Thursday, October 25, 2007

Let There Be SLACK!

Consider the following excerpt from They Thought They Were Free, which gives an invaluable insight into what it feels like to be living through the fall of a democratic system into that of a fascist police state:
"You see," my colleague went on, "one doesn't see exactly where or how to move. Believe me, this is true. Each act, each occasion, is worse than the last, but only a little worse. You wait for the next and the next. You wait for the one great shocking occasion, thinking that others, when such a shock comes, will join with you in resisting somehow. You don't want to act, or even to talk, alone; you don't want to "go out of your way to make trouble." Why not? - Well, you are not in the habit of doing it. And it is not just fear, fear of standing alone, that restrains you; it is also genuine uncertainty.

"Uncertainty is a very important factor, and, instead of decreasing as time goes on, it grows. Outside, in the streets, in the general community, "everyone is happy. One hears no protest, and certainly sees none. You know, in France or Italy there will be slogans against the government painted on walls and fences; in Germany, outside the great cities, perhaps, there is not even this. In the university community, in your own community, you speak privately to you colleagues, some of whom certainly feel as you do; but what do they say? They say, "It's not so bad" or "You're seeing things" or "You're an alarmist."

"And you are an alarmist. You are saying that this must lead to this, and you can't prove it. These are the beginnings, yes; but how do you know for sure when you don't know the end, and how do you know, or even surmise, the end? On the one hand, your enemies, the law, the regime, the Party, intimidate you. On the other, your colleagues pooh-pooh you as pessimistic or even neurotic. You are left with your close friends, who are, naturally, people who have always thought as you have.

"But your friends are fewer now. Some have drifted off somewhere or submerged themselves in their work. You no longer see as many as you did at meetings or gatherings. Informal groups become smaller; attendance drops off in little organizations, and the organizations themselves wither. Now, in small gatherings of your oldest friends, you feel that you are talking to yourselves, that you are isolated from the reality of things. This weakens your confidence still further and serves as a further deterrent to— to what? It is clearer all the time that, if you are going to do anything, you must make an occasion to do it, and then you are obviously a troublemaker. So you wait, and you wait.

"But the one great shocking occasion, when tens or hundreds or thousands will join with you, never comes. That's the difficulty. If the last and worst act of the whole regime had come immediately after the first and the smallest, thousands, yes, millions would have been sufficiently shocked— if, let us say, the gassing of the Jews in "43" had come immediately after the "German Firm" stickers on the windows of non-Jewish shops in "33". But of course this isn't the way it happens. In between come all the hundreds of little steps, some of them imperceptible, each of them preparing you not to be shocked by the next. Step C is not so much worse than Step B, and, if you did not make a stand at Step B, why should you at Step C? And so on to Step D.

"And one day, too late, your principles, if you were ever sensible of them, all rush in upon you. The burden of self deception has grown too heavy, and some minor incident, in my case my little boy, hardly more than a baby, saying "Jew swine," collapses it all at once, and you see that everything, everything, has changed and changed completely under your nose. The world you live in— your nation, your people— is not the world you were in at all. The forms are all there, all untouched, all reassuring, the houses, the shops, the jobs, the mealtimes, the visits, the concerts, the cinema, the holidays. But the spirit, which you never noticed because you made the lifelong mistake of identifying it with the forms, is changed. Now you live in a world of hate and fear, and the people who hate and fear do not even know it themselves; when everyone is transformed, no one is transformed. Now you live in a system which rules without responsibility even to God. The system itself could not have intended this in the beginning, but in order to sustain itself it was compelled to go all the way.

"You have gone almost all the way yourself. Life is a continuing process, a flow, not a succession of acts and events at all. It has flowed to a new level, carrying you with it, without any effort on your part. On this new level you live, you have been living more comfortably every day, with new morals, new principles. You have accepted things you would not have accepted five years ago, a year ago, things that your father, even in Germany, could not have imagined.

"Suddenly it all comes down, all at once. You see what you are, what you have done, or, more accurately, what you haven't done ( for that was all that was required of most of us: that we do nothing). You remember those early meetings of your department in the university when, if one had stood, others would have stood, perhaps, but no one stood. A small matter, a matter of hiring this man or that, and you hired this one rather than that. You remember everything now, and your heart breaks. Too late. You are compromised beyond repair.

"What then? You must then shoot yourself. A few did. Or "adjust" your principles. Many tried, and some, I suppose, succeeded; not I, however. Or learn to live the rest of your life with your shame. This last is the nearest there is, under the circumstances, to heroism: shame. Many Germans became this poor kind of hero, many more, I think, than the world knows or cares to know."

I said nothing. I thought of nothing to say.
Now, go back and look at that phrase in the penultimate paragraph, the one that says, "for that was all that was required of most of us: that we do nothing."

Ponder that long and hard for a moment.

Then, click here. Further explanation here.

Tuesday, October 23, 2007

Repost: Tremble before the All Poweful OZ!

Note: Apparently, the hate that consumed me when I first posted this laid some sort of technological voodoo on the Mojowire page. S9 has apprently exorcised the evil spirit responsible, and asked me to repost this.

David brooks is often heralded as many liberals favorite conservative
pundit. Perched in some of the most refined media real estate, the
New York Times opinion page and a pundit for the Newshour on PBS, the
sorts of people who read and watch these media outlets often regard
Brooks as an honest broker of conservative faults, willing to
criticise if warranted.

Naturally, this is an enormous crock of horseshit. David Brooks is to
moderation and constructive discourse as the Trojan Horse was to the
cause of Peace between Greeks and Trojans. Today's column in the New
York Times is a classic example of the wretched sewage Brooks serves
up to people desperate to find some comity and safe harbor in today's
politics. Let's take a look:

Alexander Hamilton was an ambitious young striver and
created an economy where people like him could rise and succeed. He
used government to rouse the energies of the merchant class, to widen
the circle of property owners and to dissolve the constraints on
commerce and mobility.

Anytime a conservative pundit invokes the founding generation, a
truly spectacular piece of schadenfreude is about to dumped on you
from on high. Alexander Hamilton is a favorite. Sometimes they get
creative and offer up Thomas Jefferson to confuse gullible democrats.
Let's plow on...
Abraham Lincoln was another ambitious young striver.
As a young politician, he championed roads, canals and banks so
enterprising farm boys like himself could ascend and prosper. While
he was president, the Republican Party passed the Homestead Act,
which gave people access to property they could enrich and develop.
It passed the Land Grant College Act, so the ambitious would have
access to knowledge. It passed railroad legislation to open vistas
for the young and aspiring.

This double whammy of Hamilton and Lincoln is a tell in a Brooks
column, you are about to be directed to gaze upon the Great Oz, while
Brooks operates the machinery behind the curtain. Why do you question
the Great OZ HIPPIE!...
Margaret Thatcher was another young striver. When she
became prime minister, she gave the British working class access to
homes and property so that they would become more industrious and

Oh God!..Thatcher?? Brooks must really be feeling hateful this
You’d think that in this and every election, the
Republicans would want to continue this tradition. You’d think that
they’d start every election by putting themselves at the kitchen
tables of middle-class families with ambitious kids. Their first
questions would be: What are the barriers to their mobility? What
concrete help do these people need to realize their dreams?
You would think that if you had been in deep cryogenic freeze since
the Lincoln Administration. Middle Class mobility? The Republican
party does not care about your kids, middle class. Unless they want
to bring their succulent young flesh to Washington so Dick Cheney can
feast on their youth and live forever? No..? Notice how Brooks
doesn't offer an example in policy terms that might prove the
existence of this mythical Republican Party? Is a Platonic form? Is
it a shadow on the wall? Does he laugh hysterically when he writes
these columns? I can easily imagine reading them over the phone to
Karl rove and laughing till blood comes out their noses. Yessss...the
republican party..patron of class mobility...

Yet at the Republican economic debate in Michigan
this week, there was no talk of that. The candidates declared their
fealty to general principles: free trade, lower taxes and reduced
spending. They talked a lot about the line-item veto and the Chinese
currency. But there was almost nothing that touched concretely on the
lives of the ambitious working-class parents who are the backbone of
the G.O.P.

Brooks: I'm shocked, SHOCKED there is gambling on here...
Reader: Your winnings Mr. Brooks.

The faux surprise is well played here. This is a common trope in a
Brooks column. You can almost see the moderate reader being drawn in.
"you see, hippie leftie blogger. He's different. He's a NIIIICCCCE


It would only be shocking if a GOP debate cut into the precious time
they spend endorsing torture and declaring war on Islam and dirty
immigrants to actually cough up something resembling an actual
policy. That's what those defeatist Democrats do. Remember, it is
gospel in Washington that voters don't care about proposals, only
image, a strong one of a decisive leader ready to kick ass.
Sometimes the candidates seemed more concerned with
massaging the pleasure buttons of the Club for Growth than addressing
the real concerns of the middle class. They talked far more about
cutting corporate taxes, for example, than about a child tax credit
for struggling families.

At other times, they sounded as if they were running
for a ceremonial post. The person who is elected president will need
concrete proposals, but the G.O.P. contenders scarcely have them.
Mike Huckabee has some sketchy plans. John McCain answered one
element of middle-class anxiety yesterday with his new health care
plan. Others seem to have decided concrete proposals are for geeks.

Brooks demonstrates the contempt he has for his readers in this
passage. Of course they act like this. This Administration won two
elections doing just that. George Bush ran on a tax cut proposal
based on utterly fraudulent numbers. Reporters treated it like it was
an actual policy idea equally valid to the reality based ones offered
by his opponent. Crunching the numbers is wonky, beneath the work of
political beat reporters. Did you know Al Gore lets feminist chicks
tell him to wear earth tones? Why would anyone in the Republican
party maintain the pretense of having a domestic policy platform?
It's pretty clear they can just mumble some pablum about taxes and
have it trumpeted it as divine inspiration from a midnight visit from
the ghost of Saint Ronnie by the beat reporters they are backslapping
on the bus. Brooks, of course, knows this and yet is perfectly
willing to pretend it's something new that just popped up rather than
business as usual. As if it was a recent development rather than the
perfect reflection of the Bush Republican Party. Yet, plenty of
people lap this stuff out like mothers milk...
In this way, the Republican Party has abandoned the
Hamiltonian ground. It has lost intimate contact with the working-
class dreamer who longs to make good. Instead this ground is being
seized by a Democrat. Over the past few months, Hillary Clinton has
issued a string of specific policy programs aimed directly at members
of the aspiring middle class.

Actually, John Edwards has based his whole campaign on exactly that.
Well, that and addressing issues of poverty and inequality, but the
Great Oz doesn't want to talk about that munchkin shit. Besides, he
gets girly haircuts from a hairdresser. Most of the Democratic
candidates have been jawing constantly about these issues in debates
and on the stump. Damn Socialists.

There's more, but I've decided to be merciful and not subject you to
the rest. The beauty of a Brooks column is the pretense that he is
the one conservative pundit willing to acknowledge the GOP glass
might be half empty. The fact it's a chalice of hemlock is artfully
ignored. The Republican party has never been the champion of the
Middle Class, it's the party of business, WASP values, and waving the
bloody shirt about some potential threat: Old Confederates, Catholic
immigrants, Commies, Hippies, and now the Muslim hordes threatening
to restore the Abbasid Caliphate. Democrats have their own history of
demagoguery to be sure. But Brooks intent is to divert you from the
fact the Republican Party is controlled by people who couldn't give
rancid crap about the Middle Class. They answer to constituencies
that have other priorities. So he offers up this faux surprise about
lack of policy proposals about class mobility, cleverly or not so
cleverly devising a make believe world where the GOP was a champion
of Middle Class success in some halcyon past. I particularly like the
pretense he is surprised that the GOP debate was anything other than
a sadism circle jerk about how torture is the defining characteristic
of the modern GOP man. He doesn't allow Ali the terrorist to spook
him, no sir. He orders that private to waterboard him one more time
for Uncle Sam, just because. Torture is like the new Old Spice.

I know John Tierney left a tough legacy to live up to in terms of
disseminating farcical conservative "commentary", But why do people
give this guy the time of day? Krugman and the besieged Bob Herbert
are the only reasons to read the op/ed section of that paper. The
rest is laughable hackery by charlatans like Brooks or my personal
favorite, increasingly shrill and bizarre ravings from the laptop of
Maureen Dowd. Who after lying about Al Gore for a year and half, is
now indulging her inner Mean Girls by going after Hillary Clinton,
and Barack Obama when she has time.
So can people stop pretending that Brooks is somehow "better" than
the mental patients at the Journal. At least those people don't try
to cover up what they are about...

Thursday, October 18, 2007


Mad props to Senator Dodd.

This Is Your Theory?

Dan Gross, writing for the Moneybox column at Slate, finds a nut:
The subprime mess has been spreading like toxic mold since the housing market peaked last year. So why did it take until now for the government to decide it should do something about it? I have a theory.
A theory? No, Dan— I read your article. You don't have a theory. You have a tenuous but firm grip on one of the few bits of reality not yet obliterated by the ongoing demolition of the financial press in the United States.

Unfortunately, you're using that grip to whack it around some more and help do more damage.
When individual borrowers began to suffer, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson didn't seem overly concerned. The market would clear out the problem through the foreclosure process. Loans would get written off; properties would change hands and be resold. When upstart subprime mortgage lenders ran into trouble, Bernanke and Paulson shrugged again. The market would clear out the problem through the bankruptcy process. Subprime companies like New Century Financial filed for Chapter 11, others liquidated or restructured, and loans made to the lenders were written down. Meanwhile, Paulson and Bernanke assured us that the subprime mess was contained.

But as the summer turned to fall, and the next several shoes dropped, their attitude changed. And that is because the next group of unfortunates to fall victim to subprime woes were massive banks. In recent years, banks in New York, London, and other financial capitals set up off-balance-sheet funding vehicles called SIVs, or conduits.
This is your theory?

You're going to be really impressed with my theory that bodies at rest tend to stay at rest. Have you heard it before? It's really very clever and revolutionary. It explains so much about how the universe works!
The entities borrow money at low interest rates for short periods, say 30 to 90 days, and use the funds to buy longer-term debt that pays higher interest rates. To stay in business, the conduits must continually roll over the short-term debt. But as they searched for higher yields, some conduits stuffed themselves with subprime-mortgage-backed securities. And when lenders became alarmed at the declining value of those holdings, they were reluctant to roll over the debt. Banks thus faced a choice. They could either raise cash by dumping the already-depressed subprime junk onto the market, or bring the conduits onto their balance sheets and assure short-term lenders they'd get paid back.

Large U.S. banks were reluctant to put the conduits on their balance sheets, especially Citigroup, which manages about $100 billion in such conduits. So Paulson sprung into action.
Or, something resembling action if you don't look too closely at it.
In September, the Treasury Department summoned bankers to suggest that they voluntarily work out some sort of arrangement among gentlemen and gentlewomen to prevent disorder in this market. (It was the same type of voluntary arrangement the New York Federal Reserve suggested Wall Street banks make during the 1998 Long Term Capital Management debacle.) The conversations bore fruit. On Monday, several banks announced the creation of a new mega-conduit that would buy some of the damaged goods from existing conduits. Voila! A federally suggested short-term bailout.
I love that phrase "a new mega-conduit" like you don't even know. That's bullshit so pure you could step all over it at 20:1 and still get $100/ounce for it on the street.

Dan. It's not a short-term bailout. It's bridge to a long-term restructuring of the mortgage securitization industry. I am, of course, trying to be careful what I say here. Progressives may want to pay careful and close attention to what's going on here, because there's a chance that what's happening in this disaster could be used to get some progressive leverage back into the hands of the middle class. These high-finance wizards have royally fnorcked themselves up here, and reconstructing the mortgage industry in the aftermath of their stupidity is an opportunity to get some things fixed that have been seriously messed up for a long time. Having the government reinsure some of these special investment vehicles could backfire on these bankers in a huge way. Let the nose of one camel into the tent, and pretty soon, you've got camels everywhere.
Today, Paulson delivered a speech in which he suggested that the mortgage industry take a cue from the big Wall Street banks and find an alternative to foreclosure, like re-adjusting rates or accepting lower payments. The industry should "get together in a coordinated effort to identify struggling borrowers early, connect them to a mortgage counselor, and find a sustainable mortgage solution." He continued: "Recent surveys have shown that as many as 50 percent of the borrowers who have gone into foreclosure never had a prior discussion with a mortgage counselor or their servicer. That must change." He announced that he was supporting an industry coalition, Hope Now, to coordinate such efforts, and declared: "I expect to see results."

These recommendations—and others he made—are all good and common-sensical. But it makes you wonder whether he's been watching birds for the past year instead of reading the headlines on his Bloomberg machine. For these measures are a little like distributing condoms at a clinic for teenage moms who are six months pregnant—good prophylactic ideas that arrived a half-year too late. Last year was a boom year for foreclosures, up 42 percent from 2005. And foreclosures have spiked sharply throughout 2007, up more than 55 percent in the first half of 2007; September 2007 foreclosures nearly doubled from September 2006. Rising homeownership rates (PDF), a success story routinely highlighted by the Bush administration, have fallen for the last three quarters.

Even as hundreds of thousands of people saw their homes dispossessed (some of them were probably speculators who may have simply walked away from no-money-down mortgages), the problem was essentially invisible to Paulson. Of course, it's doubtful Paulson knows many subprime borrowers or subprime lenders. On the other hand, the former head of Goldman Sachs is a member in good standing of the club of Wall Street CEOs. When the subprime meltdown began to disturb the CEOs' sleep, he responded with alacrity. Even as he had harsh words for the entire mortgage complex—from brokers to credit-rating agencies—and recommended far-reaching reforms, Paulson was careful to single out one class of actors for protection. He noted that the issue has been raised as to "whether greater liability should be imposed on securitizers and investors." In other words, should the Wall Street firms that peddled mortgage-backed securities that turned out to be worthless a few months later be subject to greater accountability through the legal system? His answer: "In my view, this is not the answer to the problem."
I'm shocked. SHOCKED, I say, to discover the high finance wizards of Wall Street caught red-handed with one hand in the till and the other mashing down the scale, but surely they're not the problem. No, not at all.

Fnorking wankers.

[Some links elided. See the original article for completeness.]

Monday, October 15, 2007

Where have I heard this before?

Isn't this essentially the argument the Greens have been making for the last decade at least?

I have enough to fret over in a day without worrying whether this organic Tibetan rice was really spirited over to my local Whole Foods in a hydrogen powered rickshaw, and whether that took more or less carbon than all the miniscule bits of electricity and storage space used in the writing, publishing, accessing, and Google archiving of that joke. Carbon consumption should be in the price of my goods, and then I can do what I often do as a consumer and make decisions based on price signals

Thursday, October 11, 2007

"We Are All Subprime Now"

The absolutely fabulous Tanta over at Calculated Risk outdoes herself* again, simultaneously smacking around the new WallMurdoch Street Journal and explaining in full-on geeky but still nicely accessible splendor just WTF has been going on in the business press with the reporting of the mortgage crisis. Hint: they're still racist jackholes. I know— you're so surprised.

Here's the concluding paragraph, but go read the whole thing:
The bottom line is, as CR notes, that "high-risk" lending was everywhere in the boom years. Of course there is a desire to collapse it all into the easy category of "subprime." And there has for a long time been a lot of political pressure to keep the association of "subprime" and "urban minorities" in place, because it has functioned as a good excuse for the subprime lenders (they "help" the poor and minorities, remember?). My view is that a whole lot of parties are very interested in maintaining rather than seriously analyzing a lot of faulty assumptions about risk, rates, and borrower credit characteristics. If this ain't "just a subprime problem," then an entire debt-based economy in which even the middle and upper middle class cannot afford homes given RE inflation and wage stagnation is suddenly in question. The last thing certain vested interests want to hear is that, basically, "we are all subprime now."
Tanta, you're my freaking hero.

* I think I got the gender right, but apologies if I screwed that up.

Tuesday, October 09, 2007

Play Ball!

Turkey has had enough

I was beginning to think the danger was mostly past, since the elections in Turkey seemed to have gone peacefully and without too much controversy.

But it would seem that someone is interested in pushing this situation to the breaking point, whether attacks in Turkey were really the work of the PKK trying to provoke Turkey into some ill-conceived military action, or a false flag operation designed to create the necessary atmosphere for the Turkish military to take an action they have been wanting to take for years...

Here is some local reporting on the ground about what's happening:
New Anatolian and Turkish Daily News; both are saying that it is now just a matter of timing, and that U.S. warnings against incursion are falling on deaf ears, if in fact, those warnings are not just pro-forma, accompanied with a wink and a nod...

mojo sends