When they’re not insisting that we’re beloved by one and all, certain U.S. “leaders” are impugning the motives of those who don’t love us.
But there are reasons why they might hate us. Not one of them is “for our freedom.” Continue reading “Why do they hate us so?”
Townhall.com has a pretty interesting set of reactions to the kefuffle over Rand Paul’s initial equivocation on the public accommodations portions of the 1964 Civil Rights Act:
They’re interesting partly because they are better than the usual charges of media bias that follow a conservative embarrassment in “gotcha moment.”
For my money, Goldberg is the funniest (not surprisingly) and closest to my view of the deepest meaning of this pretty shallow episode:
[T]he only people who are really jazzed to reopen the argument about the Civil Rights Act are liberals.
And they have good reason: They won that argument, politically and morally. This is a fact liberals never stop reminding us, and themselves, about. Like a paunchy middle-aged man who scored the winning touchdown in the high school championship, nostalgic liberals don’t need an excuse to bring up their glory days (which were not the Democratic Party’s glory days, by the way). Give them a living, breathing politician who suggests, no matter how imprecisely or grudgingly, that the Civil Rights Act wasn’t perfect, and they’ll talk your ear off like a drunk uncle at a wedding.
How many activist groups insist that their plight is sublimely analogous to the civil rights struggle? How many times did the Democrats try to make health-care reform a continuation of civil rights? …
What really makes this debate remarkable is that someone has volunteered to be the straw man liberals are always creating.
But Harsanyi’s opener is good, too:
Isn’t it time we started querying our political candidates on issues that really matter?
Let’s start with this one: If you were a convention delegate in 1778, would you have voted to ratify the Constitution of the United States?
If the answer is yes — and you don’t hate America, do you?! — it’s only fair we conclude that you support restricting voting rights to male landowners exclusively. Surely, from your position, we can also deduce that you support slavery.
If the Devil created an anti-city, a place where people would feel least human, Atlanta would surely be that place ….
So William Howard Kunstler opens his blog this week, but not so much to excoriate Atlanta as to introduce it as, ironically, the site of the 18th Congress of the New Urbanism. The blog is a pretty good 30,000-foot view of what’s most endearing about Kunstler’s thought. If you want an overview with spoken words and pictures, check here.
Or rummage through your own wetware if you’ve ever walked Boston’s Freedom Trail or Beacon Hill, or gawked at the dense cheek-by jowl homes of New York’s Greenwich Village, or ambled through Charleston’s Battery neighborhood, smelling the linseed oil of summer painting, or strolled, sweating, under the Live Oaks of Savannah’s old streets near the River (out in “Garden of Good and Evil” territory). There’s something human about those places, and it’s not just nostalgia — though nostalgia plays its part.
The New Urbanists, in my conviction, are advocating something — the only thing I know of — that makes sense for urban living, as opposed to the urban-suburban auto treadmill, waiting for the Oil Fairy to make peak oil go away. It needn’t be rank imitation of the places I just named, but they’ve got the scale right.
As my friend, Practicing Human, wrote this morning:
[W]e would be doing well to ask about consumption of energy resources on a micro-, meso- and macro-scale. Managing our energy diet towards a sustainable rate means more than just changing our light bulbs. We can think creatively about building and community design. And we can adjust national priorities, which always proves to be incredibly difficult.
America is a country working foremost in a consumptive paradigm. Until we can think differently about standards of living, then we are going to recreate the same problems. But I think a different economic paradigm is still very far removed as it requires a significant leap in economic, political, and sociological thinking.
Sadly, the economic crisis is hurting the good guy developers along with the bad. Kunstler again:
I heard a lot of stories during the meeting in Atlanta last week but one really stood out. It was about the money and revealed a lot about what is going on in our banking system these days. A New Urbanist developer had gotten a small project going for a traditional neighborhood. Despite the global financial [crisis], the developer was able to meet the payments of his commercial loan. But the FDIC sent bank examiners around America and they told the small regional banks that if they had more than twenty percent of their loans in commercial real estate (CRE) they would be put out of business. The banks were ordered to reduce their loads of CRE by calling in the loans and liquidating the assets. Ironically, the banks only called in their “performing” loans, the ones that were being regularly paid off, because they were ignoring and even concealing the ones that weren’t being paid.
The developer in question had his loan called in when the FDIC descended on his bank. He couldn’t pay off the $3 million in one lump, of course. The FDIC’s agents are going to seize and sell off his project if he can’t get it refinanced in short order. He can’t get it refinanced because there is now such a shortage of capital in the banking system that no one can get a loan for anything. Also, since it is now well-known that the bank failed, the vultures are circling above his project hoping to buy it for a discount, so even the few private investors who have money won’t throw him a lifeline. By the way, the FDIC agents told him they are doing this because they now expect that virtually all commercial real estate loans in the USA will fail in the months ahead. Pretty scary story, huh? And he was one of the good guys.I suppose it was a tragic thing that the New Urbanists made themselves hostage to the same banking system that was behind suburban sprawl …
I have no great overarching point, but if people will read Kunstler, we are likelier to make the paradigm jump we need.
We don’t even have a nominee yet, but the posturing — academic and political — is shaping up, as signaled on the editorial page of today’s Washington Post.
In the right corner, weighing in with the mantra of “commitment to the text of the Constitution and the vision of the Founding Fathers,” is senator Jeff Sessions from Alabama, ranking Republican on the Judiciary Committee.
In the left corner, weighing in with the historical untenability of ascribing to the Founders any unified “original intent,” is Joseph J. Ellis, a Pulitzer Prize-winning professor of history at Mount Holyoke College.
Ellis is would win the match on points, but Sessions has a knockout punch: by and large, Americans agree with him, whether or not original intent is tenable historically.
It is perhaps probably significant that neither one speaks of abortion, the issue that, whether explicitly or encoded, has dominated confirmation hearings for decades. The current hot button issues for Sessions are political speech, guns, and eminent domain.
“Goldman Sachs” is not a term of endearment at my favorite websites, such as Front Porch Republic. And I have reflected my own ill-ease with such too big to fail concerns in recent weeks, as well as passing along some counter-arguments.
Wall Street Journal columnist Gordon Crovitz today defends Goldman Sachs in his own way: short selling a derivative signals the market that a sector may be ready to collapse. I certainly agree with that – just as short selling a stock signals that a particular stock may be ready to tank.
The most telling point for me in Crovitz’s column – apropos of why the SEC may lose its case against Goldman Sachs rather than why derivatives are good – is simply that once you accept the premises that (1) shorting a derivative is beneficial because it signals the market of a possible sector collapse, and (2) long buyers in these specially created securities knew someone else was selling short, it seems to follow that “it would be hard to prove that it mattered who [the short seller] was.” That John Paulson was selling short and that Goldman Sachs bundled the derivative for him seems to be what SEC thinks GS should have disclosed.
All this, of course, ignores John Médaille’s, invocation of Aristotle and Aquina to distinguish natural from unnatural market exchanges, but Distributist economics are, for the time being at least, so far out of the mainstream as to be easily ignored. Considering the repeated failures of mainstream economics, that may be ripe for change.
The Democrats have a bright if peurile idea: “Hey, guys! I’ve got a great idea! Regulation utterly failed to prevent the economic collapse, and voters are mad at Wall Street, so lets grab this chance to make Washington bigger with even more regulation! Whaddya think, guys?!” (I’m not sure the Republicans have a counter-plan. They’re just in denial that a market could fail.)
Pretending to regulate something as complex as derivatives is destined again to fail, so I would be remiss were I to pass up, before Congress passes “the most sweeping overhaul of the financial regulatory system since the aftermath of the Great Depression,” not to sing another rousing chorus of “if they’re too big to fail, bust ’em up!”
Holman Jenkins at the Wall Street Journal rises to the defense of Goldman Sachs, and this time it’s not half-hearted. (You knew someone would, didn’t you? Some people are just contrary.)
Make no mistake: The gestalt behind the SEC case is that short selling is bad. Constructing deals to enable short sellers to bet against certain markets (as Goldman did) is bad. When longs lose money because of freely chosen participation in such trades, it’s bad. When shorts make money, it’s bad …
Remember, the long investors could have bought mortgages directly if they wanted to invest in housing. They wanted the more attractive premium stream from insuring mortgages for an investor who was betting they would fail. And only in hindsight has Mr. Paulson become the mastermind who made billions betting against what now is judged to have been a bubble.
Of course, you can’t go wrong betting on the media’s unwillingness to unwrap itself from the errors of hindsight bias—that bet by the SEC has paid off. But there are bigger fish being fried. For more than a year, certain knowledgeable bloggers and investigative reporters have argued that such deals—Goldman’s was hardly unique—exacerbated the bubble, with special focus on the activities of a Chicago hedge fund called Magnetar.
It’s true that such deals gave housing bulls an additional way to lose money. But to blame shorts for making the bubble worse comes close to saying salvation for the markets is to exclude participants who are bearish.
This is especially peculiar since the bubble’s true Rosetta Stone is being ignored, though it has been hammered away at by a member of Washington’s own Financial Crisis Inquiry Commission, in the person of Peter Wallison.
Mr. Wallison has publicized new data showing that Fannie, Freddie and FHA financed a lot more subprime and Alt-A loans than anyone realized (because they were mislabeled). It turns out almost half of the $10.6 trillion in U.S. mortgages outstanding in 2008 were low quality. This is the data that might have changed investors’ minds—suggesting that the American public’s capacity to shoulder housing debt was far more saturated than anybody knew.
I don’t think any account of the housing bubble collapse is even near complete without factoring in the role of the federal government and its creations, Fannie, Freddie and FHA, in encouraging subprime mortgages to make homeowners of more people. That is turn is driven by lobbyists from the real estate industry. It is part of the crony capitalism I blogged about yesterday.
Is it evil to want to empower people to own their homes? No. Is it fraught with unforeseen consequences? You bet.
(Full disclosure: I’m a sucker for writers who use “gestalt.”)
Meanwhile, out of the mainstream, a Distributist economist, John Médaille, invokes Aristotle and Aquinas as worthy bank regulators:
Not too long ago, a Prominent Economist told me that Aristotle had nothing to teach us about modern finance. I beg to differ; Aristotle, and the Scholastics who adopted his approach to economics, were surprisingly sophisticated on these topics, while so many Prominent Economists are surprisingly naïve. Indeed, Aristotle left us a principle of commerce that serves very well as a principle of regulation. This principle is the distinction he makes between natural and unnatural exchange. Modern commentators, who make no distinctions, have viewed this as a mere primitive hostility to business; actually, it was a shrewd appreciation of commerce. For Aristotle, natural exchange was that which was necessary for the provisioning of the family (the true meaning of economics.) Unnatural exchange that which had only money as it object.
The former is “natural” because it limits itself; that later unnatural because is has no natural limits. For example, a man wishing to buy bread for his family will buy only as much as he needs; this is a natural exchange. But a man wishing only to make money in the bread biz may wish to buy up all the bread and corner the market so as to raise prices and make a fortune on others’ necessities; this is an unnatural exchange. When applied to finance, a transaction is natural when it is when it is firmly and directly tied to the production of some actual product; it is unnatural the more abstract and derivative it becomes, and when its only object is to make money rather than profit from production. Thus, we may say that banks directly financing home purchases or construction are natural transactions, and less natural when they become “securitized,” bundled together and sold in packages to remote investors who will have no contact with the actual homes, banks, or borrowers. The situation becomes even more abstract when you speak of securitizing the securities (“CDO-Squared” or even “CDO-Cubed”) or with CDSs, which become pure speculative bets on the market. The more abstract the instrument, the more closely it should be scrutinized.
As things now stand, we have reversed Aristotle’s order: the natural exchanges are highly regulated, while the unnatural ones are often unregulated. In more normal times, when you went to George Bailey to get a mortgage, he squinted at you real hard to see if you are the kind of person who will pay him back for 30 years. George needs little oversight to encourage him to be prudent, since he has the bank’s capital and the depositors’ money at risk. But if George merely intends to securitize the loan, then he merely glances at you to see if you are the kind of person who will pay for two weeks, because after that you are somebody else’s problem.
(Full disclosure: (1) Tipsy is intoxicated by Distributism, a “third way” economic theory, like wine to the head of a teetotaler – see masthead. (2) Tipsy is part owner of a title insurance company that was formed partly because mortgage loans were routinely being sold out of the community, and consequently old-fashioned county-seat-lawyer abstract opinions weren’t worth jack any more.)
The world of punditry is full of opinions about filling the seat of Justice John Paul Stevens upon his long-overdue retirement this summer, so important has become the Supreme Court to our polity.
Doug Masson, perhaps half-jokingly, defended what I’d call a moderately activist judiciary. It’s moderate because the activism Doug advocated involved pulling legislative chestnuts out of the fire more than inventing new constitutional “rights”:
What occurred to me only later is what immense responsibility this would place on legislators if they were actually forced to deal with nothing but strict constructionist judges. They’d have to think through the full implications of what they wrote into law without being able to trust that judges would be, well, judicious in how the law was applied …
I’ve read enough legislation and draft legislation in my time to shudder a bit at the thought of judges applying the language absolutely in all situations unless the text specifically instructs them not to regardless of whether doing so makes sense or seems remotely just. That would really up the pressure on legislators to craft legislation meticulously, being sure to describe every caveat and exception.
I agree completely with Doug that lots of legislation is drafted shoddily, but I think that’s partly a consequence of knowing that the Court’s will bail them out.
I’d love to see our legislatures become something other than the Branch of Grand-and-Voter Pleasing Platitudes. Courts legitimately resolve ambiguities in positive law (i.e., legislative enactments), but a law can be unambiguously stupid. Unless there’s no rational purpose to it, judges should enforce it with perhaps a rebuke thrown in for the legislature (e.g., “What in heaven’s name they were thinking when they wrote this is beyond me, but ….”)
I am particularly appalled at the increasingly common disregard of legislators – at all levels, including County Commissioners – to shrug off their oath to uphold the Constitution by saying, in effect, that “constitutionality is for the courts to decide; I think this law will please my constiuents, so to hell with my oath.” (Okay, I exaggerate, but only a little.)
Adam Liptak at the New York Time is one of many noting that Stevens is, formally, the last Protestant on the Supreme Court:
His retirement, which was announced on Friday, makes possible something that would have been unimaginable a generation or two ago — a court without a single member of the nation’s majority religion.
I cannot recall what Protestant allegiance Stevens ever claimed, but were it not so implausible, I’d suspect he was a soul-competency Baptist. As I wrote quoted soon after his announcement:
[I]n four different places in an opinion barely five paragraphs long, Justice Stevens used the word “indoctrination” as a synonym for religious education. Stevens asserted that the voucher program was being used to pay for “the indoctrination of thousands of grammar school children.” He surmised that an educational emergency might provide a motivation for parents to “accept religious indoctrination [of their children] that they otherwise would have avoided.” He decried the fact that “the vast majority” of voucher recipients chose to receive “religious indoctrination at state expense.” And he depicted the voucher program as a governmental choice “to pay for religious indoctrination.”
This is not an unfair summary of Justice Stevens’ hostility to any religion that actually has doctrinal content that adherents think should be preserved and transmitted. I infer that his deprecatory use of “indoctrination” reflects the view that everyone should decide all this stuff for himself or herself – a very, very American approach that has led to countless sects, cults and semi-Christian denominations, not to mention multiply-countless unaffiliated Churches (unaffiliated means you get whatever the Pastor feels like today – kind of like following a blog, except that bloggers, taken with the appropriate grain of salt, are less likely to lead you to delusion and damnation).
See also Ann Coulter’s entertaining take on the last Protestant. (Coulter is like a 15 car pileup – I feel guilty for reading her sometimes, but it’s irresistible. She is quite smart about the law, too.)
I agree with George Will that political experience is not a prerequisite, and I always have shuddered when someone like Oren Hatch is mentioned as a potential Supreme Court nominee because his colleagues respect him, he could be confirmed fairly easily, and he once upon a time went to law school.
Lastly, I’d say Timothy Egan is right on the facts about Harvard and Yale being disproportionately represented on the Court, but I’d sure hate to see law school diversity become a criterion for nomination. Yeah: Michigan, Chicago, Stanford (Justices O’Connor and Rehnquist, I believe) are top-tier, and I wouldn’t expect a Justice from the top tier of one of those institutions to be appallingly stupid. But I suspect, especially from his title (“Supreme Club”) that Egan is engaged in a little populist posturing at the highly elitist New York Times.
Tipsy Teetotaler ن 