enough that I don't need to draw them out, but here's the kicker: we don't actually vote for our senators.

The Senate consists of 105 members appointed by the Governor General on the advice of the prime minister.[1] Seats are assigned on a regional basis, with each of the four major regions receiving 24 seats, and the remainder of the available seats being assigned to smaller regions. The four major regions are: Ontario, Quebec, the Maritime provinces, and the Western provinces. The seats for Newfoundland and Labrador, the Northwest Territories, Yukon, and Nunavut are assigned apart from these regional divisions. Senators may serve until they reach the age of 75.

I just want to make two little points towards the end of this quote-heavy post. One, when the Conservatives were out of power, all that I ever heard from my friends and their parents and, well, random dudes in restaurants wearing suits and cowboy hats, was that a Triple E Senate was a necessity to keep Canada from eventually breaking apart. The three Es stand for Elected, Equal, and Effective, as the Tories were weary of a senate stuffed full of liberals gumming up the works and, in their own little way, filibustering. Now that they're in power, and have been there long enough to have moved a number of people into the Senate, obviously they're not keen. Two, this bill is basically only demanding that Canada get to work on meeting the framework it has already agreed to in the United Nations. It isn't radical or overbearing or anything, it's had a series of readings, and it's already four years too late. Good god.

Summer Reading

2010-07-01T06:33:00.000-07:00

Whenever I find something on the internet that interests me--about which I, correctly or not, presume myself to have something novel to say, or that I, (again) correctly or not, presume one or some or all of you might be interested in--I open up a tab and leave it there for later. Later, because I conduct most of my serious weekly internet scowering in those narrow bands of time between consciousness, work, and the weekend. And in those bands of waking, unoccupied or inebriated freedom that flicker by my each week, I am usually in a hurry (before work) or exhausted (after). So the grand masterstroke of biting analysis I had first envisioned only rarely becomes more than a stale tab of news past eventually deleted.

I have a few tabs open now. These tabs have been held open for too long now. My browser is getting sore. So, instead of deleting them, I thought I'd just post all the links here in a barrage of lazy, incoherence on my part. These links are not particularly thematically consistent (most of the news referenced therein is bad, so there's that). I just found them interesting, thought they were worth sharing, and figured at least a few of them might have slipped under a radar or two.

On Fossil Fuels:

A Recent History of BP Being BP (Propublica)

A Recent History of the Obama Administration Being Just Fine With BP Being BP (Rolling Store)
Plus: Part Two
Frakking Hell

I'll only add here that as maddening as the consistently lax regulatory oversight featured in all four of these stories may be, I couldn't help but think back to the Lisa Margonelli piece I linked to in a post back in May. Her basic premise was that if we aren't mining it from our own backyards, the oil and gas we consume is coming from someone else's. The disaster in the gulf is only exactly what the Niger Delta has been going through ever year since the 1960s. And on the issue of gas, this excerpt from the Propublica fracking piece speaks for itself:

Last month President Dmitri Medvedev of Russia said he would curtail natural gas production by the state company Gazprom until the study is completed. In part that’s because Medvedev isn’t sure there will be a viable market for Russian gas if the U.S. develops its domestic reserves, and because he believes that the regulations that could result from the EPA study could determine whether the U.S. drills its own gas, or imports it from overseas.

So, on our fossil fuel problem: It's demand, stupid!

On economic development:

I wanted to write something about the first link, the recorded lecture of Ha-Joon Chang, when it first came out months ago. I eventually gave up on the idea believing, probably accurately, that I wouldn't have much to say about it and that nobody would bother to listen to the whole thing anyway. But whether or not you bother to check out either of these, Chang and Rodrik hit on a pretty interesting (and obviously relevant) point. Development, they both believe, is not achieved by addressing adhoc and after-the-fact the symptoms of its absence (corruption, lack of access to health-care, poor education, etc). The definition of development they ascribe to is, instead, a process of macroeconomic structural change, in which the society as a whole moves from low productivity work to higher productivity work. And if those are the set of assumptions you carry around with you, the potential role of government you envision within that process is much, much broader.

On Financial Crises and How to Fix Them:

Marxism Illustrated (11 minutes long, totally worth it, and regardless of your views on the overall ideology, hard to argue with.
"Not Good Enough," says Feingold (Ezra Klein)

Back in March, I linked to Paul Krugman's article and posted the following:

There are times when even a highly imperfect reform is much better than nothing; this is very much the case for health care. But financial reform is different. An imperfect health care bill can be revised in the light of experience, and if Democrats pass the current plan there will be steady pressure to make it better. A weak financial reform, by contrast, wouldn’t be tested until the next big crisis. All it would do is create a false sense of security and a fig leaf for politicians opposed to any serious action — then fail in the clinch.

As to how things stand now, I've yet to read a comprehensive run-down of the entire bill (or at least, what's likely to be in the final-est of final versions). So, though I'd like to agree with Russ Feingold as a matter of mancrush, and though I'd like to seek comfort in my original cynicism, I honestly can't judge here. I just don't know very much about the bill itself. I don't know how strong the strong derivatives language is. I don't know how protective the consumer protection will be. I don't know how tough the tougher proprietary trading rules are. Anyone?

So that's that. And, just saying and everything, I would totally welcome similar suggested reading posts from all of you.

This post is not about the G20

2010-06-28T18:19:00.001-07:00

Yeah, I know that Toronto just hosted the G20 summit, and I know that the police made the most arrests at any single event in Canadian history, and I know that a couple hundred people were herded into a park and made to stay there in the pouring rain for several hours, but you know what? Fuck that shit. I'm gonna post a really fucking cool blog post about how people die from fucking volcanoes, because I can.

[T]hat is how the people at Pompeii, who's remains were found trapped and partly preserved within ghostly body-shaped tombs within that pyroclastic flow, died. They did not suffocate. They did not get blown apart by force. They did not die of gas poisoning. They simply cooked. Instantly.

Fuck. Yeah. That is some cool fuckin' research. For those who don't know (the details), Mt. Vesuvius, a still-active volcano 8 km away from Pompeii, erupted with extreme force in 79 AD, burying the city (and a bit of some other ones nearby) with ash and pumice. The type of eruption which occurred is still known as a "Plinian eruption," after the Roman author Pliny the Younger who described the eruption which killed his uncle Pliny the Elder in a letter to his friend Tacitus.

This research actually has important implications for disaster preparedness and discovery today, as such eruptions are rare and their effects have not been terribly well-documented. But forget that. Fucking awesome.

Original paper here.

Two Questions

2010-06-23T09:29:00.000-07:00

Stanley McChrystal, or someone speaking for him anyway, called Obama weak and the French gay. Also, the Vice-President was instructed to bite an aide. That is gist of the controversy stirred up by Rolling Stone's profile on the brilliant, balsy, nunchuck-wielding, man-child of a general.

But what the kerfuffle over the name calling has overshadowed within the piece, and what leads me, much more than the insubordinate bravado of a commander, to despair, are paragraphs like this one:

Today, as McChrystal gears up for an offensive in southern Afghanistan, the prospects for any kind of success look bleak. In June, the death toll for U.S. troops passed 1,000, and the number of IEDs has doubled. Spending hundreds of billions of dollars on the fifth-poorest country on earth has failed to win over the civilian population, whose attitude toward U.S. troops ranges from intensely wary to openly hostile. The biggest military operation of the year – a ferocious offensive that began in February to retake the southern town of Marja – continues to drag on, prompting McChrystal himself to refer to it as a "bleeding ulcer." In June, Afghanistan officially outpaced Vietnam as the longest war in American history – and Obama has quietly begun to back away from the deadline he set for withdrawing U.S. troops in July of next year. The president finds himself stuck in something even more insane than a quagmire: a quagmire he knowingly walked into, even though it's precisely the kind of gigantic, mind-numbing, multigenerational nation-building project he explicitly said he didn't want.

And this one:

In the first four months of this year, NATO forces killed some 90 civilians, up 76 percent from the same period in 2009 – a record that has created tremendous resentment among the very population that COIN theory is intent on winning over. In February, a Special Forces night raid ended in the deaths of two pregnant Afghan women and allegations of a cover-up, and in April, protests erupted in Kandahar after U.S. forces accidentally shot up a bus, killing five Afghans. "We've shot an amazing number of people," McChrystal recently conceded.

And this one:

This is one of the central flaws with McChrystal's counterinsurgency strategy: The need to build a credible government puts us at the mercy of whatever tin-pot leader we've backed – a danger that Eikenberry explicitly warned about in his cable. Even Team McChrystal privately acknowledges that Karzai is a less-than-ideal partner. "He's been locked up in his palace the past year," laments one of the general's top advisers. At times, Karzai himself has actively undermined McChrystal's desire to put him in charge. During a recent visit to Walter Reed Army Medical Center, Karzai met three U.S. soldiers who had been wounded in Uruzgan province. "General," he called out to McChrystal, "I didn't even know we were fighting in Uruzgan!"

And then, from the reliably dour Juan Cole:

Obama needs to define an attainable goal in Afghanistan and then execute it swiftly. As it is, when he is pressed about what in the world we are doing there, he retreats into Bushisms: “So I want the American people to understand that we have a clear and focused goal: to disrupt, dismantle and defeat al Qaeda in Pakistan and Afghanistan, and to prevent their return to either country in the future. That’s the goal that must be achieved.”

Well that isn’t a good enough reason to be in Afghanistan. There is no al-Qaeda to speak of in Afghanistan. And although insurgents and Taliban probably control about 20 percent of the country, they have not let al-Qaeda set up shop in their territory. If they don’t now, when they obviously need all the help they can get, why would they in the future? One major guerrilla leader, Gulbadin Hikmatyar, went from expressing willingness to fight under the banner of al-Qaeda to roundly condemning the radical Arab group for having gotten the Taliban overthrown.

As for Pakistan, the US presence in Afghanistan is not necessary to partnering with Islamabad in rooting out al-Qaeda Arabs in the Pashtun tribal belt.

In other speeches, Obama has spoken about “defeating” the Taliban. But the Taliban are by now a long-standing social formation among the Pashtun ethnic group, and are a little unlikely to be wiped out by mere military means, especially the means available to a foreign military.

A congressional investigation has even thrown up good evidence that the US itself is indirectly funding the Taliban, insofar as the USG is paying warlords to provide convoy security on roads and they are using the money to bribe Taliban not to attack on their watch.

In short, we have no idea why US troops are being sent to Afghanistan at such an accelerating rate. It isn’t to fight al-Qaeda. And if it is mainly a matter of fighting the Taliban, why should we do that? They are not going to go away, and their brand of Muslim fundamentalism is by now woven deeply into the fabric of rural Pashtun life, such that for foreign Christian troops to argue the Pashtuns out of it at the point of a gun is a fool’s errand.

Even Mr. Friedman Unit wrote this morning that he can see no logical end to this. There is, as far as I can tell, no good news to report from Afghanistan.

So I ask these two questions (not rhetorically and not with any intended snark, because I'll take hope where I can get it), but if you think we ought to stick it out in Afghanistan, or second-best, you understand and sympathize with that view:

(1) What does victory look like?

(2) How do we get there?

I have been trying to answer these questions myself for the past few years. I'm still coming up blank.

And, just for the sake of chiming in, I agree with Juan Cole on this final point:

Obama has largely misunderstood the historical moment in the US. He appears to have thought that we wanted a broker, someone who could get everyone together and pull off a compromise that led to a deal among the parties. We don’t want that. We want Harry Truman. We want someone who will give them hell. We don’t want him to say one day that Wall Street is making obscene profits when the rest of the country suffers, then the next day say that the brokers deserve their bonuses. We don’t want him to mollify Big Oil one day then bash it the next. More consistent giving of hell, please.

If Obama doesn’t fire McChrystal, he will never be respected by anybody in the chain of command that leads to his desk. Moreover, moving McChrystal out now would be a perfect opportunity to pull the plug on the impractical counter-insurgency campaign that the latter has been pursuing, which probably has only a 10% chance of success. (A RAND study found that where a government that claimed to be a democracy actually was not, and where it faced an insurgency, it prevailed only 10% of the time. Sounds like President Hamid Karzai in Afghanistan to me.)

Monday dose of postie-ism

2010-06-21T10:56:00.000-07:00

Colonialism and the World Cup (via Feministing).

Lady Gaga and femin(ism)/(ity) (via my friend Catherine).

Sociological Images on hyper-sexualized hyper-masculinity in the 'net comedy world.

New Stars album comes out tomorrow! I am excited (this is unrelated to the rest of the post).

However...new book coming out tomorrow that I want to read!

Striking and sad

2010-06-18T08:35:00.000-07:00

From a piece entitled 'Words' on Tony Judt's New York Review of Books Blog:

Today “natural” expression—in language as in art—is preferred to artifice. We unreflectively suppose that truth no less than beauty is conveyed more effectively thereby. Alexander Pope knew better. (“True Wit is Nature to Advantage drest, / What oft was Thought, but ne’er so well Exprest.” —Essay on Criticism, 1711) For many centuries in the Western tradition, how well you expressed a position corresponded closely to the credibility of your argument. Rhetorical styles might vary from the spartan to the baroque, but style itself was never a matter of indifference. And “style” was not just a well-turned sentence: poor expression belied poor thought. Confused words suggested confused ideas at best, dissimulation at worst.

...
I am more conscious of these considerations now than at any time in the past. In the grip of a neurological disorder, I am fast losing control of words even as my relationship with the world has been reduced to them. They still form with impeccable discipline and unreduced range in the silence of my thoughts—the view from inside is as rich as ever—but I can no longer convey them with ease. Vowel sounds and sibilant consonants slide out of my mouth, shapeless and inchoate even to my close collaborator. The vocal muscle, for sixty years my reliable alter ego, is failing. Communication, performance, assertion: these are now my weakest assets. Translating being into thought, thought into words, and words into communication will soon be beyond me and I shall be confined to the rhetorical landscape of my interior reflections.

Though I am now more sympathetic to those constrained to silence I remain contemptuous of garbled language. No longer free to exercise it myself, I appreciate more than ever how vital communication is to the republic: not just the means by which we live together but part of what living together means. The wealth of words in which I was raised were a public space in their own right—and properly preserved public spaces are what we so lack today. If words fall into disrepair, what will substitute? They are all we have.

Caught in the throes of a steep descent into neurological torpor, I imagine that declinism has a visceral feel for Mr. Judt that is otherwise far-removed from ourselves. Still and all, it can't be argued that fluidity, and even simple literacy, hasn't taken a nasty tumble since the liberationist consensus of the post-war years began making significant social--and especially educational--gains. I find myself very moved by what Mr. Judt wrote (and has been writing, as he lives the final hours of his communicative life), and not only because of his condition: does no one else have the palpable feeling of injury to, if not the mortal wounding of, intellectual clarity in the public domain?

Ideas Esteemed For Their Acceptability: Lazy Block-Quote Edition

2010-06-08T17:30:00.000-07:00

A gem from Bloomberg:

President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”
[...]
Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of competitors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.

Dan Fuss, one might add (but not Bloomberg in this case), and not too many others at the moment. Treasury notes of the longest maturity (10-year) are currently selling off at a yield of 3.17. That is, even with all that debt, even with all those like Dan Fuss and Bill Gross and Bloomberg journalists who are so worried about the long-term solvency of Uncle Sam, investors as a whole are still willing to lend the government money, to not see their full return for another decade and are willing to accept a return of just over 3% for the trouble. That is lower, by the way, than this years annual average. And the one from last year. And, unless I'm missing something, from every year since they started collecting the data in 1962.

So with that in mind, here are a few paragraphs to chew over. The first batch come from Paul Krugman. He's talking about a recent IMF study on future sources of U.S. government debt:

First, since cutting stimulus would weaken the economy, it would reduce revenues — that is, a substantial part of the debt growth the IMF attributes to stimulus would have happened even without stimulus, through lower revenue. Second, for the US at least the core reason for long-run budget concern is rising health care costs — in fact, health cost control is the sine qua non of long-run solvency — which has nothing whatever to do with how much we spend on job creation now.
So how much we spend on supporting the economy in 2010 and 2011 is almost irrelevant to the fundamental budget picture. Why, then, are Very Serious People demanding immediate fiscal austerity?

The answer is, to reassure the markets — because the markets supposedly won’t believe in the willingness of governments to engage in long-run fiscal reform unless they inflict pointless pain right now. To repeat: the whole argument rests on the presumption that markets will turn on us unless we demonstrate a willingness to suffer, even though that suffering serves no purpose.

Next, Martin Wolf who asks the question, "if not the government, then who?":

A consensus is forming that policymakers should tighten fiscal policy, sharply, in countries with large fiscal deficits. Yet what makes these policymakers sure that business and consumers will spend in response to austerity? What if they find that it tips economies into recession, or even deflation?...Premature fiscal tightening is, warns experience, as big a danger as delayed tightening would be. There are no certainties here. The world economy – or at least that of the advanced countries – remains disturbingly fragile. Only those who believe the economy is a morality play, in which those they deem wicked should suffer punishment, would enjoy that painful result.

Last, Stephan Gordon on the "stimulus":

There has been much talk of the size of the US federal stimulus, and much debate about whether or not it has been an effective counter-cyclical policy instrument.
But it's important to remember that the proper measure for fiscal stimulus is not spending by the federal government; it is spending by all levels of government. And when you look at the contributions to US GDP growth (Table 1.1.2 at the BEA site), total government spending has been a drag on growth over the past two quarters. The increases at the federal level have not been enough to compensate for the spending cuts at the local and state levels.
I suppose that this could be interpreted as good news: despite a contractionary fiscal stance, the US economy is in recovery. But it raises the question of how much better it could be doing if it had an expansionary fiscal policy.

Public Opinion and the Flotilla

2010-06-06T05:37:00.000-07:00

I want to start from a relatively contentious place, in order to make I think a less contentious point. Let's say, for my sake, that the world we exist in is not one where either Israel or Palestine can ever really be proven to be right or wrong in any given situation. There are many intangibles, justifications and provocations abound, and for all intents and purposes there are two separate and highly distinct histories of the Israel-Palestine conflict. Between these two histories is a spectrum upon which the rest of the world sits - a multitude of shaded and nuanced takes on what has transpired in this one fairly small part of the world over the last couple millenia. These takes, as an aggregate, matter a great deal to the fate of the conflict - they dictate which side receives aid, foreign sympathy, and political clout to maneuver for its preferred outcome.

Now, some of these perspectives are immutable, and some may be more important than others on a strategic level, but I would argue that a sizable portion are still fluid. Israel built up a lot of international goodwill through the late 20th century, and Jewish communities around the world have lobbied effectively for some time to keep a lot of support on their side. Assuming, for the sake of this exercise, that this is a zero-sum conflict*, one would think that it was in Israel's best interest to work assiduously to push this window as far as possible in their direction. In that sense, a rational-thinking Israel would assess its Palestine policies in two ways: one, are they advancing our goals, and two, are they helping to create a favourable environment to do so?

We've already discussed, at length, the public image nightmare that the flotilla attack presents for Israel. As Ben pointed out, even those who are comfortable with the WHAT of the situation are going to have a hard time with the HOW. But bad shit happens, and while it may be difficult to pull off, one could see a lot of political upside to a stance of public contrition by Netanyahu and his government. Instead, we get this:

When Israeli Prime Minister Binyamin Netanyahu delivered his angry response to a cascade of international condemnation of Israel on Wednesday, he spoke first in Hebrew to a domestic Israeli audience. Choosing to address his home constituency, rather than the broader world, was a sign of his continued willingness to accept international ire as the price of upholding policies that are broadly supported at home...

"Once again, Israel faces hypocrisy and a biased rush to judgment. I'm afraid this isn't the first time,'' he said.

This is really, really, really the wrong tack to take. Especially now, as Israel is slowly decoupling from what once was its strongest ally abroad: American Jews.

Among American Jews today, there are a great many Zionists, especially in the Orthodox world, people deeply devoted to the State of Israel. And there are a great many liberals, especially in the secular Jewish world, people deeply devoted to human rights for all people, Palestinians included. But the two groups are increasingly distinct. Particularly in the younger generations, fewer and fewer American Jewish liberals are Zionists; fewer and fewer American Jewish Zionists are liberal. One reason is that the leading institutions of American Jewry have refused to foster—indeed, have actively opposed—a Zionism that challenges Israel’s behavior in the West Bank and Gaza Strip and toward its own Arab citizens. For several decades, the Jewish establishment has asked American Jews to check their liberalism at Zionism’s door, and now, to their horror, they are finding that many young Jews have checked their Zionism instead.

The New York Review of Books published that article on May 12, two weeks before the attack even occurred. It focuses on a group to which exactly one half of this blog belongs, and it's right, if a little hyperbolic. As Israel turns inwards on itself, rejecting all criticism from abroad (even from its friends) as hostility, it will start to cede ground in the public sphere. By refusing to address the flotilla in a responsible, honest way, Israel is doing more than its share of work to push away those groups abroad that could do it the most good.

In other words, the window of public opinion is closing fast. What makes the flotilla assault so terrible and so frightening is that it's simply going make it close even faster.

* There are some caveats here. One, this would imply that Israel and Palestine at all times would pursue the wisest courses to their end goals. Two, it implies that they are coherent entities with coherent goals. Three, it assumes that these goals are mutually exclusive and thus necessitate conflict. I don't really believe any of these things, I just want a simpler model to work with when discussing this absurdly complex situation.

Another Quick Flotilla Post

2010-06-06T03:24:00.000-07:00

From the Guardian:

Israel was tonight under pressure to allow an independent inquiry into its assault on the Gaza aid flotilla after autopsy results on the bodies of those killed, obtained by the Guardian, revealed they were peppered with 9mm bullets, many fired at close range.
Nine Turkish men on board the Mavi Marmara were shot a total of 30 times and five were killed by gunshot wounds to the head, according to the vice-chairman of the Turkish council of forensic medicine, which carried out the autopsies for the Turkish ministry of justice today.
The results revealed that a 60-year-old man, Ibrahim Bilgen, was shot four times in the temple, chest, hip and back. A 19-year-old, named as Fulkan Dogan, who also has US citizenship, was shot five times from less that 45cm, in the face, in the back of the head, twice in the leg and once in the back. Two other men were shot four times, and five of the victims were shot either in the back of the head or in the back, said Yalcin Buyuk, vice-chairman of the council of forensic medicine.
[...]
"The only situation when a soldier shot was when it was a clearly a life-threatening situation," said a spokesman for the Israeli embassy in London. "Pulling the trigger quickly can result in a few bullets being in the same body, but does not change the fact they were in a life-threatening situation."

Meanwhile, from Noam Sheifaz:

At this point it is extremely important to say what we don’t know..We don’t know where [the dead activists] were killed, when, and how they died. We don’t know if and when people were given medical treatment. There were security cameras on deck, but Israel doesn’t show us what they filmed, except for the material which serves its purposes. The night vision clips released by the army end just before the shooting begins.

If you're of the mind that either the raid itself, taking place in international waters, or the Gaza blockade on the whole is unambiguously illegal, it probably doesn't matter much what the confiscated video shows. As Glenn Greenwald puts it, "Whether the Israelis fired at the passengers before or after landing on the ship matters little to the crux of what happened here. The initial act of aggression was the Israeli seizing of a ship in international waters which was doing nothing hostile; that action was taken to enforce a horrific, inhumane blockade and, more generally, a brutal, decades-long occupation"(Salon). In this respect, the immorality of a massacre only compounds the greater immorality of Israeli policy; focusing on such details only serve to distract from the larger issue.

On the other hand, if you believe, as does Sol, that it isn't so much the What or Why of the military action, but the How, the details that might emerge with the release of the supposed footage start to seem a lot more important.

Either way, one would think it to be in interest of the Israeli government (particularly if it wants to maintain any sense of legitimacy as it plans to conduct its "independent" review) to release the footage. Refusing to do so (and worse yet, doctoring it heavily for propaganda purposes) have only lead critics to assume the worst.

Ideas Esteemed For Their Acceptability

2010-06-02T06:26:00.000-07:00

A new wisdom has gone conventional. That's according to Paul Krugman anyway, whose column last Friday warned that the respected thinkers of the world are fast coming upon a new and sad conclusion: it's time to get austere. With the crisist-y part of the crisis now over, the argument goes, it's time for governments around the world to start cutting back before countries like Spain become countries like Greece and countries like Greece implode into homo-friendly Zimbabwes. It's an argument which has, according to Krugman, been recently "proliferating in op-eds, speeches and reports from international organizations." I haven't seen too many of these op-eds and I haven't heard too many of the speeches, but I sure have been hearing a lot about them from people like Paul Krugman. In the Financial Times and a half a dozen blogs and now for the third or fourth time in the New York Times, the conventional wisdom to which I've been exposed has not been that of the crisis of government debt, but of the crisis of the conventional wisdom of the crisis of government debt.

That being said, I was listening to an LSE public lecture podcast on my way home from work today in which Carlos Guitierrez, Secretary of Commerce under George W., stood in perfectly for Krugman's strawman Chicken Little. With the soft-spoken fatalism of the well-and self-assuredly informed, he regretfully informed the audience that government largess across the West would have to be trimmed--nay! slashed vigorously and unforgivingly (with spending cuts and tax increases, but mostly spending cuts). He talked a lot about Europe. And then with a wink and segue, he talked about the United States.

The first criticism to this new old way of thinking is predictable. Economies across the world are still largely fragile, if not totally in the shitter, and pulling the life-support now could cause another collapse. In any event, concerns over unsustainable debt or inflation seem particularly misplaced when looking at the U.S., where neither interest rates nor inflation seem anything other than historically low and stable. But I've blogged about that before, and recently too.

What might be a little more worrisome is the sudden ubiquity of the call to surplus. As Peter Dorman writes, with the OECD, the EU, the Obama Deficit Commission, and a growing number of U.S. Congressmen and women calling for the brakes, "[t]he deficit hawks seem to have forgotten, if they ever learned, the granddaddy of all accounting identities": with one person's debt being another person's asset (or to put it another way, with every borrower matched by a creditor), there is no way for everyone to pay down debt at the same time. It's functionally impossible.

In the grandest scheme of things, there are only a few ways for an economy to adjust to a government surplus. Looking at most of the countries in question, the adjustments that aren't very painful are very unlikely. Keeping in mind that total spending has to equal total income and that any change in the former must automatically translate into an equal change in the latter, the options are:

1) The government saves a bit more than it spends, the domestic private sector spend the difference, and the economy keeps chugging along.

But...
I doubt anyone would really anticipate this happening while private sector deleveraging and high unemployment are still a major facts of economic life in most Western democracies.

2) The government saves a bit more than it spends, foreign consumers spend the difference, and the economy keeps chugging along

But...
What's true in one country is likely to be true in the next one. And for problem economies like Greece, Spain, Portugal, and maybe Italy, more competitive exchange rates are off the table. At least, their off the table that doesn't involve the EMU crumbling around at the edges. But on a more fundamental note, from John Mauldin, "Every country cannot run a trade surplus. Someone has to buy...Yet politicians want to believe that somehow we all can run surpluses, at least in their country. We can balance the budgets. We can reduce our debts. We all want to believe in that mythical Lake Woebegone, where all the kids are above average."

3) The government saves a bit more than it spends, some combination of the domestic private sector and foreign consumers spend the difference, and the economy keeps chugging along.

Check out my previous Buts.

4) The governments saves a bit more and no one spends the difference (at least, not enough to compensate the decrease in total spending); with less total spending, total incomes across the economy decline by difference; tax revenue falls accordingly.

Or, to put it another way, private sector indebtedness increases by exactly as much as the government surplus. This is not because fiscal thrift magically induces the public to get irresponsible, but because in the absence of any other spending, by accounting necessity, the income withdrawn from the economy by the government will show up as a decline in income on the private side. With total private debt left unchanged, household indebtedness increases.

Back to John Mauldin, "You can run a trade deficit, reduce government debt and reduce private debt but not all three at the same time." In Greece, with constraints on its ability to borrow or adjust via the exchange rate, this is a real dilemma, not so for the U.S.

Cite your sources!

2010-06-01T03:48:00.000-07:00

Edit: I am aware that it has been extensively discussed that this is James Murphy's Eno/Bowie in Berlin album and all, but still. Kanye's reached back into Krautrock to cover this inane topic already. Why do it again?

Can I just say one thing real quick?

2010-05-31T19:21:00.001-07:00

A country has the right to send soldiers to investigate six boats that are about to enter its territory without permission and carrying unknown cargo. Am I really crazy for thinking that?

(Of course, Israel fucked up bad in the end. But really, people. I hate the tired old "Israeli-double-standard" yarn, but this is just ridiculous.)

EDIT: I love when the first actual analysis I read backs me up, and when it's recommended to me by Josh Marshall: link

House passes bill with DADT repeal provision

2010-05-28T14:45:00.001-07:00

Like it says on the label.

The House voted to pass the annual Pentagon Policy Bill which this year contains a provision for the repeal of the ban on openly gay and lesbian servicemen and servicewomen (Don't Ask, Don't Tell). The way it would work is that heads of the armed forces would be forced to remove the policy 60 days after they receive a report that basically states that having teh gayz in the military would not disrupt activities and policies. Whew.

The NYT article I linked also reports that there is still a chance that the bill will be vetoed by Obama based on funding for F-35 fighter. Because it's a major military policy bill, there are also delightful things like billions of dollars for military development etc. as well as $159 billion for overseas military operations, so...

Still, this is exciting!

Alright, everybody out of the pool.

2010-05-20T08:33:00.000-07:00

Well, shit:

A North Korean submarine's torpedo sank a South Korean navy ship on 26 March causing the deaths of 46 sailors, an international report has found.

Investigators said they had discovered part of the torpedo on the sea floor and it carried lettering that matched a North Korean design.

For the non-Bens in the audience, this shit went down back in March, and the international report was released today. Speculation has been heavy from the beginning that it was a North Korean torpedo that sunk the Cheonan, and now we have fairly conclusive evidence that that was, in fact, the case. What happens next, I don't really know. I've been told that the release of the report coincides suspiciously with the June local elections, but considering the length of time that has passed since the incident, plus the multinational nature of the investigation, that seems somewhat implausible. My guess is things went deliberately slowly because no one wanted this to spiral out of control and because South Korea is highly opposed to any military escalation. In fact, it doesn't seem to me like anyone wants a military escalation. If this was a deliberate, from-the-top kind of attack, then North Korea was probably doing what it's done so well in the past, playing the crazy card to get aid and relief from sanctions. It's equally likely, though, that it was unplanned and spontaneous, the kind of thing one would expect from a navy that believes that its opponents have horns and drink children's blood.

All that said, I really don't know what kind of effect more sanctions will have, even if the Chinese are on board for this round. The Kim dynasty is absurdly resilient, and sanctions haven't had much of an effect on North Korea's actions or proclamations. They've also responded antagonistically to the report, suggesting that any sanctions will be interpreted as aggression. This only boxes Lee Myung-Bak in more; after weeks and weeks of wall-to-wall grief porn on every television station in this country mourning the lost sailors, he won't be able to get away with some toothless sanctioning and menacing statements. It's certainly possible that Ben and I may be home sooner than we thought.

Anyway, here's a good summary of the situation, even though it was written weeks before the report came out. This is a fascinating international crisis. If only I wasn't living in it.

Periods are kind of like the oil spill, right?

2010-05-18T07:36:00.000-07:00

A mish-mash of things about birth control.

For starters, here's an interesting article on the adverse health effects of hormonal birth control.

Then there's this. Have any of you heard about this new form of birth control...for men?! Zapping the testicles with ultrasound waves is apparently a safe way to halt sperm production. I remember a few years ago there was all this hoopla about a birth control pill for men, but very little seems to have come of that. This, however, seems like it might be a thing.

So what do you think, gentleman? Would you try it?

(both links via Re:Cycling)

Details on the Spill

2010-05-17T09:14:00.000-07:00

For whatever reason I'm having trouble getting the actual video to work here, but if you have the time (about 25 minutes in two parts), check out the 60 minutes report on the Deepwater Horizon spill.

Don't hate the player, hate the game

2010-05-14T02:15:00.000-07:00

So the narrative of Elena Kagan has formed pretty darn quick. She's ambitious but murky, secretive and covetous, a highly experienced lawyer with an empty paper trail, possibly a softball-playing lesbian. Of course, like any good Supreme Court nominee battle, the narrative is flawed, crafted in part by waves of countervailing spin and in part by the media's desire for a easy digestible pro/con scheme. Sonia Sotomayor was many things, but the one with the highest syllable-to-controversy ratio was "wise latina", and so that was the thing she was. I won't try to tackle all of it at once, only to state my opinion that she isn't as progressive as I'd like but a) I'm Canadian b) she will, like most judges in recent history, vote the way her president wants her to, and so her liberal cred isn't a huge deal to me. The other thing is that I fall on the Lessig side of things; I think Greenwald pretty grossly misinterpreted her take on Executive authority, and I'll let SCOTUSblog do the heavy lifting for me:

Some have criticized Elena Kagan for supposedly favoring a strong view of executive power. They equate her views with support for the Bush Administration’s policies related to the “war on terror.” Generally speaking, these critics very significantly misunderstand what Kagan has written.

Kagan’s only significant discussion of the issue of executive power comes in her article Presidential Administration, published in 2001 in the Harvard Law Review. The article has nothing to do with the questions of executive power that are implicated by the Bush policies – for example, power in times of war and in foreign affairs. It is instead concerned with the President’s power in the administrative context – i.e., the President’s ability to control executive branch and independent agencies. That kind of power is concerned with, for example, who controls the vast collection of federal agencies as they respond to the Gulf oil spill and the economic crisis.

Nor does the article assert that the President has “power” over the other branches of government in the constitutional sense – i.e., a power that cannot be overridden. To the contrary, Kagan “accept[s] Congress’ broad power to insulate administrative activity from the President.” (2251). She instead makes the descriptive claim “that Congress has left more power in Presidential hands than generally is recognized.” (Id.)

Anyway, I'm getting away from myself. What I really wanted to talk about was the "ambitious" in "ambitious softball-playing lesbian".

This sharp post got me thinking about it. Jonathan Bernstein's point, for the short of reading, is that Kagan is being unfairly maligned for being ambitious, when being ambitious is just a given for those who seek federal office. It's a fair criticism, and fairer still when you think of how uncontroversial an argument it is. Can you possibly imagine a scenario in which an unambitious person wound up president? Maybe if the president and the first 30-40 people in the line of succession were all swallowed whole in a Sarlacc pit, there would be a slight chance that you'd wind up with a replacement president of minimal political appetites. Even then, a stretch.

This isn't to say unqualified people can't occupy political office, just that ambition is essentially a qualification. Those without ambition, be it personal or ideological, just aren't going to get involved. So attacking a politician for being ambitious is, to me, kind of like attacking a politician for being unprincipled. If it makes good political sense for someone to flip and flop all over the place, why wouldn't they? Obviously it's scummy, just like how ambition can be scummy as well, but unless we return to some kind of monarchical system that limits the ranks of the political elite significantly, we're stuck with it. Even then, people are going to keep trying to take the throne, they're just going to use a lot more swords.

Bernstein makes this argument, but it bears repeating: if we fear the rise of judges who hide their paper trails because of their ambition, then we have to change the system of Supreme Court nomination to make hidden paper trails a liability. Ambition is a structural fact of political life and of human nature. Smart people are always going to look at what they want, figure out how to get it, and pursue that strategy, and if the dominant strategy for entering the Supreme Court is to keep your mouth shut as much as possible then that's what tons and tons of judges are going to do. I know that there are strong partisan reasons that would seem to preclude rules reform, but even small things, like a requirement that the nominee had taken a public stand on a certain number of significant issues, could really get rid of this problem. Until that happens, however, talking about the ambitions of a Supreme Court nominee is like talking about a marathon runner's legs: of course they've got them.

Light, blessed light

2010-05-13T21:18:00.001-07:00

There may, in fact, be something about America that doesn't cripple me with nausea:

Poll: Most oppose Reagan on the $50 bill

Rep. Patrick McHenry (R-N.C.) last month proposed putting Ronald Reagan on the $50 bill instead of former president Ulysses S. Grant, arguing that the "last great president" of the 20th century deserved the honor.

But 79 percent of Americans oppose the idea, according to a Marist Poll released Thursday. Only 12 percent support McHenry's idea while 9 percent are unsure.

Perhaps most notably, 71 percent of Republicans oppose the idea, an interesting statistic considering the Gipper's GOP hero status. Among Democrats, 83 percent don't want Grant replaced and 79 percent of independents agree.

Over at the LRB, August Kleinzahler does a very good job of summing up why you should not be tempted to good thoughts about the Gipper, ever. I am relieved by the fact that, however hard the G.O.P. might still be beating the drum of deification, Americans are, for once, too conservative to agree.

Oh, I am a buttface stupidpants!

2010-05-13T08:35:00.000-07:00

I'm not sure quite how far back, Dave mentioned something about how conservative humourists seemed like they were trying too hard, or maybe just didn't know what humour is, really, but they heard all the pretentious liberals were doing it, and so they have to get on board. Now, finally, there is proof that Dave was just another ass in a suit. Obama does have hilariously large ears! Thank you, Present Discontent, the people did need a laugh. God! ! (wink!) (the wink makes it ironic!) (Irony is humourous!).

Slightly more intriguing, as I recently finished writing about the Gilded Age, is this video about how Ford can't build an truly "advanced" automobile plant because Labour doesn't like it. This is probably true. All of us who had so much fun during the Carnegie Steel Strikes know that Vertical Integration is the best way to increase national industrial output - the country almost entirely halted its industrial growth following the Progressive reforms at the turn of the century and the communist revolution that we didn't have. Fuck fancy cars, if we hadn't pussied out to Labour, we might make most superior potassium on planet! I think my favorite part, though, is the implication that the American auto industry is being held back because Ford is forced to outsource its best work to our samba-loving neighbors. If only our workers would accept exploitative quasi-trusts to operate in our country, maybe Toyota would come and open a plant here! (The comments drive me wild!)

David Leonhardt Writes a Stupid Thing

2010-05-12T19:59:00.000-07:00

This has already received some attention since I first saw it, but redundancy has never stopped me before. David Leonhard wrote something stupid in yesterday's New York Times:

It’s easy to look at the protesters and the politicians in Greece — and at the other European countries with huge debts — and wonder why they don’t get it. They have been enjoying more generous government benefits than they can afford. No mass rally and no bailout fund will change that. Only benefit cuts or tax increases can.

Yet in the back of your mind comes a nagging question: how different, really, is the United States?

Pretty different. This would be a prime example of why questions dredged from the back of one's mind should not provide the premises of front page news articles.

For one, Greece is not the United States. There are a few important distinctions one could make. Greece is much more corrupt than the United States. Greece has much higher tax avoidance than the United States. Greece has much more unstable economic, fiscal, financial, and political record than the United States.

And then there are a few really important distinctions one could make. Greece has a lot more debt then the United States. Greece doesn't use the world's safe-haven currency which, incidentally, is that of the United States. Greece can't hypothetically depreciate out of the crisis as could, in the worst case scenario, the United States.

This is to say nothing of Leonhardt's casual reference to the other PIIGS-members. As Paul Krugman has written over and over, the problem facing countries like Spain and Portugal are not problems of fiscal irresponsibility. To try and moralize on the dangers of government debt based on the crisis (crises) facing Europe is misguided at best and dishonest at worst.

My quibble isn't with the overall thesis of Leonhardt's article; the U.S. has a lot of debt and we're going to have to deal with it sooner or later. Furthermore, it's nice to see an analysis of U.S. federal debt that talks about taxes and entitlement spending and not just welfare bums using government checks to get abortions and gay marriages. But I find the framing irresponsible. Presenting the crisis as a crisis of government excess feeds a particular political narrative that I find, given the current unemployment crisis the U.S. still faces, given the current state of our infrastructure and healthcare and education systems, fairly dangerous. Leonhardt also does very little to distinguish between the U.S. government's short-term budgetary issues (which result primarily from a drop-off in revenue and which ought to be addressed with more stimulus spending) and the government's long-term debt crisis (which, as Leonhardt correctly points out, has to be tackled with a combination of spending reductions on entitlement programs and tax increases). But again, in failing to clearly make this distinction, he provides fodder to those who are calling for spending cuts now and across the board.

Paul Krugman and Brad DeLong pick it up from there.

First, Krugman:

I would really question this comparison:

The numbers on our federal debt are becoming frighteningly familiar. The debt is projected to equal 140 percent of gross domestic product within two decades. Add in the budget troubles of state governments, and the true shortfall grows even larger. Greece’s debt, by comparison, equals about 115 percent of its G.D.P. today.

Um, that’s comparing a (highly uncertain) projection of debt 20 years from now — a projection that’s based on the assumption of unchanged policy — with actual debt now. Actual US federal debt is only about half that high now. And it’s worth pointing out that Greek debt is projected to rise to 149 percent of GDP over the next few years — and that’s with the austerity measures agreed with the IMF.

Here’s a more or less apples-to-apples comparison of the medium-term outlook. I’ve taken the Auerbach-Gale projections for the US budget deficit as a percentage of GDP outlook under Obama policies, and compared them with the IMF projections for Greece, subtracting out “measures” — that is, the austerity measures agreed in return for official loans. Here’s what it looks like:

And DeLong:

1) Starting around 2020 the U.S. has to finally solve the problem that Ronald Reagan created in the 1980 presidential campaign with his claim that the federal government could tax like Alabama and spend like Connecticut and somehow everything would work out. It won't. The U.S. has another decade to decide whether it wants to tax like Alabama and spend like Alabama, or tax like Connecticut and spend like Connecticut.
2) Financial markets continue to be astonishingly confident that the U.S. will in fact solve this problem: U.S. Treasury bonds continue to sell at astonishingly high valuations.
3) As long as unemployment is unduly elevated--above 7.5%, say--our major economic ill connected with big deficits is not excessive deficits forecast for the 2020s and beyond but excessive unemployment and idle capacity now.
4) An even larger U.S. budget deficit now would be a useful tool to help cure our major current economic ill by booting demand: right now the problem is not that our deficit is too large for the economy but that it is too small.
5) Some fear that large deficits today are undermining financial market confidence in the long-term fiscal stability of the United States. So far there are absolutely no--absolutely no--signs in financial markets that our current large deficits: U.S. Treasury bonds continue to sell at astonishingly high valuations.
6) Should financial markets begin at some point in the future to lose confidence in the long-term fiscal stability of the United States, that does not mean that the United States turns into Greece. Greece does not control the currency in which its government borrows. The U.S. does. That makes a huge difference.
By my count, David Leonhardt makes point (1) at great length, makes point (2) very briefly, doesn't make point (3) at all, doesn't make point (4) at all, doesn't make point (5) at all, and doesn't make point (6) at all.

Greenwald v. Lessig

2010-05-12T09:15:00.001-07:00

Discuss.
Or don't discuss.
But watch if you have a chance.
And feel interested.

Buy It!

2010-05-10T19:10:00.000-07:00

According to the Planet Money blog, the Sick Old Lady of Finance, Fannie Mae, is seeking another booster shot from Uncle Sam to the tune of $8.4 billion. It's almost enough to make a person wonder whether keeping the old hag around is really worth it (to say nothing of her parasite-in-arms, Freddie Mac).

Let's forget for a second that certain sovereign creditors of the U.S. government might have an interest in the continued (ostensible) solvency of Freddie or Fannie. Looking at the primary intent of these institutions (that is, to implicitly subsidize homeownership), along with various distortion in the national tax-code and federal subsidies to lenders, does it make any sense in the long-term to continue forwarding a national policy that is, in the words of Paul Krugman, "based on the premise that everyone should be a homeowner." (NYTimes)

An Edwardo Porter article from 2005 says no. Here are some excerpts:

Arguments for the positive effects from a society of homeowners - what economists call positive externalities - stem mainly from the fact that homeowners have a bigger financial stake in their homes than renters do. This motivates them, so the theory goes, to take better care of their houses and communities. In short, it will make them better Americans.
The argument seems to be supported by compelling evidence. In a 1998 study, Edward Glaeser, an economics professor at Harvard, and Denise DiPasquale, then a social scientist at the University of Chicago who now heads the housing research firm City Research, analyzed data from the General Social Survey, a big national study carried out annually since 1972, and concluded that homeownership did relate to heightened civic activity.
For instance, they found that 77 percent of homeowners said they had at some point voted in local elections, while only 52 percent of renters said they had. About 20 percent of renters knew the name of their representative on the school board; 38 percent of homeowners did. Homeowners went to church more, and invested more in the upkeep of their homes.
But as alluring as the data may be, economists and social scientists haven't been able to determine whether homeownership is actually generating all the positive statistics or whether, instead, it's just that people who vote more are more likely to buy homes.
Owning a home relates to a bunch of other things, too, and it doesn't necessarily mean that homeownership causes or encourages them. For instance, according to the 1998 study, homeowners are older, richer, more likely to vote Republican, and more than half of them own guns, while only a quarter of renters do.
[...]
Beyond the difficulty of proving that owning a home generates positive social spillover, homeownership may also affect society in negative ways.
Homeownership limits mobility. According to census data, 31 percent of renters moved in 2003, compared with about 7 percent of homeowners. While this stability can be good for a community, the reduced mobility can become a problem in the face of a local economic downturn.
And homeowners may influence social policy to benefit themselves, at the expense of others. In a study of voters in California in 2000, Mr. Glaeser found that homeowners were more likely to restrict new home-building, voting for tough zoning rules and land-use controls.
"Homeowners have spearheaded the movement to limit new housing supply that has artificially inflated housing throughout the U.S.," Mr. Glaeser wrote. "This is the downside to having individuals who have incentives to keep price up."
The tax incentives might even be hurting America's inner cities, increasing the segregation of rich and poor.
Mr. Gyourko and Richard Voith, a former economist at the Federal Reserve Bank of Philadelphia who is now a partner in Econsult, a consulting firm, have argued that the mortgage interest deduction encourages richer families to buy bigger places in the suburbs and leave the more cramped cities to the poor.

At least until recently, it seems that the social good of home-ownership--home-ownership for its own sake--has been taken for granted among both policy makers and academics. Seems kind of silly now.

Not even a peep

2010-05-09T13:22:00.001-07:00

The Senate voted 61-33 against the SAFE Banking Act on Thursday. Also known as the 'Too Big to Fail Amendment', SAFE would have given Congress the power to break up the largest financial institutions in the country. That it was defeated is sickeningly unsurprising, but what initially peaked my curiosity was simply the fact that not a one of our media establishments have breathed a word about the bill and the course it sought to chart. Isn't granting the federal government the greatest interventionist power it has had in generations a big deal--or any deal of any size? How did this get ignored? I suspect that I already know the answer, that you do, too, and that it involves the public relations arms of Goldman and J.P. Morgan and an anti-aircraft cannon filled with Lamborghinis.

What claim do we Americans make to citizenship in a democracy, anymore? I await the day when asking that question will produce an indifferent shoulder-shrug from any given respondent. That's when we'll know the door has shut for good behind us.

Beyond Petroleum

2010-05-09T03:19:00.000-07:00

Now that the most recent attempt has failed to stop the oil from hemorrhaging into the Gulf--as it turns out, dropping a 98 ton milking machine on top of the leak is just as stupid as it sounds--it seems an appropriate time as any to re-assess the morbid assessments of just how bad this thing is going to be and just what we can expect our wizened representatives in government to do about it.

A week ago, Ezra Klein posted excerpts of the following report from Cumberland Investors. Beginning with the best-case scenario:

Containment chambers are put in place and they catch the outflow from the three ruptures that are currently pouring 200,000 gallons of oil into the Gulf every day. If this works, it will--

At this point, I think we can comfortably skip ahead to the doomier and gloomier scenario:

This spew stoppage takes longer to reach a full closure; the subsequent cleanup may take a decade. The Gulf becomes a damaged sea for a generation. The oil slick leaks beyond the western Florida coast, enters the Gulfstream and reaches the eastern coast of the United States and beyond...Monetary cost is now measured in the many hundreds of billions of dollars. (Ezra Klein)

For the Gulf economy in particular, to say nothing of the possible (let's say, likely) ecological catastrophe, we might be witnessing the end of the end for the region's fishing industry.

The Louisiana coast includes 3 million acres of wetlands that serve as a nursery for game fish such as speckled trout and red drum and are currently nurturing the brown shrimp crop to be harvested by the state’s fishing fleet.
Louisiana is the largest seafood producer in the lower 48 states, with annual retail sales of about $1.8 billion, according to state data. Recreational fishing generates about $1 billion in retail sales a year, according to the state.
“Our marshes are nurseries and if those marshes are impacted, those juveniles that are dependent on feeding in those marshes will be affected too,” [Karen] Foote said in an interview...Those species include shrimp, oysters, crab, menhaden and game fish that have made Louisiana a destination for seafood lovers, commercial harvesters and anglers[.] (Business Week)

Oil production and fishing are two of Louisiana's largest industries. From an economic standpoint, B.P. might be finishing what Katrina started.

In the days following the April 20 explosion, the administration's backpedaling was as immediate as it was obvious. As Lisa Margonelli wrote last week in a New York Times opinion piece, a new moratorium on off-shore drilling is likely to follow. But this policy conveniently ignores the crux of the country's (and the world's) oil problem: demand.

All oil comes from someone’s backyard, and when we don’t reduce the amount of oil we consume, and refuse to drill at home, we end up getting people to drill for us in Kazakhstan, Angola and Nigeria — places without America’s strong environmental safeguards or the resources to enforce them.
Kazakhstan, for one, had no comprehensive environmental laws until 2007, and Nigeria has suffered spills equivalent to that of the Exxon Valdez every year since 1969. (As of last year, Nigeria had 2,000 active spills.)...Effectively, we’ve been importing oil and exporting spills to villages and waterways all over the world. (New York Times)

Optimism for more far-sighted policy might not be entirely unfounded. Aside from the predictable revulsion and panic, my initial thoughts on the spill were that, coming so soon after the Massey coal mining disaster, it might prove to be a toxic contradiction sufficiently enormous and awful to catalyze real change. At the very least, the reasonable and naive spectator might hope, we should expect a series of re-regulation measures ranging from worker safety to environmental, if not a full upheaval in our national energy policy. This could be something as broad and patently necessary as Margonelli's set of off-the-cuff recommendations:

a comprehensive oil reduction dependency act that aligns highway policy with reducing subsidies with a loan program that allows middle-class people to get much more efficient cars to natural gas trucking to incentives for businesses to cut gas usage. (Ezra Klein)

I suspect that the president's bully-pulpitting on this issue is a necessary but not a sufficient condition for change. But with the majority of the affected states boasting political representatives heavily financially dependent upon the petroleum industry and populations largely suspicious of federal regulation and reform, even if Obama should overcome his lack of credibility on this issue and discover his inner-Lyndon Johnson in the process, I find it difficult to prepare myself for anything other than disappointment.

A very serious, thoughtful, argument that has never been made in such detail or with such care.

2010-05-06T17:06:00.000-07:00

If you have eight or so minutes to spare and you're a huge fan of the Jonah Goldberg political theory rollercoaster, this is good for what ails you:

UPDATE: The necessary context, for the uninitiated, is here, here, and most importantly, here. I readily admit that I am something of a Goldberg obsessive, as his way of thinking always calls to mind some kind of similarly named overly complicated piece of machinery.

Acronyms to Ponder

2010-05-02T19:55:00.000-07:00

Until last week, I'd never heard of "IBGYBG." But during the Senate Permanent Subcommittee on Investigations' eye-opening hearings into ratings agency malfeasance, former Moody's senior credit officer Richard Michalek introduced me to it while testifying about the perverse incentives that dominated the industry. On the investment bank side, he said, bankers were looking to score the one-time fee from whatever securitization deal they were asking the agency to rate, and move on to the next deal. The incentives for the bank, Michalek said in prepared testimony, were clear: "get the deal closed, and if there's a problem later on, it was just another case of IBGYBG--I'll be gone, you'll be gone."
Michalek says he first heard the phrase from "an investment banker who was running out of patience" with his "insistence on a detailed review of the documentation."(The Nation)

Clever.

You had better have missed me

2010-04-27T09:26:00.000-07:00

It's been a while. I know, I shouldn't have left you, not (at least) without a strong rhyme to step to.

Only David will possibly understand that joke.

So! It's springtime, and the headlines are pregnant with fuck-uppery. I don't even know what I should be aiming at, if I'm to carry out a successful sniping mission in the smugness and obscurity of the sidelines. Ben got Goldman, and Dave's dug up the dirt on Rush and Rand; I'm feeling like the fat kid who's sweating his way to the start line even as the long-legged Adonises blaze towards the finish.

How about Greece? It's in a tight spot, and I'm going ten to one that it'll take more than olive oil and kebab fat to squeeze its way out. For all of you who've made heavy bets in sovereign-debt markets, I'd suggest you start shedding bonds like necrotic extremities. My guess is that Athens will be so weakened by discord and popular dissent that it will have succumbed to semi-, and then full, anarchy by mid-summer, with the worship of ritualized conflict as mortal pseudo-sport a sure bet for the Christmas season.

Financial regulation is doing well: it's shaping up to be almost as eye-boilingly infuriating as healthcare was. If I had a nickel for every time I wanted to infect a Republican member of Congress with incurable bone plague, I wouldn't even need to spring for the plague--I could just choke him with nickels.

Finally, everyone give a big round of applause for the United Kingdom, where it looks as if the utter ruination of the Labour Party is all but tattooed onto the Queen's chest. In a surprise upset, backstretch warmers the Liberal Democrats are set to snatch an unprecedented three-times-ten-percent share of the upcoming vote. Not bad for the worst country in the world, transforming a devastating and relentless economic catastrophe into a once-in-a-generation political upheaval which may yet remake British politics entirely for the better.

Who am I kidding? They're still ugly and awful, and, if lazy, American humor is anything to go by, they eat like medieval dungeon prostitutes. U-S-A!

My Belated and Obligatory Goldman Post

2010-04-24T00:52:00.001-07:00

I realize that this is coming a week and a half too late (too late for me to contribute anything new or particularly meaningful to the subject in any event), but having saved a dozen or so tabs on my browser just for this occasion and this blog being that it is, I would have felt remiss in not at least mentioning the SEC v. Goldman thing, if only for continuity or posterity.

Information on the SECs complaint and Goldman's potential violation abound, and so I won't rehash the issue here. If you've missed or ignored it up until this point, there's this New York Times article from back in December, this more recent update, and this post at Baseline scenario, to name a few sources that explain the whole in clearer terms than I would be likely to muster.

There are a number of issues that this case raises. First, now that SEC has taken the rare step of actually doing something in its capacity as an enforcer, does this auger a change in attitude or approach at either the agency specifically or throughout the administration as a whole? Specifically, is this to be the first in a long line of cases brought by the government against financial malfeasance or is this going to be, much like the case against Madoff I think, an easy way to blame the entire financial crisis on a few bad people doing a few bad things and to ignore a system-wide overall in the process? Which is all to paraphrase Yves Smith who writes:

it is too early to tell whether this suit is indeed the beginning of a concerted initiative (with the initial litigation allowing the SEC to perfect its legal arguments and uncover more information through the discovery process) or simply an effort to address (as in appease) to a public mad as hell about no-questions-asked bank bailouts and continuing subsidies to the financial services industry. (NakedCapitalism)

The timing of this case, given the current wrangling over financial regulatory reform, could really be interpreted either way, I think.

But there are some positive signs, according to Bonddad:

[I]n government based litigation, the government is going to argue more or less the same thing in a line of cases. Therefore, they usually bring their best case first to set a precedent for other jurisdictions to follow (this is what the IRS does in anti-avoidance litigation). I'm guessing this is the government's best case in this area. In correlation, the SEC is desperately trying to re-establish itself as a potent enforcement arm. I don't think they would bring a case right now unless they thought they had as close to a slam dunk case as possible.

Admittedly, those are some pretty thin tea leaves: little more than speculation, it seems to me. Either way, Bonddad makes a compelling case that whatever the motivation behind bringing this case at this time in this way, the SEC is forcing Goldman to fight this issue out in the public (a settlement would open the bank up to an onslaught of civil charges). From a policy perspective, the more attention this gets, the more pressure members of congress receive to actually act against this nonsense, the better.

Second, this all brings to mind the all-too-familiar conclusion: so much of modern finance is socially useless. As far as I can tell, none of the financial products or arrangements in the Goldman-Paulson deal, like those in the strikingly similar Magnetar scheme explained on last week's This American Life, like those concocted by Lehman Brothers according to this New York Times article, serve any good whatsoever, even by the standard definition of social good offered by finance academics and bankers. In many cases, the opposite seems just as likely to be the case.

More than anything, a lot of it amounts to complexity for the sake of complexity. Smoke and mirrors serve the interest of banks. It makes it that much easier to maximize fees, over-price assets, and circumvent regulation. And within the banks themselves, based on the recent testimonies of Robert Rubin and Charles Prince--

Even his lofty title at Citigroup didn't involve frequent meetings and "wasn't a substantive part of the decision-making process," Mr. Rubin told the panel...Mr. Prince said he wasn't aware that Citigroup traders decided to keep on the company's books $40 billion of super-senior collateralized debt obligations, pools of assets tied to subprime mortgages. "After all, having $40 billion of [highly rated] paper on the balance sheet of a $2 trillion company would typically not raise a concern," he said. Such assets eventually produced losses of $30 billion. (WSJ)

--the complexity and scale of the institutions and transactions involved make it virtually impossible for the left hand to know what the right is up to. Or at least, it provides management with an ability to make that argument and take their bonuses with a straight face when the shit inevitably hits the fan.

It is a bit of a cliche at this point, but banking should be boring. From what I understand, the regulatory proposals being discussed don't go nearly far enough in achieving the obvious goal. But maybe, the SEC can start picking the slack.

In which David's feelings are hurt

2010-04-23T02:34:00.000-07:00

NOTE: What follows is super navel-gaze-y and whiny and for that I apologize. Think of it less as a blog post and more as something I would be telling you about over a beer were I physically proximate enough to do so.

Although I am a heavy consumer of blogs, I rarely, rarely comment (except here, of course). There are a few reasons, but the main one is that blog comment sections are dens of logical and rhetorical iniquity, places where lonely, angry people are given free rein to verbally assault other lonely, angry people that they may never meet. Trying to insert one's carefully crafted opinion into a comment section is like dropping a bottle of Purel into an outhouse.

It's not that I don't read comment sections occasionally and desire to jump in as well. It's just that I know that no matter what I say, no matter how limited in scope or tentatively put it may be, if there is an ounce of provocation or debate in it, someone will jump up and down on my e-balls like a crazed baboon.

The relevant example: yesterday, a friend of mine changed his Facebook status to

"To all those who "liked" the page "DEAR LORD, THIS YEAR YOU TOOK MY FAVORITE ACTOR, PATRICK SWAYZIE. YOU TOOK MY FAVORITE ACTRESS, FARAH FAWCETT. YOU TOOK MY FAVORITE SINGER, MICHAEL JACKSON. I JUST WANTED TO LET YOU KNOW, MY FAVORITE PRESIDENT IS BARACK OBAMA. AMEN." need to explain to me why calling on the death of a sitting US president (who isn't even liberal, let alone a socialist) is ok..."

He's a liberal dude who is originally from Northern Florida and was in a frat, so I doubt he posted it without expecting some kind of response. And of course he did.

A sampler:

"he is a socialist, communist, super leftie who sucks at his job...and what, these jokes were never around for other presidents...chill out chevo!"

"Fritz has a point. The 2008 election had a record number of extremely uneducated voters who turned up at the polls for "hope" and "change". (read: clever marketing). They didn't know the issues then, they don't know them now. All that goes on in their heads is "Obama = god, people who don't like Obama = idiot right wing extremists who don't know what they're talking about". Nothing has changed in America, except the fact that now China basically owns us..."

"...So why are they raising taxes on nearly everything AND proposing this God awful VAT? Maybe so they can continue to fund the support of the 47% of the US populace that does not pay any income tax. Make sure the plebes have their bread and circus and Rome can continue. It isn't that hard."

Against my better judgment, I posted a response:

1. What does "rated as the most liberal senator" mean, exactly? Not only are those ratings usually pulled together by thinktanks with thinly veiled political intent, how do you rate someone as "the most liberal"? What is "the most liberal" thing I could do?

2. "Maybe so they can continue to fund the support of the 47% of the US populace that does not pay any income tax." This is horribly misleading. This number refers to federal income tax only. There's a whole array of other state and federal-level taxes that are being paid, like state income tax or payroll taxes (3/4 of American households pay more in payroll taxes than incomes taxes anyway). In reality, the number of people who pay no net federal taxes is around 10%. Beyond that, states taxes are mad regressive, so whatever benefit the "plebes", as you put it, may acquire from exemptions on federal income taxes are lost.

3. Where is the evidence that "some of the most uneducated people voted in this election"? Is that provable? Does Rush Limbaugh own an apartment in your brain, or just rent?

Here's the entirety of what I got back:

Oh look at the clever liberal. I don't like Obama's policies, so I must be a Rush Limbaugh listener. Fail logic sir. I don't watch FOXnews either, I know, how can that be possible! Doesn't like Obama AND doesn't like conservative talk radio/TV?

I'm a fiscal conservative. Everything Obama is doing to the country goes against what I believe fiscally. Nothing good will come from spending this kind of money on programs with limited foreseeable benefit. I think the Bank Bailouts proved that beyond a doubt, have you seen the unemployment numbers? Money well spent? Not in this life, buddy.

That's it.

Now, to be fair, there were a number of people who posted (30 long, long comments) and both the tone and the intelligence level varied a lot. But c'mon! I put forward a series of points, and the only response I get focuses entirely on a line of snark I nailed on to the end before wandering back into the land of fact-free irrelevance. It's almost like the dude scrupulously avoided reading or thinking about any of what I wrote that didn't offend him.

Anyway, I could go on, but I shouldn't. The point of this post is that while I find the internet a great place to find and study information and opinions, it really is a horrible place to have an actual conversation. Am I alone in thinking this?

Take them on, on your own

2010-04-20T04:00:00.002-07:00

In the original spirit of The Chorography, as a place to bring any and all relevant and not-so-relevant things to each other's attention, I present you with The Judiciary Reorganization Bill of 1937:

The Judiciary Reorganization Bill of 1937, frequently called the court-packing plan,[1] was a legislative initiative to add more justices to the Supreme Court proposed by U.S. President Franklin Roosevelt shortly after his victory in the 1936 presidential election. Although the bill aimed generally to overhaul and modernize all of the federal court system, its central and most controversial provision would have granted the President power to appoint an additional Justice to the U.S. Supreme Court for every sitting member over the age of 70½, up to a maximum of six.

Crazy stuff, especially for someone whose knowledge of New Deal history is fragmentary at best. Roosevelt got beat to shit over the court-packing plan, as it was a fairly blatant attempt to overcome a number of unfavorable rulings the Supreme Court had handed him through his first term, but it's interesting to me to compare this kind of legislative tactic with, well, anything Obama has done. I only came about this while reading Path to Power, a book about yet another progressive/left-of-centre president with ambitious plans for the federal government, and as bad as Johnson (and, to some extent, Roosevelt) come off looking, the sheer ball-sack that they brought to the table in the pursuit of a progressive agenda is pretty impressive. I suppose you could argue that they lived and operated at a time when organizing legislative/populist resistance to liberalism was harder or that modern partisanship would paralyze any president, no matter how persuasive or assertive he or she may be. That said, reading about Johnson and Roosevelt isn't doing a lot to convince me that Obama is a leader in their mould. Whether that's a good thing, I guess, is something we should debate.

Things that are awesome

2010-04-13T11:37:00.000-07:00

This picture was taken with a pinhole camera over six months.

Things I did not realize

2010-04-13T09:00:00.000-07:00

1. Rush has a big old boner for Ayn Rand.

2. You can get published in an academic journal just for pointing this out.

Thankfully, knowing these things doesn't make 2112 any less awesome.

An open letter

2010-04-12T06:13:00.000-07:00

Dear everybody:

Please stop comparing women to dogs. It wasn't funny when Peter McKay did it and it's not funny now.

The thing is, it's not a double standard if calling a woman a dog carries the kind of symbolic weight (i.e. all strong women in politics are bitches) that it does.

Sincerely,

Sarah

Veil debate update

2010-04-12T06:04:00.000-07:00

Article in the G&M about a young Muslim woman ordered to leave government-funded French classes because of her refusal to take off her veil.

I'm still not entirely sure where I stand on the whole veil debate, but there is one thing I will say: for everyone complaining that the veil oppresses and disempowers women, etc., please consider that perhaps taking a French course is an empowering experience for her. That's certainly the impression I got from the article.

I do not personally like the veils and I admit that I find them jarring and seeing women in the niqab makes me uncomfortable. However, I think that by removing access to government services Quebec is removing access to the very kind of empowerment and independence that everyone seems to claim that veiled women need.

EDIT: by "everyone" I don't mean this blog.

Vile and disgusting trigger warning here

2010-04-07T03:58:00.001-07:00

I'm back, ladies and gentlemen, and with something particularly horrifying on this delightful Wednesday morning.

Via Shakesville: a great article in the Guardian by a Shakesville contributor concerning a cartoon by a right-wing blogger (Darleen of Protein Wisdom) depicts Obama putting his shirt on and leaving after raping the statue of liberty.

I'm not going to post the cartoon here because I can't figure out how to put it behind a cut and I don't want to put it on the front of the blog.

As another blogger, Amanda at Pandagon, writes, what is so fascinating about this is how some conservatives are able to understand that rape is about power when using it as imagery to describe legislation or governmental power they don't like, yet the same (or other conservatives) are unable to understand this when rape is happening to ACTUAL PEOPLE, choosing instead to understand it in the context of promiscuity (women) or humour (men).

The other blatant, glaring issue here, for me, is the fact that the blogger who came up with the cartoon denies that there is a racial element to it. Even if (and this is a big IF) she came up with the cartoon without any intention to have racist over-, under-, and any other kind of tones, the failure to recognize the implications of "black man" + "sexual assault" + "white - OK, green - woman" is a gross oversight.

There are just so many things wrong with this that I don't know what else to say.

The Great Unveiling

2010-04-02T18:25:00.000-07:00

This veil business is surprisingly interesting, something I've never paid much attention to until Dan and Sol wrote about it. So congrats, guys, you're getting me to stop thinking about America and start thinking about Canada.

The larger issue here, as Dan briefly touched on, is that Canada has one broad standard of cultural acceptance, and Quebec has a much narrower one. I made mention of this in the comments for Dan's post, but a not insignificant portion of the Canadian elementary/high school social studies curriculum is devoted to parsing the differences between Canadian "multiculturalism" and American melting pot-ism. Obviously, any attempt to talk about Canada and America is fraught with problems of identity, autonomy, and inferiority, and I still to this day do not fully understand what the distinction is or why its a good thing. The 30-word summary of it, though, is that Canadian immigrants are allowed to retain their cultural heritage (becoming Italian-Canadians or Indian-Canadians) while American immigrants have to take a citizenship test and assimilate (becoming Americans, full stop).

Now, much ink has been spilled debating whether this is a good idea. Frankly, I'm no ultra-nationalist, but I think that if Canadians are seriously concerned about maintaining cultural and political autonomy from our neighbors to the south, we need to do a better job of making people proud to be and proud to be called Canadian. At the moment, the "mosaic" approach makes citizenship in Canada look like a great dental plan: of course you're glad to have it, but it ain't you, man. The concept of Canadian identity is largely detached from any social or civic obligation, leaving it to the predations of beer companies and heritage moments.

As we all know and have experienced, Quebec, the nation within a nation, has a much different take on this, one that is fundamentally irreconcilable with the federal concept of multiculturalism. The provincial government has a huge say in determining a) what is part of the Quebec identity b) whether it should be legally enforced and c) how. As the demographics of the country have turned against them (no link, but the French-only population is on the decline), the aggressive defense of French Canadian identity has picked up steam. One can see that in the veil ban, something we seem to all agree has very little to do with feminism and as Dan pointed out effects a very, very small portion of the population.

The problem, for me, is Ignatieff's response. Yes, he's only opposition leader, but he's highlighting a political dynamic that I expect we will be dealing with for some time. In short, the current balance in the House of Commons makes Quebec an incredibly valuable piece of real estate. Conservatives have, in the last three elections, worked hard to take seats from the Bloc, with varying success, largely because they realize that a majority government can only realistically be formed with some portion of French seats. As a result, both the Liberals and the Conservatives have adopted a strategy of neutralization: if they can take away the nationalist reasons for voting for the Bloc, they might have a shot with the Quebec electorate. Harper's 'nation within a nation' is an obvious example of this, and I think Ignatieff's comment on the veil issue is too.

So the federal political climate is basically letting Quebec drift even further away from the multicultural ideal than it was before. This is the worst of both worlds: Canada on the national level remains undefined, while Quebec becomes more and more absurd and militant about its own identity. Stressing the flexibility and openness of Canadian society while tacitly letting Quebec close in on itself is a recipe for disaster, the kind that rhymes with "shmeparation" and maybe also with "shmederal shmissolution".

Thinly veiled...

2010-03-31T20:33:00.001-07:00

This is really a comment riffing on (or ripping off) Sol's post, but in light of the length, I'm posting it separately.

Not that common sense needs academic verification (I beg pardon of all social psychologists among our readership), but most of the "work" done on women's rights in Islamic societies supports Sol’s view. Wearing veils of any sort is more often an expression of the wearer's agency, rather than direct imposition by another barty, notwithstanding the fact that this "choice" may reflect a desire to avoid scorn within the moral framework of a patriarchal society. The argument, thus, is that if a woman makes the choice to not be called an "exhibitionist whore," it is no less her choice.

Curiously, the Qu’ranic passage most often quoted in this debate echoes this conclusion almost explicitly. Surat Al-'Aĥzāb (33:59) states that female “believers” should draw their “jalabeeb” over themselves, “that they may be recognized and not molested.” Exactly what sort of garment would be the modern equivalent of a jalab and how much of a woman it should cover (hair, face, eyes) is a point of strong debate. Nevertheless, the passage indicates that the veil announces or even confers the social status of “believer” within a society in which non-believers do not hold the same rights.

The Qu’ran makes no provision for Muslims living outside of Islamic society, nor do the Hadith – the other primary sources of Islamic law – or the early commentators. Therefore, if we may infer that the primary function of veiling is to express one’s religious affiliation (and assumedly, pious observance), rather than to serve a religious duty in itself, the issue that rises is not one of Feminism so much as the Canadian “salad bowl” vision of immigrant culture. For the veil to serve its original social function, one must presuppose a society that recognizes Muslimhood as being more respectable than other religious affiliations.

It does seem ridiculous to legislate that a woman cannot wear something that gives her “more rights” within her own community, unless the real issue is that a separate community, with distinct moral…let’s call them “valences” for Benny…exists within the larger Canadian culture, and more importantly visibly interacts with it. If a law were made against Confucian-inspired corporal punishment within Chinese families, I think few people would complain outright, but it would be impossible to enforce – mostly because it wasn’t occurring in the public milieu of the Canadian public.

The veil sticks out like a scimitar scar on the cheek of French Canada, because it exposes that there is already a community with unequal privileges that support its assimilationist policies: bienvenue au Québec. Ignatieff’s support of the ban further indicates that his base may be facing a broader question of how many separate cultural frames the country can support before it starts to lose its strong sense of itself, especially if these frames are accompanied by expressions of cultural superiority (and unequal rights for unveiled women). (Theoretically, one could argue that the ban is Feminist not because it liberates observant Muslim women, but because it frees other women from the scorn of Muslim men by making them harder to differentiate.)

See what I did there? I conflated the superiority that veiling confers within (certain) Muslim societies with its multiple expressive uses in the Canadian context. I did it by drawing from the Qu’ran as if I could reach a privileged understanding of Islamic law from a single quote. Prime Orientalist work, you say, Mr. Said. It is, but I believe that’s the thought process that can justify such a ban, without also banning nuns' habits and priests' collars. And I believe such thinking will persist until Canada and other Anglo-European democracies can stop pretending that assimilation is not a prime concern of their respective majorities.

For a little context on the ban, glance at this article from the Gazette. Please note the part stating "10-15" women might have worn a niqab out to the polls to get an idea how urgent this legislation was. I probably see 10 niqab on a sunny bike downtown, although that's a different valence altogether..

2010-03-25T08:43:00.000-07:00

I believe everyone here would agree with the following statement:

Telling women what they can and cannot do is anti-feminist.

In fact, it seems to me that that axiom is, at its base, the core of feminism and gender equality. It really doesn't get any simpler than that: a woman can do what she wants. But, Jean Charest and the Quebec government believe otherwise, and it has been pissing me off for some weeks now.

It started a few weeks ago when a Muslim woman was asked to leave a government sponsored French language exam unless she removed her niqab (that's the full face covering, as opposed to the hijab.) Other cases include a Muslim woman wishing to be looked after by a woman at a public health centre, and a man refusing to be served by a female employee at a public health centre wearing a head-covering. And now, the Quebec government is enacting a law that would bar face covers from all government buildings, whether on employees or customers. (A good history of the law can be found in this article.)

Now let me say something: it would make me happy if women didn't wear clothes dictated by their religions. I think fairly often it's probably someone else, male or female, who's deciding what the woman is wearing. The Charest government, however, is couching this law in bullshit terms of gender equality. Charest: you are tellling women what to do. By framing it in terms of freeing women from oppression, you're making the assumption that women are incapable of thinking for themselves, and that they have no agency at all in the decision to wear a veil. If a woman wants to veil herself, a woman can veil herself. If it's a symbol of her submission to her husband or father, well, that's a damn shame, and I hope she'll rethink her decision and position, and assert her right to be stand on equal ground. If it's a symbol of her own religious convictions, well, that's great, and she has every right to uphold those convictions so long as they don't impinge on anyone else's rights (which, when they involve an individual's clothing, they don't.) And if it's a symbol of something else entirely, whatever it is, that's her goddamn inalienable right.

I can see no reason whatsoever for a woman in a niqab to not be allowed to take a French exam. I can see infinitesimally more of a reason for a woman to not be allowed to request service from a female employee, since that would slow down general service an ever so little bit, but with equality in hiring laws, she could easily be allowed to wait until the next female employee is available. And that asshole who refused service from a veiled woman? Yeah, he's an asshole. I can't think of how the veil make services rendered by the woman any worse. When she says to say "aaah," does this guy need a goddamn demonstration? The goverment shouldn't be catering to assholes.

Thoughts?

Nancy Pelosi, Superwoman

2010-03-21T02:35:00.000-07:00

While I will try my best to remain cautious on the hopes of HCR passing the house tomorrow, things do appear to be looking pretty good. There's a lot to be said for momentum in these kinds of situations, and while the Democrats were pretty incompetent for long stretches of last year, it's been an impressive week of headline-grabbing vote turns and big ballsy talk. This legislation will be good and helpful and corrective; maybe not the Canadian dream, but a damn sight better than what exists now, and we should, as progressive people, all be pretty happy about it. So, assuming it passes, who should we thank?

Well, Nancy Pelosi:

During a mid-February conference call with top House Democrats, Pelosi made it clear she would accept nothing short of a big-bang health care push – dismissing the White House chief of staff as an “incrementalist.”

Pelosi even coined a term to describe Emanuel’s scaled-down approach: “Kiddie Care,” according to a person privy to the call.

Pelosi’s remark was more than just a diss. It sent a clear signal to House leadership that Pelosi wouldn’t compromise – and it coincided with Obama’s own decision to renew his push for an all-encompassing bill after weeks of confusion and discussion.

In the end, Pelosi, Obama and Senate Majority Leader Harry Reid (D-Nev.) braved a political backlash to pursue comprehensive reform, green-lighting a two-step reconciliation process that requires the House to approve a Senate health bill reviled by many House Democrats.

I've been reading Path to Power over the last month, a truly excellent book on a level I can barely describe, and I just finished a chapter on Sam Rayburn. Rayburn was an ass-kicking, vote-getting, progressive-legislating machine, the kind of guy who grew up mad and populist and turned that anger into a long and worthy stream of accomplishments (he created the SEC, for example). In short, Rayburn was the kind of guy whose absence is keenly felt in an age of Democratic incompetence and spinelessness. I was talking with John Macleod about that fact, debating the reasons why there are no politicians today who are admirable both as legislators as well as humans beings. John was characteristically pessimistic, so there wasn't much in the conversation, but my thinking was that it probably has to do with the media and campaign environments as they currently exist, forcing politicians to tack to whatever extreme and intransigent opinion will generate funds and screen time.

I was even going to write a post on this, on how the new media environment has really had a negative overall effect on legislative efficiency, when I started to read about Nancy Pelosi's role in the last few months, reeling health care back in from the edge of the world. Then I got to thinking about the House over the last session, and what kind of things we've seen passed - a decent climate change bill, health care reform with a public option, the stimulus, 288 other bills the Senate has yet to act on. Nancy Pelosi is one awesome lady! She's been grinding out tons and tons of nice progressive legislation over the last year, often at great political expense, often knowing the Senate is so broken that the legislation may never even get to Obama's desk, often knowing that she is exposing a significant portion of her caucus to risky votes. No one can accuse her of not trying to take advantage of the moment, and no one can accuse her of lacking the stones to push through the reform she believes is right. So here's to Madame Speaker: if, by this time tomorrow, she's passed the Senate bill and the fixes, someone should really name a building after her.

Euro Crisis Update (Lazy Block-Quote Edition) II

2010-03-13T21:04:00.000-08:00

...the re-updatening.

Here's that block-quote:

The IMF usually has maximal bargaining power at a country’s moment of crisis – it typically cares far less about whether the country makes it through than the country itself does, and hence can extract harsh conditions in return for aid.2 But – as we have seen with the Greek crisis – EU member states are far less able to simulate indifference when one of their own is in real trouble, both because member states are clubby, involved in iterated bargains etc, and because any real crisis is likely to be highly contagious (especially within the eurozone). In other words, the bargaining power of other EU member states (and of any purported EMF) is quite limited. If Greece really starts going down the tubes, Germany faces the unpalatable choice of either helping out or abandoning the system that it, more than any other member state, created. In short – any EMF, unlike the IMF, needs (a) to concentrate on preventing countries getting into trouble rather than dealing with them when they are already in trouble, and (b) deal with the fact that any country in trouble likely has significant clout in the architecture overseeing it.

From my sense of the EU integration process, and of the rough bargaining strengths of the actors involved, I imagine that any final bargain will emphasize forward-looking measures, which are intended to forestall problems before they arise. Unhappily for Bundesbank disciplinarians, these are likely to rely more on carrots than sticks – it is clear from previous experience with the Growth and Stability Pact that threats of harsh punishment are not sufficient to produce virtue if these threats are not credible. We can expect moderate levels of fiscal transfers (likely ratcheting up over time), aimed at helping ease the pain of adjustment, together with admonishments (and withdrawal of goodies) for those who fail to live up to their promises...So yes – the Greek crisis is plausibly a very significant step indeed in EU integration (whether for good or bad, I am not going to speculate, since even if I am right, it would depend heavily on the detail) (CrookedTimber).

In my first big post on this topic, I speculated that because the current arrangement in Europe is so unsustainable both economically or politically (Greece being the case in point), the system could only fall one of two ways: Europe will unravel or it will converge, but the middle ground can't hold any longer.

But I think I may have been wrong. For reasons relating to policy inertia, confidence in financial markets, politics, and the sheer limits of logistical implimentation, it seems like integration is a bit of a one-way street. It would be very difficult for any one actor in Europe to begin disentangling itself from the rest of the continental system, let alone to disentangle that system itself. At this point, it seems like things can only roll one way.

Couldn't have said it better

2010-03-08T14:07:00.001-08:00

From this New Yorker piece by James Surowiecki on a tax loophole that benefits private equity fund managers to the tune of billions:

"If we were starting from scratch, after all, it seems unlikely that the Senate would choose this particular moment to pass a bill subsidizing money managers to the tune of billions of dollars a year. But, because the tax break already exists, it exerts a kind of gravitational pull that makes it hard to get rid of. In part, that’s simple economics—those who benefit from the tax break have more money to lobby for it to be kept in place. Furthermore, while the cost of subsidies is spread out among all taxpayers, the benefits are highly concentrated, so, naturally, opposition is generally diluted and diffuse while support is intense. If you work in private equity, it’s possible that nothing the government does matters more than keeping this tax break intact. And this pattern is true not just of subsidies but of government programs in general: every government action creates a constituency with an interest in keeping that action going."

Bien dit, non?

Middling thoughts for middling things

2010-03-03T21:58:00.000-08:00

What does it mean to take the middle ground? Perusing the March 1st issue of the New Yorker, and, in what is admittedly a more pedestrian moment, on the day that I saw Shutter Island, I read a very smart piece on psycho-pharmocology by Louis Menand. The article had as its basis two recent critiques of biological psychiatry by psychologists Gary Greenberg and Irving Kirsch. Though they end up with different versions of the same prescription for the problem--Greenberg championing "existential, humanistic talk therapy," and Kirsch just the normal type--both men take aim at anti-depressants as being a fiction of drug company-marketing and therefore of no ultimate value to the sufferer of depression. Menand mentions a few more authors who corroborate their views, cites the opposing, pro-medication stance in the work of a certain Peter Kramer, and then discusses both the hype that has surrounded drugs and the axiomatic resistance they have met in other quarters.

I've had enough debates with certain individuals who we all know and love about psycho-pharmacology, enough so that I doubt anyone would be surprised at which side of the debate I fall on. I am suspicious of almost anything that is done for profit, and drastic interventions into the body and mind all the more so. My stance is of course completely one grounded in sentiment. I could not cite you any specific studies that support my view. At best, I rely on anecdotal evidence and logical argument, almost certainly drawn from an a prior distaste for healthcare as an industry.

I am not writing this, however, to open up the topic of trends in modern psychiatry. I'm reaching for something much more abstract. Menand's piece made me aware, as I often find myself being, of how attractive the middle ground is, and how widely used it is as a device of intellectual delivery. It also made me, as, again, I find myself being, profoundly suspicious. That suspicion of moderation is something I can't quite shake, and so I'm bringing it to the table for you, my peers.

I won't begin with some tired trope about spinelessness or indecision, words that are very frequently directed at moderates. My monthly quota of viperish invectices was used up on poor President Obama. What I'm curious to discuss is the powerful attraction that we all have to so-called objectivity. Menand's article demonstrates a canny fluency in exactly that genre, and so that's why I mentioned it. To better illustrate the point, I'll give you a selection from his closing paragraphs:

We are proud of our children when they learn to manage their fears and perform in public, and we feel that we would not be so proud of them if they took a pill instead, even though the desired outcome is the same. We think that sucking up, mastering our fears is a sign of character. But do we think that people who are naturally fearless lack character? We usually think the opposite. Yet those people are just born lucky. Why should the rest of us have to pay a price in dread, shame, and stomach aches to achieve a state of being that they enjoy for nothing?

Or do we resist the grief pill because we believe that bereavement is doing some work for us? Maybe we think that since we appear to have been naturally selected as creatures that mourn, we shouldn't short-circuit the process. Or is it that we don't want to be the kind of person who does not experience profound sorrow when someone we love dies? Questions like these are the reason we have literature and philosophy. No science will ever answer them.

Aside from those two, unfortunately glib sentences which conclude it, I think that this excerpt intelligently phrases some of the strongest concerns with, and arguments for, psycho-pharmacology. It gave me the best reason I can think of not to think with my gut on a subject for which I usually let my gut have a free ride. That stepping back was exactly the attractiveness I'd always found in moderation: by asking two questions with opposing answers instead of one of a preach/choir stripe, an objective writer forces us to consider an issue as if it were value-neutral. Once we've arrived at this point, it should be easier for us to evaluate the issue as if we were only interested in its best resolution.

But are there limits to the effectiveness of this device? I wonder about this more and more. Just this sort of dispassionate rationality makes me less sanguine, even leading me to raised hackles and the like. It seems that too often, objectivity is responsible for false dualism. In this regard it is almost pathological. Almost every social conflict of deep import must, now, have two sides, both of which require equal time and attention from us. Yet there must be situations--and I suspect that these come in no small number--in which there really is only one right answer, or at least, for the purposes of enacting social policy, one path which, when embraced as fully as possible, will lead to the greatest possible benefit. In the matter of financial regulation, I simply cannot see the merits of the opposed camp. Yes, there may be a case to be made that certain types of regulation will cause more harm than good, but to me that is merely a nuanced argument for public supervision--it isn't that we don't need regulation, but that we need good regulation. That suits me just fine.

The twentieth-century was probably the worst possible petri dish in which to have observed the development of strong, (semi) coherent viewpoints. Drowned by the shadow of eugenics, totalitarianism and free market dogma, it's no wonder that those of us who learn towards honest and salutary intellectual progress are loathe to raise a flag in the name of this or that robust idea. But this strong commitment to objectivity begs the question of our total flaccidity. Parliaments around the world are deadlocked; the social sciences are reduced to technocratic bickering; in short, nobody (except the most disingenuous among us) can take a stand, and all of this while enormous and sometimes disastrous social traumas pass over us, wave after wave after wave.

Are we right to fear ideology? Or, in order to maintain a workable social equilibrium, do we require it, even if we are forced to lock horns with its vilest or most misguided proponents? Is it really wrong to feel that there is a right answer, and that sometimes that answer does not demand recourse to a position of compromise?

To phrase the question in earlier terms: what am I supposed to take from Menand's article? Intelligent and well-researched though it is, I, the reader, have no idea what it means. Am I supposed to be suspicious of psycho-pharmacology, or am I supposed to understand its relative merits? Surely I benefit from acknowledging that the issue is complex, and that my gut isn't the only guide to navigating it. Yet all I know in the end is that this psychologist says this, and that one that, and here I am, high and dry, forced to rely on some ambiguous mixture of literature and science to sort out for myself what is right or wrong. Unless I dive into both spheres, I'm effectively back where I started, and I don't think I'm wrong to guess that, like me, few others would sit down with Phenomenology of the Mind and the D.S.M. and hash it out for themselves. Not every forked path can be walked both ways.

What do you think? If possible, I'd like to hear what your preferences were when reading about anything which is rent by opposites, and therefore is safest to navigate behind the edifice of objectivity. Do most of you tend to favor the middle ground? If so, why?

A Graph is Worth A Thousand IOUs

2010-03-02T04:57:00.001-08:00

From Econbrowser:

The first bar is the impact on the unified budget balance of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001. The second is the impact on the budget balance of the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) of 2003. The third bar is the CBO estimated impact on the deficit of the Patient Protection and Affordable Care Act proposed in the Senate on November 19, for 2010-2019.

Also, for the record, that unemployment benefits extension that has, in its wanton disregard for fiscal responsibility and intergenerational equity, so offended Senator Bunning, would (I believe) pop about a fourth of the way down the JGTRRA column. And as long as you have that record open (leaving aside the budgetary (that is, economic) cost of not extending benefits), Bunning's vote on both the 2001 and 2003 GTRRA bills (are you sitting down?): yea and yea.

Kill the (Other) Bill!

2010-03-01T19:12:00.000-08:00

Paul Krugman's piece in the Times today revisits what is now an all too familiar and worn out question: is it better to settle on imperfect compromise while the option to reform is available or should we instead hold our breaths and wait for better legislation? Of course, this time the bill in question is financial and not health reform. And this time, Krugman's answer is different.

So here’s the situation. We’ve been through the second-worst financial crisis in the history of the world, and we’ve barely begun to recover: 29 million Americans either can’t find jobs or can’t find full-time work. Yet all momentum for serious banking reform has been lost. The question now seems to be whether we’ll get a watered-down bill or no bill at all. And I hate to say this, but the second option is starting to look preferable.
[...]
There are times when even a highly imperfect reform is much better than nothing; this is very much the case for health care. But financial reform is different. An imperfect health care bill can be revised in the light of experience, and if Democrats pass the current plan there will be steady pressure to make it better. A weak financial reform, by contrast, wouldn’t be tested until the next big crisis. All it would do is create a false sense of security and a fig leaf for politicians opposed to any serious action — then fail in the clinch.
[...]
No reform, coupled with a campaign to name and shame the people responsible, is better than a cosmetic reform that just covers up failure to act.

This time around, I doubt we'll see anything close to the same level of controversy as when this same question was applied to the health care bill. For one, arguments over financial regulation don't really carry the same emotional wallop as, say, a debate over whether we ought to let poor blue-eyed American children die of tuberculosis. And unless I'm just making an ass out of you and me again, this time, the consequences, stakes, and therefore, solution to the above debate, seems a little more obvious depending on your policy preference. But in the off chance that this becomes another internecine handwringer for the American Left(ish), you read it here first!

No good news is no good news

2010-02-26T05:13:00.000-08:00

Months ago, I recall writing a short post on the possibility of state debt crises with a very specific focus on California. I also mentioned the numerous state-run pension systems that were being used from late 2006 onwards as dumping grounds for investment banks' mortgage-market mistakes, and what kind of a burden that would translate into for those already-starved systems.

Well, according to the FT, those pension liabilities, when combined with healthcare obligations, have now risen to $1 trillion (and may be as much as $3 trillion in the long-run) above what states can pay. The piece's title, 'US states struggle in the shadow of Greece', is supposed to hint that, with states facing such a mounting gap between revenues and outlays, debt crises may threaten us on this side of the Atlantic as they do to our swarthy neighbors on the other.

Its author is quick to pull back the scare tactics, noting that municipal bond markets have remained stable despite a very poor budgetary outlook for the year. Many states are prohibited from borrowing, and for many others a balanced budget is non-negotiable, meaning that spending cuts and tax hikes have been pursued aggressively. What really challenges state governments is not necessarily the possibility of default, but the fact that the stickiness of the economic downturn is threatening their ability to slash-and-burn their way out of the red. At a certain point, taxes can't go any higher, and public outlays any lower, without a severe political backlash. There is a wall, and it's going to be hit sooner or later.

If revenues still don't match obligations, states will have no choice but to lean more heavily on bond markets. But, as I wrote all those months ago, new bond issuances are usually a terrible idea: they're relatively expensive (rates hover between 6 and 10 percent) and, used to plug immediate holes in payroll and essential services can't be invested for any return, exacerbating future budgetary distress. The Feds, as part of last year's stimulus package, introduced subsidized 'Build America' bonds, effectively guaranteeing a new source of debt for states and local governments and transferring the burden of servicing it to themselves. While not a bad idea, it's less a solution to the underlying problem (too many states have been bleeding cash for years) and more a bit of sleight-of-hand that delays a reckoning by following the age-old tradition of shipping our troubles off to the Potomac with a smile and a prayer.

In the end, in the absence of healthcare reform and an overhaul of public pension management, there will be no way to escape a collapse of state finances. Whether that comes as a slow deflation of budgetary balloons or a sudden nosedive is up to Washington, which needs to make an effective attempt to prevent a future financial crisis. It's too bad that, for now, that sort of federal muscularity is only a pipe dream.

It wouldn't let me write a comment so long

2010-02-23T01:12:00.001-08:00

C'est pour toi, David:

Full disclosure: I had never heard even the tip of a tit about this book until you wrote about it, Dave. My research into it has gone no further than the summary on Amazon.com and a couple paragraphs on Wikipedia, because these are the things that come up first on Google. I am so poorly informed on the whole subject of contemporary radical thought that I might as well be discoursing on particle physics.

All of this having been said, here we go:

First, I admit that my hackles are uppened by the fact that the political tradition from which this springs is French post-modernism and deconstructionism. This response, however, represents nothing more than blanket prejudice. 'Deconstructionism', by being so unnatural on the tongue, is an automatically heinous word, and I don't intend to impune the intellectual credentials of the authors of 'The Coming Insurrection'. Before I do any such thing, I should of course read the book. Still, I am suspicious that the whole thing might be as far away from the ground as the clouds in the sky, as unfortunately so much in this genre tends to be.

This reaction is tempered by both the book's sales record on Amazon, and this summary of it, which gets me not a little hot and bothered:

"Hot-wired to the movement of '77 in Italy, its preferred historical reference point, The Coming Insurrection formulates an ethics that takes as its starting point theft, sabotage, the refusal to work, and the elaboration of collective, self-organized forms-of-life. It is a philosophical statement that addresses the growing number of those—in France, in the United States, and elsewhere—who refuse the idea that theory, politics, and life are separate realms."

The book, by the way, is priced at $7.77, a reference that the above passage allows us to shoot a knowing wink at, though I suspect that, given floating exchange rates, the joke is somewhat obscure for non-Americans.

Yet what a marvelous thought, that theory, politics and life might be understood to be married together (I'm guessing that we're all probably less sanguine about theory, but Bob's your uncle)! It is absolutely the case that nothing these days--not to my demonstrably spotty knowledge--has joined such a level of popular exposure with 'disproven' ideas. The fact that this is a French book is of course immediately telling, even if the publisher is American; there's barely anyone in the States these days who would agree that capitalism itself has some fundamental flaw. With everyone's values so transformed to meet the expectations of the status quo, nobody with a noteworthy launching pad for their rhetoric would dare make any such radical pronouncements. That I call them radical at all is proof itself that these ideas have passed far beyond the realm of 'relevant'--single quotes intended--and should automatically inspire no small amount of interest.

Dave, if I were you, I would buy this book. On the strength of your recommendation, I know I will. I think things have reached a point at which any non-totalitarian radicalism is worth paying attention to, so starved are we of departures from the common wisdom. Whether or not its specific prescriptions for social change, including schematics for the organization of revolutionary cells, are particularly utile, I can't say. It is absolutely the truth that, as Obama, the Democrats in the US, and centre-left parties everywhere demonstrate, something far beyond institutional methods of social change are necessary to overcome our global cultural malaise.

(If you do buy it, I would be careful under what name, and how. Whatever merits the book's content might have, it's very clearly been singled out as a threat by national security agencies on both sides of the Atlantic. I've read in several places that its authors have been arrested in France. I don't, naturally, mean to imply that any of us would be threatened in such a direct way, but I wouldn't be surprised if purchasing data from such a large site as Amazon wasn't going directly on some kind of watch list.)

In allying theory with politics and life, the trick is not to become mired in any one area. Each is attractive, depending on one's preconceptions; pragmatists lap up empiricism and the realities of dealing with established political conduits, tending therefore to shun the abstraction of the larger picture and to focus instead on the quotidian workings of government, and how their technical improvement; while the more academic are assuaged by the thought that for institutions into which they are not allowed, and are therefore opaque to them, the black box problem can be overcome by a solid edifice of ideas that tie all realms of social activity together by a common critique of the values which underlie them. Neither realm is less important than the other, I think. It takes real skill, though, to show why they are ultimately reflections of one another. Thus my skepticism of the intellectual tradition from which this springs: I don't know if this book demonstrates the kind of finesse capable of sitting unoperationalizable social analysis alongside the hard data while demonstrating where and how the two realms intersect, and, if possible, why they are not conflicting interpretations of our shared experience.

That having been said, a failed attempt is better than what we've got, which is no attempt at all. I'm going to give the book a go. It should be readily clear to anyone with the heart to worry that something is very, desperately wrong with us at this moment in time. If the very definition of a social aspiration is to effect outcomes that have a plural positivity--if, in other words, we get together to make sure we're all at least somehow better off--then we are looking at a serious human catastrophe on the horizon. It wouldn't be the first time that this happened, and I doubt that it will be the last. We could rest on those time-honored laurels and leave all up to fate, but then we'd be implicitly endorsing the inutility of knowledge, and eschewing our thusfar magnificent efforts in pursuit of it. If we can't learn from history then we might as well all go to work for Goldman, because we're guaranteed that no action we take will result in a better human society. That is a depressing thought, and is no help to any of us in this, the genesis of our aspirational years.

To summarize: at this point, it's either this or 'The Lexus and the Olive Branch', and, judging by the size of Friedman's pool, that's a no-brainer.

The New Poor

2010-02-21T14:55:00.001-08:00

If you have time to read the whole thing, I'd recommend reading this article in this Sunday's New York Times. Maybe it's a predictable enough story--that this time, even more so than the last time, jobs are not likely to surge back with the rest of the economy--but worth reading anyway.

If you don't have the time, here are the highlights:

Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.

[...]
Traditionally, three sectors have led the way out of recession: automobiles, home building and banking. But auto companies have been shrinking because strapped households have less buying power. Home building is limited by fears about a glut of foreclosed properties. Banking is expanding, but this seems largely a function of government support that is being withdrawn.
At the same time, the continued bite of the financial crisis has crimped the flow of money to small businesses and new ventures, which tend to be major sources of new jobs.
[...]
Yet as jobs have become harder to get, so has welfare: as of 2006, 44 states cut off anyone with a household income totaling 75 percent of the poverty level — then limited to $1,383 a month for a family of three — according to an analysis by Ms. [Randy] Albelda.
“We have a work-based safety net without any work,” said Timothy M. Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin, Madison. “People with more education and skills will probably figure something out once the economy picks up. It’s the ones with less education and skills: that’s the new poor.”

It's hard to imagine what the long-term policy solution to this will be. In the meantime, I think it's self-evidently important that the government extend unemployment benefits to keep people afloat, if for no other reason than to allow them to keep looking for work. But it also seems that the U.S. is structurally a very different animal than it was two decades ago. I know I'm not saying anything new here. The question was being asked even before the recession but it's obviously that much more pertinent now: where are the new jobs going to come from?

Harmonic Convergence

2010-02-19T01:39:00.000-08:00

Well, Lion's screed left me blog-satisfied for a while, especially seeing as how my opinions of Obama have gotten closer and closer to Mssr. Summerbell's as the days of incompetence and dithering have passed. I had a moment of particularly intense frustration today, possibly coming off the post (which has been stewing in my head for a while), and opened my computer to see this:

The old saw that there is no such thing as bad publicity could be behind the success of The Coming Insurrection, published under the pen name the Invisible Committee, which rejects the official Left and aligns itself with the younger, wilder forms of resistance that have emerged in Europe against immigration control and the "war on terror." Published by Semiotext(e), a small California press, best known for works of French cultural theory by Jean Baudrillard and Michel Foucault, the book has spent much of the week on Amazon's top 10 bestsellers list, alongside better known titles like Game Change and The Help...

But even before the official pub date, The Coming Insurrection benefited from an "endorsement" from Glenn Beck. As part of a seven-minute rant on Fox News in July, he said, "I am not calling for a ban on this book. It's important that you read this book." Since then, each time Beck has talked about the book, sales have spiked, according to MIT Press associate publicist Diane Denner. It's latest jump came after Beck devoted an entire segment to The Coming Insurrection, which he called "quite possibly the most evil thing I've ever read."

First off, starting from a more meta-level, very interesting to see a book like that getting a real sales bump. Obviously, birthers and Beckites are out there picking it up in the hopes that it somehow reflects true liberal/progressive thought across all boundaries, and so not every purchase is a sympathetic one, but it's nice (having not read the book and all) to see a possible resurgence of radical political thought that seems to actually make a dent on the thinking of, say, more than some myopic university students. Also, I'm always happy to see a political book getting sales that isn't Wings of a Dreamer a glossy retrospective on Sen. Bumblefuck's life and calling that is unsubtly funneling profits into some PAC somewhere.

Second, I want to read it. I'm considering ordering it via the interwebs, but I wanted to know if you'd yet digested it, Lion, and if so, what your thoughts are. I'm obviously not expecting a revelatory experience or even really a convincing one, I'm just curious to see what the state of radical thought is in this particular mire of an era we live in.

Fuck you, Obama

2010-02-10T17:01:00.000-08:00

I don't know if everyone has gotten to this yet; I saw it in three places simultaneously (thanks to my RSS feed) which is why I clicked on, and ultimately have decided to post about, it.

I guess it isn't just that the president tries to minimize the outlandish size of the bonuses by comparing them to sports salaries. That's a specious strategy to begin with; both athletes and investment bankers are paid vastly too much, so I'm not sure what kind of reassurance I'm supposed to take from the thought that one ekes out a bit more than the other. I think what really, really gets to me, what really makes me dislike Obama more than any Republican, is his naked spinelessness:

Obama sought to combat perceptions that his administration is anti-business and trumpeted the influence corporate leaders have had on his economic policies. He plans to reiterate that message when he speaks to the Business Roundtable, which represents the heads of many of the biggest U.S. companies, on Feb. 24 in Washington.

You see, Obama's only anti-business when he's speaking to MSNBC or on the street with Joe "Average Joe" American. Multiply the cost of the interviewer's suit by a considerable factor and suddenly he's got a Hayek tattoo on his forehead and his tie is supply-and-demand-striped. 'Trumpeted'? He trumpeted his administration's prostration before moneyed interests? That could be journalistic bombast, but even if it's only half-appropriate as a characterization of his tone, that is fucking appalling.

And through all of his public equivocation and cravenness, through every defeat and humiliation, it's as if the president never reads any of the commentary on himself. Does he not realize that everyone hates the guy who kisses all of their asses, regardless of how eagerly and how furiously he puts lips to cheek? People like people who stand up for things, I would hazard, because, however irrational it may be, they respect the strength of a position far more than they are personally invested in the transactional details of it. All the registered voters in the country won't necessarily stand behind such concreteness, but consistency inspires converts, especially when married to an inarguable ethics such as progressives claim to represent.

That's how politics works, isn't it? You represent something solid, and that's what gives you leverage over your opponents and wins you continued support from those who put you in office. Why is the president brown-nosing like his titty fell out on MTV? He's a Democrat: he should be working for the Democrats. Last time I checked, the party's selling point was that it was sorta less OK with sucking from the money-udder than the Republicans. What can he hope to gain by throwing that to the wind?

This is a majority democracy. I don't see a law anywhere that says everybody is supposed to be made happy. I honestly don't give two rats' asses on a flying fuck if the whole state of Arkansas is miserable with Obama as president, because by participating in this polity they've already decided that sometimes their team will not be the trophy-winners. Sorry, Buck and Chip: them's just the rules of the game. But more than anything else, that's a lesson that those grinning little fat-faced whitebread fucks in corporate boardrooms across the country should be taught by whatever means necessary. Otherwise, we're just ratifying a de facto dualism of social contracts: one, for the not-rich, full of responsibilities, the other, for the plutocrats, monopolizing all the rights.

Sorry, Mr. President, I realize that this arrangement doesn't make too much room for you. I suppose we can squeeze lackeys in, too.

Euro Crisis Update (Lazy Block-quote Edition)

2010-02-07T19:37:00.000-08:00

First, Simon Johnson:

Some financial market participants cling to the hope that the stronger eurozone countries, particularly Germany, will soon help out the weaker countries in a generous manner. But this view completely misreads the situation.

The German authorities are happy to have the euro depreciate this far, and probably would not mind if it moves another 10-20 percent. They are convinced that they must – in fact, should – export their way back to acceptable growth levels.

Competitive depreciation is of course a no-no in international policy circles. But if your dissolute neighbors – with whom you happen to share a credit union – threaten to implode their debt rollovers, and markets react negatively, how can you be held responsible?
[...]
The euro depreciates, the dollar strengthens, and our path to recovery starts to run more uphill.

And if these European troubles start to be reflected in difficulties for leading global banks over the next few days or weeks, the negative impact will be much greater.

Then, Yves Smith:

We do have a factor here that could get the reluctant Europeans, meaning the Germans in particular, to act, namely, that Eurobanks are still wobbly and are not doubt exposed directly and indirectly to a European sovereign debt crisis. There is no way to avoid rescue operations of some sort, it’s merely a matter of picking which poison. Do they want to face the ugly bailout of countries they see as profligate, or wait till it morphs into a crisis and have to put their banks on emergency life support? The problem is the latter is politically more palatable, even though ultimately more destructive, since a lot of collateral damage will occur in the wave that hits the banks.

And just for the sake of reiteration, lastly, Paul Krugman:

Spain is an object lesson in the problems of having monetary union without fiscal and labor market integration. First, there was a huge boom in Spain, largely driven by a housing bubble — and financed by capital outflows from Germany. This boom pulled up Spanish wages. Then the bubble burst, leaving Spanish labor overpriced relative to Germany and France, and precipitating a surge in unemployment. It also led to large Spanish budget deficits, mainly because of collapsing revenue but also due to efforts to limit the rise in unemployment.
If Spain had its own currency, this would be a good time to devalue; but it doesn’t.

On the other hand, if Spain were like Florida, its problems wouldn’t be as severe. The budget deficit wouldn’t be as large, because social insurance payments would be coming from Brussels, just as Social Security and Medicare come from Washington. And there would be a safety valve for unemployment, as many workers would migrate to regions with better prospects. (Wages wouldn’t have gone up as much in the first place, because of in-migration).

The point is that this has nothing to do with a spendthrift government; what’s happening to Spain reflects the inherent problems with the euro, which now more than ever looks like a monetary union too far.

A thought

2010-02-04T04:04:00.000-08:00

This is a casual observation so I'll be reserved about generalizing from it, but I'm struck again and again by what I would term a distortion of both perspective and self-image in the modern, North American psyche. I think I am guilty of it, too, only in myself I have the gall to assume that it doesn't have as negative a net social result, if only because I lack the resources to be of consequence to anyone but myself at the moment.

But in people of means, and here I don't refer solely to the paper-thin slice of the demographic pie that rakes in Blankfein-esque payouts, but to the well-off more generally, there appears to exist a tendency towards normalizing their standing to fit the ground level of the social hierarchy. In plainer English, what I'm trying to get at is that the rich and the middle-class seem to assume that they are in some ways the economic equivalent of the poor. It's usually from this stance that they then justify behavior with externalities as their consequence.

Now, I say North American psyche because I don't know enough about anyone else's to claim that they suffer from the same self-delusion. I probably can't even generalize too much about Americans, since there is nowhere in this portion of the Western hemisphere where inequality is more pronounced than New York. I assume the tendency to exist in other places if only because a dimmed estimation of others is something axiomatic to the natural informational limits of human beings.

Yet the sentiment pops up here again and again, and I'm shocked by its ferocity each time. Poor is redefined to mean ever greater states of material plenty that seem less only relative to the even more grossly inflated abundance of one's current economic standing. This psychic disconnect of course stands firmly in the way of any kind of positive redistributive action. It also prevents the United States, at least, from forming the fundamental tenets of social solidarity that I think are necessary to call a body of human beings a society at all.

Are we a society? Or are we fooled by physical proximity, contracts and their mechanism of enforcement into thinking that our collective existence is structured by a meaningful social latticework?

Oh, and fuck Locke.

My Big Fat Greek Debt Crisis

2010-02-01T05:00:00.000-08:00

Evidently it took last week's €8 billion bond sale to alert bond and currency traders world-wide that, now that you mention it, with its massive debt and deficit to GDP ratios and its rapidly deteriorating economy, Greece might not be the primest of borrowers. Greek government and corporate bond yields have been steadily climbing this week and even the euro itself is beginning to feel the panic. In the meantime, having run to China for an emergency loan, only to be denied, it looks increasingly likely that the birthplace of European civilization will soon be structurally adjusting itself back into the good graces and deep pockets of its less swarthy neighbors up north like the best of the third world.

Whether or not the Greek government receives a string-laden emergency loan from the the richer Eurozone countries or, less likely, the I.M.F., the lack of a coherent response from within the E.U. is disturbing in its own right. This is particularly relevant given the respective economic profiles of countries like Spain, Portugal, Ireland, and to a certain extent, Latvia and Estonia, all of which look disturbingly similar to Greece. That is, encasing the creamy, rich center of Europe, we have a host of economies with highly indebted governments, declining incomes, and an unhealthy dependency on foreign creditors. These countries are also either operating on the euro, or currencies pegged to it.

"If fears of contagion become widespread, risk-averse investors could start to gun for even the larger or 'stronger' euro zone economies and their debt," said Geoffrey Yu, a currency strategist at UBS.

"Spain, Italy, Austria and Belgium -- together accounting for more than 35 percent of the euro zone economy versus just over 6 percent for Greece, Portugal and Ireland combined -- may then be next in the firing line," he added. (AP)

As significant and potentially awful as the immediate situation is, what I find to be the most interesting element of this story is how the development and eventual resolution of this crisis reveal and potentially address the structural and logical failings of the E.M.U. system.

Does it really make sense, for example, for an economic powerhouse like Germany to share a monetary policy and currency with a much more fragile economy like Greece's? As Yves Smith points out, Germany might see the logic in to the relationship during the boom where it can trade its way into a massive surplus upon a currency cheapened by its union members. Likewise, I suspect countries such as Greece spent the better half of the last decade enjoying their ability to borrow on better terms than would otherwise be available to them (all the better to fuel a financial or a real estate bubble). But in a downturn, say, like the one we're in, such an arrangement might suddenly seem a lot less attractive for both partners.

Paul Krugman wrote the following for a lecture he is about to give to the Allied Social Science Association. It's on the slightly different issue of currency crises, but I think this excerpt is still applicable:

Suppose that the underlying problem is a level of prices and wages that makes your production uncompetitive – typically the consequence of an earlier period of excessive capital inflows. Then what must happen, sooner or later, is a decline in prices and wages relative to those in your trading partners – a real depreciation. This can happen through nominal currency depreciation – but this has the unpleasant consequence that the real value of foreign currency debt will rise, creating a deleveraging crisis.

Unfortunately, the alternative is worse. Real depreciation without nominal depreciation must take place through deflation. And this means that the real value of all debt, not just foreign- currency debt, rises. So the deleveraging crisis will be even worse if you don’t depreciate. (Krugman)

That is, in the case of a pegged and overvalued currency, the inevitable readjustment during a debt (or broader economic) crisis can come in two flavors: a downward adjustment of the currency, the "external price" of all goods and services (which will be terrible for domestic borrowers using foreign cash and consumers of foreign goods) or a downward adjustment of all "internal" prices and wages, (which will be terrible for everyone). Of course, Greece does not have a peg (though the Baltic states do), but in using the euro, it is effectively using an overvalued currency. With the euro then, Greece's hands are tied: it has no ability to conduct monetary policy and currency values are determined by the larger economic aggregate of the Eurozone.

At the heart of the issue is the concept of the "optimal currency area." From its inception, because of the differentials in productivity, in language, in fiscal policies, in fiscal goals, and because of remaining constraints on factor mobility, many criticized the Eurozone for being definitively non-optimal. That is, that the European Union made more political and ideological sense--that the economic logic was missing. As Paul Krugman wrote on his blog last month:

Suppose that some members of the euro zone are hit much harder by a downturn than others, so that they have much higher-than-average unemployment; how will they adjust?
In the United States, such shocks are cushioned by the existence of a federal government: the Social Security and Medicare checks keep being sent to Florida, even after the bubble bursts. And we adjust to a large degree with labor mobility: workers move in large numbers from depressed states to those that are doing better.

Europe lacks both the centralized fiscal system and the high labor mobility. (Yes, some workers move, but not nearly on the US scale). (TCOAL)

However, in my mind, this is not necessarily an argument for the dissolution (or the inevitability of the dissolution of the EMU), but potentially just the opposite. If Athens and Berlin are considered illogical candidates for a mutual currency while rural Alabama and downtown Chicago are, this may very well be due to linguistic and cultural divisions, and it's certainly possible the productivity differential between those two countries is more extreme than that between those of the American example (I really have no idea). But if, as Krugman writes, more than anything else rural Alabama and downtown Chicago are able to share the almighty dollar because a broader political and economic framework exists to support that otherwise unequal pairing, that sounds like a case not for fragmentation, but further economic unification.

In this respect, the Eurozone stands in an illogical half-way house between a multi-currency system and an United States of Europe. Quoting Nouriel Roubini:

"The eurozone could drift, essentially with a bifurcation, with a strong centre and a weaker periphery, and eventually some countries might exit the monetary union," he warned.
For all the focus on Greece, however, he also said that Spain may eventually pose an even bigger threat to the eurozone because it is the region's fourth-largest economy and has higher unemployment and weaker banks. (Independent)

That is certainly a possibility. But it's also possible, though probably less so, that a crisis in Greece (or Spain, or Portugal, or Ireland, or...) will push the richer Eurozone members into taking the first crucial steps towards a comprehensive continental fiscal system. Either way, whether a bailout of Greece establishes an accidental precedent for future transfer payments or drachmas and pesos make a surprise reappearance in Europe, it seems like something will have to give. The maintenance of the status quo--either through a series of one-off bailouts on one hand, or total inactivity on the other, allowing the peripheral economies to wither, hoping the Eurozone will persist in its current state through pure inertia--will only postpone the resolution of Europe's structural inconsistencies until the next crisis.

Burning Down the House

2010-01-30T08:17:00.000-08:00

It's a little late for a State of the Union reaction post, and I doubt my opinions on it will be revelatory or particularly controversial. He did an excellent job, as usual, of making me feel all warm and fuzzy and confident, a feeling that will last, oh, well, probably until it becomes abundantly clear that he has abandoned health care reform entirely in favour of pointless pandering. Oh, wait...

So really there's not much to note about the speech other than the well-known fact that Obama's rhetoric rarely seems to match the sausage he manages to grind out. Two days later, however, he traveled to Baltimore for a Q&A session at the House Republican retreat, and CSPAN was there to record the whole thing. Definitely worth watching the whole thing, both for the surprising level of candor with which Obama discusses his situation and for the civility with which he was treated by the group of raving baboons that currently occupies the right side of congress.

The money line, for the impatient, is here:

Bolshevik plot! Hey-o!

Elsewhere, Obama makes two particularly shrewd points that did a hell of a lot more to restore my hope-boner than the SOTU did. At one point, a congressperson whined that Obama was being mean to the poor Republicans by saying they had no ideas and that he was ignoring some plan they had developed that would supposedly cover everyone and not cost a dime. His response was to point out how little sense it would make for him to reject such a proposal, both from a policy angle and from a political one. Why, as a pragmatic, non-ideological type of guy, would he opt for a more expensive and less successful reform bill during a period of intense budget strain and declining approval? Of course, the reality is that the Republican proposals are pure snake-oil, put forward only to provide the party the ability to pretend it is interested in the debate over HCR in any real way, and Obama very gently and indirectly points this out.

Later, when pressed more on the general theme of the evening, why Obama won't listen to the Republicans, the president made an interesting observation. He noted that, by demonizing him so much, House Republicans have tied their own hands. They can't, without facing a nutty-ass primary challenge a la Rubio, Hayworth, or Specter, cooperate in any way with the Democrats or the White House. By accusing him of wanting to cram government into every orifice of the American public, they can't support him or influence him even when they may want to. As a result, there is no logical reason for Obama or Pelosi to even try to negotiate with them. It would have been nice if Obama had known this maybe 11 months ago, but whatever, he's totally right. Obstructionism and cries of socialism may fill the campaign coffers and energize the Fox News mouth-breathers, but they certainly limit the already limited effect a minority party can have on legislation. It was heartening to hear the big man say it himself, although it remains to be seen whether he'll take this hard-earned nugget of political wisdom and make something of it.

Another Reason Banks Aren't Lending

2010-01-28T08:01:00.000-08:00

Let me shamelessly block-quote Felix Salmon block-quoting "a California banker":

If you’re a bank with a relatively healthy balance sheet with adequate capital, (like us)you want to maintain surplus capital in order to stay on the FDIC’s list of banks they can transfer the loans and deposits from a failed institution into.

This is a home run for the acquiring bank and far more of an instant benefit than any new lending.

The problem here is that healthy banks end up competing with each other to have the largest capital surplus and therefore the greatest chance of being anointed in this manner by the FDIC. If everybody was lending, the FDIC would still have to place failed banks’ assets and deposits with someone. But instead we get the opposite corner solution, where nobody is lending — except, presumably, for banks which are close to failure and need all the interest income they can get.

On the list of reasons why banks aren't passing the easy buck onto potential borrowers, I suspect that this particular prisoner's dillema ranks significantly below, say, a dirth of demand on the one hand, and extreme risk aversion on the supply side. But it's still kind of an interesting situation. Off the top of my head, I suppose the FDIC could start charging higher premiums to banks with surplus capital over a certain level. That is, if they even have the power to do that. And if that makes any sense; it sure sounds counter-intuitive. Thoughts?

Either way, if the goal is to get banks lending again, additional hurdles/disincentives like these probably don't help.

1937 Comes Early

2010-01-26T06:34:00.000-08:00

It was last week that President Obama allowed himself to be seen in public with Paul Volcker. Lion wrote about it. The wilted flower that was once called Hope sprang anew upon the calluses of my heart. He say's that he's changed, I thought. And this time he means it.

Questions over whether the proposal to impose meaningful regulation on the financial industry had been inspired by post-Massachusetts panic seemed insignificant compared to what the development might portend for the future of Treasury policy. To quote from the best:

If Volcker ousts, or at least chastises, the Summers-Geithner axis, it will make for a very different White House, and not just because, at 6'7", he could probably outbox a gorilla.

What a difference a week makes. Today it looks like that gorilla has just beaten the teeth out of the ephemeral shade that was once our dream for a progressive economic agenda. First the facts if you haven't already seen them:

US President Barack Obama is to announce a three-year partial spending freeze aimed at reducing the country's $1.4tn (£860bn) budget deficit...Officials have told US media that defence, some health care programmes and the massive economic stimulus package will be unaffected. Critics said the planned savings, expected to cut no more than $15bn off next year's budget, were insufficient. But officials said the plan would result in savings of about $250bn during the next 10 years. (BBC)

Ignoring the politics for just a moment, this policy makes absolutely no sense to me. Maybe Obama thinks that America will emerge from the recession this year, but most are forcasting persistent unemployment for many more months to come, perhaps extending over the tenure of the freeze (and certainly exacerbated by it either way). And with the majority of state governments deep in the red, for economic, political, and simple moral considerations alike, this is exactly the wrong time to cut spending on education, transportation, and infrastructure. I say this not only as a Californian; so far this year 39 states have faced mid-year budgetary short-falls.

But then there's the question of where these cuts will actually be made. (It goes without saying that future tax-increases are out of the question). I won't argue that U.S. federal deficits are structural and do need addressing. Cutting into the meat of the budget anywhere seems like really bad timing to me, but I also imagine that there is plenty of fat to be trimmed. So what's being frozen?

As it turns out, the more important question is: what isn't being frozen?

Obama is planning to call for a three-year freeze on non-security discretionary spending, which means everything except Medicare, Medicaid, Social Security, the Defense Department, Homeland Security, and the VA–that is, everything except the vast majority of the budget. This at a time when the unemployment rate is at 10%. (Baseline Scenario)

Which is to say that as a serious attempt at deficit reduction, cutting $250 billion over a decade (about 5% of the accumulated debt forecast for that period) doesn't make the sufficiently big cut. With the added benefit that this is sure to be a kick to the ribs of the overall economy at a time when the overall economy is already in traction (to say nothing of the fact that, as far as I can tell, our government is still in a pretty good position in terms of its ability to borrow), I'll say again: this policy makes absolutely no sense to me. Or to Brad DeLong:

As one deficit-hawk journalist of my acquaintance says this evening, this is a perfect example of fundamental unseriousness: rather than make proposals that will actually tackle the long-term deficit--either through future tax increases triggered by excessive deficits or through future entitlement spending caps triggered by excessive deficits--come up with a proposal that does short-term harm to the economy without tackling the deficit in any serious and significant way. (GROT)

Unlike most of the things President Obama has done (or not done or proposed to do or not do) that I disagree with, I can't find the logical political angle here. Compromising on the stimulus or taking his hands out of the healthcare negotiations or keeping Guantanamo open are choices I at least understand from the cynical logic of electoral or legislative politics. But I don't understand where this is coming from. Concern over the national debt polls high. But that over unemployment polls higher. And trading more economic hurt for a little fiscal discipline isn't going to win any voters if your so-called discipline is, in the words of Brad Delong, nothing but "Dingbat Kabuki."

But Tyler Cowen is feeling generous:

There's not much to say in terms of the economic issues, the real lesson is that politics is more constrained than many people think. Berating Obama for his lack of courage or his "failure to get tough" is simply denying or postponing this fundamental realization. (Marginal Revolution)

First of all, I'm not even sure I understand what this means since Obama isn't proposing the freeze in concession to any immediate focused pressure. So I'll agree that he isn't "failing to get tough" by proactively making a Republican talking-point a part of his economic plan. But even assuming that a debate over the debt and deficits were to be the logical end-results of the HCR fiasco--and this is what I assume Cowen means, that Obama is reigning in that old time Socialism out of political necessity--being realistic about the viability of a particular proposal is not the same thing as preemptively caving to the opposition. Even if you know you're going to lose, in politics, the theater of the fight might be worth having.

But maybe I'm getting ahead of myself. The State of the Union comes Wednesday. We can access the damage then.

Still Fresh, One Year On

2010-01-25T17:56:00.000-08:00

I'm not sure how exactly, but I thought this would be in keeping with the anniversarial spirit.

Happy Birthday Chorography.

Retrospecticus

2010-01-25T04:21:00.000-08:00

So it's been a year. For definite, congratulations are in order: there are many, many ideas that we as a group have considered, entertained, or even briefly pursued before abandoning, and while there have been long dead stretches here at the Chorography, we're somehow still pumping away (albeit with the consistency and frequency of a faulty pacemaker). I am proud of us for this, even if it is a flawed accomplishment: in a year of flawed accomplishments and significant disappointments, both political and personal, it's nice to know we've kept up with the zeitgeist.

In saying that, I don't want to diminish what we've accomplished here. We've managed to set up and maintain a space to vent our spleens at and with each other from afar, something we used to do up close. I think I've become a better writer over the last year as a result, and I don't think I'm alone. It's just that this little retrospective, which I had originally intended to be fairly analytical and dispassionate, has gotten kind of personal. The more I look back over what we've written, the more I see the directions our lives have taken in the last year. There are the obvious lulls in posting, where one or all of us was in some sort of big transition or trip or move; the frustrated rants, some of which only flimsily cover up something larger and deeper; and the long, obviously time-consuming posts, the kind one could only put together with some real unemployment on one's hands. This isn't to say we weren't writing real good stuff, the kind we should scavenge and poach from mercilessly, just that it's not easy to look at a post from, say, August, knowing where we all were at the time (physically, on a lake; mentally, in a rut), and not think more about that than about the contents of the post.

Anyway, we've done good things here. We should keep doing good things here. This blog is a good thing for us as friends and a good thing for us as thinkers. We should engage each other more on the blog than we have so far: our opinions tend to converge on most things but when they diverge it has made for some solid stuff (see Lion v. everyone on New York v. Montreal). We should start thinking about, in a glacial way, how we can (and whether we even want to) make this something people who aren't us will read. Most importantly, we should just write more. If you look back through the months, there are long dry spells followed by sudden bursts of heavy posting. My guess is that, when other people are posting, we're more inclined to do the same. When they aren't, we aren't. Kind of a Catch-22, but the only real solution is to just start posting more. We've done a, if not amazing, then at least admirable, job of keeping this sucker afloat during a turbulent and confusing period in our lives. Who knows, maybe it gets easier from here.

1 year!

2010-01-21T16:10:00.000-08:00

I just want to say that, in the middle of this sudden spate of solid posts, we passed our one-year anniversary for the blog a couple weeks ago, around the time that Ben and I were rolling around drunk in Seoul and I assume you all were doing the same in saner places. Congrats, all! I am going to, next week at some point, write up a one-year retrospective. In the meantime, if you can think back that far, see if you can find some of your favorite posts from other folks and we'll kick 'em back up for a re-read.

Spaketh I in haste?

2010-01-21T12:47:00.000-08:00

Maybe Obama is not the limp-wristed, effeminate, chickenhearted, yellow-bellied yes-man that I lampooned him for being a mere handful of (figurative) moments earlier. It only took one loss in the senate to prompt a complete reversal of his economic policies to date. We have been promised a new Glass-Steagall, a ban on mergers and takeovers in the financial industry, and a bank fee to the tune of $90 billion (over ten years, that is). That's a good start, one he should've led with when he, you know, started.

But aside from bombastic promises to what has finally been recognized as an upset electorate, there is something mentioned in brief that is far more interesting. The separation of speculative and deposit-taking institutions is going under the nom-de-guerre "The Volcker Rule," in honor of Paul Volcker, who flew to Washington to discuss it with the president. Yves Smith at Naked Capitalism sees it as the most promising development of Obama's 'new' hardline stance, too. Volcker, who beat stagflation and put monetary policy on a much sounder footing than it had been in the 70's, is a giant in every sense of the word. He is also no friend of finance's--at a conference in Sussex early last month, he unzipped his pants and peed in the face of his banking audience by asserting that "the 'single most important' contribution in the last 25 years has been automatic telling machines, which he said had at least proved 'useful.'" The Telegraph goes on to report,

Echoing FSA chairman Lord Turner's comments that banks are "socially useless", Mr Volcker told delegates who had been discussing how to rebuild the financial system to "wake up". He said credit default swaps and collateralised debt obligations had taken the economy "right to the brink of disaster" and added that the economy had grown at "greater rates of speed" during the 1960s without such products.

If Volcker ousts, or at least chastises, the Summers-Geithner axis, it will make for a very different White House, and not just because at 6'7" he could probably outbox a gorilla. As we've seen, Obama is extremely pliant vis-a-vis his advisers, which thusfar that has been a severe liability. Volcker might just make it a blessing.

A Podcast That Will Blow Your Mind

2010-01-21T08:24:00.000-08:00

Another flash post:

If anyone has the time and interest, I just finished listening to a two dueling lectures of the journalist Misha Glenny (the author of McMafia, which I believe you have read Dave, though I have not) and the former prosecutor Michael Hartmann, who is now an adviser to the U.N. Office on Drugs and Crime. I recommend it. The title of the lecture, The War On Drugs: An Upper or Downer for Development?, (British humor is so dry and sophisticated) characterizes the subject a little too narrowly. It's really a much broader legalization versus prohibition argument and, more importantly, it's a really interesting one.

Leave a comment if any of you get around to listening to it. I'd be curious to know what you think.

To Top It Off

2010-01-21T07:59:00.001-08:00

Carrying on this proud micro-trend of ripping posts from TPM, I just wanted to make sure everyone saw this development before it gets completely overshadowed by healthcare's umpteenth round of horrendously unsatisfying hand-wringing:

In a ruling that has major implications for how elections are funded, the Supreme Court has struck down a key campaign-finance restriction that bars corporations and unions from pouring money into political ads.

The long-awaited 5-4 ruling, in the Citizens United v. FEC case, presents advocates of regulation with a major challenge in limiting the flow of corporate money into campaigns, and potentially opens the door for unrestricted amounts of corporate money to flow into American politics.

In the case at issue, Citizens United (CU), a conservative advocacy group, was challenging a ruling by the FEC that barred it from airing a negative movie about Hillary Clinton. CU received corporate donations and the movie advocated the defeat of a political candidate within 60 days of an election. CU argued that the FEC ruling violated its freedom of speech, and that the relevant provision of McCain-Feingold was unconstitutional.

The court overruled a 1990 decision that found that government can stop corporations from spending money on ads that urge the election or defeat of a candidate. It's rare for the Supreme Court to overturn a precedent arrived at so recently.

A bit further down, the article carries the following block quote from the majority opinion:

Distinguishing wealthy individuals from corporations based on the latter's special advantages of e.g., limited liability, does not suffice to allow laws prohibiting speech. It is irrelevant for First Amendment purposes that corporate funds may "have little or no correlation to the public's support for the corporation's political ideas." Austin, supra, at 660. All speakers, including individuals and the media, use money amassed from the economic marketplace to fund their speech, and the First Amendment protects the resulting speech.

Which is to say, distinguishing a living breathing human being from a legal entity that we have long since collectively decided ought to enjoy the civil rights of a mortal citizen does not suffice to prohibit the latter from drowning any candidate to the left of Richard Nixon with dollar-sign embossed cloth bags of gold. But don't worry, you on the other side will always have the economic might of the unions behind you.

As much as it pains me to write it, with this Court, I wouldn't hold out much hope for that Leftist-wave, Lion.

And so does this

2010-01-21T06:37:00.000-08:00

Another repost from TPM, but this time I'll agree to simply excerpt:

National Democratic politicians, and modern Democratic Presidents in particular, have been acutely conscious of the dominance of organized interests within the party. This, I think, is why Carter, Clinton and now Obama have so often come off as men trying to tip-toe their way through complex situations without making anyone important to them really unhappy. The majority of Americans who are outside Democratic Party politics and "the groups" look at this and see weakness, even fecklessness. They also see an unwillingness to listen to them, which is only partly wrong. National Democrats do listen, but lack confidence that acting on what they hear from the public rather than "the groups" will produce victory.

...
George W. Bush's unpopularity was Barack Obama's greatest political asset during the 2008 campaign, and nothing else was even close. No one wanted to be known as a Bush Republican; even today, Republicans do not accuse Obama of wrecking the great work Bush did as President. They know no one would believe that. Obama hasn't used this asset at all, not really. As far as he and his team have been concerned, there is no such thing as a Bush Republican. Opposition to health care reform is not the Bush Republican position; support for bonuses on Wall Street is not what Bush would do. There are no references to Bush incompetence, none to Bush corruption. If Bush had left office with 70% approval, or 50% approval, or even 40%, the silence of Obama and the Democrats about Bush would be sound politics. Then again, if any of these things had been true, John McCain would be President now.

The Brown victory, and the performance of the Democratic Party more generally, has me more and more convinced that there not be any opposition to Republican politics until either a new leftist party emerges or, and this requires fewer parts blue moon, a new wave of Democrats replace the older defeatists who are rotated in and out of power now. And I don't mean new like Obama. I had no faith in him from the beginning because it was clear that the swollen, Wagnerian rhetoric we were bludgeoned with was employed purposefully to distract from the fact that he was a non-entity, a compromiser who was skilled at verbal artifice--he was a lawyer, after all--and little else. No, a new generation of Democrats has to be hard-line: it has to start from the assumption that it will win and pursue with unyielding aggression the leftist policies that the United States requires in order to continue being a functioning democratic state.

I will also go ahead and say that I still wish McCain had won in 2008. If that had been the case, it would've been the Republicans who were tasked with explaining the deterioration of the economy that their politics precipitated. The Democrats could've wiped the floor with them in 2012 on a much stronger basis and maybe with a more substantive candidate, though who, from the sorry ranks of the modern party, that would be, I haven't the foggiest. And it isn't as if we would be missing any glorious Democratic legislative triumphs. We largely have a moderate Republican administration as it is.

That says it all

2010-01-20T21:04:00.000-08:00

Reposted from TPM, written by an anonymous Democratic Senate staffer:

I certainly wouldn't want to indicate I have any unique insight on how everyone feels around this place but I thought you might be interested in how one Senate staffer is feeling.
My background is like probably the majority of staffers I know. I came to DC, from a far superior climate and quality of life, because I wanted to save the world. I arrived, and took a job in the House, at what I still view as the nadir of Congress - in 1996. Republicans had recently taken over Congress and had 230 seats in the House and 52 in the Senate. Democrats were in a state of shock and we watched (because that was essentially all we could do) in horror as they systematically went after nearly every institution of civil governance culminating in nearly removing the President from office via an entirely trumped-up charge. They had destroyed the Democrats in 1994 because they simply couldn't deliver - the BTU tax went down, health care went down, and finally the Crime Bill failed because it had such laughably wacky ideas as "midnight basketball" as a crime prevention measure (something with is widely approved of today and is completely noncontroversial). As a young LA, it was amazingly dispiriting. Literally nothing we proposed could get passed - we couldn't even get votes. Every bill came to the floor under a closed rule so we couldn't propose amendments and our Senate colleagues faced a full amendment tree on every bill such that unless they had Republican patron they couldn't get votes either. Kennedy fought like hell for things like minimum wage and sometimes could arm-wrestle a procedural vote win out of them but things would just die in the hands of the Hammer in the House. Eventually, my boss got fed up and retired and I went over to the Administration where I thought I might be able to get more accomplished.

Even there, in a Democratic Administration, we faced constant battles as anything remotely beneficial to the public or in keeping with our mission was forcibly outsourced by the Congress or investigated into near-paralysis. The Republican Majority in the House had steadily eroded so that by the end of the Clinton years they had only a 5 seat cushion (223) in the House, but their strong majority in the Senate (55) kept them firmly in control. Then, when Bush took over in the wake of the most disputable election imaginable, the political appointees flooded in and began reversing policies (including policies promulgated by previous Republican administrations) as if they were exercising the overwhelming mandate of the people. Republicans barely kept the House with 221 seats and only held on to the Senate via Cheney's tie breaking vote on the organizing resolution. I left to start a family.

Despite Jeffords' flip, and the razor-thin majority in the House, the Democrats dealt no significant losses to President Bush and his agenda went essentially unchecked, and nominations were processed efficiently and quickly (after all, the people had spoken!). The only arguable exception I can think of right now is that the Administration was unable to push through drilling in Arctic National Wildlife Refuge but they actually did put it on reconciliation, they just lost too many Republicans to win. I returned to being in the Minority on the Hill, on the Senate side this time and as staff to an important Committee, and Republicans now had a 51-seat Majority in the Senate and had strengthened in the House to a mighty 229 seats. We fought valiantly to slow them down but were unsuccessful in stopping a one-sided energy bill, escalation of a needless war in Iraq, and continued erosion of the social safety net and de-funding of civil institutions through tax cuts for the well-off. We got occasional fig leaves, and maybe could get a witness or two included in a hearing, but were essentially not a part of the final discussions to put together bills. I dreamed that if only we could get two Senate seat takeaways, then we could finally take the reigns back - after all, poll after poll showed the American people agreed with us on nearly every issue. In 2004 we would surely break through to the public - we had neutralized them on their central issue by nominating a war hero and people were desperate for health care and education reforms. We had moved away from that scary Howard Dean fellow and were now proposing only modest reforms to health care, more tax cuts, and deficit reduction (don't worry, never at the expense of the Pentagon!). How could we lose? Republicans strengthened their majorities to 55 Senators and 232 House Members and I almost lost my job as the now-overwhelming Republican Majority in the Senate increased their allocation of the office space and staff salaries. Now a majority was a faraway dream and the best we could hope for was a few sympathetic Republicans on a few issues that might help us at least expose what they were doing (and we did manage to beat back drilling in Arctic again).

Unexpectedly, public mood did finally begin to sour on the wars and deficits agenda in 2006 and we were able to eek out victories in MT and VA so that we could take a narrow 51-49 majority in the Senate (including a dicey vote from Lieberman) and a massive 233-202 Majority in the House. Of course, we'd have to cautious and trim our sails a bit since Bush still was President and we had several skittish votes in the Caucus, but the American People were giving us a shot. We suffered some disappointments but we did about as well as could be expected in the Senate, but at least we were making progress and, though I had to trim my ambitions a bit, I was finally writing provisions that were becoming law. On balance, it was a good Congress, but I dreamed of having big majorities like 55 Senators so that we could really do the stuff we've all been waiting for.

A wave election hit us in 2008 where we not only had overwhelming majorities of 59 seats in the Senate (once Republicans finally got around to letting us seat Franken) and 257 seats in the House (returning us to the same power level as when we ruled the House with inpugnity in 1992-3) but, most importantly, a President who was explicitly elected on an agenda of "change." It was a once-in-a-lifetime opportunity to wrench the wheel away from the abyss and really deliver on our promises. It was disheartening when it seemed that Reid was allowing McConnell's disingenuous narrative of "it's always taken 60 votes to get anything done" to take hold, but we were later even saved from that when Specter switched. But it seems we've spent the entire year moving our own goalposts farther away. Things have gotten so bad that in roaming the halls today it feels exactly as if we lost the Majority last night.

The worst is that I can't help but feel like the main emotion people in the caucus are feeling is relief at this turn of events. Now they have a ready excuse for not getting anything done. While I always thought we had the better ideas but the weaker messaging, it feels like somewhere along the line Members internalized a belief that we actually have weaker ideas. They're afraid to actually implement them and face the judgement of the voters. That's the scariest dynamic and what makes me think this will all come crashing down around us in November.

I believe President Clinton provided some crucial insight when he said, "people would rather be with someone who is strong and wrong than weak and right." It's not that people are uninterested in who's right or wrong, it's that people will only follow leaders who seem to actually believe in what they are doing. Democrats have missed this essential fact.

The stimulus bill in the spring showed us what was coming. In the face of a historic economic crisis, Democrats negotiated against themselves at the outset and subsequently yielded to absurd demands from self-described "moderates" to trim the package to a clearly inadequate level. No one made any rational argument about why a lower level was better. It would have been trivial to write "claw-back" provisions if the stimulus turned out to be too much or we could have done a rescission this year to give these moderates their victory, but none of this was on the table. We essentially looked like we didn't know what the right answer was so we just kinda went for what we could get. This formula was repeated in spades in both the Climate and Health Care debacles.

This is my life and I simply can't answer the fundamental question: "what do Democrats stand for?" Voters don't know, and we can't make the case, so they're reacting exactly as you'd expect (just as they did in 1994, 2000, and 2004). We either find the voice to answer that question and exercise the strongest majority and voter mandate we've had since Watergate, or we suffer a bloodbath in November. History shows we're likely to choose the latter.

Although I realize this is far too long to publish, if you do decide to use any of it, please keep my anonymity. Just in case I'm wrong and there is more good to do yet.

I have something substantive to post, but more time is needed to polish it so that it might meet our exacting standards. I'll try to get it ready by Friday.

Waiting for the end of the world

2010-01-14T06:13:00.000-08:00

Huffington Post, via Political Wire:

Congressional negotiators and White House officials are moving forward with plans to add the repeal of Don't Ask Don't Tell to the upcoming defense authorization bill, Democratic sources tell the Huffington Post.

In Congress, members are being whipped to ensure that the votes will be there for passage, should the legislation be placed in the bill. At this juncture, aides say, the prospects look good. Meanwhile, a source close to the White House says the president has instructed the Defense Department that he believes the repeal of DADT should be placed in the authorization bill.

However, disagreements could emerge when it comes to crafting the actual legislative language, over which Defense Secretary Robert Gates will wield his influence. And at this juncture, few of the offices working on the issue said they were willing to take passage as a fait accompli.

Request line: Paging Dan Ruppel

2009-12-28T00:49:00.001-08:00

Dear Dan:

What the hell is this all about? You know probably infinitely more than I do about Yemen, and as neocons across the political sphere start roiling up their war erections about this latest failed terrorist attack and the countries that need to suffer because of it, I figure we should probably all, you know, learn at least something about it.

Love,
David

PS: Shave your beard.

Unsurprisingly, I am not sanguine

2009-12-24T11:11:00.000-08:00

Dave, your side is now in the hot seat. And, I guess, I will finally weigh in on “the most important piece of social legislation since the Social Security Act passed in the 1930s.”

I lament the death of the public option. Without it, the bill feels somewhat rudderless. Public subsidies to private industry are stupid and wasteful, and represent further rent-capture on the part of insurance companies. That having been said, I agree with Dave that momentum is not an inconsequential force in politics. I have no empirical basis from which to argue with the cost-projections made by the CBO, either, though it seems that it rests on more assumptions than hard evidence. If there was just some kind of sign that this process would continue to move forward, I would be a little more eager to pop the Moet. My feeling, however, is that the Democrats are completely platzed. It took everything they had to push this train wreck through and they didn’t start with much in the first place. Harry Reid, poor old sod, was in such a tizzy from exhaustion that at one point he even—if temporarily--voted against his own bill.

So I’ll come out and say it: I think that this bill is a mistake. I say that as a person for whom healthcare reform has an immediate and meaningful impact. My parents are in their 50’s and skirting the poverty line, so that healthcare is completely unavailable to them. I have no idea how generously they will be subsidized, but, at $13,000 for a family policy, it’d better be legendary or my family is gonna take a severe hit on this one.

After falling upon it with outrageous savagery, I’ve since warmed to the stance taken by This American Life in its pair of shows on reform. The problem in healthcare does not lie, I don’t think, in the structure of the insurance industry. The problem is in pricing, which means the problem is caused by doctors and hospitals. Case in point: the cost for a single scan by an MRI machine in Japan is US$98. In stark contrast, it's two grand a pop here in New York, as my mother was aghast to discover. This disparity is not due to the availability of MRI machines, though per capita Japan has slightly more MRIs than the US. It’s simply because per unit costs for MRIs are not as high in Japan as they are in the United States. Something in Japan curbs the Japanese healthcare industry’s rent-seeking and that is to the benefit of the consumer, and it isn't public insurance. The majority of healthcare spending is done by some 2,000 private entities, though there is a substantial contribution (31.7%) by the government--a share that is still far below the 42.9% of spending done by public agencies in the United States. Yet Japanese healthcare is cheaper.

The Netherlands is exceptional in that it has a completely privatized healthcare system, as I've mentioned before. Premiums average US$300 a month. Again, this could only be possible if the per unit cost of healthcare services was low, so that insurance companies would have no need to charge outlandish premiums. Once more, something exists there to curb the rent-seeking of healthcare providers, and it does so regardless of the for-profit structure of the Dutch insurance industry.

It’s no secret that I am not a fan of privatization. I would prefer public provision of insurance, if only because it would be responsive to legislative, rather than market, pressures. Public power has the ability to distribute losses and gains in a socially beneficial manner. A public institution can operate without making a profit, or even at a loss, and thus can ensure the wide and equitable availability of strictly economically inefficient public goods (such as health) to the greatest number of citizens. That, to me, seems more compatible with the stated aims of democracy than the shareholder-driven incentives of private limited-liability concerns.

That having been said, in the United States, where the public soil has been so irradiated by ignorance and meritriciousness, you have to be a pragmatist if you want anything of worth to grow. Maybe we do like the Dutch, and have a privatized healthcare system. As the Netherlands demonstrates, that’s not incompatible with the goals of universal provision and low costs. The key is to control prices. And that’s exactly why this bill is a wash: it does nothing to shift the power to set prices to the government.

Every single healthcare system worth a damn on this green earth has an agency that sets prices: every single one. Whether in systems with high participation by the private sector (Switzerland, the Netherlands, Japan), a balance between the two (Germany) or low to non-existent private competition (France, England), there is always a public price-setting authority. The extent to which each national regimen exercises this power varies. Drugs are almost always price-controlled, but services, such as MRIs, may be the prerogative of individual suppliers. Regardless of national idiosyncracies, rent-seeking behavior under all of these healthcare systems is severely circumscribed by the public power to fix prices. The government, in effect, sets the absolute limit on the profitability of healthcare providers, and they work within that range. They are subordinate to the legislature, and to public goals in healthcare provision.

And why should governments set prices? Isn’t price-fixing horrendously inefficient? What about lines at gas stations in the 70’s or queues at Soviet stores? The proper response to these oft-trotted out tropes is that price fixing only leads to deadweight loss (the difference between quantity supplied and quantity demanded) if the conditions of perfect competition hold: that is, if no provider has the power to influence the price of a good and if markets clear immediately i.e. prices and quantity supplied change based on exogenous and endogenous movements of supply and demand. Healthcare services, however, always and everywhere do not obey these rules (actually, you’d be hard pressed to find many industries that do, but that’s a whole different subject). The healthcare industry is, I would say, much more appropriately approximated by the model of monopolistic competition.

Monopolistic competition is usually explained, and only briefly, in my experience, as its very existence makes many mainstream economists squirm, as occurring in sectors of the economy that are influenced by geography. The restaurant business is the example that was most often cited to me. Restaurants provide a broadly similar service—food—and there are many suppliers in any given market, but, in their pricing patterns, they do not obey the rules of perfect competition—prices do not trend towards equilibrium. The reason for that is that geography is an extremely important factor when one makes the decision of what restaurant to eat at. We don’t get a list of every pasta and burger joint in the metro area, compare prices, and then go with the one that’s cheapest. I’m not gonna take the 6 to Parkchester just because I know that gyros are a dollar less than they are around the corner from me. We accept to some degree price-setting behavior by suppliers because there’s a non-monetary residual in our choice-making: convenience.

Hospitals are like restaurants. I may know that a hospital in Trenton will charge $2100 to fix my broken army, as opposed to St. Vincent’s, across town, which will charge $2500. That will not affect my choice to go to St. Vincent’s in the slightest if it’s a block away from me when my bone snaps. Doctors and hospitals are naturally monopolistic because location is important to consumers of their services. This fact is only exacerbated in the United States where, through their aggressive rent-seeking behavior, they have gained even greater influence over prices. This American Life singled out hospital groups as being some of the most powerful actors in American healthcare, and they were right to do so. In effect, hospital groups combine many local monopolies into one gigantic regional monopoly. Knowing that demand for healthcare services is highly dependent on geography, and on trust (we like seeing the doctors we know), a hospital group has nearly free reign in choosing what to charge its customers for enormous swathes of America. It isn’t a stretch to think that insurance companies, wanting to retain their paying customer base, and knowing that their customers consistently demand services from certain hospitals, will cave into that hospital’s—or group of hospitals’—demands.

This systemic imbalance could easily be solved by a single-payer system, of course. No hospital would be powerful enough to argue with the federal government. But we’re nowhere near single-payer, and, if we really want to reform healthcare in a meaningful, i.e. cost-reducing way, we have to attack those who set prices first, and only then move on to the secondary industries that respond to those prices. I already said in my previous post on This American Life’s healthcare special that acknowledging the negative impact of doctor and hospitals on cost-control does not imply that the insurance industry is thereby excoriated. Private insurance companies are grossly inefficient: in effect, all they manage to do is pass on the effects of obese rent-capture by hospitals to consumers with a 5-10% mark-up for themselves. But by focusing solely on them, we constrain our ability to lower prices by a maximum of 10%. If we set our sights on the price setters, we could achieve real savings in healthcare, the kind of savings—say 30-50%--that could make healthcare work. And, by reducing the economic power of one sector of the economy, we’d correspondingly reduce its political power and therefore its future ability to alter the legislative status quo to protect its inequitable share of national rents.

I’m afraid that, in this bill, all I see is a lot more faucets for the bad guys to drink from. Ben, you did a commendable job in trolling through the CBO’s report and it’s clear from your post that there is some reason to think that prices will at the very least be stabilized, if not, for the large group market, decreased. The kind of savings that are being projected are such a drop in the bucket, though, that I just don’t feel any rush of enthusiasm. The fact remain that American healthcare is outlandishly expensive, and that cannot be solved by targeting the insurance industry. Do we content ourselves with plugging the hole with public subsidies for an indefinite period of time? Unless some meaningful reform comes out of this process it just, to my mind, will be a whole new headache down the road.