I know he’s Brad Pitt and all and is probably pretty secure in that, but I wouldn’t let Angelina Jolie anywhere near Bill Clinton if I were him. Ms. Jolie has lost a lot of weight lately, but she is totally the ol’ hound dog’s type. And Ms. Jolie was married to Billy Bob Thorton so we know she has a high tolerance for dried up, grey old guys and vulgar male pantings in that dopy Southern accent.
Lawrence Summers has an editorial in yesterday’s Financial Times arguing against excess concern with moral hazard (“Beware the Moral Hazard Fundamentalists,” 24 September 2007, p. 11). It is a well deserved and long overdue point. Whenever an economic crisis looms, the usual suspects trot out all the laissez faire tut-tuting. It was probably a day or two after the major news stories about the most recent central bank interventions that The Wall Street Journal editorial page started in with the boiler plate about how a few routine government interventions today spelled cataclysm of serfdom down the road. Mr. Summers’s editorial or others like it should be kept at the ready at more responsible economic editorial boards around the country.
I’m going to refrain from reposting Mr. Summers’s analysis because it is long, but it is worth reading at the link. It is worth noting that Mr. Summers doesn’t split hairs about the significance of his argument though.
Moral hazard fundamentalists misunderstand the insurance analogy, fail to recognise the special features of public actions to maintain confidence in the financial sector and conflate what are in fact quite different policy issues. As a consequence, their proposed policies, if followed, would reduce the efficiency of the financial sector in normal times, exacerbate financial crises and increase economic instability.
Mr. Summers’s three points of contention all argue that moral hazard, as its soothsayers characterize it, does not in fact obtain. I’m not an economist, but I’m going to go further and suggest that even if it did, under sufficiently dire circumstances, we still shouldn’t concern ourselves too much with it.
The economy isn’t a system that admits a state of perfect tune, but instead of optimization. Many factors trade off and the object is a state of affairs where maximum benefit is derived from a given factor without the deleterious effects of said factor overwhelming the positive. The Philips curve or patent protection are good examples, but others abound. It’s part of the power of economic-like thinking. And the economy is dynamic: the advantageousness or deleteriousness of a certain ratio of factors may change with time, or in relation to a third factor. For instance, central banks may have an easier time controlling inflation and may be able to do so at lower rates of interest when governments balance their budgets.
Given a dynamic balance of harms and advantages, moral hazard is a factor like any other. Moral hazard trades off with other objectives. Like the present, the most common example that people point to where it trades off is with capitol liquidity. Mr. Summers compiles a good list of examples of so objected government programs to preserve liquidity.
Moral hazard is indeed something to be minimized when times are good, it’s affordable, and its harms relatively troubling compared to the mix of harms on the horizon. But it is a goal to be relaxed when its attainment becomes extremely costly in the face of our other goals.
Think of it like this. Not spilling hot coffee in out lap is one of our objectives and under most circumstances it’s a pretty affordable one. On the go, you may have to drink from one of those sippy-cups and lean into a swig as an extra precaution, but still pretty easy. When suddenly an oncoming car swerves mid-coffee-sip into your lane, the equation shifts and the time, attention and dexterity to maneuver the coffee cup into your car’s dashboard cup holder becomes unaffordable. In order to achieve some of your other goals, you may forgo the no-hot-coffee-in-lap objective and just drop the damn cup to get the second hand on the steering wheel in a timely fashion.
When faced with a potential economic crisis, a little moral hazard may be an acceptable sacrifice. So long as the government preserves an element of roulette and just deserts in who survives and who perishes in a crisis and cultivates a reputation of preferred laissez faire — or at least an adequate amount of uncertainty about where and when it will intervene — then economic actors will remain sufficiently terrified about the future as to plan accordingly.
Also in nuclear news, despite some pretty severe smack-downs from some prominent names in the arms control community, Glenn Kessler and the Washington Post are apparently sticking by their story that Israel bombed a Syrian nuclear installation on 6 September 2007 (“Israel, U.S. Shared Data On Suspected Nuclear Site,” 21 September 2007, p. A1).
Joseph Cirincione, coauthor of the widely consulted reference, Deadly Arsenals: Nuclear, Biological and Chemical Threats, calls this story “nonsense” (“North Korea-Syria Nuclear Ties: Déjà Vu All Over Again?,” Foreign Policy, Passport, 14 September 2007) and Jeffrey Lewis of Arms Control Wonk goes so far as to call it “bullshit” (“Did Israel Strike a Syrian Nuclear Facility?, 16 September 2007). Mr. Cirincione writes and Mr. Lewis excerpts approvingly:
The Washington Post story should have been headlined “White House Officials Try to Push North Korea-Syria Connection.” This is a political story, not a threat story. The mainstream media seems to have learned nothing from the run-up to war in Iraq. It is a sad commentary on how selective leaks from administration officials who have repeatedly misled the press are still treated as if they were absolute truth. Once again, this appears to be the work of a small group of officials leaking cherry-picked, unvetted “intelligence” to key reporters in order to promote a preexisting political agenda.
This is definitely the administration that has cried wolf too many times, but the Washington Post article seems pretty heavily sourced. And I don’t believe that Syria is an Israeli bombing range where the IDF just flies out for practice missions. If they went in, they must have had some pretty serious concerns. I’m going to need a lot more than unnamed Bush officials and bluster before passing judgment on this story.
The Washington Post put a major story about the six nuclear armed cruise missiles unwittingly flown across the country on the cover of the weekend edition (Pincus, Walter and Joby Warrick, “The Saga of a Bent Spear,” 23 September 2007, p. A1). Details on the exact point of failure remain under wraps, but it sounds like an instance of a single failure leading to a chain of subsequent failures.
The article goes on to point out that this is just the final, high-profile outcome of a longstanding, but not yet newsworthy problem:
A secret 1998 history of the Air Combat Command warned of “diminished attention for even ‘the minimum standards’ of nuclear weapons’ maintenance, support and security” once such arms became less vital, according to a declassified copy obtained by Hans Kristensen, director of the Federation of American Scientists’ nuclear information project.
The Air Force’s inspector general in 2003 found that half of the “nuclear surety” inspections conducted that year resulted in failing grades — the worst performance since inspections of weapons-handling began. Minot’s 5th Bomb Wing was among the units that failed, and the Louisiana-based 2nd Bomb Wing at Barksdale garnered an unsatisfactory rating in 2005.
Both units passed subsequent nuclear inspections, and Minot was given high marks in a 2006 inspection. The 2003 report on the 5th Bomb Wing attributed its poor performance to the demands of supporting combat operations in Iraq and Afghanistan. Wartime stresses had “resulted in a lack of time to focus and practice nuclear operations,” the report stated.
It’s worth noting that it’s not just the Army that is being degraded by the excess demands of the administration’s war in Iraq.
John isn’t the only liberal who likes guns. Here’s Matthew Yglesias and Ezra Klein. And Yglesias is doing it with style!
I imagine John a lot more Eddie Bauer, whether it’s out fly fishing or carrying his concealed piece. With a cable-knit sweater and mock turtleneck you can’t very effectively wear one of those cool strappy holsters that situate your gun high under the arm (there’s probably a lesser-known leather-man fetish around these holsters), but the ankle holster is pretty cool too. It results in some awesome crouched action poses. Or maybe John has two sawed-off shotguns rigged up his sleeves a lá John Conner in the first Terminator film.
When Violet Blue posted that she had been invited to appear on the Tyra Banks Show to talk about women and pornography, I thought that maybe there was a dollop of intelligence to be found somewhere in the daytime television world, that maybe there was something slightly enlightened about Tyra Banks (she did tell reporters to “Kiss my fat ass” when the usual rags had run some stories about how she may have put on some weight). Well, Ms. Blue has the post-taping report up (“Tyra Banks Show — *Not* America’s Next Top Blogger,” Open Source Sex, 20 September 2007) and it sounds like daytime television remains the wasteland of small-mindedness and petty sadism that I remember it.
[Annotation (3 September 2011): in a previous incarnation, this blog was titled “This is Not a Dinner Party”]
Via Andrew Sullivan, a particularly scathing review by A. A. Gill (“Put Not Your Faith in Comedians,” Times (London), 16 September 2007) of television show, The Dinner Party:
Finally, and most awe-inspiringly, that someone sat down at a keyboard, tapped away and made The Dinner Party — a crippling, dribbling, mewling homunculus of plagiarism. And, having done it, they didn’t turn white and book themselves into an ashram. They said: “This is cool. I’ll show it to the grown-ups”, and pressed Send. The next time this writer sees his or her name in print, I abjectly pray it’s under “Employee of the month” at Burger King.
One of the titles that we considered for this blog was homunculus. But I remind you, this is not a dinner party.
So it’s great that The New York Times Select wall has come down. I always told myself that if The New York Times went subscription, I would subscribe. It’s too important to do without. But instead of making such a cut-and-dry situation, they only made part of their content subscription, so I didn’t know what to do. I wanted to read Paul Krugman, but I could buy the paper off the stand for $2.00 per week, or $8.00 per month — $1.00 more than the Select subscription rate. The extra $1.00 was totally worth it to not be exposed to the rest of The New York Times’s lackluster editorial page. As much as I wanted the ease of access to Paul Krugman, I just couldn’t bring myself to pay for the rest of those dismal nobodies.
How is it that “the paper of record” ended up with such a weak stable? If I were in charge, I would keep Krugman, Brooks and Friedman and dump the rest in favor of a real feisty debate — not the thin gruel they are currently serving up. That would leave six slots to fill. I would pick maybe two real devotees each, right and left and two people rightish and leftish, but unorthodox and hard to pin down. The amazing thing is that such a bunch of mediocrits have the megaphone of The New York Times editorial page when so many amazing talents are backbenched at lesser read magazines like The Progressive, The American Conservative et cetera. Time for some promotions.
On the right I’d get someone smart — not a hack — who can occasionally refrain from reworking party talking points. Say Max Boot or David Frum. For the two on the left I would definitely go with Barbara Ehrenreich. She filled in for Thomas Friedman for a few weeks once and it was great and she would help to make up for the shameful lack of women on the page. Then maybe someone like Rick Pearlstein, Thomas Frank or Jonathan Chait. For the hard to pin down I would go with someone like Andrew Sullivan, Christopher Hitchens, Michael Lind or Virginia Postrel.
Check that, I’d fire Thomas Friedman too and replace him with someone similar, but less Howdy Doody. Maybe Fareed Zakaria if he could be lured away from his already pretty sweet post at Newsweek or Andrew Bacevich — he could double as the hard to pin down as well.
More important than anything else is that is that Maureen Dowd be forced back behind some — any — kind of wall. She’s like a Ritalin sedated cross between Bertie Wooster’s aunt Dahlia and Carrie Bradshaw. Does the left really need its own Peggy Noonan? And yet has anyone ever done so much damage to the left, irregardless of which way she turns her poison pen? Her petty rages against the left are the purest breed of the once established, insurmountable standard narratives that capture media coverage and yet her juvenile sprite-bitch screeds against the right are frame-ready examples of the right-wing character of the left. And I swear, no one is working so relentlessly to undermine the feminist cause as Dowd with her preening, prissy socialite stylings. When I read her column I need to remind myself that she is a freak and that women are in fact capable of serious thought. Do you know that she actually won a Pulitzer? What can that possibly mean?
I see that her current column is already the most e-mailed article on the site. She could be ignored as a writer more suited to Entertainment Tonight were this not the ase twice a week. It’s enough to make me think that Ann Coulter is on to something with her descriptions of peevish, smug, small-minded Upper West Siders.
From the Hell Is Other People Files comes this great cover story from last week’s New York Magazine about a man who decided to take the eat local movement to the next step and tried to eat only out of his own back yard … in Brooklyn. On the cover, the story is billed as “Green 1/55th of an Acre,” though inside the title is “My Empire of Dirt,” (Manny Howard, 17 September 2007, pp. 22-29 & 107-108). A significant subplot of the story is just how much this little venture pissed off his wife. Mr. Howard recounts the following story:
Then came the last straw. The following afternoon, Caleb and I constructed most of a high-rise chicken coop in a few hours. We decided on a vertical design filled with ramps so that it would take up a minimum of the garden’s square footage (another concession to our urban setting). We equipped it with wheels and tracks so the poop could be removed from under it and the coop rolled back into place. The work was going well. At about 5:30 p.m., Caleb scrubbed up and got on his bike in order to get home in time to tidy up and attend his bartending class. At 6:30, I was putting the finishing touches on the rig. Inspired by the coop design in Nick Park’s animated film Chicken Run, I was using the table saw to mill eight-inch plywood into strips to make footholds for the entrance ramp when the blade of the saw tagged my right pinkie, destroying the second knuckle. Parts of my finger were left on the saw and on the ground.
I pried my cell phone out of my work pants using my left hand and, holding my right hand above my head, called Josh, a childhood friend who is now a firefighter and, more to the point, lives around the corner. He ran over immediately and field-dressed the mangled wound while I stood there scared—not so much of the wound, which I figured was not going to kill me, but of Lisa, who probably would. I expected her to come through the door with the kids at any moment. After another long day at the office, this would be quite a scene for her to stumble into.
Deciding not to take me to an emergency room, where we’d get stuck at the end of a long queue, Josh located a hand surgeon named Danny Fong on Canal Street, and he agreed to see me and my pinkie immediately. But before we could get out the door, Lisa turned up with Heath and Jake. Before even a hello, I said, as casually as I could muster, “Hon, I’ve banged my finger and I need to go to the doctor.”
“How?” she asked. “How bad?”
“Not too bad,” I lied. Then I came clean: “With the table saw.”
She screamed in anguished frustration. She couldn’t just resent me for my silly folly; now that I’d maimed myself in the process, she had to feel sympathy too.
Behind every enthusiast or eccentric stands a spouse decidedly less than amused, doing their part to reign in these outliers of spirit. In some ways we all support one another, but in demanding support in return, we all collude in deadening each other.
Dan Savage strikes a forward-looking tone in discussing some organizational changes at The Stranger (“The More Things Change,” SLOG, 19 September 2007):
You’re reading this online, so you’re probably aware that The Stranger isn’t just a newspaper anymore: In addition to our weekly print edition, we’ve got blogs, podcasts, video, tons of expanded web content, and the occasional amateur porn contest. In order to manage the growth of our editorial content — in order to keep putting out Seattle’s only newspaper while at the same time running the best alt-weekly website in the country — we’ve had to change our editorial department’s structure.
Media is changing, as inevitably it will under the pressure of technology. One can be matter-of-fact about it, or try to get out ahead of it and shape the coming new world or one can endure the slow extinction of a species whose ecological niche is dwindling. “The Stranger isn’t just a newspaper anymore.” What a breath of fresh air. And this from a man who just two years ago wrote as a guest blogger (“Who Am I? Why Am I Here?, Daily Dish, 8 August 2005),
“Savage Love” readers have been asking me to start a blog of my own for, oh, six or seven years now and I’ve resisted. I’m a Luddite, I confess, one of the ways in which my deeply conservative soul expresses itself. It was only a few years ago that I started accepting email at “Savage Love” …
This reminds me that Matthew Yglesias had a subdued blog-triumphalism mini-kick back in July-August that unlike most blog-triumphalism was really pretty interesting.
“Now With Charts,” The Atlantic.com, 24 July 2007
This is a reminder, I think, of why we should look forward to the day when the op-ed column is a dead format and everyone just blogs. Brooks’ original column would, obviously, have been better if it — like Nyhan’s reply — had come with links to data and charts. What’s more, it’d be good if we could expect Brooks to reply to the sort of criticisms he’s getting from Nyhan, Dean Baker, and others. Maybe he has something fascinating to say on his own behalf. But the way the columnizing world works, there’s almost no chance he’ll address his next column to trying to rebut the critics of this one. But a back-and-forth debate on this subject with links and charts and data would be much more interesting than what we’re going to get instead where liberals decide Brooks is a liar and Brooks remains convinced that liberals are crazy.
“Better Get a New Job,” The Atlantic.com, 19 August 2007
As Kevin Drum says there was no crowding out here where what Marty Lederman or Duncan Black or Andrew or I were doing somehow made it more difficult for newspapers to do investigative reporting. If anything, the reverse is true. The widespread availability of a vast sea of armchair analysis and commentary on the internet will, over time, force large, professionalized news organizations to focus on their core, hard-to-duplicate competencies — and spend less time on the sort of fact-averse punditry Skube’s doing right here.
It was easier to see the harrumphing of the recording industry as what it was: the slothful groan of the vested interest in the face of a new upstart. There was too much crass money lying around for us to not see through all their protestations about art. Journalists and writers have a more subtly wrought tale to spin.
I particularly like Mr. Yglesias’s second point. The bloggosphere and the mainstream media are like countries in the economist’s parable of comparative advantage. And like the citizenry of those countries, bloggers and journalists can’t help but see the shifts and specialization from which the advantage arises as anything but threatening. “They took our jobs.”
It’s worth noting that in the theory of comparative advantage both countries benefit from specialization even when one country is superior at all activities in question. Perhaps it won’t matter so much that bloggers are just a bunch of guys in their pajamas and that politicians have learned how to game the press.
Marching Under Banners 