Saladin's Blog

Why no populist outrage? We are indentured.

2009-10-27T21:09:26Z

Today in the New York times Bob Herbert laments about changing the world. Bob is very disturbed that we seem to be so passive in the face of our crumbling society. There are many likely causes to this 'paralysis', but here I would like to argue one that I don't think gets much attention- Debt.

Herbert opens with a the tragic story of Andrew Goodman- a young idealist who went to Mississippi in 1964 to fight on the front lines of the Civil Rights campaign, but was then murdered by the Ku Klux Klan. He contrasts this sad, but noble story with today's society.

Americans have tended to watch with a remarkable (I think frightening) degree of passivity as crises of all sorts have gripped the country and sent millions of lives into tailspins. Where people once might have deluged their elected representatives with complaints, joined unions, resisted mass firings, confronted their employers with serious demands, marched for social justice and created brand new civic organizations to fight for the things they believed in, the tendency now is to assume that there is little or nothing ordinary individuals can do about the conditions that plague them.

This is so wrong. It is the kind of thinking that would have stopped the civil rights movement in its tracks, that would have kept women in the kitchen or the steno pool, that would have prevented labor unions from forcing open the doors that led to the creation of a vast middle class.

Bob then pivots to shift the blame where he thinks it lies:

This passivity and sense of helplessness most likely stems from the refusal of so many Americans over the past few decades to acknowledge any sense of personal responsibility for the policies and choices that have led the country into such a dismal state of affairs, and to turn their backs on any real obligation to help others who were struggling.

I am not so sure that that is the correct diagnosis, in fact I think personal responsibility might be at the heart of our passivity. In 1964, the same year that Andy Goldman set out to fight for civil rights, Eric Berne wrote a bestselling book, Games People Play. In it he identified 5 life games, or patterns of behavior that are often destructive and can bedevil individuals throughout their lifetime but they have hidden psychological rewards. Berne's fifth game, Debtor:

"Debtor is more then a game. In America it tends to become a script, a plan for a a whole lifetime just as it does in some of the jungles of Africa and New Guinea. There the relatives of a young man buy him a bride at an enormous price putting him in their debt for years to come. In America the big debt is a mortgage: the role of relatives is taken by the bank. Paying off the mortgage gives the individual a purpose in life."

Margaret Atwood (whose book Payback I lifted the above reference from) points out that Mortgage means "dead pledge" in French (How especially fitting today that 1 in 5 owe more then their houses are worth, and 1 in 9 is in foreclosure). Bob asks where is the sense of outrage and I think that part of it is that we are scared to lose what little we have. But I also think that there is a sense of shame that causes us to clam up. Not shame for the country, but shame that we did actually take advantage.

Occasionally we did refi that mortgage to buy that new car or max out the credit cards for that vacation. We didn't mean to, but everybody was doing it and prices of everything just kept rising, but wages just didn't seem to keep up. So we sometimes dipped into the house equity (after all we did it once in the 90's and everything seemed fine), or pulled out the credit cards- we started relying on it even though we knew it was wrong. I think this is a reason why a lot of Americans don't feel they can say anything, or are too scared to rock the boat. It is because we are deep in debt and just praying it will go away.

If we make a lot of noise then soon you will ask us our personal situation and yes, we know, we made mistakes. Not only do we have that house to pay for- but also that occasional luxury we couldn't quite afford and always knew that their would be a payback- and now it has come. So we shut our mouths.

But there is another aspect of our shift into an indebited society that is retarding the development of social movements. This is one where the victims didn't get to enjoy much of the 'party'. Times have advanced in the forty ought years since Berne published and today debt is much more widespread. And thanks to the miracles of financial innovation we also have debt instruments like 7 year auto loans, credit cards given to you for your 18th birthday, and most pernicious to democratic society: Student Loans.

In human society it is usually the youth that are the agents of change. With their invincibility complexes and zealous idealism kids like 20 year old Andrew Goodman are willing to go out and try to make a difference in the world. These are the ground soldiers who do the grunt work and provide the energy to social movements that Bob Herbert pines for. But today, like those New Guinea husbands strangled by the guilt strings of the dowry, we trap those kids in deep in debt, usually well before they are fully developed enough to rent a car.

The average undergraduate student graduates with nearly 23,000 in student loan debt, graduate students 45,000 (bonus debt: half of all undergrads have 4 or more credit cards!- with an average debt of $3,173). Don't even ask about our doctors or lawyers-suffice to say that they aren't going to be volunteering much. And taking that public service job is akin to the priesthood lifetime vow of poverty.

Jeffrey Willams recently put forth a provocative article in Dissent Magazine, Student Loan and the spirt of indenture. In it he examines student loans as a new form of indentured servitude. Both targeted the upward mobility desires of the working class, both had large middleman industries that developed that profited immensely for little risk (or in today's case- No Risk!!), both are for set lengths of term, and most significantly both are debt secured not by property but by personhood- with NO LEGAL RECOURSE (unlike all other debt- you can not bankrupt from student loans).

College student-loan debt has revived the spirit of indenture for a sizable proportion of contemporary Americans. It is not a minor threshold that young people entering adult society and work, or those returning to college seeking enhanced credentials, might pass through easily. Because of its unprecedented and escalating amounts, it is a major constraint that looms over the lives of those so contracted, binding individuals for a significant part of their future work lives. Although it has more varied application, less direct effects, and less severe conditions than colonial indenture did (some have less and some greater debt, some attain better incomes) and it does not bind one to a particular job, student debt permeates everyday experience with concern over the monthly chit and encumbers job and life choices.

But that is the cost of getting ahead if you are middle class here in America, so shut your mouth. You signed on that line. Take responsibility for your actions, and whatever you do don't yell at your betters- you need them to give you a job.

And your parents- well they deserved it. They shouldn't have borrowed that money either. Sure they felt guilty that they wanted to provide you with more then they could afford but now its payback time. Maybe they started that business that couldn't make it, or god forbid tried to flip a house at the end of the bubble.

Here are some more Credit Card stats (there are lots more on this site).

At the end of 2008, Americans' credit card debt reached $972.73 billion. The average outstanding credit card debt for households was $10,679 at the end of 2008.

The average credit card indebted young adult household now spends nearly 24 percent of its income on debt payments.

And small businesses (which comprise 70% of US jobs).

44 percent of small-business owners identified credit cards as a source of financing that their company had used in the previous 12 months --- more than any other source of financing, including business earnings

So America shuts up, because we know- its our fault.

(Update- I corrected the spelling of Andrew Goodman (not Goldman)

Goldman and JP Morgan tell Obama to kick those second rate losers so everyone will just shut up already.

2009-10-22T00:52:33Z

From the Nytimes:

The Obama administration will order the companies that received the most aid to deeply slash the compensation to their highest paid executives... The companies are Citigroup, Bank of America, theAmerican International Group, General Motors, Chrysler and the financing arms of the two automakers.

Hey look Obama finally decided to throw the raving populists a bone. Okay, so Citigroup and BofA are insolvent publicly owned banks, and GM and Chrysler are essentially government jobs programs for our former industrial heartland, but at least AIG is nominally gratefying:

At the financial products division of A.I.G., the locus of problems that plagued the large insurer and forced its rescue with more than $180 billion in taxpayer assistance, no top executive will receive more than $200,000 in total compensation, a stunning decline from previous years in which the unit produced many wealthy executives and traders.

But what about the two companies that 'innovated' the very products that brought the world's economy to its knees? You know the ones that knowingly gamed AIG?

The ones that most benefited from the bailout and continue to make massive profits borrowing money from the fed at 0% and then giving it back to us at 3% to 4%. They needed our cash too and now with their amazing risk skills they are taking candy from a baby and rubbing our faces in it. And who knows what the secret hedge fund bastards have been doing with their insane wealth to play the win-win no 'moral hazard' game that TARP and the Fed's printing press at the discount window has created (its a secret-shhh, just like derivatives need to be).

Thanks to Giethner and Summers and the revolving door for wall street elites, those companies are protected. And so far it doesn't look like their will be any new Pecora commission with real investigations, much less trials, or jail time. Nope its looking like we are going to get the head's of a few second rate schmucks and some watered down show regulations while taxpayers keep getting hosed (but thanks to lack of media coverage they seem to like it). Hell even our TPM resident republican and former hedge fund trader mcbill is pissed.

Any company that took TARP funds should forfeit dividends and bonuses. Period. I don't really care that those contracts are already written and the cool kids already won, that money was not theirs. I don't care how hard they worked it over they already broke the whole fucking system. But instead of Justice Obama and company are going to kick those second rate losers that were dumb enough to go into the car business or not pretty enough to get hired at Goldman or JP.

For those keeping track we have so far given away 573 billion in the TARP bailout. Thats right BILLION in 2009 dollars. (check out http://bailout.propublica.org/ Propublica is doing great work tracking this). And don't forget that there is the Fed's magic balance sheet which has quietly given the banks trillions, with no easy way to unwind. But the MSM is bored and doesn't really understand how all that stuff works anyway so they are worried about 1 trillion a decade from now from Health care reform. Great work guys! and I know it is way to much to ask you to investigate the impact of suspending 'mark to market' on balance sheets. But then you might learn something very scary. We can't have that, I mean, its almost Halloween.

All this money came from our taxes, now and future. Instead of Jobs, or Health Care, or even basic infrastructure, we have madly subsidized the richest among us. While right now we are destroying both the credit worthiness and employability of tens of millions. Maybe journalists will start paying attention when their jobs are all gone.

You're welcome Wall Street. You deserve it. For Like W before you are continuing the fine tradition of proving that in America Chutzpah is worth more then, well, everything else.

Historic Mental Health Break- Elizabeth Blackwell Gains Admission

2009-10-09T05:43:11Z

I have a confession to make: I love Lewis Lapham. Yes he is often lampooned, (in particular Slate loves to mock his predictable pretentiousness) but I don't care. I don't mind his occasional over the top metaphor or searing indignation at the idiocy of it all: why haven't we learned this yet? Sure I often get angry too, but mostly I find his writings comforting-I like being reminded that there is a long view. I simply love history. That the same tiresome games of war and hubris are constantly replayed is certainly distressing, but it seems to me that the overall trend is clear- we are getting better. We do slowly learn even if every two steps forward are often accompanied by a huge step backwards.

So When Mr. Lapham left his perch as editor of Harper's and started Lapham's Quarterly, I signed up immediately. Each quarterly devoted to a particular topic and includes a series of disparate historical pieces from throughout the world (and time) around that theme. The outrageously priced magazines are also beatiful, lushly printed on a heavy stock with a clean layout punctuated with tasteful maps and art. Often I admit I don't get a chance to read them all but I skim them and give a good effort (between books, friends, TPM cafe!, and working- well time is short). Maybe I am just an naive armchair wannabe, but I am fine with that. The world is more intersting, and more hopeful.

Last night I read this piece and for some reason I found it quite moving. From This quarter's issue: Elizabeth Backwell Gains Admission. (I have chosen not to blockquote it for ease of reading)

While making applications to the different medical colleges of Philadelphia for admission as a regular student, I enlisted the services of my friends in the search for an alma mater. The interviews with the various professors, though disappointing, were often amusing.

May 27
Called on Dr. Jackson (one of the oldest professors in Philadelphia), a small, bright-faced, gray-haired man, who looked up from his newspaper and saluted me with, "Well, what is it? What do you want?" I told him I wanted to study medicine. He began to laugh, and asked me why. Then I detailed my plans. He became interested, said he would not give me an answer then--that there were great difficulties, but he did not know that they were insurmountable; he would let me know on Monday. I came home with a lighter heart, though I can hardly say hope. On Monday, Dr. Jackson said he had done his best for me, but the professors were all opposed to my entrance. Dr. Horner advised me to try the Filbert Street and Franklin schools. A professor of Jefferson College thought it would be impossible to study there and advised the New England schools.

June 2
Felt gloomy as thunder, trudging round to Dr. Darrach. He is the most noncommittal man I ever saw. I harangued him, and he sat a full five minutes without a word. I asked at last if he could give me any encouragement.

"The subject is a novel one, madam, I have nothing to say either for or against it; you have awakened trains of thought upon which my mind is taking action, but I cannot express my opinion to you either one way or another."

"Your opinion, I fear, is unfavorable."

"I did not say so. I beg you, madam, distinctly to understand that I express no opinion one way or another; the way in which my mind acts in this matter I do not feel at liberty to unfold."

"Shall I call on the other professors of your college?"

"I cannot take the responsibility of advising you to pursue such a course."

"Can you not grant me admittance to your lectures, as you do not feel unfavorable to my scheme?"

"I have said no such thing; whether favorable or unfavorable, I have not expressed any opinion, and I beg leave to state clearly that the operation of my mind in regard to this matter I do not feel at liberty to unfold." I got up in despair, leaving his mind to take action on the subject at his leisure.

The fear of successful rivalry which at that time often existed in the medical mind was expressed by the dean of one of the smaller schools, who frankly replied to the application, "You cannot expect us to furnish you with a stick to break our heads with," so revolutionary seemed the attempt of a woman to leave a subordinate position and seek to obtain a complete medical education. A similarly mistaken notion of the rapid practical success which would attend a lady doctor was shown later by one of the professors of my medical college, who was desirous of entering into partnership with me on condition of sharing profits over five thousand dollars on my first year's practice.

During these fruitless efforts my kindly Quaker adviser, whose private lectures I attended, said to me, "Elizabeth, it is of no use trying. You cannot gain admission to these schools. You must go to Paris and don masculine attire to gain the necessary knowledge." Curiously enough, this suggestion of disguise made by good Dr. Warrington was also given to me by Dr. Pankhurst, the professor of surgery in the largest college in Philadelphia. He thoroughly approved of a woman's gaining complete medical knowledge, told me that although my public entrance into the classes was out of the question, if I would assume masculine attire and enter the college, he could entirely rely on two or three of his students to whom he should communicate my disguise, who would watch the class and give me timely notice to withdraw should my disguise be suspected.

But neither the advice to go to Paris nor the suggestion of disguise tempted me for a moment. It was to my mind a moral crusade on which I had entered, a course of justice and common sense, and it must be pursued in the light of day, and with public sanction, in order to accomplish its end.

The following letter to Mrs. Willard of Troy, the well-known educationalist, describes the difficulties through which the young student had to walk warily:

Philadelphia, May 24.
I cannot refrain from expressing my obligations to you for directing me to the excellent Dr. Warrington. He has allowed me to visit his patients, attend his lectures, and make use of his library, and has spoken to more than one medical friend concerning my wishes; but with deep regret I am obliged to say that all the information hitherto obtained serves to show me the impossibility of accomplishing my purpose in America. I find myself rigidly excluded from the regular college routine, and there is no thorough course of lectures that can supply its place. The general sentiment of the physicians is strongly opposed to a woman's intruding herself into the profession; consequently, it would be perhaps impossible to obtain private instruction, but if that were possible, the enormous expense would render it impracticable, and where the feelings of the profession are strongly enlisted against such a scheme, the museums, libraries, hospitals, and all similar aids would be closed against me. In view of these and numerous other difficulties, Dr. Warrington is discouraged and joins with his medical brethren in advising me to give up the scheme. But a strong idea, long-cherished till it has taken deep root in the soul and become an all-absorbing duty, cannot thus be laid aside. I must accomplish my end. I consider it the noblest and most useful path that I can tread, and, if one country rejects me, I will go to another.

Through Dr. Warrington and other sources, I am informed that my plan can be carried out in Paris, though the free government lectures delivered by the faculty are confined to men, and a diploma is strictly denied to a woman--even when (as in one instance, it is said) she has gone through the course in male attire. Yet every year, thorough courses of lectures are delivered by able physicians on every branch of medical knowledge, to which I should be admitted without hesitation and treated with becoming respect. The true place for study, then, seems open to me; but here again some friendly physicians raise stronger objections than ever. "You, a young, unmarried lady," they say, "go to Paris, that city of fearful immorality, where every feeling will be outraged and insult attend you at every step--where vice is the natural atmosphere, and no young man can breathe it without being contaminated! Impossible. You are lost if you go!"

After a short, refreshing trip with my family to the seaside, the search was again renewed in Philadelphia. But applications made for admission to the medical schools both of Philadelphia and of New York were met with similarly unsuccessful results.

I therefore obtained a complete list of all the smaller schools of the northern states, "country schools," as they were called. I examined their prospectuses and quite at a venture sent in applications for admission to twelve of the most promising institutions, where full courses of instruction were given under able professors. The result was awaited with much anxiety, as the time for the commencement of the winter sessions was rapidly approaching. No answer came for some time. At last, to my immense relief (though not surprise, for failure never seemed possible), I received the following letter from the medical department of a small university town in the western part of the state of New York:

Geneva, October 20.

To Elizabeth Blackwell,

I am instructed by the faculty of the medical department of Geneva University to acknowledge receipt of yours of application. A quorum of the faculty assembled last evening for the first time during the session, and it was thought important to submit your proposal to the class (of students), who have had a meeting this day and acted entirely on their own behalf, without any interference on the part of the faculty. I send you the result of their deliberations--and need only add that there are no fears but that you can, by judicious management, not only disarm criticism, but elevate yourself without detracting in the least from the dignity of the profession.

Wishing you success in your undertaking, which some may deem bold in the present state of society, I subscribe myself,

Yours respectfully,

Charles A. Lee, Dean of the Faculty

This letter enclosed the following unique and manly letter, which I afterward copied on parchment, and esteem one of my most valued possessions:

At a meeting of the entire medical class of Geneva Medical College, held this day, October 20, 1847, the following resolutions were unanimously adopted:

1. Resolved--That one of the radical principles of a republican government is the universal education of both sexes; that to every branch of scientific education the door should be open equally to all; that the application of Elizabeth Blackwell to become a member of our class meets our entire approbation; and in extending our unanimous invitation, we pledge ourselves that no conduct of ours shall cause her to regret her attendance at this institution.

2. Resolved--That a copy of these proceedings be signed by the chairman and transmitted to Elizabeth Blackwell.

--T. J. Stration, Chairman

With an immense sigh of relief and aspiration of profound gratitude to Providence, I instantly accepted the invitation, and prepared for the journey to western New York.

Leaving Philadelphia on November 4, I hastened through New York, traveled all night, and reached the little town of Geneva at 11 P.M. on November 6.

The next day, after a refreshing sleep, I sallied forth for an interview with the dean of the college, enjoying the view of the beautiful lake on which Geneva is situated, notwithstanding the cold, drizzling, windy day. After an interview with the authorities of the college I was duly inscribed on the list as student No. 130 in the medical department of the Geneva University.

Max Buccus kills Wyden Amendment. Employees to stay Serfs.

2009-10-02T21:25:10Z

Score one for United HealthCare and overpaid human resource chiefs. Today my Senator, Ron Wyden threw full blown temper tantrum. From the Oregonian:

"We have stripped this bill of choice and competition," Wyden told the Senate Finance Committee, minutes before withdrawing his amendment. He essentially conceded defeat on a measure he said was necessary to salvage a flawed bill.

"This amendment is an attempt to inject real reform in the bill," he said."Where in this bill does it give choice? I can't find it in this bill, colleagues."

So what happened last night? What was the amendment? Erza Klein:

The Senate Finance Committee finished its markup last night. Pretty much, anyway. It adopted a couple of important amendments, including one from Olympia Snowe cutting the penalties for the individual mandate to less than $800 per person. But the drama came late in the evening. About one in the morning, Wyden's Free Choice Act came before the committee. But it never came up for a vote.

Instead, Max Baucus effectively ruled it out of order. The reason? It didn't have a full CBO score. This came as a surprise to Wyden and his team, who'd gotten the amendment scored by the CBO, and had been in endless negotiations with Baucus, the White House, employers, and labor over the past week. If the score was in fact partial, as Baucus and Conrad claimed, you'd think someone might have mentioned it. No one did.

But suddenly, in the wee hours of Friday morning, the chairs of the Finance and Budget Committees were explaining that the amendment lacked a valid score. ANde an amendment without a valid score is "out of order." Wyden was left with little choice but to withdraw the amendment. It was not deliberative democracy at its finest. But it served its purpose: it killed the amendment.

Corporate lacky Max Baccus totally fucked Wyden through an in your face lie.

Now throughout this healthcare 'insurance reform' debate, I have been quite hard on Senator Ron Wyden, who is pretty much the stereotypical democratic pussy (Even Baccus knows he's a pussy). I am someone who believes our existing system is broken and needs a hatchet taken to it (while the corporate dems are convinced a scalpel and a few more $$$ will suffice). I want a single payer, or at the very least an vast expansion of Medicare. I understand that this would mean a lot of hospitals, insurers, and other inefficient redundancies in our system would be put out of business, and frankly, I am fine with that (16% of GDP is insane, lets get it down to 10% and spend the money elsewhere).

Wyden has been less then fulsome in his support of a public option and his various health care maneuverings and pronouncements have been, well, confusing. I have left a couple of mean messages asking him to strongly support a public option and his lackluster support. However after reading up on his Free Choice Act, I came to agree that if we are going to have a multiple insurance system then this is a needed policy change. Klein again:

If the Free Choice Act had passed, politicians could have made a very simple argument to the insured: When this bill becomes law, you will have insurance choices just like those enjoyed by a member of Congress or a government employee. You will have a variety of insurers competing for your business and the opportunity to keep the same insurance even as you change jobs, or fall unemployed, or open your own business. You don't have to take advantage of this if you don't want to. You can stick with what your employer offers. But if you do want the choice, you can have it. It's here for you. That's what reform means, for everyone: choices, competition and continuity.

So for the 175 million Americans who have to take whatever insurance their boss offers Wyden was trying to introduce a measure that would allow them to choose. This would break the medieval tie of employee to corporate job and free individuals to have control of their own healthcare. If we are going to stick with the stupid insurance system we have then this seems like a great idea to me. It would both free businesses to stop wasting resources on health care decisions and free workers to work the market.

The fact that businesses were against is another classic case of American Business shooting itself in the foot. From an economic point of view it really doesn't make any sense that businesses are in the health care business of their employees. They should be dedicating their resources to their business. Matt Miller in the Wall Street journal:

Mr. Wyden's proposal, the coalition asserts, would "fundamentally frustrate employers' attempts to administer integrated health improvement strategies." As a factual matter, this is incorrect. But why should "health improvement strategies" be the job of American businesses? Sounds more like a job for American doctors, in conjunction with their patients.
The status quo crowd also writes that Mr. Wyden's measure "would likely harm employer-employee relations because most employees have a longstanding expectation that their employer will be their primary source for health coverage." But employees already chafe at the shrinking coverage now available on the job. And who wouldn't want more options?

It's clear to anyone who looks that the edifice of employer-based coverage is crumbling. A recent survey sponsored by the Committee for Economic Development, a business-led think tank, showed that 62% of senior executives think the system is unsustainable. While the under-65 population has grown by 25 million since 1999, the number of people who get health care from their employers has declined. Numerous CEOs have told me privately that they'd just as soon get out of the benefits business altogether, which makes one wonder who the National Benefits Coalition really represents

And lets not even get into global competitiveness.

Classic American Business AND Labor Stupidity: If its the government, unless its a handout we are against it. Don't mess with the status quo, even if its killing us.

Update- Made some editing changes. Sorry I need to get better about reading before posting.

A Reflection: My Joe Wilson Moment.

2009-09-11T00:45:00Z

I disapprove of what you say, but I will defend to the death your right to say it...
-commonly, but mistakenly attributed to Voltaire

I want to start out by admitting I am loathe to write this post, for I don't know fully where it will lead, or even how I truly feel. However this story has been on my mind a lot lately and since I have posted it as a comment in two previous blogs (Desi's first Van Jones rant, and then Rooties inflammatory Iraqi public option). After South Carolina Republican Joe Wilson's outrageous outburst, I feel that I should just write it as a stand alone post and throw it out there.

Let me confess that this story is not fully mine, and in fact, I am not the 'Joe Wilson' character at all. However it deeply affected me and will always cause me to think twice about political debate, and the rules of civil decorum. This is a personal story of a 'debate' on the Iraq war that I attended in spring 2005 between Howard Dean and Richard Perle in Portland, Or. This was shortly after the devastating nailbaiter decided by Diebold machines in Southern Ohio, and I had (have) not fully recovered. Howard Dean had been recently named the head of DNC and there was some controversy before the debate as he wanted his comments to be off the record (which didn't happen).

It was held in a large auditorium with tickets sold ahead of time. The crowd was predominately middle class professionals with a sprinkling of students and of course some political diehards. The debate was ostensibly about how policies in Iraq and it proceeded with the usual talking points that we all knew intimately in the year after the 2004 election. However it quickly devolved back to origins. You know Dean making the strong left case that containment should have been the answer and that we only created more problems by going in. Stirred up the hornets nest, but now the goal was to get out as quickly as possible. Meanwhile Richard Perle just kept returning to the paramount threat that Saddam and WMD's meant to us and how we "had no idea what he had and that it was too important.... I set there in my sit and stewed in absolute anger.

I mean it was utter nonsense. WE had bombed the shit out of the country less then a decade ago, we investigated all the weapons facilities for most of those intervening years, we had spy satellites on every inch 24/7, we patrolled 2/3ds of it with "no fly zones" we blockaded Basra and confiscated the oil ships the smuggled every few weeks, and just for good measure we had been bombing suspect targets every month or so throughout that decade. Which was rarely ever reported in the US. We had everything locked up. And here he was saying that we didn't have any of this knowledge. that the risk was too great. I was incredulous.

And then it happened. A 20 something student ripped off his shoes and threw them at Perle and started shouting "Liar. Liar. Liar". This lasted about 30 seconds and then he was muscled to the ground and dragged out (this was well before the famous Iraqi shoe thrower). He was dragged out the doors but for the next 3 minutes we could still hear the muffled kid shouting liar. Perle gave a smirking laugh and then rolled his eyes. Dean said nothing. Then the debate carried on as if nothing happened.

The crowd set there, mildly uncomfortable with nervous apprehension, later broken by a lame throwaway laugh a few minutes later by Dean.

I was so angry. The kid was right and a million are now dead.

But I sat there too.

Yesterday's outburst brought this story that has been on my mind into new light. A breach of civil conduct, never before has the sitting president been so disrespected. All because some white southerner is worried that maybe somewhere a poor brown person might get some medical help on his dime. Wow. How fucked is that?

But then that his what he cares about, and I find myself in shock and leaning towards Oleeb's excellent post demanding resignation. But I think about that story and that moment and I pause.

What if I were in the audience for any of these:.

"Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction." - Dick Cheney, speech to VFW National Convention, Aug. 26, 2002

Would I politely applaud?

"No terrorist state poses a greater or more immediate threat to the security of our people and the stability of the world than the regime of Saddam Hussein in Iraq".- Donald Rumsfeld, testimony to Congress, Sept. 19, 2002

Really? So our military can't contain, but can easily conquer and occupy? And what the fuck is a terrorist state anyway?

Would I protest?

"We know for a fact that there are weapons there". - Ari Fleischer, press briefing, Jan. 9, 2003

Would I scribe his words without question and broadcast them loudly accross the land?

Our intelligence officials estimate that Saddam Hussein had the materials to produce as much as 500 tons of sarin, mustard, and VX nerve agent.... The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa. - George W. Bush, State of the Union Address, Jan. 28, 2003

Really from Niger you say? Joe Wilson you just got back what sayth you?

Intelligence gathered by this and other governments leaves no doubt that the Iraq regime continues to possess and conceal some of the most lethal weapons ever devised. - George W. Bush, address to the U.S., March 17, 2003

Would I consider my shoe?

There are hundreds more. All lies. Blatant outright lies:

We know where they are. They're in the area around Tikrit and Baghdad and east, west, south, and north somewhat. - Donald Rumsfeld, ABC interview, March 30, 2003

But my point is not to rehash this battle. They won it. They lied and they have gotten away with everything and the strategic battlefield has irrevocably changed for the worse. Iraq is becoming a colony of Iran. I can't help but wonder how long that lasts. Over one million dead, millions 'displaced' or forever maimed.

My question is would my protestations really be different from Joe Wilson's. I say they are.

I don't have the exact reasons, my philosophy days are too far behind me. But there are orders of moral magnitude that make this a different case. People will die or have died. That matters. Alot.

This is why I consider equivalency of the teabaggers with the protests of Iraq to be foolish. Why I think comparing the Birthers to the Truthers is lunacy. Sure the Truthers might be distasteful, but we still don't know what happened that caused 3400 deaths. Obama is from kenya- so what it doesn't kill anybody.

1,339,771 DEAD , and all Joe Wilson cares about is less taxes.

I would shout "You lie". I wish more had.

Labor Day Weekend!!! - Time Based Art Edition

2009-09-07T00:04:49Z

Its a holiday weekend and here in my hometown of little Beirut we are currently enjoying our awesome annual Time Based Art festival. Last night I went to an amazing performance of 10 tiny dances and it inspired me to lighten the cafe up a little with a few time-based art examples that I have come across in the last few months (well videos really).

I know this might not be the standard issue political cafe post, but I like my TPM varied and interesting, and well occasionally even uplifting. It's a cafe after all. So consider this post some of the rotating art on the walls (you know next to the Yoga sign up sheets).

First up, a beautiful rendition of evolution. From the artist's (Owen Gatley and Luke Jinks description:

A short animation loosely based on the scientific recording of life's great species. And how this has given us clues that piece together, for us to discover the secrets of the evolution and diversity of life on Earth.

A Record Of Life from Owen Gatley and Luke Jinks on Vimeo.

Okay, lets do something with books now. Why? Um because everybody here loves 'em (except maybe that dude in the top hat,- just jibing you buddy :). This animation was created by fourth Estate, a UK book publisher, to celebrate 25 years

This Is Where We Live from 4th Estate on Vimeo.

Next up. The heart- that thing that bedevils us all (even you CT :). As a sometimes builder with a pretty good mastery of google sketch-up I found this video simply stunning. But the love story is the real beauty here. If you only are going to watch one of these videos. Make this the one.

This is a short by filmmaker Bruce Branit known also as the co-creator of 405 (from the youtube description) .

Stunning. No?

Now for a quick bit of fun. Gumby's got nothing on this kid (from So you think you can dance).

Alright. Now I like to play this out with a nice music video. Warning its a little emo, but hey its been that kinda year. This is Imogen Heap's latest video Canvas. Its awesome, and she does amazing things with sound (check her out some time).

Well I warned you it was a little emo. But beautiful imagery. I am so thankful that youtube brought music videos back into my life (you know after MTV became a reality tv network).

Hey great news! The sun just came out, that means bonus video!!!

Yep. I don't know how they do it either. Humans are pretty neat though.

Okay all, have a great labor day!!!!

US Budget (Amazing Poster)

2009-08-24T01:00:20Z

I just came across this amazing poster, Death and Taxes, that shows the entire 2010 US Government Budget. I then lost the next half hour playing in it. So I thought I would continue my accidental theme of the week of posting graphic displays of complex legislation (see Health Care Reform for Dummies) and share it with the cafe.

From the website Wallstats.com :

Death and Taxes" is a large representational graph and poster of the federal budget. It contains over 500 programs and departments and almost every program that receives over 200 million dollars annually. The data is straight from the president's 2010 budget request and will be debated, amended, and approved by Congress to begin the fiscal year. All of the item circles are proportional in size to their spending totals and the percentage change from 2009 is included to spot trends and disproportion.

And more about the creator and his projects.

WallStats (wôlstăts) n.1. Complex and elusive information synthesized into palatable and insightful visual pieces. 2 Friggin' awesome posters.

I'm Jess Bachman and I love information. But far too often, chewing on a raw data set can leave a salty and dry taste in your mouth. That is why I use my pseudo- culinary-visualizing skills to form data into sweet and savoury design.

There really is a wealth of information in there. We hear all these numbers about programs thrown around without much perspective of the size or overall strategy, this really helps.

Hint: if you click the upper right corner it goes fullscreen.

Health Reform Bill for us Semi-Literates (flowchart)

2009-08-21T17:15:29Z

Nicholas Beaudrot at Donkeylicious put together this simple flowchart to show how the Current Healthcare reform bill will affect you. (via Krugman)

Chart available for download here (iin small, medium, or extra large for granny)

Bush really was a fullblown religious nutjub.

2009-08-09T21:33:24Z

Well, in a sensible country one might find these revelations scary. But in America, this is considered perfectly normal. You know kinda like our defense minster decorating war reports with apocalyptic quotes.

From the article:

President George W. Bush told French President Jacques Chirac in early 2003 that Iraq must be invaded to thwart Gog and Magog, the Bible's satanic agents of the Apocalypse.
Honest. This isn't a joke. The president of the United States, in a top-secret phone call to a major European ally, asked for French troops to join American soldiers in attacking Iraq as a mission from God.

Now out of office, Chirac recounts that the American leader appealed to their "common faith" (Christianity) and told him: "Gog and Magog are at work in the Middle East.... The biblical prophecies are being fulfilled.... This confrontation is willed by God, who wants to use this conflict to erase his people's enemies before a New Age begins."

Here is a site with the background (with links to the original french article where Chirac disclosed this interview, (also an English translation)).

Yep. The Iraq war saved the world from the Apocalypse. No wonder he is so calm. God bless him. I wonder who he thought was Gog and who was Magog? Osama and Saddam. How many innocents are dead now? Has it crossed the million mark? I am certain that there is a place in Gehenna waiting for him.

Stunning Sand Animation

2009-08-07T01:01:04Z

I just came across this performance by Kseniya Simonova and I wanted to share it (Via andrew sullivan )

I tried to do a bit of research and it seems that this comes from the Ukraine variety show "Ukraine's got talent".

From the video share website Gawkk:

What she depicts is love and war, set amidst the turmoil of The Great Patriotic War, or as we call it in America, WWII. Ukraine was probably the area most devastated in the war, even more than Germany. It was a conflict that saw nearly one in four Ukrainians killed. Ukraine represented almost 20 percent of all the causalities suffered during WWII. That's the context of war memory that Kseniya reaches out to.

Its quite moving.

Damn cool solutions to serious problems - Cement that consumes Carbon Dioxide

2009-08-03T01:20:26Z

Reading the daily news about how our economy has finally bottomed out and that the banks are in the money again often leaves me a little down. But a while back I came across Ty Cowen's link to an article arguing that The 1930's were the most technologically progressive decade of the twentieth century. And it inspired me to start a series of posts on interesting innovations that might spurn a similar advancement during our own current economic morass. So, I want to inaugurate this semi regular series with a promising invention of Cement that absorbs Carbon dixoide.

When I was a kid, I came home one day with a fun assignment: write a list of the worlds most important inventions. I was really excited and of course listed all the fun and shinny things I could think of cars, airplanes, TVs. I turned to my dad and asked him what he thought and he answered 'roads'. I am certain that I reacted with something like 'What? that's so boring". But it got me thinking, maybe he was right how would we get anywhere without that flat surface to smoothly on. But ever a prideful kid and thought that roads couldn't really be an invention, so I asked what are roads made of. I wrote 'concrete'.

Today that is the only thing that I remember from that list, and it certainly belonged. It is the basis of most of our roads, buildings, sewage systems, just about every structure relies on concrete for its base. It is literally the foundation of our civilization. Today we still stare in awe at Roman works like the Coliseum that still stand proud after eons of wear (there is considerable evidence that the Pyramids are also concrete). Concrete is simply amazing to me, I mean its essentially rock that we liquefy to form into just about any shape we want. Magic!

But then there is the dark side. The world produces nearly 2 million metric tons of cement a year. It is estimated that that production produces 5% of the worlds carbon dioxide emissions. And then most of that is used for roads and bridges (which carry automobiles which emit even more CO2). It may be magic, but it is an environmental nightmare. That is why I was so excited to learn about the British Company Novacim's invention of cement that is carbon negative.

From the Guardian article, the technical stuff:

Making traditional cement results in greenhouse gas emissions from two sources: it requires intense heat, and so a lot of energy to heat up the ovens that cook the raw material, such as limestone. That then releases further CO2 as it burns. But, until now, noone has found a large-scale way to tackle this fundamental problem. Novacem's cement, based on magnesium silicates, not only requires much less heating, it also absorbs large amounts of CO2 as it hardens, making it carbon negative.
Standard cement, also known as Portland cement, is made by heating limestone or clay to around 1,500C. The processing of the ingredients releases 0.8 tonnes of CO2 per tonne of cement. When it is eventually mixed with water for use in a building, each tonne of cement can absorb up to 0.4 tonnes of CO2, but that still leaves an overall carbon footprint per tonne of 0.4 tonnes.
Novacem's cement, which has a patent pending on it, uses magnesium silicates which emit no CO2 when heated. Its production process also runs at much lower temperatures - around 650C. This leads to total CO2 emissions of up to 0.5 tonnes of CO2 per tonne of cement produced. But the Novacem cement formula absorb far more CO2 as it hardens - about 1.1 tonnes. So the overall carbon footprint is negative - ie the cement removes 0.6 tonnes of CO2 per tonne used.

Since the eighteenth century invention of modern Portland cement the basic formula for concrete has stayed pretty constant. Manufacturers would make minor adjustments to the mix for different environmental conditions and strength. But today there are lots of concrete companies are experimenting with hundreds of different processes and additives in order to both increase the utility and mitigate the environment impact. The most popular environmental addition is the use of the coal waste byproduct fly ash, which although takes longer to set greatly strengthens concrete. A Hungarian inventor has even come up with a translucent concrete by adding fiber optics. Awesome!

Concrete is also naturally white, which as Steven Chu points out that if we paved all our roads with it instead of black top it would be the equivalent of removing every automobile from the road for 11 years (oh yeah that and paint all our roofs white- but still huge). Imagine if all of our roads and buildings became carbon sequesters, that would be truly sustainable building.

Updated- Toxic assets have not gone away & Why not have Elliot Spitzer head new Pecora commision.

2009-07-17T14:03:02Z

I just read TPM's utterly depressing take on the new pecora commission nominees and the republican plans to neuter it and I wanted to repost my call for Elliot Spitzer to head the commission. I wrote this post originally in April and I find it particularly apt as this week Goldman Sachs, the very bastards who made a fortune both shelling toxic assets and then a fortune selling them short and crippling our economy and JP Morgan Chase, the institution that invented the derivatives and securties which infected our entire system, both reported record profits!

WTF? They are making billions, you lose your job and watch corrupt senators water down health care reform and whine about racist latinas. TARP was 750 billion dollars and lets not even talk about the trillions quietly pumped out by the FED.

Make no mistake toxic assets have not gone away. Banks, flush with your tax dollars (both directly and indirectly through AIG) are sitting on them. The suspension of mark to market (see Destor's smart take here) means that they do not have any incentive to move the millions of foreclosed properties off the books. That would mean accepting that the face value 600k condo is really only worth 200k, which would lead to insolvency for thousands of our banks (in case anyone forgot here is a great video explaining the finacial crisis that lead to the 800 billion TARP).

I had had some hope that the new Pecora Commission would confront some of these facts head on. Ron Chenow, author of the excellent House of Morgan, wrote a New York Times Op Ed that was one of the earliest calls for such a commission. In it he wrote eloquently of the 'electrifying' hearings.

The riveting confrontation between Pecora and the Wall Street grandees was so theatrically apt it might have been concocted by Hollywood. The combative Pecora was the perfect foil to the posh bankers who paraded before the microphones. Born in Sicily, the son of an immigrant cobbler, Pecora had campaigned for Teddy Roosevelt and been imbued with the crusading fervor of the Progressive Era. As a prosecutor in the 1920s, he had shut down more than 100 "bucket shops" -- seamy, fly-by-night brokerage houses -- and this had tutored him in the shady side of Wall Street. ... Bankers had been demigods in the 1920s, their doings followed avidly, their market commentary quoted with reverence. They had inhabited a clubby world of chauffeured limousines and wood-paneled rooms, insulated from ordinary Americans. Now Pecora defrocked these high priests, making them seem small and shabby.

I want Elliot Spitzer to head the new commission. I know I am not the first to think of it, and I too initially dismissed the idea out of hand. But I now think that the pros strongly outweigh the cons.

The Pros
1. He was the NY State attorney general and then Governor when most of this went down. He knows NY, Wall Street, all the players, and most importantly how they all play the game.
2. He has repeatedly gone to battle with and defeated All the major investment banks. Most notably with a 1.4 billion dollar settlement over investment bank stock price manipulation- even Goldman was caught with their hand in the cookie jar and had to pay up.
3. He has already KO'd AIG and ran former CEO Hank Greenberg out of town. They fear him. In the Current Crisis he has been one of the earlist and most vociferous in keeping our eye on The Real AIG Scandal, the 100% payouts and funneling of cash to Goldman and partners (180 Billion and counting...)
4. He has caught mutual funds and their hedge fund buddies red handed in numerous late trading and market timing scandals. He doesn't have any insane Chicago School free market ideology. He knows these people game the system because its their job to make money anyway they can, and it was his job to catch them. He understands the structural flaws endemic to our system.
5. He has taken on mortgage lenders, their predatory practices, and Bush admin protectors.
6. Until his self immolation by Dupre, he was largely undefeated. Not a bad track record.
7. He thinks his current job sucks and badly wants historic redemption. He will stay up late, do the homework, and fight for it.
.
8. His name is Elliot, I always think of the Elliot Ness whenever I hear about him. I can't help but think that that's a good omen and its the same era as Pecora so that must count for something
9. He was never very likeable as attorney general with his snarl and righteous tirades against evil doers. Now he is human and people can relate to him. Like Mr. Ness he is now untouchable.- I mean he survived stupid shit like this:

10. He wants revenge. 'Suspicious wire transfers' reported to the FBI-My ass. Somebody was gunning for him and he was stupid enough to get caught. (I know, ...'eight years of W has whacked me out', whatever, but I'm not alone check out this great Alternet conspiracy theory).
11. Entertainment & Civic literacy. Lets face it, most of the country gets its news from comedians these days. Nominating Elliot guarantees a ton of press from the commission. Everybody will hear about it and if he plays it right he can use his celebrity as a bullhorn for some perspective. "Sure I got laid, but Casano and his buddies Edward Liddy and Hank Paulson each have 100 million of your taxes" Think about it.

The Cons
1. He had relations with a prostitute. Does this really destroy his credibility? I mean Bill redeemed himself, Diapers Dave is probably going to win reelection on the strength of conservative voters. Would this really prevent him from effectiveness? Do we need our prosecutors to be without sin in order to take them seriously? I don't know.
2. He is too political. Which leads to number 3.
3. The Democrats don't have the balls. I mean seriously do we really think that Harry Reid and our Holier-than-thou President will stand for a six months of Jay Leno making Emperor's club jokes. I don't think so. Hell, Nancy seems to have the biggest sack of the lot of em but she is still so enamored with the taste of actual real power that she won't rock the boat. The truth is that it seems our fearless leader doesn't have the stomach to get his hands dirty.
I suspect what we will end up with will be a mild mannered mouse who will make the very occasional roar and then file a quiet report that will say "mistakes were made, shame on AIG and over-leveraging, but really we all participated so its really all of us that are all to blame..."
Did anyone see Elisabeth Warren on the Daily Show, I like her alot but she is utterly ineffectual and thats probably the best we are getting.

In the meantime the depression will continue to worsen. Populist rage will be fomented by Fox's teabaggin and other anti-government lunacy, and the O-team lead by Timmy and Larry will rightly come to be seen as protectors of those doing the looting.
So thats my list, please add your own pros/cons or alternative nominations in the comments.
And for Dickday a fun video:

Iterum posteri procul prex of meus amicus pullus

Infomercial Master Billy Mays on Health Care

2009-06-30T06:18:51Z

Billy Mays, famous pitchman for such products as Orangeglo and Oxiclean, died yesterday. This is from the Philadelphia Inquirer Obituary:

"I don't take on a product unless I believe in it. I use everything that I sell," he told the Tampa Tribune in an April interview.He liked to tell of giving bottles of OxiClean to the 300 guests at his wedding.

Here's Billy's pitch for affordable health care:

Yep, the healthcare insurance industry really just needs a better marketing, you know like the The Snuggie or the Hawaii Chair!

Jihadists, Anarchists, Communists, KKK, Weatherman...- 'Terrorist' groups are not new and 9/11 didn't change anything

2009-05-21T16:35:02Z

The favorite meme of Cheney & Company is that somehow September 11, 2001 changed everything. Never before had the United States had to confront a threat from a non-state group that threatened the homeland. This 'fact' therefore justifies abandoning our principles because we have to confront this threat from a 'war footing' rather than a 'police footing'; i.e. we must be willing to use all options. However, that basic assumption is simply not true; the United States and the World have repeatedly faced small organized groups who inflicted terror with the intention of subverting or destroying the existing way of life. Our principles are, in fact, that which have enabled us to defeat them.
For example the Anarchists of the late Ninetieth and early Twentieth century. They succeeded in assassinating president William McKinley, bombing a Chicago market, and perpetrating numerous acts of violence. And that was just in the US. Internationally they were well organized and extremely prolific. In researching this post I came across this eloquently written Economist article that highlights the parallels between the Anarchists of the turn of the Century and the Jihadists of today.

BOMBS, beards and backpacks: these are the distinguishing marks, at least in the popular imagination, of the terror-mongers who either incite or carry out the explosions that periodically rock the cities of the western world. A century or so ago it was not so different: bombs, beards and fizzing fuses. The worries generated by the two waves of terror, the responses to them and some of their other characteristics are also similar. The spasm of anarchist violence that was at its most convulsive in the 1880s and 1890s was felt, if indirectly, in every continent. It claimed hundreds of lives, including those of several heads of government, aroused widespread fear and prompted quantities of new laws and restrictions. But it passed.

The Anarchists likely even succeeded in an earlier version of September 11's attacks on the World Trade Center by attacking the 1920 symbol of American economic might: Wall Street, killing 38 people. The list of small organized terrorist groups that have attacked the United States is quite long, from the Post Civil War KKK to Sarah Palin's favorite boggieman Bill Ayers and the Weatherman Underground.

The idea that we must abondon our principles in the face of one particularly lucky group of Saudi rich kids, after they have held strong for two centuries is both ridiculous and inherently illogical. Principles are not principles if we are able to simply dismiss them as convenient (It's what the word 'principle' means). It is truly disturbing that traditional moralist conservative pundits can state these arguments with a straight face without recognizing that inherent contradiction. Regardless of the logical incompatibility, it is vital to recognize that it is our principles that have given us the ideological ammunition that defeated each disaffected group in the past.
The strategy is to win the battle for ideas among the populace. It is time-proven and effective. Torture, or whatever Orwellian euphemism you chose to rename it, is self defeating because you immediately lose the battle of ideas.
Does anyone really think that Dave Kaczynski would have turned in his brother, the Unabomber, if he was going to be tortured? Of course not, and people would still be wary of opening their mail today. Families in Iraq, Afghanistan, and the rest of the world are no different. They will not provide the cooperation we need to prevent another Madrid or 7/7 if they think we will torture. They are more likely to help their friends and family. And of course who could forget the classic in international conspiracies: There is a Spector haunting Europe.... That small international organization has inspired terrorism from the Bolshevik Revolution to today's FARC and Shinning Path. However even after the Soviet Union gave the international conspiracy massive state backing and succeeded in taking over half the world it was our human right principles that ultimately defeated them. It was not Star Wars that defeated the Soviet Union - or Reagan breaking the bank to 'deficit doesn't matter' military spending that the republicans like to deify. No. It was Mikal Gorbachev, who in the face of widespread democratic human rights protests in Eastern Europe, chose to not ruthlessly crush them. That inaction allowed the wave to swallow the system whole, and new democracies enshrining human rights arose in its wake.
Ideals are what win hearts and therefore minds; that is the story of America. It is our character that is the source of our true strength and respect in the world. Sure, we have a checkered past, but our ideals are still envied and respected throughout the world. That is the reason why our election of Obama effectively worked as a reset button. We returned to our ideals, and most of the world, despite everything we have done, is willing to give us another chance.
Principles matter.

Post script- Terrorism expert Richard Clarke lays out a proper international strategy in his book Defeating the Jihadists: a blueprint for action.

Simon Johnson on Larry Summer's Economic Astraology

2009-04-28T02:39:13Z

Spring is in the air and with it some happy talk of economic green shoots.

Indeed, our banks are again raking in the billions, courtesy of taxpayer's largess and some fancy sleight of hand. Yet of late the cafe has been dominated with thoroughly engaging torture discussions, leaving a relatively sparse collection of economic posts (causing some of us econ worrywarts to start jonesing for a fix). So I wanted to share this post from the always must-read former IMF chief economist and MIT professor Simon Johnson.

Last friday, Mr. Johnson attended a conference at the InterAmerican Development Bank that featuring our supreme economic Czar Larry Summers addressing a house of development experts. He posted an excellent blog exploring the implications of Summer's current thinking. Larry is the man who gives Obama his daily economic briefing, and seems to have the ear of the president. I would really like to know how Volker, Rohmer, Goolsbee and the rest of the economic brain trust fit into the picture (and if anyone has some insights please comment). However, it appears that despite his ethical conflicts, Larry's is the most influential voice in forming our economic policy.

Simon Johnson shares his insight into Mr. Summers thinking. It is not very encouraging. During his speech Mr. Summers made five main points that Mr. Johnson summarizes as:

1.All crises must end. The "self-equilibrating" nature of the economy will ultimately prevail, although that may take massive one-off government actions. Such a crisis happens only "three or four times" per century, so taking on huge amounts of government debt is fine; implicitly, we will grow out of that debt burden.
2. We will get out of the crisis by encouraging exactly the kind of behaviors that "previously we wanted to discourage" two years ago. It is "this insight, this view" particularly with regard to leverage (overborrowing, to you and me) that "undergirds the policy program in the United States."
3. There is a critical need to support financial intermediation and to ensure it is adequately capitalized, with a view to the risks inherent in the current situation. He then said, with a straight face, that the current bank stress tests are designed with this in mind.
4. Growth in the 1990s and more recently was based too much on finance (this appears to be a relatively new thought for Summers). The high and rising share of finance in corporate profits "should have been a warning". The next expansion should be based less on asset bubbles and more on investment in key public services.
5. The financial regulatory system "in fundamental respects has been a failure". There have been too many serious crises in the past 20 years (yes, this statement was somewhat at odds with the low frequency of major crises statement in point 1).

Proceeding from these premises Simon gives his analysis of the potential flaws and some of the implications that arise from our current policies.

The essence of the government's short-term strategy is obviously to prop up the financial sector, in order to sustain something close to the current levels of debt in the economy. But there was no hint in his remarks that this creates tension with point #4 - growth needs to be less finance-oriented in the future, i.e., talent has to be allocated elsewhere. If the rents are now government-generated but still in the financial sector, why would people or capital move?
And if enormous effort goes into sustaining the prosperity (and apparently the bonuses, according to first quarter set-asides) of Big Finance, how will that help with serious regulatory reform - which presumably will be opposed by the banks that are now regaining their fortunes? This thinking, put next to the NYT article this morning on Tim Geithner's work at the NY Fed, is not encouraging.
...Forbearance on banks may work, but at great cost to the taxpayer. And how is that helpful to either to Summers' stated strategy of growth led by further public investment, or - given the existing state of our public finances - to a more plausible strategy of (nonfinancial) technological innovation?

To Simon this is the crucial flaw in Larry's logic. Our bailouts through TARP, TALF PPIP, etc. are essentially subsidies to maintaining the current financial industry (and the powerful elite behind them). Even the most optimistic proponets acknowledge that Geithner's toxic asset strategy continues this by placing the risk to taxpayers and giving the banks and hedgefunds most of the upside. This simply encourages more resource allotment into the overgrown and unproductive FIRE sector. (There is more to Johnson's analysis and since I am really just cribing his thoughts I really recommend you send him some traffic.)

I would like to know more about Larry's reference to more investment in key public services. Is this contained in the budget? Or is there more to come? A second stimulus perhaps? Frankly, I am left wondering if the teabaggers might not be on to something that the Obama plan is simply for government spending to slowly rise and take up the slack that will be left from a dramatic reform of the financial industry.

I certainly would welcome a move towards a more European style system with a strong safety net and an infrastructure that works. However, I don't currently see that mandate so what is going to sustain us economically until that comes about? Are we just going to limp along until things get so bad that we all clamor to become Belgium? Is that the master plan? Starve'em to socialism?

Mr. Summer's clear annunciation of his first idea I find a little unnerving. I read it as a "stuff happens then eventually it stops". Johnson points to Japan as a potential worst case, but I would mimic Krugman and point to the 30's, or even more foreboding the depression of the 1870s. Does such a clear emphasis of this idea indicate a 'wait and see' strategy? Larry also made numerous statements this weekend that the Economy is going to keep declining . Great.

Of course as always of late I am left wondering how exactly is this going to be different from Japan? Or even if Japan is perhaps a best case scenario. Our position in the world's economy as consumer of last resort means that we can't export our way towards solvency. If we are not going to take the red pill and quickly write down our debts to manageable levels, are we going to limp along writing them off slowly (japan) or simply inflate them away? Do our leaders really think that there is a middle path that we can take? Can they give us some historical precedents?

Part of me wonders if perhaps the O team has been seduced by an idea that we can inflate without inflation. That because of the worldwide economic downturn and the resultant 'flight to safety' to dollar denominated T-bills that we can run the presses without worry of raising interest rates rise to attract buyers. I mean in these circumstances who is more credit worty than Uncle Sam? Is this even possible? Anybody care to venture another idea?

As an aside, I also can't help but note that in the last week we have seen a spate of negative pieces on Treasury Secretary Geithner. From yesterday's exhaustingly researched New York times piece on Geithner's 5 years as the head of the NY Fed, to Portfolio's recent portrayal of the Secretary as little more than the ever loyal burecratic apprentice, The reeducation of Tim Geithner. This has led to some speculation that the knives are coming out. (I too believe that Timmy has been groomed to be the designated fall guy but my money's on next September, anyone want to start a betting pool?).

And for those who read this far, here's a distressing bonus link. Via Krugman a thought provoking Financial times post Banking Credit Catch 22. Our haphazard bailout strategy combined with our fun financial products are creating some very intresting winners and losers. I find this amusing but I fear the implications. What good is a capitalist system that consistently rewards losers?

Oh well, its spring time, :)