There’s no way you are actually accomplishing work this week, is there? Here’s some really good wonk stuff I’ve read recently online:
– Ryan Avent on Bernanke’s testimony and Person of the Year award.
– Felix Salmon makes a list of the Fed’s regulatory errors after reading this excellent Washington Post piece. It’s amazing to me how much the current ideas behind the Frank bill codify the problems Felix points out: “Overreliance on internal bank risk officers…” is the living will concept, “A touching belief in securitization and triple-A credit ratings” is still there and the Fed’s new methodology of risk states for the largest institutions is strikingly similar to that original ratings style, “A feeling that banks had to be able to compete…” is the argument for returns to scale (and the implicit justification behind the fact that the largest institutions are now getting bigger as a result of government action).
– Ezra Klein responds to Jane Hamsher’s 10 reasons to kill the bill, the critique of the Health Care bill from the left. I’m excited to get the Health Care bill behind us if only for Ezra’s mental health.
– Yglesias and Krugman (and to a an extent, Kevin Drum) have said that financial reform should be the issue that the left doesn’t compromise on: “So there’s a strong case for coming out swinging against denouncing a too-weak [financial] bill as a sham and drawing some bright lines.” Nice. I’ll do my best in 2010 to help pick the spots where we dig the trenches.
– Noam Scheiber on how top MBAs moving from business to finance both as an educational curriculum and a matter of job desirability has left us with an interesting question: could anyone manage a rise in manufacturing anymore? I’m reading this fascinating ethnography of Wall Street analysts (more on which later), so I’m very interested in the fashioning of our current business elite these days, and I think this change is important across the board. As a practical matter, the rise of “management consulting”, the other big boom market for elite MBAs next to investment banking, could be able to address Noam’s worries about manufacturing – but does it? (Paging James…)
– Visiting home for the holidays, it’s amazing to me how certain groups of friends, who I mostly considered in the generic Republicans/conservatives camp, have been wading deeper into the Ron Paul territory. “Abolish the Fed” is one thing, but what surprised me the most was when I was at a Christmas party several people mentioned, fairly out of nowhere, how bad FDIC is for the economy. I think they thought that regular depositors could have done a better job vetting financial institutions than major sophisticated shareholders. When I tried to point out how if there wasn’t FDIC and millions of savings accounts were getting wiped out in ordinary bank runs we’d almost certainly have a wave of turn-of-the-last-century style violence that is hard for us to even imagine now – think bomb throwing anarchist violence – they seemed to be ok with that.
What have you been reading?
Rortybomb 
Re: Ron Paul territory, those people are simply disturbed. They are alienated and angry and tyrannical. They are not democrats (small ‘d’). They do not accept the messiness of pluralism; they can’t. They are too rigid.
I am sorry that you have people like this close to you in your life, but truly it is pathological. There are versions of this on the Left as well, make no mistake.
Absolutism, rigidity, and a willingness to tolerate violence are bad stuff. No two ways about it.
I think there is a difference between extreme views and being disturbed. And I don’t think Ron Paul or many of his followers are disturbed. He has many good points. And it’s not too bad to have someone out there letting the Federal Reserve know, they are like any other part of the system that doesn’t do it’s job or is not beneficial—THEY ARE EXPENDABLE.
I have to disagree with Dennis. Ron Paulism is expanding because the left has left has neglected to create a populist answer to this crisis and left the field wide open for these crazies. These people want answers and those of this blog doesn’t seem to reach them.
It has nothing to do with pluralism or pathology; it is deep anger, just like ours, at what’s happening in front of us and the total disconnect between our economic elite and the common people. It is a very profound feeling and progressives will have to learn to tap it or will be crushed by it.
Hey Mike, are you taking CD or music download recommendations??? “Them Crooked Vultures” freaking rocks dude! The singles “Scumbag Blues” and “Elephant” are 2 of the better ones.
A couple of recommendations:
– Nate Silver had an interesting take on the stimulus: http://www.fivethirtyeight.com/2009/12/greg-mankiw-stimulus-critic-so-wrong.html
– John Quiggin also has some draft chapters of his book-in-progress (for the econ folk) over at Crooked Timber, all of which make for fun reads.
– Matt Yglesias has been linking to news stories on Pakistan; for anyone interested in the history (beyond the pathetic summaries found in most of the media), there’s a great- if slightly old- list available here: http://www.chapatimystery.com/archives/homistan/readings_on_pakistan.html
Happy holidays!
The most appealing explanation I’ve read for the conspiracy/revolution talk among a broad swathe of the right goes like this:
0) America’s 2-party system is increasingly manichean post-Jim Crow (and especially post ’94).
1) In the current alignment, the R’s own the “we’re-the-REAL-Americans” crowd.
2) Obama comes after the South has lost all hold on Congress, meaning that crowd really have no representation that can pass a law or enforce a policy. Politics really is black and white, and Obama is Black, and they are White.
3) As a matter of both strategy and internal dynamics, elected Republicans are pursuing a “pure minority” strategy which heightens the Manichean atmosphere.
4) The economy and the government really are big and scary to rational observers.
5) Per your writing, the bankers and the Fed really are strongly influencing the government on behalf of Wall St. against most of us, with the connivance of our nominal “representatives” who really are bribed and mostly not subject to electoral discipline.
6) That the Republican party and their own nativism/racism –their own tribe, in other words — is a primary efficient cause and a significant moral agent in all of this is not something they are going to grapple with for reasons of common/universal human psychology.
7) The very real sense of powerlessness caused by (1)-(5) leads directly to extremism-in-the-defense-of-liberty talk, again because of universal human psychology.
Per Yglesias recently I think the chicken-and-egg problem of an electoral minority adapting more extreme policy positions as its influence on actual policy declines, with the crucial exception of a sporadic veto on the majority’s efforts, is a dangerous development for the health of our civic society. Your relative’s crazy talk IS crazy, but it’s the logical consequence of the situation.
Your friends’ skepticism of the FDIC prompts a reading suggestion (for them):
“Are there no prisons?” asked Scrooge.
what makes you think “elite MBAs” are the only people who know how to run a factory? The worship of the higher classes is not very flattering, nor will it produce results different from what we have already experienced.
In answer to the question you pose at the end, I’ve been mired in “Atlas Shrugged” and wondering about a world in which the strong vanish into a hidden valley as a protest aainst taxation with representation…
OK, it’s near Christmas, I’m not gonna say anything bad about Ayn Rand….. or say anything bad about Ayn Rand’s writing….. not gonna do it…..
Ted, in that you’re letting the spirit of Christmas get in the way of an expression of your true feelings, I can surmise that you are not a Randian. John Galt would never be swept away by “tidings of comfort and joy…” He is, after all, the man who said:
“I swear-by my life and my love of it-that I will never live for the sake of another man, nor ask another man to live for mine.” (Obviously a man without children!)
Sounds like you and I are on the same page when it comes to Ayn Rand.
Can you recommend any good, recent papers on microstructure? With exchanges and clearinghouses in the news (ICE Trust, CBOE: http://www.ft.com/cms/s/0/7211658e-ef27-11de-86c4-00144feab49a.html?nclick_check=1) and on the regulatory agenda, this would be a good time to start delving into the nitty-gritty of market infrastructure. Especially with the repo market being reexamined. (http://www.newyorkfed.org/prc/report_091222.pdf)
«with the connivance of our nominal “representatives” who really are bribed and mostly not subject to electoral discipline.»
That the powers-that-be can override the will of voters and democracy (“electoral discipline”) is not working is one of the most enduring myths that progressive love to delude themselves with.
The policies of the last 15 years since Gingrich’s Contract On America (and Reagan’s Involution before that) are very popular indeed, and REAL AMERICAN voters have endorsed them enthusiastically.
Do you think that Republican and Blue Dog Senators are thinking “oh sure bubbles/PATRIOT/Iraq/TARP/… are very unpopular, but I vote for them even if it is going to cost my re-election?”.
Voters are not babes in the wood, misled by the MSM and unable to change their corrupt, authoritarian representatives.
They very corrupt, authoritarian themselves; the key figure is that 70% of voters (those who actually vote) are rentiers, petty landlords, and the percentage of retired or middle aged voters about to retire is much higher than it useed to be (and IIRC campaign donors are 100% middle aged/pensioner petty rentiers).
The majority of voters are only extraordinarily pleased by policies that create bubbles that result in huge tax free capital gains for them, and by policies that reduce wages and employment driving down the costs of what they buy with those capital gains. They also want more repression, more wars, more brutality against suspects, safety at any cost (any cost to brown or dark skinned nobodies).
As Grover Norquist has been boasting, the strategy of turning the middle class into petty rentiers has created a permanent conservative and authoritarian voter culture, and the triangulating or Blue Dog democrats (or New Labour in the UK) have learned that to win electorally they must pander to those voters first and foremost.
««with the connivance of our nominal “representatives” who really are bribed and mostly not subject to electoral discipline.»
That the powers-that-be can override the will of voters and democracy (“electoral discipline”) is not working is one of the most enduring myths that progressive love to delude themselves with.»
Let me add some historical parallel: Dixie voters overwhelmingly supported the war for slavery, and went enthusiastically to die for slavery in their hundreds of thousands, and many kept determinedly fighting for it even after military defeat and ruin.
The Slavery War was not created solely by «nominal “representatives” who really are bribed and mostly not subject to electoral discipline.» (even if there is evidence that a plurality if not a majority of Dixie whites were not in favour of the war).
There is a mean, vicious, petty aspect of USA culture (e.g. plague blankets sent to the Indians in winter to clear out land for speculation), a “WINNERS do whatever it takes, and good riddance the losers” culture, and it has become more popular (also I think thanks to Ayn Rand concentrated delivery of it in her writings).
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