What you have to realize about bankers is that they are economically rational actors, a.k.a. sociopaths. They want all the money in the world. That's the goal of a corporation in general, but usually a corporation's aims are limited by their share of the market, by the limited number of things they do, by their cash reserves, etc. A financial corporation doesn't inherently do anything useful so it has no limits on the amount of wealth to which it sees itself as entitled.
Like other sociopaths, they realize they can exploit normal people's emotions by claiming to have emotions themselves, as part of the dealmaking process. "Embarrassment", for example. Yeah... that's why we need all of earth's money... because we're "afraid" of being "embarrassed". Those are the kind of words the hu-mans use when they are being manipulative. We can do it too.
'Embarrassment' seems like poor word choice. Isn't the argument here that we were trying hard to prevent (even more of) a bank panic, which would have cost the government (even more) money? Not publicly disclosing exactly how shaky the banks' finances were seems reasonably tailored to that end.
I think embarrassment here is being used to mean something like "appearance of weakness", which was the real worry.
I really don't know what I'm talking about here, and I'm just throwing stuff out. But might "embarrassment" mean "loss of public confidence in the banking system leading to OMG TEH END OF TEH WORLD!!"?
That whole public confidence thing seems to have been important.
2 sounds right. There is a real concern lurking in the background, which is that public perception of problems in the banking system could lead to a run on the banks, which is a bad thing for everyone. I don't think the worry is even so much about costing the government more money as about deepening the recession.
Of course, I have no doubt that bankers will use these real concerns to their advantage in all sorts of selfish and evil ways, but the concern is still there somewhere.
I assume somewhere it is framed not in terms of embarrassment but, eh, some sort of wealth-destroying public doubt, something bad for Main Street. Isn't that the customary way of selling things that would, in a non-bizarro world, call for some sort of accountability?
I don't think the worry is even so much about costing the government more money as about deepening the recession.
Well, one or the other, I suppose is what I was thinking. Doing one to try to prevent the other. Although it's possible that both would have been inevitable.
An "embarrassed" or "humiliated" bank is one the investors or creditors might lose confidence in and then we could have today's equivalent of a "bank run." Since so many of the structured vehicles are essentially "repay on demand" Goldman Sachs can demand instant redemption of its billions in loans, or whatever, and bring the whole system down. As G-S did to Lehmann and AIG, IIRC. And possibly the other dead ones like Merrill-Lynch.
A) the gambling is insane, AFAIK, the bets are instantly callable, in whole or in part.
b) And yes they are sociopaths, but they are not monolithic sociopaths. They have divisions that loan to and borrow from each other and outside, with managers in each division having million dollar bonuses on the line. This is a casino where the house has no bank, and is down in the pits picking roulette numbers with the marks.
The cynical counterargument: the story that public perception was disastrously fragile probably came straight from the banks in the first place.
This is a casino
Ooh! Does this mean we're getting free cocktails?
No, Stanley. We are the ones serving the free cocktails.
9: Right, which seems like a form of moral hazard. (I'm not quite sure that's the right phrase in this context, but you know what I mean.) But I don't think that's really a counterargument: whether the public perception comes from the banks or not, the perception itself is dangerous.
Still, even if "embarrassment" is a misleading word, SECRET LOANS11!1 is still infuriating.
Obviously I should have spelled it SEEKRIT LOANZ11!1
comment by rjs, links to barrons
"week before last week i wrote that one trader controlled 90% of the copper in the warehouses of the london exchange; this week that trader was identified by zero hedge & barrons to be JP Morgan"
Thoma">http://economistsview.typepad.com/economistsview/2010/12/paul-krugman-the-finite-world.html">Thoma Quotes Krugman on Commodities
I'll bet not exactly JPM, but a commodities, maybe the London commodities "division" of JPM. One division, oh mortgages, tells London that are generating twenty billion a month in leverage, will London take ten billion of it for 1 billion a month in interest? London says, sure, we can buy all the copper.
So maybe 1 billion in original home mortages gets leveraged at three successive divisions into 1 trillion in copper.
the story that public perception was disastrously fragile probably came straight from the banks in the first place
This strikes me as pretty bad history.
OTOH, the idea that if we'd just let the financial sector collapse the world would have collapsed along with it did seem to come mostly from the banks, and persons sympathetic to them. I'm still not at all convined that nationalizing the banks and feeding all the bankers to dogs wouldn't have gotten us a better end result.
DeLong linking Mike Konczai of Rortybomb who is terrific
Upon What Meat Hath Our Finance Sector Grown So Great
But that wasn't what I was looking for
ahh, here
Originate And Don't Distribute at Merrill Lynch
Two years before the financial crisis hit, Merrill Lynch confronted a serious problem. No one, not even the bank's own traders, wanted to buy the supposedly safe portions of the mortgage-backed securities Merrill was creating. Bank executives came up with a fix... a new group within Merrill, which took on the bank's money-losing securities. But how to get the group to accept deals that were otherwise unprofitable? They paid them....Within Merrill Lynch, some traders called it a "million for a billion" -- meaning a million dollars in bonus money for every billion taken on in Merrill mortgage securities. Others referred to it as "the subsidy." One former executive called it bribery. The group was being compensated for how much it took, not whether it made money.
that nationalizing the banks and feeding all the bankers to dogs
That's not at all inconsistent with the idea that you needed to avoid a crisis of confidence to protect the economy -- nationalizing the banks would have guaranteed them and provided control, whereas in fact what we did was guarantee them but without asserting control. We could have both avoided the crisis of confidence and had more control over the eventual regulation of the banking system and have meted out some justice if we'd followed the nationalization+feeding to the dogs strategy, which IIRC was the wonkish Krugman-liberal consesnsus at the time.
||
OT: I just noticed this in a recent DeLong post which I assume to be a shout-out of sorts:
Without language it is really difficult to learn from the experience of very many other people: you actually have to see Ogged poke a hornet's nest with a stick. With language it is easy: the cautionary tale of not to do what Ogged did to the hornet's nest can spread rapidly around the entire globe.
|>
At an early point in my life I decided to go with a "too insignificant to mess with" survival strategy.
I'm thinking now I should have gone for "too big to let fail" instead.
18: yeah, of course you needed to avoid a crisis of confidence in order to protect the economy. When I said "just let the financial sector collapse ", I meant the financial sector as we knew it.
Do dogs actually like the taste of bankers? It might be cruel to make them eat bankers, guys.
19: Is the Unfogged archives now required reading in DeLong's Intro to Econ class?
DE LONG ENDORSES PALEO DIET!!!!!
. You got lots of exercise hunting and gathering. But you watched perhaps three-quarters of your children die. But you did have pretty much all your teeth--hunters and gatherers had a low-carbohydrate zero refined sugar diet. That is what life was like between 48,000 BC and 8000 BC. You were physically relatively fit. But populations grew at only the most glacial pace--which means that the odds were good that the jaguar got ya.
Now, you can live like that with no jaguars and POBAD.
16:I am not so sure. It was a small Austrian bank in 1929. We are even more globalized
If we let the banks go, it might the China Central Committee Chairman's Grandson who goes out a window this time, and Grandad will be pissed at the trader who sold his relative shite and walked away with a billion. And pissed at that trader's boss, and pissed at us.
I think the Vampire Squid and its progeny really do have us all by the throat, in shackles and chains.
The real question is why on earth Heebie would have a subscription to The Week.
22 -- I think we probably agree 100% on this.
It was a gift, but I kind of like it. It's a good fit for my attention span.
18:We couldn't can't afford to nationalize the banks.
Lehmann is still in bankruptcy court, trying to resolve all the derivatives, loans, and bets.
Remember they are all callable. Nationalize BofA, and Goldman, which looks great on paper, calls its 3 trillion in "loans", Now. NOW. Or we kill the economy.
The loans may be bullshit vaporware, cancelling each other out, but they are legal vaporware, looking as legit as any other loan.
We didn't have that kind of money, and Congress wouldn't vote for it. Would been revolution, or a different revolution, since we already had one when Obama blinked.
Oh man, DeLong is on fire:
Most people after the invention of agriculture, look to have been quite short. Most people look to have been pretty much toothless and eating corn mash by the time they were 40--if they were alive. Everybody looks to have become a wonderful environment for human diseases: think of a bunch of people living together in a village, talking to each other, coughing at each other, drinking each other's water--the bacteria love it and disease becomes a much bigger deal.
If your adult height is 5'2" for males or 4'11" for females, something has gone very wrong with respect to protein and calcium deprivation. If you were to feed your future children a diet that would make make the boys 5'2" at their adult height, California Child Protective Services would take your children away. But that appears to have been the kind of diet that most human beings seem to have had in the years between 8200 BC and, say, 1800 A.D.
There were, of course, exceptions. The biggest people that the anthropologists have are found so far are in fact the Sioux--the Lakota Indians of the American Great Plains. What is going on? By 1600 a bunch of tame horses imported into America by the Spanish Empire have escaped and run north. These are animals whose ancestors had been tamed and domesticated by humans for 3000. So the Souix can tame them. And all of a sudden the Sioux are no longer dragging their teepees and their other belongings behind them on human or dog-drawn travois as they follow the buffalo. They are riding horses--they can outrun the buffalo.
Suck it, grains and corn!!! Buffalo!
Anyone know of a good breakdown of where the financial industry's profits come from? I'm familiar with the Cowen post passed around several weeks ago that argues the profits are ultimately due to the implicit government guarantee allowing them to accept more risk at below rational prices, but I'm curious about the details.
Read the second link at 17.
I don't think it is about the banks. M-L could set up a second "independent" division to buy vaporware because the lawyers told them they could, and somehow avoid liability.
It's about the fucking lawyers.
33:implicit government guarantee
With all due respect to Tabibi, the banks are not conscious Cthulhus.
It is individual assholes like Lay and Skilling, who breed lesser assholes at the trading desks, all looking to do as much looting as they can legally get away with. Its about the bonuses.
Banks don't pay attention to moral hazard. Nobody cares about corporations or corporate reputations. I have fucking watched Arthur Anderson and Merrill-Lynch die in my lifetime, something I would have believed impossible.
Bankers have a problem with moral hazard.
My grandmother adores her subscription to The Week.
34: It's about the fucking lawyers.
Don't forget Obama.
You know who should die of embarrassment? Scott Adams, that's who.
I'm embarrassed that I've ever laughed at his stupid comic.
So turns out in the end he's the pointy-haired boss.
I'm just having a hard time even fathoming the idea that he's claiming not to be "rich". I have no idea exactly how much he makes, but... seriously??
Oh, but please, please no one read the comments.
42: Oh right, I always forget that shit. Plus black.
I never read the comments anywhere.
45: Neither do I. I'm simple and proud that way.
33
Anyone know of a good breakdown of where the financial industry's profits come from? I'm familiar with the Cowen post passed around several weeks ago that argues the profits are ultimately due to the implicit government guarantee allowing them to accept more risk at below rational prices, but I'm curious about the details.
Yglesias has a somewhat different theory, that the profits come from ripping off the customers and the customers are too stupid to realize this. I have had similar thoughts .
43
I'm just having a hard time even fathoming the idea that he's claiming not to be "rich". I have no idea exactly how much he makes, but... seriously??
By LB's definition he isn't. And are tax brackets above 250000 $/year really such a stupid idea?
50.1: Included in the plans for the home, at the end of Crellin Road, are an 8,476-square-foot attached indoor tennis court and 8,325 square feet of living space, including five bedrooms, a home office and game rooms. ... While the size projections would likely make Adams' home one of the largest, if not the largest home in Pleasanton, the cartoonist emphasized it will be environmentally-friendly.
50.2: Not necessarily, but arguing like a whining douchebag is.
That must be like two tennis courts.
Wow, what an incredibly confused and poorly argued thing that Adams piece is. I mean, the guy's not very bright, is he? I'm a bit surprised.
51
Looks like the Edwards property is (was?) bigger. And was also claimed to be environmentally friendly.
44:Oh right, I always forget that shit. Plus black.
Oh, I doubt you ever forget Obama's black.
Speaking of Identity Politics, Yglesias took a strong stand. The comments aren't so great, although Dan Kervick is becoming a regular at Yggles, and he is always worth reading.
I didn't comment because I am still working on it. Socialists have always had problems competing with identity politics, obviously including nationalisms. Going back to the Post-WWII era is a little ignorant.
So I spent a little time studying the American women's suffrage movement. Not enough to understand its contemporaneous relationship to the labor, anarchist, etc movements.
I'll just note that at the almost exact moment Woodrow Wilson was pushing hard the 19th amendment, he was going to war and crushing the socialists. This is no coincidence, nor irrelevant to modern politics.
54: Did Edwards argue that a higher tax bracket for those over $250K amounted to gang-rape?
then social intolerance becomes a tool of divide and conquer strategies by capital
Look, if Capital enslaves or oppresses everybody equally, divide and conquer will not work. Carrots for a few, sticks for the rest, tell the winners they are morally deserving and the losers are the real enemy.
Capital and liberalism, by means of selective distribution, can create as well as employ social intolerance for its ends.
Oh, I doubt you ever forget Obama's black.
Well, you do bring it up incessantly, so it's not like anybody gets much chance to lose track of it.
58:Check the thread. Stormcrow brought it up at 44. I never mentioned it before that.
Funny how that worked.
His mother was from Kansas or something.
Kenya, Kansas, Kamehameha oh my!
I actually rarely think of or register Obama as black, myself. What I do register is: well-educated. While it's true that numerous other high profile politicians are also well-educated, not a lot of them show it -- one assumes they intentionally hide it, dumb down their language and elocution. Obama's done that to some very small degree, but not much.
(Since I come from a similar educational background, I find Obama's style familiar and to that extent ... comforting? no, just familiar, as though I can read his affect better than I feel able to read that of other politicians.)
It's been my impression that the Elitist! label, or epithet, hasn't really managed to stick to Obama.
66:Better.
My question, reading the Yglesias, was kinda the reverse of his:How did the working class male become the enemy, the Other? Obviously very convenient for Capitalism.
I say working class male (general) leaving out the "white" because black working class males haven't done that great during Matt Yglesias's Golden Age. Prison populations, unemployment, IIRC the demographics if you factor out education and a rise in black women's incomes blacks in general haven't done so well. The black working man is also the Other for the liberal class.
It isn't really about the racism or sexism. Haley Barbour and Larry Summers may get a little constructive feedback, but they still get the good jobs and the great money.
I guess I'm going to have to read Yglesias in order to understand what you're talking about, bob.
How did the working class male become the enemy, the Other? Obviously very convenient for Capitalism.
Like in They Live.
69 sounds like a plan with two very weak links.
71: You can expound on that comment at my forthcoming internet blog site, WeakyLinks.
I don't even remember race.
Has there been porn called "Too Big to Fail" yet?
Ok I slightly withdraw this.comment.1 because as funny as the riffs are, I think "I don't even see race" is a somewhat misdirected meme. When I've heard the statement in question, it's been made in good faith, worth gentle poking-at rather than mockery. Not that anyone here is all that vitriolic about it, but Elsewhere On the Interwaffle....
71: Now, that's rude. bob's talking about the Yglesias post he linked in 55, which, as it turns out, is Y's reflection on a Drum post I read earlier today. Okay: progress!
It doesn't seem to me that Yglesias adds much to what is really a massively complex question -- for one thing, you really do need to know a fair amount about the women's movement's involvement with labor and the decisions made there (the relatively recent Susan Faludi piece in Harper's that was discussed a bit here not too long ago is helpful for the newb, or at least I found it so) in order to get started, it seems to me.
The first thought upon reading the original Drum piece is: wait, why is socioeconomic progress being viewed as a zero-sum game, as though progress in the rights of women and minorities necessarily means a slowing of progress in economic equality?
So I can now add "'Too big to fail' pornography title" to "Princess Leia spanking video" on the list of shameful search strings Unfogged has led me to send to Google today.
Now, that's rude.
Only a little bit.
Has there been porn called "Too Big to Fail" yet?
Pitch it! I can get you a meeting!
Seriously, I grew up with a girl (now a woman, I'm guessing) whose uncle was (is? -- ack, tense is getting confused here) a pr0n king. We discovered this in junior high, much to consternation of the young woman's (split the difference, right?) parents. Anyway, she's since gone on to a semi-illustrious career as a terrible writer of terrible fiction. After being educated at Harvard, of course.
Sorry, the end of that comment was to have read: "See, it call comes back to Yglesias. Narrative arc!"
I'll just note that at the almost exact moment Woodrow Wilson was pushing hard the 19th amendment,
One description of what, exactly, "pushing hard" meant.
On November 15th, 1917, Alice Paul and Lucy Burns, founders of the National American Woman Suffrage Association (NAWSA) were arrested along with 216 other women who had picketed the White House under the Woodrow Wilson administration, bearing signs for the right to vote. By morning, some of the incarcerated women were barely alive. Lucy Burns had been beaten. Her hands had been chained to the cell bars over her head, bleeding and gasping for air. When Alice Paul engaged in a hunger strike, guards tried to force-feed her, tying her to a chair and using a tube to pour liquids down her throat. Thirty-three women endured ongoing torture until word was finally smuggled out to the press.
President Wilson soon realized the need to take action as the clashes between police and suffragist protestors had become highly publicized. In May of 1919, Congress convened a special session, and the amendment was passed in June, one month later. However the conflict was not fully resolved until August 18th, 1920, when all the individual states also ratified the amendment.
74: (the relatively recent Susan Faludi piece in Harper's that was discussed a bit here not too long ago is helpful for the newb, or at least I found it so)
Wait. I just realized I completely fumbled the reference there. I was reading about that stuff a couple of months ago in The Other Women's Movement by one Dorothy Sue Cobble.
Apologies for the confusion.
Yeah, I wasn't go to dive into that swamp, Nick, but Aileen Kraditor, who's pretty much the go-to source (which is weird, because that book is ooooooold) on the struggle for the 19th Amendment, makes no hero of Wilson.
I should add to 80 that I want to like Wilson as a president but I've become convinced that he was actively bad on most issues dealing with minorities of any sort.
He only worried about minorities on the other side of the Atlantic.
Parsimon made me be nice and I said something so dull, it killed the blog.
84: the only minority President Obama cares about is the Senate minority. Amirite?
74
The first thought upon reading the original Drum piece is: wait, why is socioeconomic progress being viewed as a zero-sum game, as though progress in the rights of women and minorities necessarily means a slowing of progress in economic equality?
It's not purely zero-sum but there is a zero sum aspect. People have a limited attention span and more time arguing (and campaigning) for measures that benefit women and minorities means less time arguing (and campaigning) for measures that benefit the poor.
On a not entirely unrelated note it seems to me that the treatment of women and gays in mass market entertainment over the last 30 years (and perhaps longer) has been considerably more favorable than the treatment of unions.
75 So I can now add "'Too big to fail' pornography title" to "Princess Leia spanking video" on the list of shameful search strings Unfogged has led me to send to Google today.
You really should report back the results, or we'll all be forced to Google the same things.
whose uncle was (is? -- ack, tense is getting confused here) a pr0n king.
"Pr0n king" means, like, directing or marketing or something, not acting in them, right?
He was a big-time producer, I think. Wait, let me google him and get back to you. Hmm, Wiki just calls him a "pornographer and businessman". Make of that what you will.
Directing sounds odd to me now. The Ingmar Bergman of pr0n!
89: And was his name Abe Froman? Because if so it's possible you misunderstood her explanation of her uncle's line of work.
My sense is that he was never in front of nor behind the camera. He was a fat cat, smoking cigars in back rooms. You know the type, right?
93 to 89. It's possible there was a New Yorker profile on him. By Eric Schlosser maybe? I don't know.
There was a New Yorker profile on me once. The only job I could find was as a coffee table.
I lost my job to a cardboard box that immigrated illegally.
97: Oh, that's terrible. A member of the Cartel Cartón, no doubt.
95
93 to 89. It's possible there was a New Yorker profile on him. By Eric Schlosser maybe? I don't know.
See here .
98: Stanley, I'm worried. Your illness seems to be progressing. (Honestly: that was pretty funny.)
33 breakdown of where the financial industry's profits come from? :
The profits come from actually making a product the customer wants, and then providing good customer service.
allowing them to accept more risk at below rational prices
I don't think accepting risk at below rational prices is a recipe for profit.
Further research: In _The Dilbert Future_ (1998), Adams predicted, in the future, all barriers to entry
will go away and companies will be forced to form what he call "confusopolies".
Confusopoly: A group of companies with similar products who intentionally confuse customers
instead of competing on price.
The list of industries he identified as already being confusopolies:
Telephone service.
Insurance.
Mortgage loans.
Banking.
Financial servvces.
I sin by responding very latelike.
13: Still, even if "embarrassment" is a misleading word, SECRET LOANS11!1 is still infuriating.
I don't think embarrassment is a misleading description here. There were reasons to worry that if people thought the banks were weak there would be a bank run (because said bank runs were happening on the banks that did fail). HOWEVER, it was also argued (by Paulson) that we couldn't nationalize or otherwise control the banks because that would be anti-capitalistic. Likewise, I am certain that the Fed had every reason to conceal the extent of the loans they were making (they resisted the 'audit the Fed' bill) precisely because it would have been politically embarrassing to admit that those banks were on life support when the Fed (and the banks) were both arguing everything would be OK with the bailout money we gave them if everyone would calm down.
From Bernanke's perspective, embarrassment might have meant sapping support for bailouts or otherwise restricting Fed activities, which, when combined with public fears over the strength of the banks (given the loans they were getting) might have ensured their collapse in a bank run. (Although it ought to be more properly called an 'investor run' in this case.)
Basically, from the word go (the Lehman collapse), the idea of protecting the banking system merged with the idea of protecting individual large banks which merged with the idea of letting execs off the hook. Trying to sort out how much of it was embarrassment of the harmless sort, and how much was protecting the system is close to impossible to sort out. Except of course, you know that embarrassment was a big issue, since we declined, over and over, to punish the bank executives in any real way. (See bonuses.)
So I think saying 'embarrassment' is just fine.
(What's interesting to me is that the extent of the loans and the sheer number of them, when combined with the bailout money they got up front, surely indicates that the banks were not just illiquid (out of operating cash on a temporary basis) but insolvent (their liabilities drastically exceeded their assets). They very possibly still are essentially insolvent. (See mortgage fraud and the endless bogo-foreclosures.) Which means that Bernanke and Geithner (and Paulson) were lying their little heads off about the shape the banks were in at the time. But then, I can understand why they were lying: it is no joke that if all those banks went down to bankruptcy a la Lehman, it would have been a Depression-sized crisis. We have, after all, gone that route before and gosh, that sucked.)
Anywho.
max
['Please to return to your thread now.']
102 makes me want to vote for Bob.
I don't think accepting risk at below rational prices is a recipe for profit.
Of course it is, if all you care about is being profitable this year. IBGYBG, baby.
Or if you know the downside risk can be socialized while you get to keep any gain. Where's my torch?
Sometimes I wonder if the global financial elite wasn't over-exposed to video games during childhood. If you can save/retry, taking the 10 to 1 shot for a 5 to 1 pay-off makes sense.
102
(What's interesting to me is that the extent of the loans and the sheer number of them, when combined with the bailout money they got up front, surely indicates that the banks were not just illiquid (out of operating cash on a temporary basis) but insolvent (their liabilities drastically exceeded their assets). ...
Well except most of the loans have already been paid back in full. According to Felix Salmon even the AIG money is likely to be paid back. There is a notable exception, Fannie Mae and Freddie Mac are into the government for $150 billion and counting. And they continue to accept risk at below rational prices.
But in the context of a world where all the other bailouts -- even AIG, amazingly -- look set to be paid back in full, the fact that we're still pumping billions of new dollars into Frannie only serves to underline how massive and disastrous the agencies' failure was. I'm glad they're still around to make their interest payments. But the only reason they're still around is because Treasury has promised them unlimited funds -- a promise which means they can never go bust, no matter how much money they end up losing.
While there's plenty to be pissed off about in the bailouts, this particular story seems a bit of a non-starter to me, unless it's referring to something completely new, which seems unlikely. All central banks operate lending programmes created to spare banks from having to embarrassingly make their needs known to the public. The Fed and the Bank of England have the discount window, the ECB has the marginal lending facility and the long term refinancing operations. The recipients are routinely kept confidential for fear that they will be subject to depositor (ie Northern Rock) or creditor (ie Lehman, if it had been a bank) runs. There's certainly a strong argument for publishing details after the immediate danger has passed, as ended up happening earlier this year with RBS and Lloyds in the UK (or indeed with the Fed's many programmes), but equally there's a strong argument for secrecy at the time of the loan. While Northern Rock's downfall was ultimately caused by its overreliance on securitisation as a funding source, combined with overly aggressive market share capture (it was originating 25% of all mortgage new lending in the UK in 2007), the proximate cause of its collapse was Robert Peston reporting on the BBC that it had gone to the Bank of England's discount window, which prompted depositors to take all their money out the next day.
wait, why is socioeconomic progress being viewed as a zero-sum game, as though progress in the rights of women and minorities necessarily means a slowing of progress in economic equality?
Indeed. Bob is actually just recapping the DLC/Lieberman/What's the Matter with Kansas line here that the problem is women and minorities, and if you threw them under the bus the Republicans would give you your reward. So capitulate more faster. This is actually a surprisingly common piece of pathological thinking.
BTW, if 90% of the LME float of copper is worth $3bn, you couldn't possibly buy $1tn worth of copper. There isn't enough copper.
109:The lies here by Alex are are astonishing. Look at how these people work.
Lieberman? throw minorities under the bus? the Senator who just pushed thru DADT?
But who opposed the public option? Who supports every tax cut? Obama the DLC President throwing minorities under the bus
And since ther Yglesias and Drum post were about the wonderful social advancement and mediocre economic justice under DLC Presidents like Clinton and Obama
What the fuck is that clown Alex talking about?
I can't argue with liars and psychos that use the exact opposite of the truth.
But then Alex is a person who can instantly find a spot quote on commodities, so we probably understand his (her?) interests in the matter.
I'll just link again to show how Alex and the DLC, which is my mortal enemy, plays this game
Here is Yglesias again.
And this is generally how politics goes in most countries. You have a dominant socio-cultural group allied with the bulk of the business community, and you have a more diffuse "left" coalition of reformers associated with labor unions and minority groups. There's nothing "inconsistent" about organizing politics this way....Yggles
And here is Dan Kervick kicking Yggles disingenuous ass in comments
It seems to me that you are agreeing with Beam more than quibbling with him. The connection you cite between social and cultural conservatism or traditionalism, on the one hand, and free enterprise-loving and government regulation-hating business interests, on the other hand, is an ideologically weak tie, and based on highly contingent historical reasons: temporary commonalities of interest that could easily be reversed.For one thing, social conservatives are hardly the "dominant socio-cultural group" in the United States. And cultural conservative are only hostile to government in the United States because they not the dominant socio-cultural group, and therefore see the government as hostile to their values.
The neo-liberals seek to confuse. But I know that Obama, Geithner, Summers are not the leaders and tools of the anti-business party, no matter how much Alex and Yggles want to use women and minorities to disguise their aristocratic aims.
From Sheldon Wolin Democracy Incorporated, which might be ok for a Princeton guy. How did Princeton get left?
The most important of these was the Share-the-Wealth movementof Huey Long, the Townsend movement for old-age pensions, and the National Union for Social Justice, galvanized by the Catholic priest Father Coughlin, that called for a guaranteed annual wage, the nationalization of public utilities, and the protection of labor unions. The striking feature of the three movements was their success in mobilizing the support of the poor, the unemployed, the workers, small-business owners, and members of the middle class, and accomplishing much of this mobilization through the new medium of national radio.
I am obviously no fan of Father Coughlin. But this shows why a "populist-progressive" axis is more useful for understanding American politics than "Democratic-Republican" or "liberal-conservative"
Glenn Beck is much closer to Father Coughlin than to the economic libertarians.
I wonder where Glenn Beck stands on a guaranteed annual wage, the nationalization of public utilities, and the protection of labor unions.
Alex is a person who can instantly find a spot quote on commodities
Or follow your very own links....
Coincidentally, it's Woodrow Wilson's birthday today. Happy birthday, Mr. Zombie President!
114:Complicated, huh?
On Woodrow Wilson's birthday, I haven't yet brought up the income tax as a substitute for tariffs, partly because I am sure how I feel about it. I do know that the neo-liberals and protectors of wealth play a long and smart game.
I do know that the rich understand money. They will give you all kinds of social "rights" as long as they get all the money, knowing that rights are useless without the money to exercise them. Like free press and abortion, for two. Or health care.
Is it even possible, even ignoring GATT, to set a tariff rate that would raise close to what the federal income tax does?
120
Is it even possible, even ignoring GATT, to set a tariff rate that would raise close to what the federal income tax does?
It appears that the personal federal income tax currently raises about $1 trillion a year and that a $100/barrel tariff on oil would raise about $400 billion/year.
We import $2.5 trillion a year. So a tariff of 40% would match the income tax if there is no accompanying drop in imports (definitely not true). So tariffs in the 60-80% range.
I would include a Tobin tax on int'l capital and financial transactions as a kind of tariff. So, including all cross border capital flows, does this help?
Financial Transaction Tax at Wiki
Estimates between 177 billion and 1.2 trillion a year in revenues.
I think we should have a tax on those annoying fart-can exhaust pipes that the kids these days are putting on the back of their cars to make them all noisy. You could tax by the decibel.
Presumably the idea was to prevent the public from knowing which banks were weakest so that they wouldn't be punished the market. It's a glib, disingenuous spin to say it was about embarrassment.
I couldn't imagine it would be a good idea to replace our reasonably progressive income tax w/ a horribly regressive tariff system (which, by dint of being passed on to consumers, would be the functional equivalent of a regressive sales tax)
"HOWEVER, it was also argued (by Paulson) that we couldn't nationalize or otherwise control the banks because that would be anti-capitalistic"
The animating theory was that we were in a liquidity crisis. If you mistake a liquidity crisis for a solvency crisis and nationalize the banks, the government will wind up spending more than it has to. To date, that looks like it's panned out pretty well (our costs have been lower than those countries - like the UK - that just nationalized troubled banks), although the jury is still sorta out.
A thoughtful and articulate expression of the conundrum, "how the working middle class became the enemy" by Francis Fukuyama ...
http://www.the-american-interest.com/article-bd.cfm?piece=906
"What was truly troubling, however, was that the collapse undermined the fundamental moral justification for material inequality in a politically egalitarian society. Basic to the legitimacy of market capitalism is the efficient market hypothesis--that is, the notion that in a truly competitive market everyone earns something close to his or her "social" rate of return. This means, in other words, that if your investment banker earns 100,000 times as much as your plumber, it's because he or she is contributing roughly 100,000 times as much to society's total pool of wealth."
"The crisis made it glaringly obvious that the efficient market hypothesis was wrong: Oversized returns were flowing to innovative financial entrepreneurs who, in their avidity to create new and more complex financial instruments and products, were destroying rather than creating value for society as a whole."
"Within a year of Barack Obama's inauguration, the most energized and angry people on the American political scene were not the homeowners with subprime mortgages who faced foreclosure as a result of the crisis, but rather those who faulted the government for taking steps to protect those homeowners, and to prevent the crisis from deepening. It was a strange phenomenon that saw many of those most deeply injured by the crisis become, in effect, objective allies of those who caused it."
in the interest of encouraging people to RTFA I would like to point out we are feeding the bankers to HOGS, not dogs.
130: We're just trying one last desperate gambit to lure Emerson back.
In my dark night of the soul
Richard Estes with a long review of Victor Serge's Unforgiving Years with a link to a review to Alexander Berkman Prison Memoirs of an Anarchist in which comments mention Rauchway's book on Czogolsz. Gotta read that someday
Estes ends:
Within the American context, Alexander Berkman recognized that the violence of the state retained a legitimacy that the violence of the individual and non-state groups did not. He never discovered a way out of this dilemma. To this day, the left remains enshackled by it, and until it finds a way to resolve it, capitalist domination through nation states is likely to persist.
I don't know if you can ever de-legitimate state violence.It is what states are, what they do, their reason for existence. You can de-legitimate particular regimes, but the vast majority of their opponents insisted that Bush & Cheney face consequences under the rubric of a state, some kind of legitimated corporate entity. De-legitimating a regime simply says that current power holders aren't true or faithful representatives of the state and its ideals.
But...
Could you, can you legitimate, in public opinion, a private actor or group for the use of violence? Not necessarily against the state, but against the regime, or against other private parties. Once the private actor becomes legitimated, then the State might be become just a flunky a overt and obvious tool of private interests. I am thinking of resisting foreclosures here.
Iraqi or Afghani freedom fighters. (Note:Jane Fonda et al attached themselves to the NV State)
Berkman vs Frick?
Forgot to mention Homestead above
There is scuttlebutt around that the Afghani Imperial Adventure is going to be greatly, and more openly, expanded into Pakistan soon.
I have always thought that Pakistan and the "Islamic Bomb" was always the core target of the American ME aggressions.
132
Could you, can you legitimate, in public opinion, a private actor or group for the use of violence? Not necessarily against the state, but against the regime, or against other private parties. Once the private actor becomes legitimated, then the State might be become just a flunky a overt and obvious tool of private interests. I am thinking of resisting foreclosures here.
I'm thinking Ku Klux Klan.
132: Could you, can you legitimate, in public opinion, a private actor or group for the use of violence?
Isn't that one of the assumptions behind Hollywood films? We ostensibly live in a "free"* and "democratic"** society, and yet everyone can see that the state's monopoly on violence trumps whatever benefits it can provide. Our capitalist imaginary resolves this conflict in the cinema by relentlessly bombarding us with the message that even the people who wrest violence out of the state's control are eventually recuperated into the state hierarchy by the kinder, gentler elements of the bureaucracy. Or, they die.
*If you're not one of the 2,200,000 people in some form of state custody.
**If you are one of the people who can afford to buy a legislator.
in the interest of encouraging people to RTFA I would like to point out we are feeding the bankers to HOGS, not dogs.
Emerson's no longer around much, and as far as I know he was the only person here with a reliable source of banker-eating hogs. I'm afraid Bob's dogs are all we have left.
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I know it's pointless to complain about the political dilettantism of football expert Gregg Easterbrook, but this crap about recycling seems like it was actually written by someone with most of his brain missing.
This issue is not the cleanliness of streets or the environmental benefits of recycling -- it's control of money. The New York City Sanitation Department pays a company called Sims Municipal Recycling about $65 million annually to pick up and recycle metal, glass and aluminum. Notice what's happening here? Recycling is supposed to make economic sense. If it did, the recycling company would be paying the city. Instead, the city is paying the company. Montgomery County, Md., my home county, imposed recycling rules saying they made economic sense. Now the county charges homeowners $210 annually as a recycling tax. If recycling made economic sense, government would pay homeowners for the privilege of picking up their valuable materials. Instead, New York City, Montgomery County and many other government bodies charge citizens for something they claim makes economic sense.
No, recycling is not necessarily supposed to make economic sense, it's supposed to recycle things.
Recycling of aluminum makes good economic sense, given the energy cost of aluminum and the high quality of recycled aluminum. Depending where you are in the country, recycling of newspapers might make sense. Recycling of steel and cooper usually makes sense. But recycling of glass, most plastics and coated paper is a net waste of energy. Often the goal of government-imposed recycling program is to use lack of understanding of economics to reach into citizens' pockets and forcibly extract money that bureaucrats can control.
And even MORE often, the goal of government-imposed recycling program is to recycle things. You could at least CONSIDER that as an option.
Notice what else is happening here -- New York City pays a company millions of dollars to do something "thieves" will do for free. The "thieves" harm no one, and could save New York City taxpayers considerable money. But then bureaucrats wouldn't be in control. And surely no-show jobs and kickbacks have nothing, absolutely nothing, to do with New York City sanitation contracts.
No, what the "thieves" do is strip the appliances for one thing they want (or as you would say, the one thing that it makes economic sense for them to want), and then throw the rest away. That's not recycling.
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138: Also he might note that it costs money to pick up the trash and keep it in dumps too.
football expertcolumnist Gregg Easterbrook
Let's not concede more than we have to.
Best friends forever! If they let us have knives here, I would carve it in a tree. FOREVER!
So why would you want to get rid of income tax, and if the idea is that the far Right would like it, what is it that you hope to get out of them? Seriously, from this European socialist's point of view, getting rid of income tax sounds like a huge present to the rich that would also gut the public budget. (I know that the US federal budget has a rather different structure to ours.)
Also, Bob, if you were thinking of getting up a campaign of mass anti-eviction protests, it wouldn't be the first time it's been done, and we're getting on pretty well picketing tax-evaders over here. That, I think would be a genuinely good idea. Hey, the last demo I went on was a washout because the target, the London Lib Dems, cancelled their conference because they were afraid of the mob.
144:I do thought experiments, not policy proposals. I try to understand, not necessarily plan. Too many people misunderstand what I do.
Tariffs bad for farmers, good for manufacturing during periods of globalization...or at least those were the old dividing lines. Tariffs meant jobs retained and created.
But the work was in understanding Wilson as proto-neo-liberal. The income tax, as we have seen, can easily be lowered with much less resistance than for example the passing of NAFTA.
I look at what was done, and what the consequences were instead of any ideal policy. The first two are hard enough.
145:IIRC, we had armed resistance to evictions in the early 30s here, accelerating until FDR had to take the steps he took.
But I am also looking at the Berkman dilemma of #132:how to de-legitimate a state, or create a counter-legitimate N-G actor. The usual story involves things like 1905 or Tiananman or Prague 68 or Selma etc where a gov't overreacts and loses legitimacy but i see that, as I said, as simply setting the stage for a regime change of rotating elites. NP and Flipp probably know a lot more than I do, feels anarchist. Probably just boils down to vanguardist revolution again.
Remember I am studying 20th century Japan right now. I don't need jpe to tell trade restictions are always bad for everybody.
The real crazy idea is the Wilson, with the Federal Reserve and income tax, was already moving toward the long-term disempowerment of labour.
I am not opposed to the income tax, but suspicious of transfer payments, and my own ideal is ELR gov't guaranteed full employment at insanely high wage rates.
I do thought experiments bloviating, not policy proposals
FTFY.
148:You cosplayl Max Baucus, dude, if it makes you feel involved. I think most of the blogosphere is stark raving, with their "Why not 65% top marginal rates?" wetdreams.
We peasants don't make policy. We do theory, then we burn shit down.
I hate it when I think of a good insult and then put in a typo.
Or when you forget the whole pseud.
Anyway, I'm going to steal the whole, "You cosplay xxx if it makes you feel xxx" formula. As long as I don't use it at the office or with mom, it'll be great.
You cosplay Jack Nicholson, dude, if it makes you feel productive.
I like it.
You cosplay June Cleaver, dude, if it makes you feel horny.