Break Up the Banks Open Diary

So sayeth the Titanic of Titans of Banking himself:


What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” Weill told CNBC this morning.

That's Sanford Weill, ex chief of Citibank, author of the Citibank-Traveler's merger (among others) that presaged (OK: forced) the revocation of Glass-Steagall and the separation of investment and commercial banking that had stood since the Great Depression.


There's no bum like a reformed bum.


What sayeth you?


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brutusettu's picture

Is there an important distinction between:

  • wanting to wipe out a nation
  • wanting to have a different party take over that isn't hardliners and aren't as itchy to bomb your country and such

What you did there, I see it

HankP's picture

you're lucky I didn't put a phrase filter on the site.

I blame it all on the Internet


M Scott Eiland's picture

I suspect that even many who say they are for the former would be willing to settle for the latter if the nation in question ceased to be a threat. Admiral Halsey comes to mind.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

Tiger Woods Syndrome, Doubled And Redoubled

M Scott Eiland's picture

Michael Phelps fails to medal in an Olympic race he competed in for the first time since the Clinton Administration, and the way some people are reacting you'd think he fell off the starting blocks and puked in the pool rather than finishing fourth by a narrow margin. I will suggest that it might have been a tad arrogant on his part to contest a race that he had publicly sworn off after winning in in Beijing, only returning to it recently--I'm not criticizing him for taking a spot, because he earned it. I'm saying that his chance of medaling in the 200 freestyle--which he dropped from his program voluntarily--was almost certainly significantly better. Oh well--I suspect he'll win the 200 fly and medal in all his other races.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

Can someone explain Nate Silver's model


over at 538?


It predicts that if the election were held today Obama would get fewer electoral votes than he's likely to get in November. So the model predicts that Obama's numbers will rise as the election grows closer.


But why believe that? Obama's been on a slow decline for a month or so and the economy is not picking up. Seems odd. 

Now Cast is More Sensitive


The November prediction is basically a moving average of Now Cast. Obama has lost in the last Now Cast, so the November prediction is higher. If Obama had gained, the November prediction would be lower.


Now Cast is more sensitive to daily variations. It's a tracking model.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

I wish he would be a bit more transparent about it


Some more visible links would be helpful, but my understanding is that the now-cast is the poll numbers as they stand today. The forecast takes into account polls but other stuff like donations, economic fundamentals, etc. So they're very separate methodologies. 

"I don't want us to descend into a nation of bloggers." - Steve Jobs

Doesn't Romney have more $


and aren't the economic fundamentals a little dodgy?


Anyways, that just struck me as off.

Here's the word from the man



In addition to running a forecast of the Nov. 6 outcome, the model also reports a “now-cast,” which looks at the same information, and runs the same code, but assumes that the election is held today instead of in November. There may be times at which different candidates lead the forecast and the now-cast. For instance, the model will adjust polls conducted just after the party conventions, which typically produce short-lived “bounces” that soon fall back to earth. A candidate in the midst of a convention bounce might lead the now-cast but trail in the Nov. 6 forecast.

Not different methodologies at all. So I guess I share your puzzlement.

"I don't want us to descend into a nation of bloggers." - Steve Jobs



the model will adjust polls conducted just after the party conventions, which typically produce short-lived “bounces” that soon fall back to earth.

That's what I mean by moving average. He is smoothing out short-term spikes of the polls, then he runs the model on the "adjusted", meaning time-averaged, polls.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

I don't think so


I believe he's adjusting on the basis of historical data.

"I don't want us to descend into a nation of bloggers." - Steve Jobs

I think that's it

HankP's picture

from what he's written before, it looks like he looks at trends over the course of past campaigns - live "In July, incumbent polls average -3 from final result" and "In August, challenger polls average -2 from final result" and is applying those modifications to the current polls.

I blame it all on the Internet



The notion of "challenger" and "incumbent" is not generic. A democrat would have different patterns than a republican on a regional basis, and a candidate from a specific region even more so. Those adjustments would get complicated, and thus unreliable, really fast.


But I will go so far as to agree that he is introducing seasonal components, though it is not clear to me exactly how. One guess, he simply lobs of a percentage of support on each side, and the percentage of poll results he discards is proportional to how much time is left. In other words, the further out you are, the less weight he gives to marginal voters (the percentage who have changed their mind within a few days or weeks), probably counting them as undecideds instead, since they are likely to flip again.


Not the same as a moving average, but similar in effect. The point is to dampen short-run variations.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

That makes some sense


I hope Nate's right on this. By my lights, here's a reminder of the best reason to vote against conservatives this election:





Listen up everyone

HankP's picture

I just listed us in Google Current, which is their news./editorial aggregator for pads and smartphones. So if you could installk Google Current and open this link on your phones -


it will register and list it on their site.


If you want to find more contributors, this is one way to do it.

I blame it all on the Internet



Seems to only grab diaries that have made it to the front page.

Better reading experience for mobile, though.

There must be a drupal plugin or theme to mobilify drupal forums by now.

Yes there is

HankP's picture

but it's far from plug and play, and I'm not sure when I'll have the time to do a separate format for mobile users.

I blame it all on the Internet

Ah, don't bother.


I find the site useable from my iPhone, especially in landscape mode.


I mean if you find a plug and play solution, fine. But if you need to sink precious hours into it, I don't see the point.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.


Bernard Guerrero's picture

Though I'm surprised there isn't a PNP solution.  I found one for WordPress in about 10 minutes.

Can you elaborate?


I don't even know what Google Current is, or why I should care. Being an iPhone owner I am not really into Google's offerings. I have Gmail but no Google+ or anything else.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

Google Current is a news aggregator

HankP's picture

like going to Google News, but formatted for pads and phones. Adding the app to your phone and joining theforvm gets it listed and available as a politics/editorial site. This means more exposure to people looking for sites to follow.


It just seemed like an easy way to get us in front of more eyeballs.

I blame it all on the Internet

I Installed the App, But Prefer Reading the Forvm in a browserNT



That's fine

HankP's picture

just hitting the site through Google Currents is all we need for now.

I blame it all on the Internet

I don't have a pad or smartphone you insensitive clod!

stinerman's picture


The Constitution does not vest in Congress the authority to protect society from every bad act that might befall it. -- Clarence Thomas

Don't worry

HankP's picture

I'm sure they'll be available in Ohio in the next few years.

I blame it all on the Internet

+1. Nt

Bernard Guerrero's picture


stinerman's picture

You win the Internet.  Well played, sir.

The Constitution does not vest in Congress the authority to protect society from every bad act that might befall it. -- Clarence Thomas


HankP's picture

I watched part of the Olympic opening ceremonies tonight, I haven't had a TV show induce an acid flashback before.

I blame it all on the Internet

I Enjoyed It

M Scott Eiland's picture

Though I'm not really down with their choice of Time Magazine's 2006 Person Of The Year to light the "cauldron." Pick someone, for heaven's sake.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

I enjoyed LSD too

HankP's picture

at least they highlighted British music, which is arguably their biggest contribution to world culture over the last 50 years (with movies being a close second).

I blame it all on the Internet

"Tough economic times"?

mmghosh's picture

How perspectives change.

Rather, it was a sometimes slightly insane portrait of a country that has changed almost beyond measure since the last time it hosted the Games, in the grim postwar summer of 1948.


Britain was so poor then that it housed its athletes in old army barracks, made them bring their own towels and erected no buildings for the Games. The Olympics cost less than £750,000, turned a small profit and made the nation proud that it had had managed to rise to the occasion in the face of such adversity.

There was that same sense of relief intermingled with self-satisfaction this time. But such was the grandeur of 2012, even in these tough economic times, that 80,000 people sat comfortably in a new Olympic Stadium, having traveled by sleek new bullet trains and special V.I.P. road lanes to a new park that has completely transformed once-derelict east London.




freedom is a fundamental value that does not need to be justified in terms of some other value like efficiency

Finally got a smartphone

HankP's picture

Replaced this POS:




with this:




One thing was strange - the phone costs $299 at the Verizon store, but $99 from Amazon. Not sure how anyone at Verizon thought that was a good idea.


My review so far? Nice phone. Call quality good. Battery good. Switched from AT&T  (who had a horrible, confusing set of plans) to Verizon. Best part about Verizon, if you have access to WiFi (which I have almost everywhere I go) there's no data charges.



The Android marketplace is huge, but the quality of apps vary from very good to abysmal. My favorites so far:


Voice recognition - Built in, so it's not really an app. Surprisingly good. I've already dictated texts and emails, if you speak clearly and there's no background noise it's close to 100% accurate.


MyFiles - Built in, but lets me access any machine on my home network.


MyPhoneExplorer - let's you sync your desktop contacts and calendar to your phone, plus a lot more.


MixZing audio player - I love WinAmp on the desktop, but their Android app is lacking. This one is much better, even though it does have annoying ads. Best feature is looking up songs in their database and identifying them correctly.


Imperio - Great RDP client, I can check my home machine (or client machines) from anywhere


Ringtone Maker - Create your own ringtones from mp3 files. Easy to use and works great.


Alarm and Timer - Stopwatch and alarm clock. Simple and flexible.


Brightest Flashlight - A light when things are darkest.


Quickoffice - Open and even edit Word, Excel, Powerpoint and pdf files.



Things I'm still missing or don't like:


Predictive spellcheckers - Just awful.


Web browser - I've tried a few, Firefox is pretty awful, Opera has some quirks and so does the built in browser.


News sites - Haven't found a good digest yet. Google Current looks promising, but I'll have to get a bit deeper into it to see if it will work.


Good bluetooth headphone/mic - I need noise cancelation for when I'm in my car, plus I'd like to be able to listen to music on it. I'll let you guys know if I find a good one.


I blame it all on the Internet

Dolphin HD is the Best Android Browser


That's a Droid 4, right?


When Moto gets around to porting ICS to the Droid 4, the Chrome browser should be the better option since it'll seamlessly link up with the Chrome browser on your desktop.


If you don't mind skirting your TOS, SVTP WiFi tether and hotspot is a good WiFi tether and hotspot.


TuneIn is a good internet radio player.


Searchify adds nice search options.


LauncherPro is a nice launcher and dock.


Flipboard (cooler, better Currents) is supposed to be coming to Android soon. Or maybe it has already. I just push everything into Google Reader with RSS feeds. Syncs with the Reader on my desktop, so I'm well informed wherever I am and never have to scroll through bad news I've already seen.

It's droid 4 ICS

HankP's picture

I'll try chrome, but to date it's been a bit too minimalist for my tastes. It drives me crazy that most phone browsers don't have a back button.


My TOS already includes wifi hotspot, the app in included with the phone.


Just downloaded dolphin, I'll see how it works.


Also downloaded Flipboard, I'll see how it goes. It looks a bit information sparse at first glance.

I blame it all on the Internet

Ah, crap. Does this mean I finally have to get one.


The pressure at work to be connected 24/7 to the imbeciles on facebook/twitter is growing noticeably.

"Hell is truth seen too late." --Thomas Hobbes

You have an image to keep up

HankP's picture

you have to remain hip and urban. How do you think people would react if they knew you yelled into speaking tubes to talk to the mail room and received your memos via pneumatic tube? They'd call you steampunk, and you wouldn't want that.

I blame it all on the Internet

Welcome to the 21st Century!


You are going to love Android, I just upgraded to the Samsung SIII.


A few suggestions Apps/websites: & all free, I'm cheap.


MightyText - text messaging from your laptop/desktop synced with your phone.


Hipmunk - best flight/hotel booking app/website out there by far. Intuitive graphic presentation of departure/arrival times & layovers - doesn't incorporate SouthWest though.


PDANet - turn your phone into a WiFi hotspot.


Photaf - Panorama photo app for the android.


Where's my Droid - in case you lose it.


DoubleTwist - Sync your music, playlists, videos and photos between your Mac/PC and Android device over WiFi.


Kingsoft Office - File handling MS office products & cloud storage











"Something I think most liberals don't understand is exactly how stupid many conservative leaders are." - Matt Yglesias

Google sky


Just point it up at the night sky (or the day sky, for that matter) and see what stars and planets are above. Cool as a moose.


My only problem with the Android is battery life. But my office has poor reception, which may account for some of that. Spends too much time looking for a better signal.

They couldn't hit an elephant at this dist...
-- General John B. Sedgwick, 1864

Thanks for the tips

HankP's picture

I've setup phones for clients, so this isn't completely new to me. But some of the good apps are really, really good which seems like a big improvement over the past year or two.

I blame it all on the Internet

The Learning Curve is Not as Bad as I Thought...However...

(#285187) that my Galaxy S II was a gift from a Thai Client, when I did a factory re-set yesterday, everything was in Thai Snake writing....Ahhhh (I was actually able to work my way thought this logically, myself)


I'm back up. The Factory re-set was made necessary, to me, because the phone sync'ed to my Google Law Email Account...and I really don't want that email accessible from anywhere except a very secure me, password is not enough. Ahem....


But the phone does take damned good video and photos...Remarkably good.  Note dates:


I will complain however that....Gmail being Gmail...and even though I have linked a different Gmail account, even after the reset, the damned phone does seem to keep trying to find all my Gmail accounts.


Still, as Hank noted...the Voice feature is remarkably good...and finally being organized as to clients and friends is....a God sent.


Best Wishes, Traveller







Your limes are a little soft.


However those other two pics are hella nice with great dynamic contrast, depth and all that stuff. Very nice pics.


I'm afraid that soon Atget/Ansel Adams quality photography is going to be available on every piece of junk portable electronic device on the market. Of course, the real photographer's eye is still going to make all the difference, and there'll be the unimaginably awesome new photo technology to freak out about...

"Hell is truth seen too late." --Thomas Hobbes

Ginned up criticism. nt.

mmghosh's picture


freedom is a fundamental value that does not need to be justified in terms of some other value like efficiency

Get MyPhoneExplorer

HankP's picture

it lets you do a backup of everything on your phone, so after a reset or replacement you can restore everything.

I blame it all on the Internet

Just a little reminder for you ingrates

HankP's picture

13th Annual System Administrator Appreciation Day

I blame it all on the Internet

Pour yourself a stiff one on me


Open bar!

"Something I think most liberals don't understand is exactly how stupid many conservative leaders are." - Matt Yglesias

I wonder why we have below trend growth and high unemployment


Is this reporting or punditry?

Bird Dog's picture

The reporter couldn't interview McCain directly so she cobbled a few things together to aid in her storyline. An example:

For instance, on campaign finance — an issue he was so personally associated with that his name was tied to the legislation that Mr. McConnell fought at the Supreme Court — Mr. McCain has been unwilling to work with Democrats on new bills to force more disclosure of the names of wealthy donors.

Funny that her cobbling together of things didn't include his reasoning for opposing the Disclose Act.

"The fundamental here," he said, "is the way you do any reform is on a bipartisan basis. This is totally a partisan bill. We all know that. It's not going to pass. It's for a political purpose. I resent that, having been involved, with Sen. Feingold, in campaign finance reform that was indeed meaningful. Unfortunately, the United States Supreme Court gutted it. But the fact is, everybody knows it has to be done on a bipartisan basis. They have chosen to attack this issue on a partisan basis, for partisan reasons."


Another reporter followed up: Would McCain introduce his own reform bill?

"No, because I don't have any agreement from a Democrat. I can't find a Democrat who'd agree to rein in the influence of the trade unions. When a Democrat is willing to do that, I expect to join him."

Another interesting tidbit.

Mr. McCain, who disputed some coverage of him by The New York Times during the 2008 campaign, has a policy of not speaking directly to reporters from The Times.

As Seth Mandel notes, this dispute was centered on a hit piece on McCain that brought forth unsupported allegations of an affair, where even the public editor said "no proof". This recent hit piece may not be as salacious, but it's still a hit piece.




"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

It's not partisan

HankP's picture

Republicans are only trying to lie about it. According to the Republican line of argument, any disclosure is "partisan" because it would force organizations to name donors publicly. Except, of course, when labor unions are forced to report their expenditures on political activities.


McCain is lying again, although in his defense he probably doesn't even realize it.


I blame it all on the Internet

Au contraire

Bird Dog's picture

When a Senate Majority Leader invokes a rule to move the bill to the floor without taking it through a committee first, as is the usual process for a congressional bill, and when Democrats write the bill in secrecy and place it on the calendar without a single hearing, and when the bill is taken to the floor without a mark-up, the bill is exquisitely partisan (link). It is political theater masquerading as a legislative process.


"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

McCain's not lying about that


he's lying about the union thing and has been for years. 


He's not good for anything anymore except a rare smackdown of someone like Michelle bachmann

You'll have to do better than that

HankP's picture

what in the content of the bill is partisan?


BTW, it's pretty funny hearing a Republican complain about violating congressional process.

I blame it all on the Internet

It's A Reminder

M Scott Eiland's picture

Namely, of the fact that when The Grey Lady or most other main stream news sources title an article "Republicans We'd Like To Serve Us," it isn't journalism--it's a menu.*

*--apologies to Rod Serling.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

LA half-story

Bird Dog's picture

No, not half of this. The narrative of this LA Times piece is 2.6 million jobs created, women hardest hit. The unmentioned other half of the story is that 80% of the 8.8 million jobs lost prior to that were held my men (link).

"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

Good to hear the recession has been over for 3 years


I got the narrative as lots of men have lost manjobs, (manufacturing, high wage) and now some men are getting womanjobs (service, low wage). Women have been reduced from workers to unpaid students or homemakers. Good to hear the recession has been over for 3 years though.

You will kill 10 of our men, and we will kill 1 of yours, and in the end it will be you who tire of it. - Ho Chi Minh

July 24, 1908

M Scott Eiland's picture

26 miles, 385 yards--and the legend of Dorando Pietri.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

Underworld to play at Olympics opening ceremony


They're very UK. They're also clubby electronica, so I'll be interested how they present themselves. Here's a live clip of their most famous tune which will maybe look a little like what they'd do at the Olympics:





What, no Skrillex? -nt-



"Hell is truth seen too late." --Thomas Hobbes

+1 . nt

Bernard Guerrero's picture

Sign here to petition Skrillex


to produce an Olympic track titled "Vuvuzela Equinox," dedicated to M. Scott Eiland. It should be played at opening, closing, and every single medal ceremony for the duration of the games.

"Hell is truth seen too late." --Thomas Hobbes

Don't bother

HankP's picture

I already have a Vuvuzela mp3 to add as background music to Scott's Olympic diaries.

I blame it all on the Internet

I thought you people....

Bernard Guerrero's picture

....we're philosophically opposed to torture.  (Folks at FC Dallas games have taken to them recently, drives me near the point of murder.)

How do your kids like it though?


I was at a local soccer game with vuvu whatever and the kids just considered it part of the event.

It makes a


very loud noise that adults find incredibly annoying, my guess is they love it.



Long time no see. Thanks for popping by.

Are they that bland on purpose??!?

brutusettu's picture

It's like they're not only bad and​ even if they could do better, they'd decide to annoying on purpose, just to appeal to narrow audience Defiance, Ohio style.



It's a thing & very Anglo Saxon.

"Something I think most liberals don't understand is exactly how stupid many conservative leaders are." - Matt Yglesias

Microsoft is Sears?

mmghosh's picture




freedom is a fundamental value that does not need to be justified in terms of some other value like efficiency

The UK vs. USA


So suppose Ireland and other European countries who can't control their own currency aren't test cases for austerity. Still, we have the US vs. UK. Cameron took over in 2010 and began austerity. Note the divergence in trajectory:


OK, but at least the UK has slashed its deficit compared to the US, right?

... the U.S. budget deficit has been reduced from 10.5 percent of GDP in 2010 to 8.2 percent in 2012. This reduction is a slightly bigger reduction in the deficit than Britain has managed to achieve in the same period – from 9.8 percent to 8.1 percent.

Sure, but then you factor in.....

Bernard Guerrero's picture

....the UK's dependence on A) the Eurozone markets and B) the City (i.e. finance) and it's also clear that they have additional headwinds.

Mostly self-inflicted headwinds IMO nt

HankP's picture


I blame it all on the Internet

Sure, always possible confounding factors


But there's of course reason to believe that the Eurozone headwinds as a whole are themselves largely caused by austerity.


Why don't you see whether all or most of the attributable GDP divergence between the UK and US since Cameron took over is due to depressed exports to Europe and the financial sector?


my recollection from reading the quarterly blurbs where the UK has been tanking is that it's just as centrally driven by a contracting public sector and domestic construction. 

Romney steps on his d!ck again

HankP's picture

Unbelievable. He's on a simple, easy trip to have his picture taken with foreign leaders and say nice platitudes. So first this:


The flap over Romney's Olympics comments comes just a day after his campaign went on the defense after the Daily Telegraph quoted an unnamed Romney adviser suggesting President Barack Obama did not fully appreciate the "Anglo-Saxon heritage" between the United States and Great Britain.


And then this:


"You know, it's hard to know just how well it will turn out," Romney told NBC. "There are a few things that were disconcerting. The stories about the private security firm not having enough people, the supposed strike of the immigration and customs officials … that obviously is not something which is encouraging."


he should have taken the advice Lee Marvin dispensed in The Dirty Dozen:


Just walk slow, act dumb and look stupid!

Hey, it worked for Bush.


I blame it all on the Internet

Stick with the tax returns


The Olympics are going to be a disaster and Romney will only look prescient for that out. 

You need to lighten up

HankP's picture

all this gloom and doom is starting to get to me.


As far back as I can remember, all Olympics have problems before and during, but afterwards no one remembers the problems (except the locals who have to pay off the bonds).

I blame it all on the Internet

Hey, I wish none of this would happen either


So do all who are living through such times. 


But all I can decide with the time that I am given is what depressing things to say about it on therforvm. 

PM David Cameron's Rejoinder


was awesome, too:


We are holding an Olympic Games in one of the busiest, most active, bustling cities anywhere in the world. Of course it’s easier if you hold an Olympic Games in the middle of nowhere.





The London Olympics are missing Mitt Romney pins


This happened:



Does anybody actually like this guy?

Those are Real?


I thought it was a made up thing like "You didn't build that."

The little valentine in the cleft


makes Romney's chin like like thumbs hooked smugly in a belt.

"Hell is truth seen too late." --Thomas Hobbes

Wow. He really managed to piss a fellow conservative off


That's pretty funny and should make some headlines.

Funniest quote so far:


"Mitt Romney is perhaps the only politician who could start a trip that was supposed to be a charm offensive by being utterly devoid of charm and mildly offensive."

"I've been on food stamps and welfare.  Anybody help me out?  No!" Craig T. Nelson (6/2/2009)

At least we know what an Anglo-Saxon relationship is now nt

HankP's picture


I blame it all on the Internet

I just wish...


American journalists would write like that.

"I've been on food stamps and welfare.  Anybody help me out?  No!" Craig T. Nelson (6/2/2009)

Very serious David Post at volokh


defends Joe Paterno and lambasts the NCAA.


David Post: Professional contrarian, always on the side of the powerful.

If JoePa barely even knew a piece of what was happening

brutusettu's picture

then the new coach has no clue who Penn State is playing in their first game.




Oh, Rahm?

M Scott Eiland's picture

You know, Calypso Louis ain't exactly a fan of gay marriage, either. Not a big fan of Jews either, last I heard.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

Several things are going on here

brutusettu's picture

1: Rahm might not care about this if he didn't think he'd earn votes and his actions don't appear to be legal.

2: I'd really love Ed expand on his implicit defense of the statement of "(biblical)  definition of marriage (fawr everybody, even non-Christians)."


Glenn Greenwald on Rahm and Chick-Fil-A


Rahm is satan's spawn


But maybe if Chick-Fil-A were doing an anti-violence campaign or other good works, rather than just selling chicken sandwiches, there'd be a reason to welcome them to Chicago.

Megaupload CEO goes after Obama


Just popped over to marginal revolution


Tyler Cowen quotes, w/out approval of course, a paper summary according to which the policies of Iceland are not better than Ireland's or vice versa:


"the conclusion is typically that one set of policies was more beneficial than the other. In this paper we have shown that the truth lies somewhere in the middle."


Smart approach! Austerity and socializing bank losses (vs. haircuts) aren't discredited, b/c the truth lies in the middle


How about instead of exploring the merits of that hazy position we ask which country's unemployment, real median incomes, and GDP have recovered more fully?


Surprise! It's Iceland. The basic idea here is that Iceland isn't in the middle between Ireland and Iceland, it just comes out on top by the most important measures.


Cowen's next book should be on his true expertise: "How to be pro-austerity, usually only vaguely so, w/out looking like too much of a hack" 

Apples and oranges, Catchy


Iceland has its own currency.


More broadly, on this issue I think you're ignoring structural constraints in your eagerness to play with moral figurines. It's partly a conservative vs. liberal thing, but much more than that, it's a Germany vs. Rest of Europe thing. The kinds of solutions that would help solve the problem, like eurobonds, would also transfer large amounts of wealth from the north to the south. That's why they're massively unpopular in Germany. That's the main reason why the problem is hard to solve, not thick-headedness.

"I don't want us to descend into a nation of bloggers." - Steve Jobs

The UK has its own currency and is deep in recession


Being able to devalue is important, but it's not the only thing. 


It's likely that mortgage relief and not socializing private creditors losses helped as well. And don't forget Iceland implemented temporary capital controls, but somehow failed to unleash anti-free market demons. 


Iceland should be massively in misery if the conventional economic wisdom were correct.


Agreed that wealth transfers are unpopular and the Eurozone crisis isn't about mere austerity stupidity. But note that austerity hasn't reduced the need for wealth transfers, it's increased it and brought suffering along with it. 


Separately, if hard $ conservatives weren't in charge in Germany, a lot of this could be inflated away by the ECB with rates that aren't outrageous, and that could get some $ off the sidelines.

Your political story does not fit reality.

Bernard Guerrero's picture

The "hard money conservatives" in charge of Germany are... most Germans:


Why?  Because as I've mentioned to you previously, "altruism" is a short-range phenomenon, usually reserved by human beings for folks similar to them to some degree.


A lot of this could be inflated away...and the Germans would, as net savers, have to shoulder the bulk of the burden.  And they don't want to do that for a bunch of foreigners.  Why is this treated as being so mysterious?   People here hated Clinton and Rubin for bailing out Mexico in '94, despite it being a profitable operation in the end.  And the same for the more recent bank bailouts, and they were a good idea under basically the same "systemic risk" reasoning.  Duh.

BG, let's distinguish between selfish and self-interested


The paradox of thrift shows the two don't always align. 


The selfish tendency of creditors and holders of wealth is of course to resist inflation. In most cases, this is also in creditors' self-interest as well. 


This isn't one of those cases. Germans don't want a deep recession and a disorderly breakup of the Eurozone, which is worse than 4% inflation, so they've got to realize it's in their broader self-interest to have a higher inflation target, even if one's narrow selfishness doesn't want to inflate away value.


To implement this, you have to throw conservatives out of power as soon as humanly possible, since their economic philosophy is mostly dressed up selfishness and only works when it aligns with self-interest.

Self-interest says


Germans do the absolute minimum to save the Euro, and that's exactly what they are doing.

"I don't want us to descend into a nation of bloggers." - Steve Jobs

Selfish is squeezing wealth out of the periphery


Self-interested is not bankrupting your export markets.


Also, I think these half measures have weakened European institutions immensely. The head of the ECB today said he'd "do whatever it takes" to save the Euro, and Spanish bonds barely fell below 7%.


I'm not saying there's no important self-interest angle to understanding the Eurozone and Germany in particular.


I also just think there's a lot of selfish conservative thought that is both self-undermining and that will tank the Eurozone unless its main proponents are jettisoned.

I don't really disagree


That a more enlightened attitude would be better for them in the long run, economically.


When I talk about self-interest, I talk about political self-interest. 

"I don't want us to descend into a nation of bloggers." - Steve Jobs

"I don't really disagree"


That is a very nice thing for you to say about my economic opinions.

I'm a Keynesian


But I'm a Keynesian that's noticed something. We've now seen the zero-bound in a number of situations: great depression, in a number of countries; Japan in the 90s; and the great recession in a number of countries. That's a pretty respectable sample. How many times have democracies successfully used a fiscal stimulus that wasn't a war build-up to pull themselves out of their slumps? Never.


China probably evaded a downturn with their stimulus, but you have to wonder whether they just postponed it (and they are not a democracy.)


I would be more sanguine about overcoming the political constraints if somebody had managed to pull it off.

"I don't want us to descend into a nation of bloggers." - Steve Jobs

I'd say Obama just did


What would the economy look like to day with fiscal tightening starting in early 2009? With GM and Chrysler gone, their suppliers gone, no stimulus, and deep cuts.


There is growth now, slow, but growth. That's out of the slump. Barely, that's true, but out, and despite strong head winds.


It could be better. The stimulus could have been better (not necessarily that much bigger). But still, things have played out so clearly to support Keynes the man's ghost must be smiling.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

Combine state and federal spending


And we were more on the austerity than on the stimulus side. Is this an endorsement of austerity then?


Look, I agree that history has smiled on Keynes, but these zero-bound situations tend to come after debt bubble bursts. Perhaps the idea that the cure for too much leverage is more leverage is too counter-intuitive to be embraced by a democratic body politic in as energetic and persistent way as is necessary. Our bailout of Mexico was rational, or Germany's bailout of the south now would be rational, but that doesn't make them any more politically palatable.

"I don't want us to descend into a nation of bloggers." - Steve Jobs



When it comes to abstractions like the deficit, people believe what they are told.


And what they are told overwhelmingly is that the deficit is a huge problem. The dominance of austerians in the financial media is nearly absolute. Which is not surprising considering this media essentially works for the financial sector. Who do you think the principal clients of Bloomberg and Thomson Reuters are?


The MSM simply parrots the financial media, while most academics enjoy five and six figure "consulting" and speaking fees from Wall Street.


So, let's see, you've got Wall Street, the financial media, the MSM, most academics, on one side. And you've got Paul Krugman on the other (with an assist from Warren Buffet). Not a fair fight, is it?

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

Surely you're agreeing with me


Because if you're saying that if only you could get the other side to shut up, then it wouldn't be a political problem... that wouldn't be very helpful.


If you excuse the only very slight hyperbole, our information environment IS our political environment.

"I don't want us to descend into a nation of bloggers." - Steve Jobs

Good Point


What I mean is that the fight is with powerful interests. The general population is not really pro or anti deficit or Keynesian or not.


I fundamentally disagree with the notion that the GOP is doing what the people demand. And they know it. They make considerable effort to obfuscate their goals.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

"Combine state and federal spending"


"And we were more on the austerity than on the stimulus side"


Not for '09 and '10. Local and state cutbacks canceled out almost half of the $300 bilion per yr. stimulus spending, but the spending was still adding $150 - $200 billion for both "09 and '10.


Since the output gap was nearly 1.4 trillion for each of those years, its unsurprising that unemplyoment continued to rise. 

Maybe technically


But look at this chart from Krugman. Does that look significant to you?

"I don't want us to descend into a nation of bloggers." - Steve Jobs



In one sense no, since the stimulus was about 10-15% of the output gap. 


In another sense, yes, since that was enough to stop the free fall that would've otherwise occurred.


One question for Keynesians is why, with the increase in federal spending under BushII, the economy wasn't better in the 00s.


Perhaps much of it was directed toward spending with low multipliers, e.g. defense, and increasing BigPharma profits via the prescription drug benefit? 



It was all military...


...and spent inefficiently, not to say corruptly, and a huge amount of it overseas.


Please don't be surprised if buying fuel from Kuwait through Halliburton at a $1.50 a gallon markup over local costs has no stimulative effect on the US economy.


Another problem, the 2000's were the time of the great outsourcing. A tidal wave of factory jobs migrating overseas, mostly to China, is a nice brake on economic activity.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

I'd be curious to see stats


Homeland Security is undoubtedly a big chunk as was the prescription med bill of the increased spending. That isn't obviously non-stimulative. 


Bush II increased government spending per year in his first term, adjusted for inflation, more than any president since Nixon/Ford. Yet the economy still underperformed.


You've probably got part of the answer and I'm not saying this is some obvious counter-example to Keynesianism, I'm just saying I'd like to understand better how this breaks down.

I'm not sure you get it


Keynesians don't think federal spending is always the driver of economic growth. They just think it needs to be in the very specific instance when demand has crumpled and monetary policy is not a viable option because interest rates are already too low (the zero-bound). 


"Government spending always good" is just the mirror image of the right's mindless "government spending always bad." It's not the position of Keynes or his modern days advocates like Krugman.

"I don't want us to descend into a nation of bloggers." - Steve Jobs



I guess I didn't ask my question very well? 


The graph you linked shows a consistent and substantial increase in the rate of government spending over the past decade even while the economy was going through a jobless (or job-loss) recovery in the early 00s and GDP growth was below trend for almost all of Bush's presidency.   


Keynesianism doesn't say deficits are stimulative only when the lower zero bound obtains. instead it says that multipliers are larger in that case. Deficit spending is non-stimulative when the economy is humming and it crowds out more efficient private spending. I don't believe that describes most of the Bush years.


So I was just asking whetehr Bush's deficits weren't very stimulative b/c there was less demand destruction at the time, or whether this is more a story of the type of deficit (non-stimualtive tax cuts for the wealthy, lower multiplier military spending) he was running.


If you don't know the answer, that's fine.         

Germany's a tough nut to crack, granted


"Some 58 percent of Germans believe Merkel's stance in the euro crisis is correct and decisive, although 85 percent of those polled also expect the crisis to get worse... Thursday's poll showed Merkel's Christian Democrats (CDU) remain the most popular party in Germany with 35 percent backing against the SPD's 30 percent."


​But these aren't impossible #s to deal with as the Eurozone's recession is likely to deepen and Merkel's support is likely to fade. The US got a fed stimulus, and this country is hardly a bastion of liberalism.


The important thing is that when it's the SPD's turn to have people who are willing to ram some Keynesianism through that shows positive results (not just "less worse than w/out it"). The short-term political price would be offset by long-term gain. It's possible with an SPD-Hollande alliance, it's just a question of whether you have wishy washy brain-dead centrists or smart people in power.  

No kidding

HankP's picture

people seem to forget what the freefall in late 08 - early 09 was like.

I blame it all on the Internet

FDR Almost Pulled it Off



I'll just take no austerity then.


But we both lived through this and know a bigger stimulus was doable in the US - the Democratic leadership just did not want to. 


It was a mistake, not a political constraint.

This is your blind spot


You imagine that Congress is a bunch of marionettes, with strings pulled by a close to omnipotent President and his leadership lieutenants.  It was a very, very tough vote, and not just conservative Democrats but also Republicans had a great deal of leverage to exert.


If you were a Senator, would you only do what people told you to do? No? Then why do you assume that the real ones are like that? 

"I don't want us to descend into a nation of bloggers." - Steve Jobs

It's your blind spot


The stimulus bill could've been passed via reconciliation, just as Bush II and Clinton passed spending bills.


Obama talked all night and day about bipartisanship in the early days of his presidency and pursued it in thought and deed when crafting legislation. He fought so hard for Republican support on the stimulus, he turned it into 1/2 tax cuts.


That was a chosen priority, not a "political constraint". He didn't need a single Repubican vote, or Lieberman's. 


Separately, none of the people who've ever been interviewed about the stimulus bill and who designed it, notably Larry Summers and Christy Romer, ever said the $ total was chosen b/c of constraints in the Senate.


This shrinking presidency is a fiction invented by Obama supporters once it became clear how inadequate the policy was, and has been passed down like a fairy tale ever since.  



You persist in this fantasy


As I've pointed out before, reconciliation can only be used when the measure reduces the budget deficit.

Separately, none of the people who've ever been interviewed about the stimulus bill and who designed it, notably Larry Summers and Christy Romer, ever said the $ total was chosen b/c of constraints in the Senate.

Wrong. There's plenty of evidence that there were political considerations. Here's Jared Bernstein, who was part of the WH economic team at the time:

In terms of size, I think it's fair to say that we recognized we needed the largest Keynesian stimulus that the market could bear. Now, what's the market? I'm not really talking so much about the economic market, because I don't think we thought we could fill the whole output gap just in terms of how deep the recession was.



What I'm really talking about here, in part, is a political market. We were talking from the very beginning about stimulus measures that were many hundreds of billions larger than anyone had ever contemplated. And to this day, people criticize the Recovery Act as not being large enough, and I take their point. But I think what they forget is we ended up with a plan that was around $800 billion; at the time members of Congress were talking about plans that were in the $200-300 billion range and balking. …



"I don't want us to descend into a nation of bloggers." - Steve Jobs

That rule about deficit-increasing could be removed at anytime


with 51 votes.


Bush II got to pass two gigantic tax cuts for the wealthy w/out following it. There was no real reason for Democrats to abide by it. Republicans won't the minute they're in power.


Even with the rule, Ezra Klein, who's as friendly as anyone to the admin, says reconciliation could've been used to get more stimulus: if they'd used a budget-neutral 10 yr. time frame.


Let's not forget threats of the nuclear option, etc.


The fact is Republicans are playing hardball and the Democratic leadership wanted to play nice. That's a preference, not a hard "political constraint". All these constraints will disappear if the GOP regains a majority. 


Thanks for the Bernstein quote. I was working with Brad Delong and others' compilations of countervailing quotes from Summers and Christy Romer who were claiming they were motivated by their estimates of the output gap, not Congress. But Bernstein's a straight-up guy, and I believe him that Congress's expectations were a consideration.


I don't think it's very reasonable to believe these expectations were some insurmountable obstacle, as Obama supporters implausibly claim.

Ezra's writing in December 2009


About a presumably much smaller additional stimulus.


If you're talking about a say... 1.5 trillion dollar stimulus in early 2009, then you have to figure out how to cut spending or raise taxes by $1.5 trillion. Even if you repealed the Bush tax cuts for everyone, rich and poor alike, over the last 5 years of the 10-year period, you STILL wouldn't raise enough revenue to be revenue neutral. It would have to be a very large tax hike, contrary to Obama's campaign promise not to raise taxes on the middle class.


Try getting 51 votes in the Senate for that.


Reid looks like he's ready to move on filibuster reform next term, and I say hurray to that. But these niceties in the Senate have had a constituency because they increase each Senator's individual power. That's why they've been hard to get rid of, and why it's taken an unprecedented level of obstruction from the Republicans to rally the caucus.


The President has very little power over Senators. He can steer some money their way, but they raise most of their own money. He can campaign for them, but many would prefer he would stay away, depending on their state and his popularity there. He can steer perks their way through executive power. He can flatter them with attention and invitations. That's about it. As a portfolio of persuasion, it's not nothing, but it doesn't really compare with the political consequences of a big vote, or the firmly held convictions these Senators may have. When you look at the supposed great Presidential persuaders, FDR and LBJ, you see they had extremely dominant Congressional positions compared to Clinton or Obama. These tales of their hypnotic powers might be true, but they are largely beside the point. 

"I don't want us to descend into a nation of bloggers." - Steve Jobs

"these niceties in the Senate have had a constituency ...


"because they increase each Senator's individual power. That's why they've been hard to get rid of, and why it's taken an unprecedented level of obstruction from the Republicans to rally the caucus"


We'll see how long that brand new D nicety not to increase the deficit w. reconciliation lasts if the GOP is in power and wants something. The Ds enacted the rule, they could've gotten rid of it w. 51.


You keep straw-manning these critiques of Obama into saying he has magical powers over Senators.


All this dispute with Obama supporters has ever been about is to get them to admit that Obama has the same power as other presidents.


Bush and Clinton passed their spending and tax bills via reconciliation. Obama could've too if they'd pushed a little against what were never hard constraints.


I guess we'll just have to wait for this all to be demonstrated the next time the GOP gets their turn.

I had a wonderful and decisive rejoinder


to this but my browser lost it. The gist of it was that you're wrong. Oh well, I guess you'll just have to take my word for it.

"I don't want us to descend into a nation of bloggers." - Steve Jobs

*shakes fist*


You've won this one, but I'll be back 

Not really

HankP's picture

they got huge advantages of a Europe wide currency that they de facto controlled, especially because they're an export dependent economy. They will suffer significantly if the Euro collapses.


There are costs and benefits to the Euro, no one seems to be interested in honestly balancing them.

I blame it all on the Internet

Read the comment again! (nt)



"I don't want us to descend into a nation of bloggers." - Steve Jobs

Oh, they're doing the absolute minimum

HankP's picture

I just disagree about the "saving the Euro" part.


And even if the Euro is saved, it and the ECB will be severely weakened.

I blame it all on the Internet

I never liked the Euro, anyway.


It's the ugliest looking currency Europe ever produced. Bland drawings of non-existing places. The ultimate PC currency.


French Francs were beautiful, not to mention the Dutch Guilder. I kept a couple of those bills...


This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

Good comment!


I'd say your last goes for both Germany and the periphery. 

It's not an austerity/no austerity dialectic.


The irish gov took on it's banks debts. The Icelandic one did not (but it was close). After that everything is innevitable including austerity.

There's an austerity history here


Perhaps Ireland doesn't provide evidence one way or the other re: austerity b/c of confounding factors. 


I was participating in a years-long tit-for-tat with economists like Tyler Cowen and others, who have proceeded on the assumption that Ireland might tell us something about austerity. E.g.:


One green shoot
by Tyler Cowen on July 1, 2010 at 3:55 am  in Current Affairs, Economics | Permalink

Ireland climbed out of recession on Wednesday with the economy returning to growth in the first quarter [2.7 percent], after suffering one of the deepest downturns of any advanced industrialised economy.



Don't get too giddy with optimism: the Irish economy had declined fifteen percent.  Still, it's far too early to judge the Irish experiment in pre-emptive fiscal austerity to be a failure.


In response to Brad Delong's question of when we could judge the policy's success, Cowen wrote (more than two years ago): "As for how the policy fares in absolute terms, 2-3 years is a good window for judging."


So basically, "Mom, he started it."

It probably does.


It's an open export economy and that side of things was not hurt by austerity so much. Still doing ok though headwinds from europe have an impact. Euro medling in tax rates could completely kill it since it is largely inward investment fuelled.


 I'm more interested in misery than GDP. The housing crash has generated a lot of misery and a lot of unemployment. I don't think you could ascribe that to austerity (in fact some austerity in time might have avoided it), but perhaps a course other than austerity would have a lot of those housing related workers in other jobs. For sure public sector job losses are hurting and cuts to vital services such as medical, in home care for old people and so on are biting very hard. Those are austerity personified.


Anyway, that wasn't really my point. My point was that once the loans of the banks were assumed by the gov auterity was inevitable. There is simple no other way to make the massive payments to service these loans and pay back capital. Default by the banks was the serious route and should have been taken.

Glenn Greenwald leaving Salon


Pretty good fit over at The Guardian


And he's as uncompromising as ever, painstakingly explaining to Obama supporters that No, guys, the President had no interest in shutting down Guantanamo Bay.

Greenwald's almost invariably misleading on these issues,


and that is the main reason people don't listen to him beyond a small circle of die-hards. He identifies three Senators who voted with Congress on the bill, but who publicly stated that their reasons for going against the President were matters of principle, not NIMBYism: Feingold, Sanders and Inoyue. Each was critical of the President's plan for bringing detainees to the mainland US because it didn't do enough to safeguard the rule of law. So, they voted to bar the President from closing Guantanamo or transferring prisoners without Congressional approval. Then Greenwald writes:

That, as all of this evidence makes clear, is why so many Democratic Senators voted to deny funding for the closing of Guantanamo: not because they favored the continuation of indefinite detention, but precisely because they did not want to fund its continuation on American soil, as Obama clearly intended.

That, as the actual votes make clear, sounds like obfuscating horsecrap. The final Senate vote was 86-13, with 45 Democrat votes in favor. The House voted 283-186 to tell the President to stuff it, with 93 Democrats (and 6 abstainers) making another D majority. Nobody except Glenn Greenwald seriously believes that all or even a majority of those 138 (D) votes in Congress were all based in Bernie Sanders-type scruples and misgivings about Obama's plan. 


Instead, most of the political world looks at that vote and says hm, Congress appears to be overwhelmingly opposed to the President's plan to a) shutter the detention facility or b) transfer detainees to the US. By Greenwald's reading, that's because Congress wanted to shutter and transfer even more than the President. It's a strained, ultimately wildly improbable counterfactual reading of events, but you almost miss it if you don't go look for yourself.


Greenwald does that a lot.

"Hell is truth seen too late." --Thomas Hobbes

It wasn't the point of Greenwald's post


to argue that all or most Congressional Ds rejected Obama's GITMO plan b/c it didn't meaningfully address the central civil rights offenses at GITMO.


It was to point out that the substantial number of Democrats who did oppose Obama's plan on those grounds were right.


We know that Obama is apparently fine with indefinite detention and inadequate access to legal counsel. 


Greenwald's "fringe" position is shared by the ACLU, the most credible organization on civil liberties in the US.



"A substantial number" - he identifies 3.


And those three voted to completely tie the administration's hands over the detainee issue (pretty much any change to the status quo now requires Congressional approval).


The ACLU always takes an aggressive position on constitutional rights issues, because that's their charter. The ACLU is "fringe," by definition and as a matter of legal strategy. Certainly no "substantial number" of Dems in Congress shares or openly endorses their position on Guantanamo.


Greenwald's argument is that a substantial number of Senate Democrats want to see suspected terrorists brought to the US to stand trial & freed if they can't be convicted. That argument is wrong.

"Hell is truth seen too late." --Thomas Hobbes

3 senators and presumably several in the House


But I don't know why you're getting hung up on the particular number. It doesn't matter.


What matters is that Obama never proposed or intended to end indefinite detention and was never committed to adequate legal counsel for detainees. Congress didn't stop Obama from doing so, he never proposed it and has since optionally restricted access to legal counsel. 


The ACLU and Greenwald are simply cataloging facts, even when they're inconsistent with pro-Obama narratives/excuses.   

Yes, faced with a choice between bringing Khalid Sheikh


Mohammed to trial and potentially being forced to release him, or simply keeping him locked up, Obama and nearly all of the elected members of our government have picked the second option.

"Hell is truth seen too late." --Thomas Hobbes

Then subsequently signed future indefinite detention into law


by signing the NDAA and subsequently restricted access to adequate legal counsel for detainees. 


I think the point Greenwald was making is that the pro-Obama narratives are a little moldy.

I think the point is that the entire federal government


is resolutely opposed to releasing terrorists just because they happen to have been tortured by the Bush admin. I share Greenwald's deep dismay at this turn of events, but damned if I can see a better option.

"Hell is truth seen too late." --Thomas Hobbes

The entire federal government


Funny how Democrats used to object to civil rights abuses until the leader of their party suddenly decided to mimic the previous admin.


In any case, the entire federal government has a lot of terrible ideas, e.g. the Iraq war or the Patriot Act. That didn't used to stop many people from criticizing those involved.


At least until apologizing for Obama became more important.

This isn't "mimicking" the previous admin.


This is recognizing that the previous admin. put the rest of us in an impossible situation wrt these 168 detainees. 


Unless the WH is currently rounding people up, holding them without trial, torturing them for intel, and not telling anyone about it. Then they are mimicking the previous admin.

"Hell is truth seen too late." --Thomas Hobbes

Not so much need to round up anyone


once it's been decided that the President can issue executive death warrants for US citizens and have them (and any of their family that happen to be around) droned.  

Obama is holding plenty of people without trial, and he protects torturers from prosecution.  There is no evidence that he is currently running any torture programs, and he has announced that torture has been stopped as a matter of policy.  His admin has carefully avoided turning it into a criminal matter, and the most likely reason for that is that he wants to keep his options open.

So sure, not mimicking the previous admin.  Better is some respects and worse in others.


mmghosh's picture

New use spotted!

freedom is a fundamental value that does not need to be justified in terms of some other value like efficiency

I Would of thought...Death from Afar, by Stealth or Surprise..nt



That's eeyn's meaning

mmghosh's picture

I think.  And a logical one.

freedom is a fundamental value that does not need to be justified in terms of some other value like efficiency

Executive death warrants.


DOD is murdering people in their sleep or at their prayers with killer robots from the air every day of the week that ends in y. There are target lists. Money is paid to informants & traitors. People are tracked & targeted, and then pimply Las Vegas kids pilot RC fighter planes overhead to blow them up along with whoever's lucky enough to be near at hand. The President, in other words, issues death warrants every day on people in several global warzones.


That there's a possibility some of these people might be US citizens makes absolutely not one whit of difference. If you're ok with A, you can't be opposed to B. I seriously doubt any court challenge would amount to anything: laws of war apply.


Declining to prosecute Bush admin torture authorizers is extremely disappointing to me. I can understand how the fact that a court would almost certainly feel compelled to acquit KSM of any charges would lead to current policy. However declining to punish those who put us in that quandary amounts to a failure of political will (on all of our parts).

"Hell is truth seen too late." --Thomas Hobbes

And the reason for this

HankP's picture

just like the reason there are no effective gun purchase screening laws, is because the overwhelming majority of Americans want it that way. It's the same reason we keep getting tax cuts but not spending cuts.


It doesn't matter how much anyone argues about "republic" vs. "democracy", if huge majorities vote a certain way that's the policy we're going to get.

I blame it all on the Internet


Bernard Guerrero's picture

....I agree with, in spades.  Or as Rumsfeld put it, democracy is messy. 

The powerless president


That's the same excuse I'm challenging here.


Obama isn't solely in charge. but it's not 100% COngress's fault or 100% the voting public's.


Obama's in fact much more to blame than the voters b/c they don't have strong opinions on e.g. adequate access to legal council, he'd bear no political price for allowing it even if they did, and he can work to change public opinion.


I'm happy to say Obama splits the blame evenly w. Congress however.

I didn't say he's powerless

HankP's picture

but in general popular positions win over time.

I blame it all on the Internet

No, Madison Avenue wins.


With help from Hollywood.


What do Hummers and Gay Marriage have in common? Both were desired by the Corporate-Advertising-Hollywood complex.


The population does have some input, but not much.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

Not shutting down GITMO

brutusettu's picture

and courting billionaire looters ...and I'm still looking for any instance where Romney is closer to a net on any issue.

Another Athlete Fails Twitter-Based Intelligence Test

M Scott Eiland's picture

Greek triple-jumper sent home for political and racist comments on Twitter.

In one sense this is a modern story, but in another important sense it is a very old one. If you do something in public that embarrasses your nation during the Olympics--whether your name is Tommie Smith or Voula Papachristou, you're going to quickly find yourself in a world of hurt from your nation's Olympic committee.*

*--and by the way, yes Avery Brundage was an insufferable p***k.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

Tommie Smith didn't embarrass the US


the legislators who were trying to keep segregation and Jim Crow alive did that. History has looked kindly on Tommie. On Brundage not so much.

MSE didn't put that Tommie didn't give embaressment

brutusettu's picture

that the US deserved at the time.  I prefer to read it as "telling the Emperor he has no clothes on could put you in a world of hurt."


M Scott Eiland's picture

The "Avery Brundage was an insufferable p***k" comment should also have been a clue.* To use a more extreme example in another venue, we don't really know what happened to the young man who blocked the tank column in Beijing in June of 1989. If he was murdered, exiled, or otherwise mistreated by the Butchers of Beijing it was another atrocity to lay at their feet--but no one could say that it wasn't a predictable consequence of that young man's act. Embarrassing your government in a forum as public as the Olympics is going to result in retaliation as extreme as that government is willing to take the heat for, regardless of the merits of the actions that cause the embarrassment. For their own sakes, it might have been better for Smith and Carlos to wait until they returned to the States to make any political statements. We'll never know.

*--also note that Brundage actually enforced a harsher penalty on Smith and Carlos than US Olympic officials wanted to enforce, until the traitorous SOB threatened to expel the entire US track team from the Olympics if discipline was not imposed. Really, it's a shame that we couldn't have found a reason to turn the Nazi-sympathist bastard over to the Nuremberg tribunals before he got his hooks into the Olympics: I'd consign him to the Firey Pit for his role in delaying the return of Jim Thorpe's medals alone, to be honest.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

OK. My sincere apologies


for misunderstanding you. I'm in perfect agreement with you on this.

No Worries

M Scott Eiland's picture

I'm not a big fan of politicizing within the Games--or boycotts, regardless of the originator--but Brundage was a monster and Smith and Carlos got a raw deal, if a somewhat foreseeable one. Brundage was behind some rather harsh discipline directed at Eleanor Holm during the 1936 Olympics, too.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

Scott, Sometimes You Come Up With the Weirdest Links...



...but this was quite interesting...some life Ms. Holm lived, eh?




Best Wishes, Travell

The Pain from Bain Drives Romneybots Insane


A new AP factcheck finds that the door can't be closed as easily on R. Money's 1999-2001 tenure at Bain as the campaign would like.

An AP analysis of thousands of SEC filings in that three-year period found at least 39 documents in which Romney was listed as sole shareholder, president or director of investment funds that controlled large stakes in Bain-related companies.

Unfortunately it appears that, whether or not he made the actual executive decisions that involved dozens of cases of mass layoffs, offshoring of jobs, investment in entities with eyebrow-raising business involvements like Stericycle, and so forth (and without further evidence that can't be ruled out)... Mitt Romney was in fact the legal fiduciary and a major beneficiary of those decisions.

"Hell is truth seen too late." --Thomas Hobbes

IOW, Romney committed a felony in his election filings


Or maybe someone can explain to me how the above and the following can be simultaneously true:


Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way. 

That quote cannot be completely technically true

brutusettu's picture



I forgot to bookmark it, IIRC there were older news reports that claim Romney said he flew back to Boston from time to time to check up on Bain (this was around the time Romney was running for office in Massachusetts and needed residency there to run).



That quote you put cannot be completely true if Romney had his name attached to official SEC documents for Bain and if Romney accepted a salary from Bain for doing nothing but signing his name stating he owned the whole show.

The Euro as the world's new reserve currency


I don't hear that one so much these days. I think the last time I heard it was around early 2010. I went digging and found someone saying that around then:


"The euro will become the world's favorite reserve currency because Europe has a better growth strategy than the US, David Roche, global strategist at Independent Strategy told CNBC."


And why will the Euro replace the dollar? B/c austerity is so awesome of course:


"They're so heavily taxed anyway. So you have to shrink spending, which opens up a whole area of the economy for entrepreneurs to enter the act."


... "The Germans are saying to everyone else: ... we're going back to fiscal orthodoxy," said Roche.


"I believe that's the right strategy to get growth going. I don't think spending money you don't have is the right strategy. So the American strategy is totally wrong. And I think the Europeans will be right. I think it (the recovery) will be governed by Germany in a very nice democratic way," he added.


​Of course, the wrongest prediction possible means CNBC has discontinued using him as an economic commentator.

Heard this on Bloomberg Radio

Jay C's picture

Funny - I listened to a discussion on this very subject the other day on Bloomberg radio while driving (long trip, I heard most of it) : one of their regulars (dunno her name: lady with a harsh (Belfast?) Irish accent) interviewing two guys about the whole "TBTF" mess. The one was making the point that in most of the recent cases of Huge Institutional Financial Risk-Taking, the "banks" involved were dealing with nothing at all like the traditional definitions of "banking": while he didn't say so directly, the point was that the the big international financial players had/have devised themselves an inconceivably vast transnational, multi-trillion-dollar casino in which to speculate with inconceivably vast sums of money - which they have fundamentally invented out of nothing - in order to rake off vast sums of "real" money as profit. And then "the market" (i.e. other peoples' governments) deal with the fallout when things go sour.


The "other side" of the discussion, though was just as revealing: some miserable chinless twerp from Goldman, Sachs (yes, I know, it's probably entirely wrong, but his quavering voice just inevitably conjured up the image of "miserable chinless twerp") hemming and hawing and dancing around the subject before finally opining that the main problem  -in the US, anyway - wasn't the lack of regulation of the banking industry, but an excess of it (foisted on the country by the Senate, somehow), and that any further regulatory tightening of the banking/"investing" distinction was a Bad and Wrong policy, because, well, All Regulation is just Bad and Wrong, so there...


Even Bloomberg's Irish moderator seemed somewhat struck at the vapidity of that response: but, predictably, little clarification was forthcoming. I wouldn't imagine that much, if anything, on this front is likely to be accomplished at all, given the inconceivably vast stakes that Moneyed Interests around the globe have in maintaining the present system; Sanford Weill notwithstanding...

My Recent Diary Touches on This


The "Gumption" one.


No market is out of the reach of our banksters' tentacles.

The really sad thing...

stinerman's picture

The Lib Dems are going to suffer mightily for their coalition with the Tories.  Just when they were just about ready to break into being the official opposition, they went and threw it all away by hitching their wagon to David Cameron.  As much as I like Nick Clegg, he committed serious political malpractice there.

The Constitution does not vest in Congress the authority to protect society from every bad act that might befall it. -- Clarence Thomas

Nick Clegg is persona non grata with me and deserves


to be forced to listen nonstop to Christmas music for the rest of his days on this Godforsaken planet.  

Don't You Have A Wager


with another commenter about all this?

Should've taken the bet, but didn't


Btw, that recession the UK conservatives are overseeing is -2.8% GDP contraction on an annual basis. 


And don't tell me it's Europe's and not the UK government's fault, b/c UK conservatives are simply implementing the same austerity policy that conservatives in Germany are forcing the rest of the continent to implement. 


The internet's most overrated economist, Tyler Cowen, would never admit it, but it's a total empirical disconfirmation of austerity.


... The scary thing is the US looks like it's about 2 yrs. behind the UK. Gordon Brown, like Obama, had no significant commitment to Keynesianism, and as a weak-willed centrist oversaw anemic growth of around 1% that ushered in the conservatives. They got to work and quickly plunged the country back into a deep double dip.


Sounds like one very possible (probable?) outcome of 2013-2014 in the US to me. 

That's a Shame


Both the missed bet and the cratering of the UK's economy.


Someone needs to work out who benefits from slow or no growth.


This guy (who really appears to be Just Some Guy on the Internet*) says it's middle-aged "median influencers" who have laid in enough to see them through to the next world, and insist on protecting it:


But the preferences of developed, aging polities — first Japan, now the United States and Europe — are obvious to a dispassionate observer. Their overwhelming priority is to protect the purchasing power of incumbent creditors. That’s it. That’s everything. All other considerations are secondary. These preferences are reflected in what the polities do, how they behave. They swoop in with incredible speed and force to bail out the financial sectors in which creditors are invested, trampling over prior norms and laws as necessary. The same preferences are reflected in what the polities omit to do. They do not pursue monetary policy with sufficient force to ensure expenditure growth even at risk of inflation. They do not purse fiscal policy with sufficient force to ensure employment even at risk of inflation. They remain forever vigilant that neither monetary ease nor fiscal profligacy engender inflation. The tepid policy experiments that are occasionally embarked upon they sabotage at the very first hint of inflation. The purchasing power of holders of nominal debt must not be put at risk. That is the overriding preference, in context of which observed behavior is rational.

I'm skeptical. But it's as reasonable as anything else I've read.



*Or a real life example of Gramsci's organic intellectual.







Re: conservative failure to mark their beliefs to market


It doesn't come any clearer than this that reality has nothing to do with conservative's beliefs:


A joint statement by Wolfgang Schäuble, German finance minister, and Luis de Guindos, Spanish economy minister, condemned the high interest rates demanded for the sale of Spanish bonds as failing to reflect “the fundamentals of the Spanish economy, its growth potential and the sustainability of its public debt”.


Markets are wrong and government employees like Schäuble and de Guindos know better.


Therefore, we should continue their policy of firing government employees to grow the inherently superior private sector.


Bird Dog's picture

If there was evidence that the mergers of investment banks and commercial banks was a cause of our recent financial troubles, I'd like to hear it. Seems like there other factors that were more significant (lax underwriting, lax oversight, botched mortgage-backed securities, loosened capital requirements, lack of new regulation on new security instruments). For one thing, GLB enabled commercial banks to buy floundering investment banks, thus averting a worse meltdown (link). For another, non-GLB entities (Fannie, Freddie, AIG and GM) did not have investment banking arms and received much larger bailouts than commercial-investment banking houses. Also, those commercial-investment banks paid back their TARP obligations with interest.

Weill has a point that taxpayer dollars were at risk from TARP, but actual taxpayer losses did not come from the companies that merged under Gramm-Leach-Bliley. There were plenty of other practices in his industry that caused more serious problems, yet he is silent on those.



"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

And why did those things happen?


lax underwriting, lax oversight, botched mortgage-backed securities, loosened capital requirements, lack of new regulation on new security instruments


And why were these policy choices made? How about millions of dollars of lobbying by the likes of JP Morgan Chase, Citigroup, Goldman, and so on?


Let's look at Gramm–Leach–Bliley Act, the one that repealed Glass-Steagall, also nicknamed the Citigroup Relief Act:

A year before the law was passed, Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass–Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998.[1] Less than a year later, GLB was passed to legalize these types of mergers on a permanent basis. The law also repealed Glass–Steagall's conflict of interest prohibitions "against simultaneous service by any officer, director, or employee of a securities firm as an officer, director, or employee of any member bank."

(from Wikipedia)


If it had been written for no other reason than to accommodate Citigroup's merger, you would not need to change a word of the act. Note that Gramm, Leach, and Bliley were all Republicans, while the bill was signed by Clinton, and backed by scumbag extraordinaire Lawrence Summers.


You seem to believe that the policy choices you blame arose spontaneously from a vacuum. But they did not. They were proposed, lobbied for, and justified by the consolidating financial industry. A quick, well-made tutorial can be found in the documentary Inside Job. (Sponsoring Amazon Link Here).


Watch it, fact-check it, and come back to us.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.


Bird Dog's picture

And the big banks would not have lobbied for their interests if GLB didn't exist? Makes no sense, M.

GLB was a bipartisan bill. It passed 90-8 in the Senate and 362-57 in the House. This has to mean that a majority of Democrats in both houses, and of course a Democratic president, ushered the bill into law. Summers makes a useful scapegoat to liberals, but it's not fathomable that an ex-Citigroup employee and Clinton Treasury Secretary is not named or blamed.


"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

Huh? Part II


Summers makes a useful scapegoat to liberals


He does? He's also an Obama appointee. How useful is it for liberals to point out that he picked a bastard like Summers?


And the big banks would not have lobbied for their interests if GLB didn't exist?


And who, pray, said anything of the kind? My point is that GLB shows complete regulatory capture by the banks, as you well point out all the way to the legislative and executive branches.


As for Rubin, he is well taken care of in Inside Job. Like I said, watch it, then get back to me.


This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

I read the script

Bird Dog's picture

The universal banks were big before they became universal banks. There many more significant factors that led to the financial meltdown than GLB. I don't disagree that there was regulatory capture for the areas under regulation.


"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

The waves of bank mergers also....

Bernard Guerrero's picture

....largely predated the end of GS.  My original checking account was with a local bank which, by dint of mergers in 1995, 96, 99, 2000 and then finally 2004, eventually became part of BofA.  Only the work on the last significantly post-dates G-L-B, and didn't in any way require it.

I think the theory is that investment banks built giant


speculative investment vehicles on the backs of various secured assets held by their commercial divisions. IBs betting on mortgages, IBs betting on derivatives, IBs betting on sovereign debt, etc.


The "evidence" that this happened is so all-pervasive, the answer to your query is simply that you're missing the forest for the trees.

"Hell is truth seen too late." --Thomas Hobbes

Except, of course, that..

Bernard Guerrero's picture

...the commercial banks with IB arms didn't get killed by speculative vehicles.  BofA, in fact, got killed bailing out a non-bank finance company, and they all got hurt making and holding mortgages.  Whereas the stand-alone IBs with no such connections (ie. Lehman) got destroyed.  So sadly, no.

TARP Wasn't the Only Rescue Vehicle


deployed to put out the inferno. It wasn't even the largest.


$7.77 trillion in sweetheart loans through the Fed's


discount window. 


$7.77 trillion. Also known as "well more than half of total US GDP for any given recession year." All unsecured, kiss-and-a-wave collateralized, taxpayer-backed emergency funds in staggering amounts that make TARP look like a tip jar. 


I think this is something we should talk about more. It wasn't just that taxpayers bailed out the banks by covering some of their liabilities after a decade of high risk asset bubble speculation blew up in their faces...taxpayers were their lifeblood. TARP didn't keep the banks alive, the Federal Reserve did.


This is equivalent to finding out 40 years later that there had actually been warheads in the air during the Cuban Missile Crisis. By nearly every available measure, the more we find out about the Great Recession, the more it becomes plain that the depth and severity of the crisis was far greater than we (including most of Congress) had been led to believe.


Consider just this one story from that report:

Wells Fargo bought Wachovia Corp., the fourth-largest U.S. bank by deposits before the 2008 acquisition. Because depositors were pulling their money from Wachovia, the Fed channeled $50 billion in secret loans to the Charlotte, North Carolina-based bank through two emergency-financing programs to prevent collapse before Wells Fargo could complete the purchase.

Imagine if you had an angel investor like that ready to bail you out every time you thought you were getting a deal and instead found yourself holding a bag of crap.


Because of the sweetheart terms of the Fed's discount "emergency" rate during the crisis, the major banks pocketed about $13 billion just in terms of their net interest margin (the difference between interest paid on borrowed accounts and interest earned on assets banks would've otherwise been forced to liquidate). 

"Hell is truth seen too late." --Thomas Hobbes


Bird Dog's picture

The Fed stepped into the shoes of banks and lent short-term money due to the looming liquidity crisis. This is not really applicable to the TBTF argument.

BTW, following Weill's logic, since Fannie, Freddie, AIG and GM were also viewed as TBTF, why did he not call for the break-up of government sponsored entities, big insurance companies and big car companies?



"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

Fannie and Freddie as


Fannie and Freddie as GSMs were/are expressly backed by the taxpayer, subject to rigorous government oversight as a result. Not true for the TBTF banks. But applying that kind of oversight to the TBTF banks would be a good start.


Likewise, GM's (and Chrysler's) bailout came with some very intensive government oversight (as well as a fired CEO). Another good suggestion for policy wrt to our TBTF banks.


AIG's counter-parties were those very same TBTF banks, who needed AIG to be saved, so they could get paid, lest the worst happen.


Again, the Fed acted to save* our TBTF banks so they could continue to provide liquidity to various markets -- secretly, at the time -- lest the worst happen. This is the definition of TBTF.




*And profit, too, which helped our TBTF banks payoff their TARP funds.





Fannie and Freddie were implicitly backed by the taxpayer, and the government oversight was about as un-rigorous as you can get.

"I don't want us to descend into a nation of bloggers." - Steve Jobs


Bernard Guerrero's picture

Doesn't it at least take a decade or so before you get to rewrite history wholesale?  And the CEOsof the banks that got got killed did, in fact, get fired.

The Fed did the job it was charged to do when it came to...

Bird Dog's picture

...liquidity. There was no reason to to let numerous banks fail because all the other banks stopped lending to each other. Not so doing so would have killed many more than just the TBTF variety.

So your logic is, with more oversight, the big institutions don't have to be broken up. Wasn't that the point of Dodd-Frank? To provide more oversight?


"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

I'm with BD on this one


The securitization of mortgage debt would have happened with or without Glass-Steagall.


Also, the Feds emergency rate helped banks recapitalize... part of the reason why we're not in as bad a fix as Europe is because our banks' balance sheets are healthier, thus they are more ready to lend.

"I don't want us to descend into a nation of bloggers." - Steve Jobs



Securitization is one part of the problem. What the repeal of Glass-Steagall shows is regulatory capture. At that point, anything was possible, and anything did indeed happen.


And so we live in a world where Moody's can tell Germany, Germany, that the outlook on their AAA debt rating is negative, while the same outfit handed out AAA ratings as if they were candy to neatly packaged junk. And not only is nobody from Moody's in jail for fraud, these guys are still in business.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

I'm missing the logic


If regulatory capture is the enemy, then Glass-Steagall didn't prevent it... because as you say, the repeal of Glass Steagall "shows" regulatory capture.


And that certainly didn't impact the rating agencies, which aren't under any very significant regulation, even now.

"I don't want us to descend into a nation of bloggers." - Steve Jobs

Go back to the start...


Bird Dog: If there was evidence that the mergers of investment banks and commercial banks was a cause of our recent financial troubles, I'd like to hear it.


My point was that one such merger, resulting in Citigroup, led directly to the demise of Glass-Steagall, and that opened the floodgates.


No, Glass-Steagall, being a law, could not prevent the capture of Congress by Wall Street, but my point was precisely that the mergers Bird Dog can find no harm in were in fact very harmful indeed. My point was not that Glass-Steagall was a superhero law that could survive an onslaught of corruption.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

Show your work


Goldman Sachs, a standalone IB, has been one of the biggest contributors to political campaigns for a number of cycles. Glass-Steagall doesn't change that.

"I don't want us to descend into a nation of bloggers." - Steve Jobs

G-S Hasn't Been a Standalone Since the Crisis


The move allowed them to take advantage of the various bailout tools.

At least he's marking his beliefs to market


Of course it would be nice if he'd never advocated for these mergers in the first place, but it's better than nothing.


Felix Salmon recently argued that only breaking up the big banks can stop financial scandals, and that increased regulation won't work:


" ... the entire financial-services industry ... needs to be restructured so as to create the kind of institutions which thrive on increased trust, rather than on maximized arbitrage of anything from news to interest rates to regulations.


In order for that to happen, we’re going to need to see today’s financial behemoths broken up into many small pieces — because at that point each small piece is going to have to earn the trust of the other small pieces which rely on it."


The question I'd like to hear answered is why Canada can have such a successful banking system with banks about as large as the US's.

Two words

Bird Dog's picture

Capital and risk. As in Canada had higher capital requirements and were much less risky with their lending. It also helps that they didn't have a housing bubble to speak of.


"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

Cart might be before the horse

stinerman's picture

Canada didn't have a housing bubble because they had higher capital requirements.


But then that might not be true, because one of my daily reads (probably Yglesias) mentioned that they're starting to get one.

The Constitution does not vest in Congress the authority to protect society from every bad act that might befall it. -- Clarence Thomas


Bernard Guerrero's picture

TX had very little in the way of bubble activity and, not coincidentally, fairly strong regional banks, despite having precisely the same federal regulators.  try again.

And how come you're responding to everyone in this diary


except me? 


I've even got some anti-Cowen bait up. What's a guy gotta do around here to get some attention?

Feeling the...

Bernard Guerrero's picture

I'd started working out


and began a diet b/c you took so long.

My recollection is that both TX and Canada


had fairly strong government protections against subprime lending.


What's yours?

In TX's case...

Bernard Guerrero's picture was two factors:


A) large quantities of flat land plus no zoning to speak of


B) a pretty simple reg that doesn't let you extract much equity from your home (LTVs are capped, IIRC, at 80%, which practice as a risk manager I heartily approve of)

High Property Taxes


Would tend to dampen enthusiasm on the demand side, too.

However, keep in mind that...

Bernard Guerrero's picture

....the high property taxes are also there because income taxes don't exist.   I'd agree that it works as a brake, but to some extent it's a wash from the household's POV; you have higher property taxes (on a rate basis, keep in mind RE is cheaper here at all levels) but you also have more unencumbered income.

Fair enough

stinerman's picture

So it was a lack of regulation (lack of zoning) and regulation (capped LTVs).

The Constitution does not vest in Congress the authority to protect society from every bad act that might befall it. -- Clarence Thomas

A shocking lack of simple....

Bernard Guerrero's picture

Well I thought I had one over on you

stinerman's picture

Because to a Republican, all regulations are always bad for all reasons all the time.


But then I remember you're a Guerriste, not a Republican. :-)

The Constitution does not vest in Congress the authority to protect society from every bad act that might befall it. -- Clarence Thomas

Not sure about A


Plenty of flat land in Nevada, with lax zoning, but they fared badly, and Florida is not known for its mountain ranges, while zoning is strict in parts of New York that saw virtually no foreclosures.


So A)? I don't think so.


B), yes. What I have read all comes down to the 80% rule. In other parts of the country, equity could be negative.


Glad to see you are crediting government regulation for something. Sly of you to point out that Texas had the same federal regulators, though.



This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

Too simplistic.

Bernard Guerrero's picture

Zoning has clearly had an impact on bubble-like activity in already built-up areas.  The area of DFW that I'm in has seen massive growth in the last two decades, but fairly tame housing inflation.  That isn't because of the equity regs, it's all new homes and first mortgages.  The thing is, the second it starts to get expensive, somebody plunks down another development one exit further north.  There was an "ecosystem" at work in the worst bubble areas that required multiple factors in order to really take off.


And I have no problem with thoughtful, simple regs or government.  Government's what keeps the riff-raff out of the neighborhood without my having to join a neighborhood watch, for instance. Win-win! :^)


Edit:  I think this will self-limit, eventually.  Much as in NYC, eventually some 'burbs will just be too damned difficult to commute from, unless tele-commuting really takes off.  So I'd expect prices to take off in the easily accessible ones eventually, though not for a good long while. (I still see cows in spots on my morning jog.)

Bear in mind that Dallas is not Texas.


Houston & Dallas have fairly unlimited expansion range (Houston's I think more limited by waterways & flood zones, whereas D-FW basically have several hundred square miles of Great Plains all to their lonesome). 


Austin & San Antonio have horrible congestion problems, and though Austin in particular has been expanding eastward out of the hills, those exurbs quickly get too far (considering also the horrendous traffic) from what makes Austin Austin for there to be much market out there. 


The rest of the state has plenty of expansion & few zoning restrictions...but nobody wants to live there. You can't have a real estate boom in places nobody really wants to live.


The "endless unrestricted expansion" model really only applies in Dallas-Ft. Worth, where both towns can basically keep expanding in concentric circles until some piddling state border gets in the way.

"Hell is truth seen too late." --Thomas Hobbes

Combination of A and C


Part C is a large population of agricultural, construction, and oilfield workers that have very decent amounts of money but no paystubs or employer letters they could show a lending officer at the bank.  These people tend to buy unzoned land either cash or owner financed, haul in a trailer, and then save enough money to self-contract their dream house or build it in stages. 


I believe the neighborhood I live in was built more or less entirely without the aid of bank loans. The ability to put in a septic tank and live temporarily in a trailer without permission,  or at least with a no-quotas/no-denials permit process, is necessary for this to work.



Makes sense


I just googled calculated risk who said the same things

There's also been the string of financial fraud since


Not sure how capital requirements are going to stop financial institutions from rigging interest rates on loans, energy market manipulation, mortgage fraud, etc.


But thanks for the article.


I note that Canada appears to have a housing bubble currently, but that's typically taken as a failure of the central bank to burst the bubble.

There's actually more to it than the 2 words

Bird Dog's picture

Schuler had an interesting piece on the differences between the American and Canadian systems. Left unmentioned were the exotic financial instruments that Wall Street developed over the years that were not so prevalent in Canuckistan. But the bottom line is they leveraged less and underwrote better.

As for interest rate rigging and so forth, seems like financial institutions were able to engage in these shenanigans without or with a merged investment-commercial banking makeup.




"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009