Mistakes happen, particularly in war, but this was not a mistake. It was policy. Or the lack of policy.
At the age of 19, Murat Kurnaz vanished into America's shadow prison system in the war on terror. He was from Germany, traveling in Pakistan, and was picked up three months after 9/11. But there seemed to be ample evidence that Kurnaz was an innocent man with no connection to terrorism. The FBI thought so, U.S. intelligence thought so, and German intelligence agreed. But once he was picked up, Kurnaz found himself in a prison system that required no evidence and answered to no one.
[...]
[Kurnaz' lawyer, Baher Azmy] dug into the case and found that the military seemed to have invented some of the charges. Military prosecutors said one of Kurnaz’s friends was a suicide bomber, but the friend turned up alive and well in Germany. [...] But far worse than the false charges was the secret government file that Azmy uncovered.
Six months after Kurnaz reached Guantanamo, U.S. military intelligence had written, "criminal investigation task force has no definite link [or] evidence of detainee having an association with al Qaeda or making any specific threat toward the U.S."
At the same time, German intelligence agents wrote their government, saying, "USA considers Murat Kurnaz’s innocence to be proven. He is to be released in approximately six to eight weeks." But Azmy says Kurnaz was kept at Guantanamo Bay for three and a half years after this memo was written in 2002.
They kept him, Kurnaz says, by inventing new charges. In a makeshift courthouse, Kurnaz claims that a military judge charged that Kurnaz had been picked up near Osama bin Laden's hideout in Afghanistan while fighting for the Taliban. Ironic, since it was the U.S. that flew him to Afghanistan to begin with.
If charges won't be filed against him, when will charges be filed against the person or people who caused or allowed this to occur? As Alex Knapp writes, this was "a citizen of one of our most valued allies [who] was tortured, denied counsel for three years, and kept in inhumane conditions, this despite the fact that shortly after he was detained his innocence was already determined. Not that it would have been justified to treat a guilty man this way, either. Due process is one of the cornerstones of America’s founding principles — one that is degrading every year."
It's getting down to desperation crunch time in the Democratic primary, so the oppo researchers are unloading the good stuff press is really beginning to scrutinize the candidates more carefully. While the "oops" moments they've uncovered probably are not campaign-ending disasters, they seem like the kind of narrative slips that could be problematic for both Hillary Clinton and Barack Obama. A parade of the recent troubles...
Hillary Clinton is running on her competence and determination to insure everybody. But she hasn't paid her staff's medical bills in a couple months.
Barack Obama is running as a new kind of candidate with a new kind of campaign. But his campaignis spreading good old-fashioned, er, misinformation. Oddly, they seem to think that hey, he amended the document and signed it himself, but that doesn't mean he actually read the thing is a good defense. [NOTE: yes, staffers do fill out questionnaires, and it is entirely plausible that Obama didn't read it the first time. It's even plausible that he didn't really read it thoroughly the second time, though one wonders why he filed an amended version if he or his policy people hadn't checked it closely enough to detect errors. But it's pretty implausible that a questionnaire was filled out and sent without ever being checked by the policy people who knew his positions well.]
Barack Obama is running as the sort of Uniter-Not-Divider politician who can bring us all together in rapturous harmony. But he keeps finding himself having to explain his choice in spiritual advisors and campaign committee members. The most recent story points out Obama's "connection to another racially divisive public figure—the stridently homophobic Rev. James T. Meeks", who was named by the Southern Poverty Law Center as one of the "10 leading black religious voices in the anti-gay movement". Incidentally, James Meeks was also behind the Halloween "hell house" which "housed a few denizens of "hell," including a pedophile trolling the Internet for a young victim, a meditating Buddhist, and two mincing young men wearing body glitter who were supposed to be homosexuals." Considering howtheProgressivesreacted to Obama'sassociation with Donnie McClurkin, I would imagine this won't make people happy.
Barack Obama is running on his unwillingness to take money from oil companies. But he's also been factcheck.org'd, since it turns out that no candidate has taken money from oil companies, and Obama has "accepted more than $213,000 from individuals who work for companies in the oil and gas industry and their spouses."
Hillary Clinton is running on her competence. But she has had to back down from her claims about experiencing sniper fire in Bosnia, claiming she was merely "sleep-deprived" and had "misspoke". ("Tired" is the politician's equivalent of the "flu" excuse that movie stars use when they need to spend a bit of time in rehab; it's transparently false, but they seem to think people buy it) But she had been "repeating this whopper for nearly three months" and the "Bosnia anecdote was part of her prepared remarks, scripted and vetted with her staff."
She must have been very tired.
Imagine what she might do if - to pick a potential Presidential situation entirely at random - there is a phone in the White House and it's ringing because something is happening in the world. It's 3:00 a.m., and your children are safe and asleep. What do you suppose she might say if she was sleepy?
It's been a difficult week for both of them, but they have only themselves to blame. Well, themselves, their opponents research departments and a few well-fed reporters.
[Peter Suderman]
Over at my blog group-home, Reihan wonders if maybe, just maybe, a "music tax" might be a good idea. He's responding to an idea that popped up in a recent Portfolio piece. Basically, the labels, or at least Warner music, want to see an additional $5 tacked onto everyone's ISP bill. They'd divide the spoils, and ISP subscribers would be able binge on file sharing without fear of legal reprisal.
I actually think this sounds great, at least provided that it's voluntary—in other words, that it's not really a tax. The article quotes David Barrett, who manages peer-to-peer networks for web hosting colossus Akamai, as saying that, no matter what the label reps say, "it's a tax."
"It'll be a government-approved cartel that collects money from virtually everyone—often without their knowledge—and failure to pay their tax will ultimately result in people with guns coming to your door."
Look, I'm usually the first person to smell hidden taxes, but the Warner rep advocating the plan explicitly denies any desire to have the government involved, and as long as that's true, this seems to be a pretty good way to solve the problem of illegal file sharing. My suspicion is that the $5 price point is probably too low unless it really is a tax, but I don't see why a $10 or even $20 fee wouldn't work. Think of it in comparison to other unlimited-media servives. The average monthly cable TV bill is almost $50, and all-you-can-watch Netflix plans run $14-$24 a month. How many people who buy music even a few times a year wouldn't spend the price of a CD a month (or less) in order to have essentially unlimited access to music?
So while I sympathize with Barrett and with folks like Michael Arrington who worry that this will quickly result in compulsory licensing, I see no reason why this can't or shouldn't work on a voluntary basis..
[Peter Suderman]
McCain adviser Phil Gramm apparently played a role in regulatory changes that some have argued led to current woes in subprime mortgage market. Over at the Capital Commerce blog, James Pethokoukis has a response from Gramm.
Jeffrey Overstreet and Peter Chattaway are both dismayed by the rumor that Hayden Christensen, otherwise known as Stephen Glass, might play Superman in George Miller's upcoming Justice League film. In fact, they're more than dismayed. Chattaway wants the project to just go away entirely.
I'm not sure the casting Christensen, if confirmed, would be particularly good news, but I don't see why this project ought to be sunk. Yes, it's low on star power, but the first X-Men film showed you could make a fine superhero picture without any A-list performers. (Hugh Jackman, an unknown at the time, was catapulted to his current status by that film's success.) And I'd rather see something made rather than nothing at all. More than that, I'm just curious what would happen if you gave the director of Mad Max and The Road Warrior $100 million and said "Go make a superhero movie!" Sure, it might be terrible; but it might not be either -- directors who start doing gonzo, low-budget genre films have a history of coming through on big-budgetprojects. Just look what happened when the guy behind Army of Darkness was put in charge of Spider-Man. Miller's got a great eye for action and archetypal characters (Max was essentially a comic book anti-hero). I see no reason not to give him the chance on this one.
[Peter Suderman]
There's a fair bit of confusion out there about the upcoming transition from analog to digital* broadcast TV. So it's too bad that today's Poststory on how some TV viewers might be affected by the transition doesn't do much to clarify the situation. For instance, here's Joel Kelsey of the Consumer's Union worrying over how low-income elderly folks will handle the transition:
"The elderly population is different in that they're less tech-savvy," Kelsey said. "Will they be able to move big TV sets, and will they know how to hook up the converter boxes?"
The last line in the piece quotes an elderly man living in Arlington:
"I may not even be alive by the time this thing happens!" Navarin said jokingly. "I hate to spend $800 on a new TV when these are perfectly good. I just don't think it's fair."
Both of these quotes seem meant to suggest that some will need to buy expensive new TVs as a result of the switch. But that's simply not the case. Most TV antennas now in use will be able to pick up the digital signals and display them with the help of a fairly inexpensive digital-to-analog signal converter box. What's more, those boxes, which typically only run about $60 to begin with (you can find them for $50 or so if you do some bargain hunting), are being subsidized via a $1.5 billion federal program that entitles everyone to $40 off up to two converters—putting the cost at about $20, not $800, and meaning that neither the elderly nor anyone else will have to buy bulky new sets.
Kelsey's concern that some TV viewers might not know how to hook up converter boxes is slightly more legitimate, but still I doubt there's much to worry about. Anyone who can figure out how to plug an antenna into a TV and adjust it so that picture comes in reasonably well can probably figure out how to connect the antenna to a box which then connects to the TV.
Here's another quote from the story, this one from Margaret Pully, who runs a community for low-income seniors in D.C.:
"TV is their lifeline to the world. Apparently it's not a free thing anymore," she said. "This is certainly an expense we weren't expecting."
Except TV, even over-the-air TV, has never been "free." You've always had to buy the equipment—the TV and antenna—if you wanted to pick up over-the-air broadcasts. A $10 or $20 one-time upgrade, it seems to me, is not unreasonable, even for someone on a tight budget. (Just as a reference point, that's about half what it costs for a 7-day rail pass on Metro.)
Now, I tend to think that there's no reason to subsidize access to broadcast TV in the first place. But setting that aside, maybe it would be fair to complain about the switch -- except that there's already a billion-dollar plus federal subsidy already in place (and one that's hugely wasteful in who it subsidizes at that). And I might be more sympathetic to worries about confusion amongst the elderly—the story reports that 73 percent of older consumers aren't aware of the subsidy—if the transition weren't still almost a year away, and broadcasters and cable companies hadn't committed roughly $1.2 billion to explaining the transition to customers, and the FCC hadn't already set aside $2.5 million to start their education efforts and requested $20 million more.
It's not like there's not a substantial amount of money, taxpayer and private, being spent to make sure that a relatively small number of people keep receiving a few channels on their aging TV sets. It's irritating, but probably politically necessary, that much of this money had to be spent at all, but the benefits from the spectrum it releases are almost certainly worth it. But as it stands, I'm not really sure what else anyone thinks ought to be done.
Politico's Kenneth Vogel writes about the Clinton campaign's slow and steady accumulation of unpaid bills. There's quite a bit of facinating detail about who she's not paying:
It’s not just the size of Clinton’s debts that’s noteworthy. It’s also that her unpaid bills extend beyond the realm of high-priced consultants who typically let bills slide as part of the cost of doing business with powerful clientele whose success is linked to their own.
Some of Clinton’s biggest debts are to pollster and chief strategist Mark Penn, who’s owed $2.5 million; direct mail company MSHC Partners, which is owed $807,000; phone-banking firm Spoken Hub, which is waiting for $771,000; and ad maker Mandy Grunwald, who’s owed $467,000....
She owed Iowa’s Sioux City Art Center Board of Trustees $3,500 for catering and venue costs, New Hampshire’s Winnacunnet Cooperative School District $4,400 in event costs, Qwest $24,000 for phone service, various branches of the Iowa-based supermarket chain Hy-Vee $15,000 for food, beverages and catering, and $7,700 to Ohio and Massachusetts branches of the theatrical stage employees’ union, for equipment costs.
In fact, about a third of the nearly 700 individual debts Clinton reported at the end of February were for various types of “event expenses,” including $319,000 for catering and venue costs, $420,000 for equipment, $11,000 for photography and $9,000 for security.
I'm trying to figure out if Hillary Clinton can somehow turn this to her advantage in the remaining primaries. I think one of three slogans would work:
1) "This just shows that no matter what the situation, I won't discriminate against the little guy"
2) "In solidarity with beleaguered homeowners, I have decided not to pay my creditors."
3) "As I told the Washington Post, I will continue to rack up unpaid debts until the Michigan and Florida delegations are seated."
Suggest your own mottos in the comments!
UPDATE: Vogel has a follow-up story: "the $292,000 in unpaid health insurance premiums for her campaign staff stands out."
In the United States, libertarians and small-government conservatives often subscribe to the idea that local government is, in general, better than federal government at providing services, barring a few exceptional policy areas, such as national defense. Local governments, at least in theory, are also thought to be more accountable to their constituents. Why should Washington bureaucrats allocate funding within school districts, when the school boards with local knowledge know better where that funding should go, the argument goes.
There is a sentiment similar in big multilateral organizations such as the World Bank, which when it advises countries often recommends decentralization plans that. it argues, will make governments less corrupt and more accountable to their people. Indeed, Sierra Leone, the country that in July will be my home, is currently undertaking a massive decentralization with backing from the Bank.
A working paper by UCLA’s Daniel Treisman may give decentralization advocates in the U.S. and at the multilaterals reason to be less sanguine about their cause. Treisman summarizes the reasons why decentralization may not be so great, and then does some neat cross-country regressions to see test them empirically. His results are discouraging.
Decentralization can be bad for a number of reasons. Decentralization can create so many checks and balances between government entities that nothing can get done. It may be harder to reform a broken system when you create more stakeholders, and thus an inefficient government, once decentralized, may become even worse. Second, adding more tiers of government, which often happens in decentralization schemes since one can rarely create more local government without keeping some power at the top, can cause duplication of policies and waste of resources. Think of the overlap between state and federal health care programs. Another worry is that local government officials can be less competent. They might also be more susceptible to bribery than those in high office.
Treisman finds little support for the “local knowledge,” hypothesis laid out in the school board trope. In general, he finds, greater local decision-making and budget authority are associated with nasties such as poorer youth literacy and sanitation. He also finds that the number of tiers of government is positively associated with the level of perceived corruption. More tiers of government are also associated with fewer inoculations, a good measure of a country’s health performance.
Now, all this is not to say that decentralization and localization of government is bad all the time. Though it may not be very beneficial on the aggregate, what doesn’t work in the majority of countries may still work fine in some. What the paper does suggest is that local government is not the cure-all for government inefficiency, though some think it to be. It also suggests that federal government may not be so bad relative to the alternatives. In a static system in which the size of government is held constant, it may be worthwhile to concentrate it in fewer levels, and nearer to the top.
While I am not above "sounding pretentious, obtuse, doltish, obsessive, or just dull", I tend to do so unintentionally, so I'll skip the awkward mucking about over how to introduce myself and simply point out that I am, to quote Douglas Adams, "just this guy, you know?"
I was honored that Megan would ask me to guest post in her absence - she's long been one of my favorite bloggers and thinkers - so I've promised her that I won't be needlessly antagonistic ("Ron Paul isn't good for libertarians, and your gold standard sucks, too") or otherwise leave the place a mess. For now, let's just get the narcissistic stuff out of the way...
Like Daniel Drezner, I'm also returning from a conference. Unlike Daniel Drezner, however, my conference was with bloggers. I cannot imagine a country governed by bloggers, which is probably for the best.
I attended the opening night at the Washington Nationals' new stadium this evening. But I'm not even a baseball fan. In fact, I didn't realize it was opening night until around the 5th inning or so. I used to be a pro sports fan - Atlanta Braves and Atlanta Hawks - but in 1994, (a) Dominique Wilkins was traded away from the Hawks and I discovered I had simply been a Dominique Wilkins fan, and (b) baseball players went on strike and I discovered I wasn't really all that interested in the exploits of petulant millionaires in tights. Still, tonight was quite enjoyable. The new Nationals Park is very well done.
I'm also not a fan of music. I enjoy pointing this out, because it invariably confuses people. "What kind of music", they'll ask. "Any", I'll respond. It just doesn't seem very interesting to me. I'm not sure why this confuses people, though. They're not surprised when somebody says "I don't like modern art", so why should it be unusual that some people just aren't touched by music?
In 2000, I voted for Harry Browne. In 2004, I wrote in None of The Above. Both lost.
I tend to be a right-of-center libertarian because I'm more concerned about the loss of economic freedom than social freedom - in part, because I think the former will lead to the latter. Decades ago, we were talking about lobotomizing gay people, now we're talking about marrying them. We're not in danger of theocracy. We should be more concerned about what Brandeis called "insidious encroachment by men of zeal, well-meaning but without understanding." The "do-goodism" to which James Buchanan referred is the greater threat. After all, "the licentious sinners we can control; the saintly ascetics may destroy us."
Limited government is a fine idea. I wish we had a Party that believed in it.
There are multiple reports that Zimbabwe's president Robert Mugabe has suffered a crushing defeat during this weekend's presidential election. Apparently, a 100,000% annual inflation rate and employment of around 25% of the adult population is not a vote-getter.
These same news stories also say that the government is holding off on reporting the results, suggesting that Mugabe may try to jerry-rig the results to maintain his grip on power.
I don't know what Mugabe will do, but I do know that one of two things will happen:
I’m Tristan Reed, and I’m honored to join Megan’s crack team of guest bloggers for the week. I agree with Peter that introductions are akward, so I'll just give you my paragraph long CV, and hope that convinces you to read me.
I’m an entering economics Ph.D. student at Harvard, with research interests in development and behavioral economics as well as political economy. I’m taking next year off to work for the Jameel Poverty Action Lab in Sierra Leone, working with NGOs and international institutions to evaluate their development programs and find out which ones work, and for whom.
In my posts this week, I'll try to bring you the latest in economics and political science research, and to spark some discussion about what it all means.
[Peter Suderman]
One doesn’t typically look to 19th century political science in order to describe the state of the internet, but it strikes me that all the way back in 1835, Tocqueville provided us with as succinct and apt a description of the transition from old media to new as you’re likely to find:
As the noble never suspected that anyone would attempt to deprive him of the privileges which he believed to be legitimate, and as the serf looked upon his own inferiority as a consequence of the immutable order of nature, it is easy to imagine that some mutual exchange of goodwill took place between two classes so differently endowed by fate. Inequality and wretchedness were then to be found in society, but the souls of neither rank of men were degraded.
Men are not corrupted by the exercise of power or debased by the habit of obedience, but by the exercise of a power which they believe to be illegitimate, and by obedience to a rule which they consider to be usurped and oppressive.
On the one side were wealth, strength, and leisure, accompanied by the pursuit of luxury, the refinements of taste, the pleasures of wit, and the cultivation of the arts; on the other were labor, clownishness, and ignorance. But in the midst of this coarse and ignorant multitude it was not uncommon to meet with energetic passions, generous sentiments, profound religious convictions, and wild virtues.
The social state thus organized might boast of its stability, its power, and, above all, its glory.
But the scene is now changed. Gradually the distinctions of rank are done away with; the barriers that once severed mankind are falling; property is divided, power is shared by many, the light of intelligence spreads, and the capacities of all classes tend towards equality.
Replace “noble” with whatever your preferred term is for mainstream media and “serf” with blogger and it’s just about perfect.
After all, isn’t the internet the 21st century’s New World? We no longer have a physical frontier to conquer, at least not in the traditional sense, but we have an infinite supply of undeveloped, undiscovered digital territory. “Land is the basis of an aristocracy,” he wrote, and he argued that the evolution of property ownership from large land holders to a widespread ownership of smaller parcels facilitated the death of the aristocracy. In the same way, the abundance of digital land has radically altered the media (and business) landscape.
Introductions are inherently awkward, even in the very best circumstances. How does one decide what to say about him or herself without sounding pretentious, obtuse, doltish, obsessive, or just dull? And how do you then say whatever you’ve just decided on in such a way that doesn’t give away the fact that you’ve given it a good bit of thought? It’s like that great Michael Cera line in Juno, “Actually, I try really hard.” Yes, but you’re never supposed to let on!
On the other hand, introductions are also an integral part of most important social activities — business, friendship, house parties. Barring any strong Unabomberesque proclivities, you’ll have a rough time in life without introductions. And since Megan has asked us to make them, I feel obliged. So here are a few informational tidbits. (Feel free to use them as talking points.)
• I contribute semi-regularly to a number of blogs, most notably The American Scene.
• I review movies for NRO.
• My favorite song this week is “Nylon Smile,” which can be found on the excellent new Portishead album, Third.
• I’m an editor of Doublethink, which not too long ago profiled this blog’s proprietor.
• I am an unabashed D.C. partisan, and as far as city rivalries go, I think of New York more or less the way a Texas A&M fan thinks of UT.
• John McCain reminds me of Worf.
For anyone who for some odd reason wants to know more, there’s a brief bio posted over at TAS.
Hello, my name is... well, it's in bold above this line, so you can figure it out. I normally blog at the wittily-named Daniel Drezner.
I'm honored to be one of Megan's guest-bloggers during her retreat from the internets. I'll try to fill her shoes as best as possible -- a daunting task, given that Megan's a foot taller than me and I'm at least fifty pounds heavier than her.
Real posting will commence tomorrow, as I'm still decompressing from attending the International Studies Association annual meeting. For me, the highlight of the meeting came in a cab. After the cab driver found out my lunch companion and I were international relations professors, he strongly encouraged us to fight government censorship and "lead the revolution." At this point I turned to my colleague and said,"could you imagine a country governed by the International Studies Association?" We laughed for the rest of the car ride.
I head off to the airport at an absurdly early hour tomorrow, leaving you in the hands of my extremely capable guest-bloggers: Daniel Drezner, Peter Suderman, Mindles H. Dreck, Jon Henke, and new blogger Tristan Reed. I'm going to be trying a brand new experiment: unplugging from the internet for an entire five days.
Meanwhile, here's something to tide you over until the guest-blogging kicks in:
You almost never see tofu paired with pasta outside of vegan cookbooks, which is a pity because the textures actually go quite well together. This is a pasta that I whipped up for myself this afternoon; it's easy, tasty, and full of protein.
1/2 lb pasta (I use linguine)
1 bunch asparagus
1 box sliced button or baby bella mushrooms
2-3 cloves of garlic
1/2 package Nasoya superfirm cubed tofu (or cut any extra firm tofu into 1/4 inch cubes)
Olive oil
Cook the pasta with at least a tablespoon of salt in the water. Meanwhile, cut the asparagus into 1 1/2 inch pieces and microwave on high for 2-3 minutes. (If you don't have a microwave, poach in 1/4 inch of water in a frying pan for the same amount of time, until just barely undercooked.) Saute the mushrooms in olive oil until they start to brown. Add asparagus, tofu, and crushed garlic. Saute until the asparagus is cooked. Salt and pepper to taste. Pour over pasta with a tablespoon of extra olive oil to coat the pasta. Serve warm.
Recently, the government raised the ceiling on the loans that can be purchased by Fannie Mae and Freddie Mac in an effort to help homeowners in pricy coastal zones. "Jumbo" loans, above the old ceiling of $417,000, carried a stiffer interest rate; the government hoped to ease the burden on those homeowners, and perhaps give a boost to the housing market.
Many homeowners and mortgage brokers anticipated that the higher limit would lower rates on bigger loans to match the conforming rates. Instead, it has created a middle tier of rates for loans between the old $417,000 limit and the new $729,750 limit. Investors are demanding higher yields for those loans because mortgage investments have imploded and investors fear the larger loans will make bundles of conforming loans riskier.
"Borrowers and Realtors say rates should be as low as possible - end of story," said Tom Kelly, spokesman for Chase home lending, which started offering mid-tier loans in mid-March. "But other people have to sort through the realities. We just don't know enough about how the market will work, exactly."
This middle tier of loans has come to be called "agency jumbos" because the agencies of Fannie and Freddie can buy them. But Keith Gumbinger, an analyst for HSH Associates in Pompton Plains, N.J., sometimes calls them "tweeners."
Mortgage brokers and borrowers, however, are more likely to call them a disappointment.
Just watched H.G. Wells' Things to Come. Apparently, he actually wrote the screenplay. It turns out that H.G. Wells was very possibly the worst screenwriter in the history of the planet, and yes, I have seen any number of Soviet propaganda films, and also, Yentl. The thing has to be seen to be believed. But be sure to lay in a good supply of beer first.
In May 2002, in the midst of a severe food shortage in sub-Saharan Africa, the government of Zimbabwe turned away 10,000 tons of corn from the World Food Program (WFP). The WFP then diverted the food to other countries, including Zambia, where 2.5 million people were in need. The Zambian government locked away the corn, banned its distribution, and stopped another shipment on its way to the country. “Simply because my people are hungry,” President Levy Mwanawasa later said, “is no justification to give them poison.”
The corn came from farms in the United States, where most corn produced—and consumed—comes from seeds that have been engineered to resist some pests, and thus qualifies as genetically modified. Throughout the 90s, genetically modified foods were seen as holding promise for the farmers of Africa, so long as multinationals would invest in developing superior African crops rather than extend the technology only to the rich. When Zambia and Zimbabwe turned away food aid, simmering controversy over the crops themselves brimmed over and seeped into almost every African state. Cast as toxic to humans, destructive to the environment, and part of a corporate plot to immiserate the poor, cutting edge farming technology is most feared where it is most needed.
My understanding at the time was that this was even worse than ignorance: Africans keep out relief grain because they know that farmers will hold some of it for seed. They were afraid that if GM entered the food chain, they would that never, ever be able to export any plant products to Europe because of their stringent regulations (these have, I believe, been somewhat relaxed). So even if the president of Zambia knew GM was harmless, he couldn't risk permanently impairing his country's economic guture.
I just can't get that excited about the complaint that the Bush administration wants to spend taxpayer money on people with bad mortgages. The government spends amazing amounts of money on amazingly stupid things. Giving money to people who want to own houses seems markedly less outrageous than, say, giving money to people who want to produce sugar in the northern United States.
To be sure, I am not a homeowner, so I do not chafe under the knowledge that irresponsible people are getting a better deal than I did. But it doesn't seem like this is going to affect all that many people--certainly, a lot fewer than the ARM freeze that Hillary was proposing. Besides, as a libertarian, I've had to inure myself to the notion that the government thinks its primary job is to prevent the chickens from coming home to roost. If I let myself get outraged by that sort of thing, I would have had a heart attack the first time we developed a federal jobs program for people who drown campaign volunteers.
What I worry about is whether this creates bad incentives. Will people be encouraged to take on risky loans in the future because of the bailout? Will we be freezing people into homes when they really ought to move? Probably. On the other hand, it's not clear to me that these effects will be extensive enough to worry about.
The bigger problem for those who want to see a crisis in Social Security’s future is this: if Social Security is just part of the federal budget, with no budget or trust fund of its own, then, well, it’s just part of the federal budget: there can’t be a Social Security crisis. All you can have is a general budget crisis. Rising Social Security benefit payments might be one reason for that crisis, but it’s hard to make the case that it will be central.
But those who insist that we face a Social Security crisis want to have it both ways. Having invoked the concept of a unified budget to reject the existence of a trust fund, they refuse to accept the implications of that unified budget going forward. Instead, having changed the rules to make the trust fund meaningless, they want to change the rules back around 15 years from now: today, when the payroll tax takes in more revenue than SS benefits, they say that’s meaningless, but when - in 2018 or later - benefits start to exceed the payroll tax, why, that’s a crisis. Huh?
The Social Security Trust fund is irrelevant; we do not have a Social Security problem, we have a general fund problem. (I also think that we should roll the payroll tax into the general income tax, while levying somewhat higher bottom rates, but that's a different rant). I also agree that it doesn't start in 2018; it starts much earlier, in the early part of the next decade, when the revenues from the payroll tax peak, and other taxes have to be raised to pick up the slack.
But I disagree about this:
Now it’s true that rising benefit costs will be a drag on the federal budget. So will rising Medicare costs. So will the ongoing drain from tax cuts. So will whatever wars we get into. I can’t find a story under which Social Security payments, as opposed to other things, become a crucial budgetary problem in 2018.
What we really have is a looming crisis in the General Fund. Social Security, with its own dedicated tax, has been run responsibly; the rest of the government has not. So why are we talking about a Social Security crisis?
We will have to find something in the neighborhood of an extra 2% of GDP to cover Social Security. That doesn't sound like much . . . but if you make $50,000 a year, that's an extra $1,000 a year in taxes. For most families I know that make that kind of money, cutting extra $1,000 a year from their budget is a pretty big deal.
Looked at in the context of the federal budget, it's an increase of about 10% of the budget to spend on one program. That, again, is kind of a lot.
I think the budget problem is ugly-but-manageable, however. The real problem is structural: Social Security discourages labor force participation among both younger workers and retirees. Every time the payroll tax gets raised, you give workers incentive to move into the informal sector. And of course, defined-benefit pensions encourage workers to retire as early as possible. Given that seniors tend to consume highly labor-intensive services, that probably means a decline in their living standards, and ours.
The other problem is precommittment--retirement programs are hard to reform on anything less than a 20-30 year time scale. So while the next administration can repeal tax cuts rapidly, whatever you do to Social Security will endure for decades. This introduces a lot of rigidity into the government.
"Anyone who was conscious in DC or Baltimore in the late 70s to early 80s won’t need any convincing. As for the rest of you—and I feel a special sense of responsibility, as the RBC has many young readers looking for guidance in this crazy mixed-up world—just say “no” to boat. Yes, we all want to experience violent, psychotic outbursts, but there’s a downside, too. "
I feel like when Hunter S. Thompson thinks a drug is too crazy, you should probably listen.
Apparently, a lot of foreclosed tenants like to trash the house before they leave. I don't get it. It's hardly the bank's fault that you can't make your mortgage payment. I mean, I understand the rage at fate that has pushed you out of your home and left your credit record in shreds--yea, even if you had a hand in that fate yourself. But I don't get pointless destruction.
Dear Dr. Boli: Why are there so many different kinds of clouds? Shouldn’t they be rationalized? —Sincerely, J. Bhatia, President, American National Standards Institute.
Dear Sir: Clouds are wilful and capricious beings, of a decidedly libertarian bent, and resist all efforts to regiment them into a more rational order. The best that can be done, therefore, is to learn the various types, so as to be able to distinguish between clouds that intend merely to get you a bit wet and clouds bent on knocking down your house.
Cumulus.—Cumulus clouds are the puffy white clouds one sees in the sky on an otherwise fair day. The most up-to-date meteorological theory suggests that cumulus clouds are the souls of departed lambs and kittens.
Nimbus.—Nimbus, or rain-bearing, clouds are the shadows cast by cumulus clouds on the other side of the earth.
Your chart here shows chronic punditry, with episodes of prognostication. Looks like you had a hard year last year.
In 2007, I made two contrarian calls. First, don't write off John McCain. Second, write off Barack Obama. My average was 50 percent, which is as well as a lot of people did last year.
It's also as well as the average chimpanzee did. Is that why you're depressed?
No, it's these doubts, this hesitation. About Obama. A man I respect. Admire. I want to fall for him, love him as so many others do. But ... I can't. I try, but I can't.
Ah. This is not so uncommon. Obama Resistance Complex. You have Barack blockage. You are afraid to love, to commit.
No, no. Some of my conservative friends think that Obamamania is a messianic cult. I don't. I understand the enthusiasm. I can't remember when I've seen a politician with as much promise. He is eloquent, charismatic, cool under fire. He's the best kind of intellectual: super-smart but not patronizing. He has taken political risks to show moral leadership. Who else would have stood at Martin Luther King's pulpit and condemned homophobia and anti-Semitism in the black community?
And wouldn't it be something to have a black president! Think of the bloody chapters in American history a President Obama could close. I want to believe. I go home, shut my eyes, and say, "Yes I can!"
But I can't.
Take a breath. Here, blow your nose. Now, try to tell me why you think you have these issues. Let it out.
If you live in DC, I highly recommend that you get yourself over to the Folger and buy a ticket for the MacBeth which is running through sometime in April. The thing is as accessible as a movie and as powerful as, well, a Shakespearean tragedy. The casting is slightly uneven--in particular, Kate Eastwood Norris' Lady MacBeth is way over the top for a role I didn't think could be played too crazy. I like me some scenery-chewing, but her borderline hysteria from moment one makes it impossible to believe that MacBeth would have listened too her. However, Ian Merrill Peakes is terrific as MacBeth--not so much in the way he says his lines as in the way his body powerfully conveys what is going on when he isn't speaking. And Dan Olmstead is absolutely outstanding as (among other things) Duncan.
And you won't care about any casting lapses, because it's simply the best staging of a Shakespeare play I've ever seen, and the style of the Folger Theater, which is modeled on the Elizabethan, makes it even more powerful. Every detail is absolutely spot-on. The set is spare, and almost modernistic, but crawling with metal vines that perfectly evoke the rot at Dunsinane. The costumes are good, the stage direction is brilliant, and the score--provided by an onstage percussionist who is visible to the audience--provides nearly unbearable dramatic tension. At one point, a particularly wrenching noise caused me to throw my pen and notebook into the air. There's plenty of fake blood. And the comedic moments are pitch-perfect. The three weird sisters alone are worth the price of admission.
The best credit risk analysis system in the world will not help you if your employees just fill in the blanks with random crap. Barry Ritholtz:
3 "handy steps" for getting a questionable loan approved by JPM Chase's automatic system:
1. Lump all of an applicant's compensation as the applicant's base income, rather than breaking out commissions, bonuses and tips.
2. Do not disclose use of gifts for down payments.
3. If all else fails, simply inflate the applicant's income. "Inch it up $500 to see if you can get the findings you want. Do the same for assets.
Thus reads an internal memo from Chase obtained that accidentally found its way into the hands of journalist Jeff Manning of The Oregonian. It was the basis for an article titled, Chase mortgage memo pushes 'Cheats & Tricks'.
This, mind you, from one of the banks who is weathering the subprime crisis rather well. One wonders where they were getting the numbers at the other banks.
I don't know many economists who respect John Kenneth Galbraith's professional work; he tended to substitute wit for rigor, and the major economic model he proposed1, the theory of countervailing force, isn't looking so hot. On the other hand, almost all economists wish, to the extent of heartsickness, that they could write that well. And while the theory behind his economic history is often not quite right, the storytelling is absolutely first rate. You can't get a better popular overview of 1929 than The Great Crash, even though A Monetary History of the United States is probably a better way to understand the thing.
In the New York Sun this week, Ed Glaeser, the leading light of real-estate economics, had a lovely piece on the 50th anniversary of The Affluent Society:
Galbraith's advocacy of public spending aimed at reducing inequality and improving infrastructure helped usher in the 1960s. Lyndon Johnson's war on poverty was decidedly Galbraithian. While the New Deal social programs were born of economic desperation, Johnson's social spending reflected the confidence of prosperity, just as Galbraith had foreseen. But after 1969, the American public gradually turned against Galbraithian social policy. By 1980, Galbraith's arch-nemesis, Milton Friedman, had found an intellectual home in the White House. In the 1990s, even Democrats embraced private wealth over public spending. But in 2008, "The Affluent Society" seems relevant once more. As the political pendulum swings left, candidates once again call for a more vibrant state to right social wrongs. The excesses of the 1960s are forgotten and once again, the government is seen as society's savior. For people of all political stripes, it is worthwhile returning to "The Affluent Society," and pondering what Galbraith got right and what he got wrong.
While I am a staunch supporter of free markets, I agree with Galbraith that there is much the public sector needs to do. Private firms do not automatically provide safe streets, good roads, and clean water. Even more important, Galbraith was dead right in arguing that we need more effective schools. Human capital is our best tool against poverty and economic stagnation.
Galbraith's great failure was that he never really understood how much society is strengthened by a free and competitive private sector. "The Affluent Society" argues that a lack of regulation made American homes inferior to those in European social democracies. That view was wrong in 1958 and is completely untenable today. American housing is the best in the world, and the weaknesses of the housing market reflect too much, not too little, regulation, especially those rules that stymie construction and make housing unaffordable. While Galbraith was right that some social problems do need a stronger public sector, his analysis would read better today if he had also appreciated the tremendous vitality that comes with economic freedom.
1rather than what you might call "conspiracy sociology"
I'm going to be very interested to read this series by Marc Andreessen, but I rather strenuously disagree with this:
Overt sexism aside, from an incentive standpoint the result of shifting from stock options to restricted stock should be obvious: current employees will be incented to preserve value instead of creating value. And new hires will by definition be people who are conservative and change-averse, as the people who want to swing for the fences and get rewarded for creating something new will go somewhere else, where they will receive stock options -- in typically greater volume than anyone will ever grant restricted stock -- and have greater upside.
And sure enough, in the wake of shifting towards restricted stock and away from stock options, Microsoft's stock has been flat as a pancake. The incentive works.
Now, against that, it is true that stock options, particularly for public companies, have an often-destructive random component: they tend to increase in value in rising stock market environments and decrease in value (potentially to zero) in falling stock market environments, regardless of whether value is being created inside your particular company.
For that reason, in the long run it probably makes sense for some new approach to stock-based compensation to be developed that both preserves the motivation to create as opposed to preserve value, but factors out the environmental swings of rising and falling stock markets. Some form of indexing against market averages would probably do the trick. This has been tried from time to time, and I expect it to be tried more in the future, at least for public companies.
This is not the major problem with stock options. The major problem with stock options is twofold: out of the money options encourage managers to take excess risk, because they get nothing if they preserve value, so even a remote chance of boosting the stock price that carries a hefty risk of failure is a good idea for the managers--but a terrible idea for the shareholders.
The other problem is that they encourage short-term misinformation about a company's prospects in order to boost the price long enough to excercise your options and sell the stock. The time of option excercise is one of the few times when an executive can sell his own company's stock without triggering a market reaction.
You will notice that while Microsoft's stock price may not have done much, it also didn't go the way of Pets.com, or even Sun. No compensation system is perfect, but stock options have big problems.
This finding comports with my own experience, both as a student and as a professor. Even attending a state school in the Deep South, my political science and history professors were predominantly (but not exclusively) liberal. But debating them tended to reinforce my conservative leanings. Years later, teaching political science courses to predominantly conservative students, I oftentimes found myself taking a Devil’s Advocate stance simply to force them to challenge their own preconceptions. (Which, on reflection, made me wonder if my own profs hadn’t done the same thing.)
Another thing to keep in mind is that politics simply is a non-factor in most college courses. Even now, when I imagine campus politics, like that in the country as a whole, is more polarized than at any time since the Vietnam era, there’s likely not much political talk in the math, science, engineering, and foreign languages courses.
One thing to think about is that the clear biases of my English professors brewed a certain cynicism in many students. It was so obviously easy to manipulate our professors by turning in sub-standard papers that catered to their political concerns that it was hard to see those beliefs as the product of rigorous analytical thinking.
Bush administration: We were for Medicare reform before we were against it
Stan Collender roundly condemns the Bush administration's complete inaction in Medicare:
I have only one thing to add to what Andrew and Pete, my two bloggers in crime here at Capital Gains and Games, have both posted on the Medicare trustees report: it was facinating to watch the Bush administra
