Much wailing and gnashing of teeth by the left on Obama's supposed inability to corral Democratic members of Congress to do his bidding. Already, the spectres of the ineffectual Carter and 1st term Clinton administrations are being raised to illustrate what seems fated to befall this administration. Apparently the fractious and independent congressional Dems like Ben Nelson and co. will gum up the works because of a failure of FDR or JFK-like leadership on the Prez's part.
Ambinder rightly calls balderdash on this meme, in a post which will hopefully help nip it in the bud. He rightly points out that Obama and the Dems are in this position because of strength, rather than weakness. In the Carter and 1st term Clinton administrations, Democratic control of the House and Senate was much narrower than it is today. Consequently, in lieu of having a bunch of extra Republicans in congress, we have a bunch of Democrats who are from states that have a sizeable number of Republican voters. All in all this is a far better situation, even if some of these moderate or conservative democrats go off the reservation from time to time, or have to prove their deficit hawk bona fides by watering down the stimulus package.
It's also important to remember that, even if some Dems defect, Obama is achieving better party unity than either Clinton or Carter. Obama had no Senate defections and 7 house defections from the stimulus plan, compared to six senate and 41 house defections from Clinton's 1993 economic plan.
The real impediment for Obama is the significant increase in filibusters, which nowadays essentially forces a 60 vote supermajority on all non-budget-reconciliation senate votes. Had today's filibuster been in place 15 years ago, Clinton wouldn't have passed much of anything. Even with 58 Senators and great party loyalty, Obama is held over a barrel by moderate senators who can extact dilutions of his reforms as the price of getting cloture.
Tuesday, March 31, 2009
Sequestering Carbon in Concrete
Every year, the world produces about 6 billion cubic yards of concrete. New technologies raise the possibility that instead of having that concrete add to atmospheric carbon (through the manufacturing of concrete component Portland cement, which is the source of about 5% of carbon emissions), concrete could actually sequester carbon that would otherwise be emitted from power and industrial sources.
The most evil people?
James Webb, author of an interesting new criminal justice reform bill:
Let's start with a premise that I don't think a lot of Americans are aware of. We have five percent of the world's population; we have 25 percent of the world's known prison population. There are only two possibilities here: either we have the most evil people on earth living in the United States; or we are doing something dramatically wrong in terms of how we approach the issue of criminal justice...
Let's start with a premise that I don't think a lot of Americans are aware of. We have five percent of the world's population; we have 25 percent of the world's known prison population. There are only two possibilities here: either we have the most evil people on earth living in the United States; or we are doing something dramatically wrong in terms of how we approach the issue of criminal justice...
Monday, March 30, 2009
Utica
Congratulations to my old stomping ground Utica, New York, following up on its previous notoriety as Arson Capital of the US, by coming in as the 10th worst place in the US to live and start a business, according to Forbes. Utica ranks slightly higher than Atlantic City, Flint, Detroit, and California's rapidly imploding central valley cities.
Sunday, March 29, 2009
Thursday, March 26, 2009
Why we can't just throw the bums out
Megan McArdle on the problem with just canning all the execs at the failed banks:
So I'm distressed to see Tim Burke, of all people, making these kinds of statements about AIG:
"Considering that the 11-year veteran executive VP says that he's not at all accountable for AIGFP's losses because he wasn't involved at all in the CDS trading and knew nothing about it, maybe the 26-year old MBA might do a fair enough job."
Really? Really, maybe a 26-year-old MBA might do an okay job of liquidating the financial products division of the world's largest insurance company? I was a 28 year old MBA from (she noted modestly) one of the top finance programs in the country, and let me assure you that there is not the faintest whiff of a possibility that I or any of my classmates could have done an adequate job. We would have cost the taxpayer billions.
Among the necessary assets we would have lacked: 1) adequate skill to maintain the company's portfolio trading strategy in a really screwed up market until they could be wound down 2) contacts in other firms who could buy either our securities, or our line of business 3) experience in executing trades so that they make, rather than lose, money 4) knowledge about current market conditions 5) experience with complicated transactions.
This kind of hyperbolic speculation about an industry which he, respectfully, knows nothing about, is the exact opposite of how thoughtfully he approaches the institutional problems of his own industry.
What I find really worrying is that neither he, nor most of the other normally thoughtful commenters making these kinds of statements, appear to give any credence at all to the possibility that this just might be really, really hard--that it simply might not be a matter of throwing a lot of well-meaning guys in there to replace the jerks currently running the place, and by applying the cleansing forces of American middle class values and good old fashioned common sense, make everything all right again.
So I'm distressed to see Tim Burke, of all people, making these kinds of statements about AIG:
"Considering that the 11-year veteran executive VP says that he's not at all accountable for AIGFP's losses because he wasn't involved at all in the CDS trading and knew nothing about it, maybe the 26-year old MBA might do a fair enough job."
Really? Really, maybe a 26-year-old MBA might do an okay job of liquidating the financial products division of the world's largest insurance company? I was a 28 year old MBA from (she noted modestly) one of the top finance programs in the country, and let me assure you that there is not the faintest whiff of a possibility that I or any of my classmates could have done an adequate job. We would have cost the taxpayer billions.
Among the necessary assets we would have lacked: 1) adequate skill to maintain the company's portfolio trading strategy in a really screwed up market until they could be wound down 2) contacts in other firms who could buy either our securities, or our line of business 3) experience in executing trades so that they make, rather than lose, money 4) knowledge about current market conditions 5) experience with complicated transactions.
This kind of hyperbolic speculation about an industry which he, respectfully, knows nothing about, is the exact opposite of how thoughtfully he approaches the institutional problems of his own industry.
What I find really worrying is that neither he, nor most of the other normally thoughtful commenters making these kinds of statements, appear to give any credence at all to the possibility that this just might be really, really hard--that it simply might not be a matter of throwing a lot of well-meaning guys in there to replace the jerks currently running the place, and by applying the cleansing forces of American middle class values and good old fashioned common sense, make everything all right again.
Allow foreclosed owners to rent their homes
This letter to the Times has a great suggestion on how to deal with foreclosures- end banks' automatic-eviction policy for families whose homes have been foreclosed upon.
This would have a number of benefits. It keeps property values up in the neighborhood by not having a bunch of vacant, boarded up houses. It keeps squatters (and the crime they sometimes bring with them) out. It minimizes the disruption for families (particularly kids) who might otherwise have to move, change schools etc. It also has the political benefit of making it less critical for the government to bail out folks who can't pay their giant mortgages by removing the cry that "these families will lose their homes."
Freddie and Fannie have already gone this route, and it seems like something that the Treasury could build into any future TARP payments to the banks that hold mortgages. Banks might complain that they need the houses empty to facilitate resale, but a.) nobody's buying these things now anyway; and 2.) anyone buying a foreclosed home at an auction is going to get a serious discount, and consequently will probably overlook the fact that the previous owner's stuff is still in the house.
This would have a number of benefits. It keeps property values up in the neighborhood by not having a bunch of vacant, boarded up houses. It keeps squatters (and the crime they sometimes bring with them) out. It minimizes the disruption for families (particularly kids) who might otherwise have to move, change schools etc. It also has the political benefit of making it less critical for the government to bail out folks who can't pay their giant mortgages by removing the cry that "these families will lose their homes."
Freddie and Fannie have already gone this route, and it seems like something that the Treasury could build into any future TARP payments to the banks that hold mortgages. Banks might complain that they need the houses empty to facilitate resale, but a.) nobody's buying these things now anyway; and 2.) anyone buying a foreclosed home at an auction is going to get a serious discount, and consequently will probably overlook the fact that the previous owner's stuff is still in the house.
New York on the Verge of Repealing Rockefeller Drug Laws
Under the plan, judges would have the authority to send first-time nonviolent offenders in all but the most serious drug offenses — known as A-level drug felonies — to treatment. As a condition of being sent to treatment, offenders would have to plead guilty. If they did not successfully complete treatment, their case would go back before a judge, who would again have the option of imposing a prison sentence.
Currently, judges are bound by a sentencing structure that requires minimum sentences of one year for possessing small amounts of cocaine or heroin, for example. Under the agreement reached by the governor and lawmakers, a judge could order treatment for those offenders.
Judges would also have the option of sending some repeat drug offenders to treatment. Repeat offenders accused of more serious drug crimes, however, could only go to treatment if they were found to be drug-dependent in an evaluation.
The State Assembly has passed legislation of this nature every session for years, but finally, with a Democratic Senate, these laws that have treated first-time drug possession offenses as being as serious as, say, beating a child with a weapon, can be removed from the books at last. Remember that when people say it doesn't matter which party is in power.
Wednesday, March 25, 2009
Unilateral disarmanent
Regarding this post, a friend writes:
I disagree with your post. You say: "A boycott is a serious measure- it seeks to silence the boycotted show instead of engaging and defeating its ideas. It's a viable tool when the ideas that we seek to silence are so atrocious, like Nazism or something, sure- let's boycott." I think you need to differentiate between state action in silencing speech/ideas, on the one hand, and concerted, community conduct that seeks to silence speech, on the other. With respect to the former, I agree that an extremely high bar ought to be set, if at all, for boycotting or restricting speech. With respect to the latter--concerted, community conduct--I disagree that you can't or "shouldn't" institute a boycott unless the ideas are atrocious.
Here's why. Generally, to have your voice heard widely in the market place of ideas you need to appeal to mainstream companies that will advertise on your program or newspaper. In other words, companies that feel that the folks listening to your show will like their product/service and, more important for purposes of this discussion, that their product/service will not be tarnished by its sponsorship of your show. The system thus is geared, as a general matter, to moderate the views of folks who are attempted to disseminate their views--or, at the very least, the system sets some outer limits to the views that are capable of being expressed through mass media, like television.
This is a good thing--you still have a First Amendment right to freedom of speech and expression--you just don't have a right to the financing to disseminate your views in the broadest manner possible. To the extent that boycotting becomes overused, moreover, people will simply stop participating or companies that advertise will stop caring--so there is probably a natural limit to its use.
I submit that this is positive state-of-affairs, and, I might add, a mechanism that serves to limit both left-wing shills and liars and right-wing shills and liars. Under your proposal, however, Republicans can take full advantage of boycotting, while Democrats do not--all for some unspecified, nebulous "high-ground." In the mean time, Republicans are disseminating fully all manner of views at the expense of Democratic views.
I think that this position is somewhat better suited to back in the day when King Arthur Flour or whoever sponsored an entire show. Nowadays, I think most advertising is done in a hands-off manner- advertisers essentially look not to the content of shows but to a set of demographics that they want to put X number of "points" of advertising in front of, and will contract with stations or local affiliates that basically say "show this Ford ad 50 times to 350,000 25-39 y.o. males" etc.
I have no problem with the general idea of not wanting to finance ideas or behavior you find offensive. I typically don't buy Coors products because the Coors family gives a lot of money to the sort of people who blow up abortion clinics. I also think it's fine to boycott Fox News- essentially don't give ratings points to the channel. I also don't buy the Weekly Standard.
I think that boycotts against advertisers are somewhat different. They're typically aimed at not just cutting into the revenue stream of the offending show, but to generate economic pressure so that the station pushes the show off the air. I agree with your distinction between state censorship and privately organized boycotts, but I still think that it's not "liberal" to try to silence one's opponent through economic pressure.
It's certainly problematic to unilaterally disarm on things like this, and I tried to make that clear in the post. This sort of thing is a real problem for the left, and very clearly manifested itself in the 2000 recount where Dems were unwilling to use the sort of tactics that the GOP did- like sending in a mob to shut down the Miami recount, or take self-contradicting positions on ballots ("we have to bend the rules to allow military voters in Pensacola to vote even if they mailed their ballots late" and "we need to hold Palm Beach voters to a strict reading of the rules"). Our refusal to use those tactics (or "squeamishness with them" to put it in a less noble fashion) had real consequences over the past 8 years. It's an issue that I very much struggle with, and one that the left must come to terms with.
I disagree with your post. You say: "A boycott is a serious measure- it seeks to silence the boycotted show instead of engaging and defeating its ideas. It's a viable tool when the ideas that we seek to silence are so atrocious, like Nazism or something, sure- let's boycott." I think you need to differentiate between state action in silencing speech/ideas, on the one hand, and concerted, community conduct that seeks to silence speech, on the other. With respect to the former, I agree that an extremely high bar ought to be set, if at all, for boycotting or restricting speech. With respect to the latter--concerted, community conduct--I disagree that you can't or "shouldn't" institute a boycott unless the ideas are atrocious.
Here's why. Generally, to have your voice heard widely in the market place of ideas you need to appeal to mainstream companies that will advertise on your program or newspaper. In other words, companies that feel that the folks listening to your show will like their product/service and, more important for purposes of this discussion, that their product/service will not be tarnished by its sponsorship of your show. The system thus is geared, as a general matter, to moderate the views of folks who are attempted to disseminate their views--or, at the very least, the system sets some outer limits to the views that are capable of being expressed through mass media, like television.
This is a good thing--you still have a First Amendment right to freedom of speech and expression--you just don't have a right to the financing to disseminate your views in the broadest manner possible. To the extent that boycotting becomes overused, moreover, people will simply stop participating or companies that advertise will stop caring--so there is probably a natural limit to its use.
I submit that this is positive state-of-affairs, and, I might add, a mechanism that serves to limit both left-wing shills and liars and right-wing shills and liars. Under your proposal, however, Republicans can take full advantage of boycotting, while Democrats do not--all for some unspecified, nebulous "high-ground." In the mean time, Republicans are disseminating fully all manner of views at the expense of Democratic views.
I think that this position is somewhat better suited to back in the day when King Arthur Flour or whoever sponsored an entire show. Nowadays, I think most advertising is done in a hands-off manner- advertisers essentially look not to the content of shows but to a set of demographics that they want to put X number of "points" of advertising in front of, and will contract with stations or local affiliates that basically say "show this Ford ad 50 times to 350,000 25-39 y.o. males" etc.
I have no problem with the general idea of not wanting to finance ideas or behavior you find offensive. I typically don't buy Coors products because the Coors family gives a lot of money to the sort of people who blow up abortion clinics. I also think it's fine to boycott Fox News- essentially don't give ratings points to the channel. I also don't buy the Weekly Standard.
I think that boycotts against advertisers are somewhat different. They're typically aimed at not just cutting into the revenue stream of the offending show, but to generate economic pressure so that the station pushes the show off the air. I agree with your distinction between state censorship and privately organized boycotts, but I still think that it's not "liberal" to try to silence one's opponent through economic pressure.
It's certainly problematic to unilaterally disarm on things like this, and I tried to make that clear in the post. This sort of thing is a real problem for the left, and very clearly manifested itself in the 2000 recount where Dems were unwilling to use the sort of tactics that the GOP did- like sending in a mob to shut down the Miami recount, or take self-contradicting positions on ballots ("we have to bend the rules to allow military voters in Pensacola to vote even if they mailed their ballots late" and "we need to hold Palm Beach voters to a strict reading of the rules"). Our refusal to use those tactics (or "squeamishness with them" to put it in a less noble fashion) had real consequences over the past 8 years. It's an issue that I very much struggle with, and one that the left must come to terms with.
Stiffing the Plumber when the Electrician burns down the house
Great op-ed today by Jake DeSantis, an exec at AIG in the commodities trading department, (which has continued to be profitable), as an open resignation letter to AIG boss Edward Liddy. The whole piece is very much worth reading.
My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.
That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”
That may also be why you authorized the balance of the payments on March 13.
At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.
I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.
You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.
As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.
My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.
That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”
That may also be why you authorized the balance of the payments on March 13.
At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.
I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.
You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.
As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.
Boycotts
After my last post on O'Reilly's thuggery toward Amanda Terkel, I signed up for the facebook group "I Stand with Amanda Terkel." Today, I got an email from the group about organizing a boycott of companies that advertise on O'Reilly's show.
This is a time-tested right-wing ploy, which gets pulled out every time there's something objectionable (read: liberal) on television. A few years back they were able to kill a TV biopic about Reagan that was insufficiently deferential. I realize this works, but I have some qualms about it.
A boycott is a serious measure- it seeks to silence the boycotted show instead of engaging and defeating its ideas. It's a viable tool when the ideas that we seek to silence are so atrocious, like Nazism or something, sure- let's boycott.
O'Reilly is undisputably a thug, a bully, a liar and a shill for the right wing. However, out of all of these things, isn't this boycott really being proposed for the last of those reasons? If it were a left-wing host hassling people, would we on the left really care? I think it's right to make a stand against O'Reilly's incivility, but to the extent that his actions are not bad enough that they would trigger a progressive boycott if they were on a left-wing or neutral show, then that means that really, we're boycotting because a right-wing jerk, not just because he's a jerk.
The problem, endemic to the left, is that the GOP doesn't hesitate to use tactics like these to shut down or marginalize our point of view. Also, taking the moral high-ground here does in fact have real-world consequences, in that more people are influenced by right-wing media, and consequently more right-wingers are elected and more right-wing, bad policies are enacted. How high is the price of the high-ground?
This is a time-tested right-wing ploy, which gets pulled out every time there's something objectionable (read: liberal) on television. A few years back they were able to kill a TV biopic about Reagan that was insufficiently deferential. I realize this works, but I have some qualms about it.
A boycott is a serious measure- it seeks to silence the boycotted show instead of engaging and defeating its ideas. It's a viable tool when the ideas that we seek to silence are so atrocious, like Nazism or something, sure- let's boycott.
O'Reilly is undisputably a thug, a bully, a liar and a shill for the right wing. However, out of all of these things, isn't this boycott really being proposed for the last of those reasons? If it were a left-wing host hassling people, would we on the left really care? I think it's right to make a stand against O'Reilly's incivility, but to the extent that his actions are not bad enough that they would trigger a progressive boycott if they were on a left-wing or neutral show, then that means that really, we're boycotting because a right-wing jerk, not just because he's a jerk.
The problem, endemic to the left, is that the GOP doesn't hesitate to use tactics like these to shut down or marginalize our point of view. Also, taking the moral high-ground here does in fact have real-world consequences, in that more people are influenced by right-wing media, and consequently more right-wingers are elected and more right-wing, bad policies are enacted. How high is the price of the high-ground?
Tuesday, March 24, 2009
Bill O'Reilly is a Thug and a Bully
A friend of mine passed me this link wherein Amanda Terkel (a friend of hers, and a blogger at CAP) gets stalked by O'Reilly's producers, cornered and harrassed by an O'Reilly producer, and then called a "Villain" by O'Reilly on his show. All because Terkel had the temerity to blog about the hypocrisy of O'Reilly headlining a benefit for a rape support foundation after he made derogatory comments about a rape victim on his radio show:
Our post highlighted the fact that in the past, O'Reilly has implied that women who dress in a certain way or consume too much alcohol should perhaps expect to be raped. Here is what he said on his radio show on Aug. 2, 2006, about Jennifer Moore, an 18-year-old woman who was raped and murdered:
"Now Moore, Jennifer Moore, 18, on her way to college. She was 5-foot-2, 105 pounds, wearing a miniskirt and a halter top with a bare midriff. Now, again, there you go. So every predator in the world is gonna pick that up at two in the morning. She's walking by herself on the West Side Highway, and she gets picked up by a thug. All right. Now she'ss out of her mind, drunk."
Take a look here at Terkel's post on the O'Reilly thuggery, as well as the clip from O'Reilly's show where the harassment takes place: http://thinkprogress.org/2009/03/23/oreilly-terkel/
Our post highlighted the fact that in the past, O'Reilly has implied that women who dress in a certain way or consume too much alcohol should perhaps expect to be raped. Here is what he said on his radio show on Aug. 2, 2006, about Jennifer Moore, an 18-year-old woman who was raped and murdered:
"Now Moore, Jennifer Moore, 18, on her way to college. She was 5-foot-2, 105 pounds, wearing a miniskirt and a halter top with a bare midriff. Now, again, there you go. So every predator in the world is gonna pick that up at two in the morning. She's walking by herself on the West Side Highway, and she gets picked up by a thug. All right. Now she'ss out of her mind, drunk."
Take a look here at Terkel's post on the O'Reilly thuggery, as well as the clip from O'Reilly's show where the harassment takes place: http://thinkprogress.org/2009/03/23/oreilly-terkel/
Sunday, March 22, 2009
Embarassment of Rich's
Today's Frank Rich column is totally washed. (Thank you, 30 Rock!)
As far as I can tell, the thesis is that President Obama either isn't angry enough about the financial mess, or that his staff isn't angry enough about it, or that he's failed to assign the task of being angry about the financial mess to people who are best capable of rallying the anger of others.
Typically, Frank suggests:
As far as I can tell, the thesis is that President Obama either isn't angry enough about the financial mess, or that his staff isn't angry enough about it, or that he's failed to assign the task of being angry about the financial mess to people who are best capable of rallying the anger of others.
Typically, Frank suggests:
To get ahead of the anger, Obama must do what he has repeatedly promised but not always done: make everything about his economic policies transparent and hold every player accountable. His administration must start actually answering the questions that officials like Geithner and Summers routinely duck.
Why should the President have any desire at all to 'get ahead of the anger'? Do you even know what that means? Which questions have they been ducking? Questions like: "how come nobody anywhere cared about how bad things were gonna get screwed up three years ago?" Real productive.
I'm pretty sure that Obama thinks that our pique, frustration, and anger will not get us anywhere. To that end, time spent on them probably won't get us anywhere either. I totally agree that some of the bailouts, the TARP, and other programs and initiatives which were around before Obama got in, and even the pre-existing policies that he has ratified, signed or implemented will continue to bear those signs of careful planning and public-spiritedness which we came to know as hallmarks of the Bush administration.
But what are we gonna do about it? If the answer is "nothing," then we need to move on. In a hurry.
---
I know Williams is a big fan of Andrew Cuomo, but unless Cuomo thinks that issuing subpoenas for a show trial that doesn't end up sentencing people will be a good deterrent against bad behavior in the future, I don't really have much respect his actions here.
Friday, March 20, 2009
A Weird State of Mind
Matt Yglesias on why it's a good thing to drive talented/ambitious people out of banks that are now owned by taxpayers:
One concern I’ve heard voiced about sharp executive compensation limits for executives at bailed-out firms is that this may cause an exodus of their most talented employees. One common rejoinder is to observe that the firms in question don’t actually seem to know very much about hiring talented employees or running a business. But another point is that I’m not sure I see why an exodus of the most talented and ambitious business minds from these firms would be a bad thing.
If you think of a talented and ambitious businessman, after all, you have to remember that you’re talking about a guy who, unlike normal people, mainly focuses his life on earning as much money as possible. That’s a weird state of mind in many ways. But it’s a good thing there are some folks like that around, because one good way to earn a ton of money is to invent a product that lots of people find useful when sold at a profitable price. None of my best friends are talented and ambitious businesspeople, but most of my favorite stuff is made by firms managed by such people. But if you’re a talented and ambitious businessman working at a government-support zombie financial institution then you don’t earn your riches by selling products to people. Instead, per Simon Johnson here and here, you maximize income by maximizing “tunneling,” i.e. “borderline legal/illegal smuggling of value out of businesses” and finding other ways to bilk the taxpayer.
A couple things:
1.) I think that Yglesias vastly underestimates the normality of spending one's life focused on earning money. Perhaps that's not normal for Harvard Philosophy majors who go immediately into liberal blogging and their friends, but this is essentially what people in the private sector are doing. Along with the people at the very top of large corporations, you also about 30 million various businesses in the US, most of which are small businesses with owners who are (gasp) focused on making money. I'm not sure that we can classify wide swaths of the country as "weird" because their focus isn't progressive blogging.
2.) It's all well and good to call Citi, AIG, etc. "zombie banks," and they're certainly getting federal money. However, it's important to remember that many of these organizations are gigantic, and have lots of parts that are in fact making money. Citibank has its retail banking and credit card division. AIG has a successful "insuring actual physical stuff" business. There's wealth and value (I like being able to access my Citibank account, factories like being insured) created by these "zombies," not merely attempts to swipe taxpayer dollars by greedy non-philosophy majors.
One concern I’ve heard voiced about sharp executive compensation limits for executives at bailed-out firms is that this may cause an exodus of their most talented employees. One common rejoinder is to observe that the firms in question don’t actually seem to know very much about hiring talented employees or running a business. But another point is that I’m not sure I see why an exodus of the most talented and ambitious business minds from these firms would be a bad thing.
If you think of a talented and ambitious businessman, after all, you have to remember that you’re talking about a guy who, unlike normal people, mainly focuses his life on earning as much money as possible. That’s a weird state of mind in many ways. But it’s a good thing there are some folks like that around, because one good way to earn a ton of money is to invent a product that lots of people find useful when sold at a profitable price. None of my best friends are talented and ambitious businesspeople, but most of my favorite stuff is made by firms managed by such people. But if you’re a talented and ambitious businessman working at a government-support zombie financial institution then you don’t earn your riches by selling products to people. Instead, per Simon Johnson here and here, you maximize income by maximizing “tunneling,” i.e. “borderline legal/illegal smuggling of value out of businesses” and finding other ways to bilk the taxpayer.
A couple things:
1.) I think that Yglesias vastly underestimates the normality of spending one's life focused on earning money. Perhaps that's not normal for Harvard Philosophy majors who go immediately into liberal blogging and their friends, but this is essentially what people in the private sector are doing. Along with the people at the very top of large corporations, you also about 30 million various businesses in the US, most of which are small businesses with owners who are (gasp) focused on making money. I'm not sure that we can classify wide swaths of the country as "weird" because their focus isn't progressive blogging.
2.) It's all well and good to call Citi, AIG, etc. "zombie banks," and they're certainly getting federal money. However, it's important to remember that many of these organizations are gigantic, and have lots of parts that are in fact making money. Citibank has its retail banking and credit card division. AIG has a successful "insuring actual physical stuff" business. There's wealth and value (I like being able to access my Citibank account, factories like being insured) created by these "zombies," not merely attempts to swipe taxpayer dollars by greedy non-philosophy majors.
Wednesday, March 18, 2009
The First Fan
Obama's NCAA tournament bracket here. Notice who he's got beating Oklahoma to go to the Elite Eight...
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