February 26, 2010
February 25, 2010
The curious weakness of popular opposition to imperialism, the numerous inconsistencies and outright broken promises of liberal statesmen, frequently ascribed to opportunism or outright bribery, have other and deeper causes. Half consciously and hardly articulately, these men shared with the people the conviction that the national body itself was so deeply split in to classes, that class struggle was so universal a characteristic of modern political life, that the very cohesion of the nation was jeopardized. Expansion again appeared as a lifesaver, if and insofar as it could provide a common interest for the nation as a whole, and it is mainly for this reason that imperialists were allowed to become “parasites upon patriotism.” (Hobson)
The contemptuous indifference of imperialist politicians to domestic issues was marked everywhere, however, and especially in England…[I]mperialism was the chief cause of the degeneration of the two-party system into the Front Bench system, which led to a “diminution of the power of opposition” in Parliament and to a growth of “power of the cabinet as against the House of Commons.” (Hobson) Of course this was also carried through as a policy beyond the strife of parties and particular interests, and by men who claimed to speak for the nation as a whole…The cry for unity resembled exactly the battle cries which had always led peoples to war; and yet, nobody detected in the universal and permanent instrument of unity the germ of universal and permanent war.
February 24, 2010
February 23, 2010
February 22, 2010
In Chicago, for instance, we’ve gotten a foretaste of the new breed of
foundation-hatched black communitarian voices; one of them, a smooth
Harvard lawyer with impeccable do-good credentials and
vacuous-to-repressive neoliberal politics, has won a state senate seat
on a base mainly in the liberal foundation and development worlds. His
fundamentally bootstrap line was softened by a patina of the rhetoric of
authentic community, talk about meeting in kitchens, small-scale
solutions to social problems, and the predictable elevation of process
over program — the point where identity politics converges with
old-fashioned middle-class reform in favoring form over substance. I
suspect that his ilk is the wave of the future in U.S. black politics,
as in Haiti and wherever else the International Monetary Fund has sway.
So far the black activist response hasn’t been up to the challenge. We
have to do better.
February 19, 2010
February 18, 2010
Most lenders will, in other words, take full advantage of the asymmetry of norms between lender and borrower and will use the threat of damaging the borrower’s credit score to bring the borrower into compliance. Additionally, many lenders will only bargain when the threat of damaging the homeowner’s credit has lost its force and it becomes clear to the lender that foreclosure is imminent absent some accommodation. On a fundamental level, the asymmetry of moral norms for borrowers and market norms for lenders gives lenders an unfair advantage in negotiations related to the enforcement of contractual rights and obligations, including the borrower’s right to exercise the put option. This imbalance is exaggerated by the credit reporting system, which gives lenders the power to threaten borrowers’ human worth and social status by damaging their credit scores – scores that serve as much as grades for moral character as they do for creditworthiness. The result is a predictable imbalance in which individual homeowners have borne a huge and disproportionate burden of the housing collapse……
The suggestion that Congress should amend the Fair Credit Reporting Act to prevent lenders from reporting mortgage defaults is premised upon the underlying mortgage contract, in which lenders agree to hold the house alone as collateral. In the case of underwater mortgages, however, the portion of the mortgage above the home’s present value essentially becomes unsecured. Lenders compensate for this by holding the borrowers’ credit score, and thus their human worth, as collateral – thereby altering the underlying agreement that the home serves as the sole collateral. As a consequence, lenders are often able to reap the benefit, but escape the costs, of their bargain.
Let us clarify for ourselves the logic of this whole method of compensation—it is weird enough. The equivalency is given in this way: instead of an advantage making up directly for the harm (hence, instead of compensation in gold, land, possessions of some sort or another), the creditor is given a kind of pleasure as repayment and compensation—the pleasure of being allowed to discharge his power on a powerless person without having to think about it, the delight in “de fair le mal pour le plaisir de le faire” [doing wrong for the pleasure of doing it], the enjoyment of violation. By means of the “punishment” of the debtor, the creditor participates in a right belonging to the masters. Finally he also for once comes to the lofty feeling of despising a being as someone “beneath him,” as someone he is entitled to mistreat—or at least, in the event that the real force of punishment, of executing punishment, has already been transferred to the “authorities,” the feeling of seeing the debtor despised and mistreated. The compensation thus consists of an order for and a right to cruelty.
In this area, that is, in the laws of obligation, the world of the moral concepts “guilt,” “conscience,” “duty,” and “sanctity of obligation” has its origin—its beginning, like the beginning of everything great on earth, was watered thoroughly and for a long time with blood. And can we not add that this world deep down has never again been completely free of a certain smell of blood and torture—(not even with old Kant whose categorical imperative stinks of cruelty)? In addition, here that weird knot linking the ideas of “guilt and suffering,” which perhaps has become impossible to undo, was first knit together. Let me pose the question once more: to what extent can suffering be a compensation for “debts”? To the extent that making someone suffer provides the highest degree of pleasure, to the extent that the person hurt by the debt, in exchange for the injury as well as for the distress caused by the injury, got an extraordinary offsetting pleasure: creating suffering…
It seems to me that the delicacy and, even more, the Tartufferie [hypocrisy] of tame house pets (I mean modern man, I mean us) resist imagining with all our power how much cruelty contributes to the great celebratory joy of older humanity, as, in fact, an ingredient mixed into almost all their enjoyments and, from another perspective, how naive, how innocent, their need for cruelty appears, how they fundamentally think of its particular “disinterested malice” (or to use Spinoza’s words, the sympathia malevolens [malevolent sympathy]) as a normal human characteristic:—and hence as something to which their conscience says a heartfelt Yes!* A more deeply penetrating eye might still notice, even today, enough of this most ancient and most fundamental celebratory human joy. In any case, it’s not so long ago that people wouldn’t think of an aristocratic wedding and folk festival in the grandest style without executions, tortures, or something like an auto-da-fé [burning at the stake], and similarly no noble household lacked creatures on whom people could vent their malice and cruel taunts without a second thought.
February 17, 2010
Lawmakers interested in re-election have little incentive to be truthful about what implied guarantees of powerful companies will cost the taxpayer. Better to brush it under the rug or pretend the costs don’t exist. Then, when they must be paid, policy makers can argue that it’s an unforeseen emergency and an odious necessity.
As the number of firms with implicit government backing has risen because of the crisis, so too have the expected costs of those commitments, Mr. Phaup said. And yet, under current budget policy, those costs will be ignored until the recipient of the guarantee collapses — the precise moment when the guarantee is likely to cost taxpayers the most.
Three years into the crisis, we are no closer to reining in too-powerful-to-fail companies or eliminating the risks they pose to taxpayers. Both goals are achievable, yet our legislators refuse to do what is necessary to protect us from trillion-dollar bailouts down the road.
It’s a disservice to a bewildered and beleaguered nation.
EVEN a layman understands the fundamental role that information plays in the economy. But what about secrecy? Does it have a place in high finance? The Clearing House and the Fed believe it does.
The Federal Reserve has wrapped itself in secrecy since the turn of the 20th century, when a select group of financiers met at the private Jekyll Island Club off the eastern coast of Georgia and, forgoing last names to preserve their anonymity among the staff, drafted legislation to create a central bank. Its secrecy, of course, persists today, with Ben S. Bernanke, the Federal Reserve chairman, refusing to tell even Congress which banks received government money under the bailout. There is also a heated battle to force the Fed to disclose its role in the controversial attempt to save the insurance giant American International Group.
In its appellate briefs, the Clearing House invoked this tradition of silence. It pointed out that the Federal Reserve Board does release information on its Web site about the total money it gives out, although not about loans to specific banks. Bloomberg News, it maintained, was trying to “upset the board’s longstanding policy against disclosure.”
Mr. Giuffra argues that the open flow of information — while ostensibly a virtue — can, in fact, be dangerous. The Fed’s discount window, which provides money on a short-term emergency basis, is a lender of last resort, as is its alphabet soup of special programs. If depositors or creditors were to find out that a bank had reached the point of needing last resorts, it might be compromised in public. And, as Mr. Giuffra notes in his court papers, “banking history is replete with examples of financial institutions failing when the public loses confidence.”
Indeed, his papers can, at times, sound something like the highlight reel from a financial disaster film. They refer to no fewer than eight bank runs — many large, some small — in recent years, though only two had anything to do with central banks.
To bolster the case that transparency is not, as the news media would have it, an unfettered good, the Fed and the Clearing House filed affidavits from several Fed employees, each one testifying that banks face a “stigma” when their emergency borrowing habits are known. The Fed wrote that these affidavits, coming as they did from experts on the front lines, were themselves enough to prove its case.
Bloomberg’s lawyers have said that this line of argument smacks vaguely of “father knows best.”
The Fed, meanwhile, has worried that if the appeals court rules for Bloomberg, then savvy traders could quickly get their hands on such data in the future and use it to their advantage even as the government was trying to stabilize the markets.
It is notoriously hard to infer judges’ leanings from the questions they ask, but even Mr. Giuffra acknowledged that the panel, which is not likely to rule for several weeks, seemed to take a dim view of some of his points. Among them was his argument that the information in the documents was not the releasable kind generated by the government — in this case, by the Fed — but was instead obtained from “a person,” or the banks, and was therefore private and protected.
Whatever the results, Ms. Bennett and her investigative team have walked away from the experience with their tribal energies revitalized.
“You can’t know how exciting and explosive it’s been,” she said. “This wasn’t some plan where we said, ‘We’re going to file the FOIA, then we’re going to wait, then we’ll check it and our ultimate goal is to sue the Fed.’
“It came up spontaneously. It’s like what it was like 30 years ago. Back in the days when journalism was exciting — really exciting.”
February 15, 2010
February 14, 2010
On Saturday morning the long-awaited battle for the walled town began. But as one of Mr. Obama’s own advisers conceded in December, when recounting the arguments that took place in the Situation Room last fall, “it’s not about the battle, it’s about the postlude.”….
In the Bush years, the rallying cry when operations like Marja began was “clear, build and hold.” Mr. Obama has added a fourth step, “transfer.” At the end of the three-month-long review of Afghan strategy, Mr. Obama vowed he would begin no military operation unless a plan was in place to transfer authority promptly to the Afghans.
That plan exists in Marja, at least on paper. Both the Americans and the Afghan military did everything to advertise the coming military strike short of posting billboards with the date and size of the operation. Gen. Stanley A. McChrystal, the American commander who persuaded Mr. Gates, and ultimately Mr. Obama, to try his form of counterinsurgency, insisted last week that the “transfer” element of the strategy had been prepared and would kick in as soon as the Taliban fled or were defeated.
“We’ve got a government in a box, ready to roll in,” General McChrystal said.
The gamble here is that once Afghans see the semblance of a state taking hold in Marja, rank-and-file Taliban will begin to take more seriously the offers that Mr. Karzai and the West are dangling to buy them off. Enticed by the offer of some political role in Afghan society — and a regular paycheck — they will think twice about trying to recapture the town. “We think many of the foot soldiers are in it for the money, not the ideology,” one British official said recently. “We need to test the proposition that it’s cheaper to enrich them a little than to fight them every spring and summer.”