Financial Industry: "Keep Government Out of Regulation!"

Dana Milbank, the Washington Post's somewhat cynical, somewhat humorous DC gadabout, has hit on something I've been thinking about lately. From Milbank's column:

At this time last year, the American financial system was near collapse, rescued only by hundreds of billions of taxpayer dollars. Now the system has stabilized, and the industry is on the verge of a coup that many would have thought impossible a year ago: an escape from any major reform of financial regulations.

He later quotes from the head lobbyist at the American Financial Services Association (AFSA):

"This was supposed to be a slam-dunk," crowed Bill Hempler, the group's top lobbyist. But instead, he said, "Democratic members are increasingly having heartburn over CFPA [Consumer Financial Protection Agency] and maybe second thoughts."

It's absolutely mind boggling that even the head lobbyist of AFSA thought this was going to be unavoidable, and yet, here we are, with no new regulation on those who plunged our nation (and indeed the entire world!) into a crisis from which we still have yet to emerge. I've discussed this topic before, but I never, in a million years, would have thought the wishy-washy, incoherent financial industry talking points (pdf) would get through to anyone. Just listen to Milbank's characterization, which I think is an accurate one:

Or, to put it another way: Don't regulate us now because the economy is still suffering from the mess we made because we weren't regulated the last time. Chutzpah, it appears, is recession-proof.

I'm sure there's more going on than I know about, which is almost always the case in Washington, and I'm not usually one to raise the banner of outraged populism, but how in the hell is this regulation not getting done? How is there no one who can bring this to the attention of the population at large? I mean, you try to alter a small percentage of the population's health insurance and people act like the troops are storming our homes, but you try and regulate an industry that is almost unanimously hated by every citizen of the country and everyone's like, "Yawn. What else is on?"

I would love to blame this failure, which I find to be the single most disappointing aspect of the new government, on the Republicans. And to some extent I can and do, as they have essentially taken a posture of "oppose anything and everything a Democrat says or does, no matter how much sense it makes," which has resulted in at least a significant delay of every single thing on the Democratic agenda (an agenda which many seem surprised to learn was actually voted for by the vast majority of Americans in both 2006 and 2008).*

In reality though, the public will exists to support this regulation. No question. No amount of strong-arming the opposition would hurt your poll numbers. No amount of dirty, hardball politics would be overkill to see this initiative through. Indeed, I would estimate the political spoils of being the champion of such an initiative to be copious. So then if it's not the people holding us back, who is it?

There are only two causes I can think of that explain this phenomenon, and I've been dancing around them this entire piece because I'm not ready to become cynical yet. You have likely already come up with them: the Representatives in charge of this reform are either spineless, or bought and paid for, and most likely both.

If this angers you (and it absolutely should), here is a list of representatives you can focus your anger on: Barney Frank (D-MA), Chris Dodd (D-CT), Richard Shelby (R-AL), Michael Bennet (D-CO), Evan Bayh (D-IN), Tim Johnson (D-SD), Bob Corker (R-TN), and Mr. Blow-Up-the-Government himself, Ron Paul (R-TX). Milbank, thankfully lists these individuals out in his column.

I only wish I lived in one of those states so I could vote against these financial industry shills. It truly sickens me, and pushes me toward the cynicism I have have tried so hard to avoid. Thanks so much, financial industry. You've ruined my country, broken my compatriots, corrupted my government, and begun crushing the soul of yet another young, bright-eyed optimist.

*This, interestingly, underscores the idea that the Republican platform of "the government is bad at everything" is actually a self-fulfilling prophesy. It's kind of like me telling you my computer doesn't work as I jam the keyboard into the CPU. When it breaks I can say, "See? It's broken."

(Image of financial worker and his conscience from http://www.bvisible.ie/newsimages)

Coincitweet

This kind of hilarious coincidence demonstrates why Twitter may have some societal benefit. From my Twitter feed (@kennethbledsoe):

And yes, John McCain is in my feed. As the old adage goes, "Keep your friends close and your enemies on your Twitter feed."

Murdoch + Microsoft = Fail

Here's an interesting cross-section of things that I think are terrible. From cnet news:

Maybe Rupert Murdoch was serious about wanting to go without Google.

Murdoch's News Corp. has initiated discussions with Microsoft over a plan to have the media company's Web content essentially delisted from the world's largest search engine, according to a report Sunday in the Financial Times that cited a person familiar with the situation. Microsoft, which owns rival search engine Bing, has also reportedly approached other media giants about having their content removed from Google search results as well.

The article goes on to note that Murdoch is also considering making News Corp. site content available only to those with a paid subscription.

I am personally antagonistic toward almost every party involved here, as well as the principles behind the actions. I find it hard to imagine how Microsoft can manage the PR of literally going around to major companies and asking them to delist from Google. I absolutely despise the idea of having certain companies associated with specific search engines. That totally defeats the point of a search engine. But leave it to Rupert Murdoch to find a way to take anything and drive a wedge into it.

Of course, this time the idea is to get Google to pay for the "privilege" of displaying News Corp.'s vaunted content, rather than the usual goal of promoting a political agenda that is personally profitable to Rupert Murdoch. It's basically extortion from Google--which won't work. Trust me when I say that Fox News needs Google a lot more than Google needs Fox News.

I have railed against Murdoch in the past, and I will do so in the future--because he is generally a terrible, terrible force in the world. He has done everything in his power to destroy the quality of news media--in television via Fox News, and in newspapers through the Wall Street Journal and others. Now he wants to push people to choose sides in a manufactured search engine war? The fact that Microsoft is ready and willing to be the enabler here is only fitting and even further justifies my decision to switch to Apple (which I count as one of my best decisions of 2009).

All that said, I actually hope the deal goes through because I can easily envision a scenario where the whole thing backfires. Let's run through it, shall we?

News Corp. content is removed from Google and available by subscription only. Following this move, nobody views News Corp. content (because honestly, who's ever going to pay for news on the internet?). Both MicroSoft and News Corp. lose favor with the burgeoning generation of tech savvy consumers because of the abhorrent PR that results from the Google delisting. As a result, more and more consumers avoid both MicroSoft and News Corp. products, causing large losses in revenue for each.

Google uses the PR opportunity to expand the user base of its products, including its forthcoming netbook operating system, and as MicroSoft's main competitor, Apple gains even more market share. Naturally there will also be a proliferation of other open source operating system adoption. News Corp., meanwhile, has now made their market even more niche than it already is, and the power of the right-wing echo chamber is correspondingly diminished. The embarrassing failure of the deal effectively demonstrates to other firms that such deals are toxic, and we never have to worry about this again.

Okay, my scenario is admittedly rosy for my own preferences, but I do imagine this whole idea backfiring at least somewhat.

Hey, a guy can dream can't he?

Update: It looks like Wired more or less agrees that this attempt to extort money from Google will backfire. I assume that they generally understand these things (certainly more so than Rupert Murdoch), so my scenario may not be that farfetched.

Teabagger: The Movie

Wow, this thing went to film quicker than 9/11 (Hat tip to Matthew Yglesias):



Seriously, this bothers me. Not because I find this movement in any way intellectually or politically threatening, but because there seem to be so many people who view themselves as heroes for being opinionated. They are calling this another "American Revolution," which is beyond ridiculous. They've even gone so far as to make a movie about themselves, and promote it as if it starred Mel Gibson.

The childishness and self-absorbed nature of the whole thing creeps me out, and has a very Michael Scott-esque quality. For reference:



Meanwhile, back in the real world, Politico notes that the "movement" (*shudders at use of that word*) is basically cannibalizing itself. So a bunch of self-absorbed angry southern white people all think they should be in charge... who would have thought.

On a completely unrelated note--and let me stress how unrelated it is--I do think it would be neat to see a film about the Boston Tea Party of 1773.

Note: I realize that my commentary on this "movement" gives it more creedence than it deserves, but like Sarah Palin, I find mockery of it completely irresistible.

Note: I should probably also point out that while I am southern, white, and arguably somewhat self-absorbed (though I would describe myself more as self-indulgent), I am not angry, nor do I perceive myself as being persecuted. This would seem to imply that the latter are really the most critical characteristics of a true teabagger.

Political Mad-Libs

I read a piece from ThinkProgress's Wonk Room blog, which is a pretty good read for a wonkish take on progressive policy, and this statement caught my eye (which I will hereafter use to launch into yet another self-indulgent, extemporaneous diatribe on my perceptions of the fundamentals of political and economic philosophy):

Sen. Judd Gregg (R-NH), widely known for his fiscal hawkishness during Democratic administrations, couldn’t resist pointing the finger, saying, “this level of fiscal recklessness and irresponsibility should be shocking to the American taxpayer, especially since it is our children and grandchildren who will be forced to grapple with the consequences of our debt.”

The piece then goes on to discuss some misconceptions about federal debt and spending. I'm less interested in that subject than I am in the idea of reworking Gregg's phraseology in a sort of political Mad-Lib:

"this level of environmental recklessness and irresponsibility should be shocking to the American citizen, especially since it is our children and grandchildren who will be forced to grapple with the consequences of our destruction."

You will almost never hear such a statement on Capitol Hill, and certainly not from the likes of Senator Gregg. This brings me to a point I have mentioned facetiously and obliquely before, but will say directly now: Way, way too many people care way, way too little about any outcome of a given policy that is not directly related to money.

Take, for example, all the hand-wringing by those whose biggest concern about legislation to curb greenhouse gas emissions its effect on the economy, despite having stated their belief that global warming is a very real and dangerous environmental problem. If you believe there is a problem that will be deeply injurious to billions of people worldwide, it seems to me that the petty economic concerns of coal miners in West Wherever, USA should be, at best, of secondary concern.

Or take, for instance, the throngs who will openly admit that our healthcare system is terrible and that it results in much unnecessary hardship on many of our compatriots, but who will march on the Capitol if they have some vague cable TV-fueled perception that there could, somewhere down the line, be a tax increase on those who make more than $1 million annually. In my mind, twisted though it seems, the goal of a good healthcare policy should be to deliver good healthcare. To read the Congressional record, however, one would perceive that the primary purpose of attempting healthcare reform is ensure that the deficit is reduced. Of course, the interesting note on that issue is that, according to CBO, the more "liberal" proposals, while more expensive in the short-term, do much more to reduce deficits over the long-term (Oh Jeebus, now they've got me doing it). This fact should, of course, be part of the conversation, but not the entireity of it.

Now when you're managing your government's economic policy, this would be the time to make economic activity the primary focus of policy decisions. It appears to me that we have essentially made all policy into economic policy, which is a fantastic way to ensure that no other societal outcome will ever get due consideration.

This tendency to focus almost exclusively on economic policy outcomes, which borders on pathological (our national tax policy fetish in particular is absolutely out of control), I would argue is the natural result of our collective national conflation of democracy and capitalism. I think too few people are unable to separate the concepts of capitalism and democracy, each one of which is an element of our society, but neither of which requires the other to function. For instance, cries of "socialism" greet any attempt to expand public services as if such a thing were anathema to democracy. The truth is, if people vote for socialism, then socialism is democratic. If one becomes king by becoming the wealthiest citizen in the land, then capitalism is monarchic. I say these things to drive home my point that democracy is form of government whereby the citizens vote to affect policy. Capitalism is an economic system where the acquisition of money (or "capital" if you will) is the primary goal. They are not the same thing.

When we conflate the two, we begin to think that the goal of democracy is to promote the acquisition of capital, and we end up with a culturally bankrupt, nihilistic society that is more concerned with money than its own progress.

I'm basically done ranting now, but I want to clarify that I am not some Marxist revolutionary, and I don't advocate the destruction of our capitalist system or our democratic system. I just advocate the ability to separate the two conceptually, which I believe would be beneficial for our society in a number of ways.

Update: I was thinking about the symptoms of this pathology, and one that occurred to me was that we have essentially stopped referring to Americans as "citizens" in favor of referring to them as "taxpayers". This seems kind of perverse to me--kind of like calling your boss "salarypayer" or calling your mother "birthgiver".

On Markets and Infrastructure

(A fantastically enticing title, if I do say so myself...)

Sorry for the time lapse since the last blog post.  I was down with the swine flu.  Make sure you wash your eyes after reading this piece, because it is highly contagious, and you may get it from my words.

Moving on, I have long worried that my blog is too negative.  Indeed, I have been told by some that it is exceedingly negative, but let's face it, it's a lot easier to get jazzed about things that make you upset than about things you like.  So in the interest of taking steps to rectify that problem, I will point you to an excellent piece by Bob Herbert in the New York Times that points to the importance of infrastructure investment for the well-being of the country.  From the column's conclusion:

You can’t thrive as a nation while New Orleans is drowning, and Detroit is being beaten into oblivion decade after decade, and a bridge in Minneapolis is collapsing into the Mississippi River, and cities in upstate New York and the Rust Belt are rotting from lack of employment opportunities, and so on.

Imagine, instead, an America with rebuilt, healthy, dynamic metropolitan areas, and gleaming new port facilities, and networks of high-speed rail, an America with electric vehicles and a smart grid and energy generated by the power of the sun and wind and water and the ocean’s waves. Imagine if the children of today’s toddlers had access to world-class public schools all across the nation and a higher education system that is both first-rate and affordable.

Imagine if we set out seriously to do all this.

Imagine.

Personally, I find this to be a fantastic vision for our country--one that I have long shared (and that John Lennon reference at the end there sealed the deal).  Unfortunately, there is a noisy political sect out there who would deride this kind of investment as "excessive spending", and would call any attempt to put policy on a more sustainable path "government control over our lives".  The alternative, according to this sect, would be to allow the free market to allocate resources to where they are most desired.

This kind of non-solution reflects, in my less-than-humble opinion, a fundamental misunderstanding of the strengths of "free markets" and the purpose of governments.  There's this sense among many that markets are efficient and benevolent, creating wealth and distributing it fairly among those who deserve it, all the while enhancing freedom and producing innovation.  I believe that this assumption is partially true.  Markets are terribly efficient at creating wealth.  If you want lots of wealth, markets are undoubtedly the best way to achieve that.  All the hulabaloo about innovation and freedom is, I would posit, a rhetorical construct to ingrain the status quo into the minds of those whose time is not best spent thinking critically about these matters. I would also argue that the experience of the last decade or so (especially the last two years) pretty clearly debunks the notion that markets are effective at distributing this wealth in any reasonable or useful fashion.  My point: markets make money and that's it.  They have no other purpose beyond that.  Nothing that cannot have a price can be effectively managed through markets.

So, if the goal of a society is to create as much wealth as possible, then let's free-marketeer away.  But if the goal of society is anything higher-minded than GDP, we're going to need an active government to help employ that wealth.  This brings me back to the Herbert piece.  Infrastructure is not, nor should it be profitable, so no private market can effectively produce infrastructure.  Thus, it should be the government's job to make it happen.  This is not socialism, this does not reduce freedom (the equivalence of which with money is a notion I find deeply problematic), and it does not violate some fictional ancient American principle.  It is the very purpose of a government.  Many like to think it was an American commitment to free markets that made our country great, but as Herbert notes, it was as much smart, forward-looking investment in infrastructure as anything else that allowed our country to prosper.  In recent years, however, we have become exceedingly dysfunctional in our ability to think forward.  This has to change.

Republican Healthcare and the Case of the Cursed System

In an effort to be a hypocrite (or more accurately, to engage in a ridiculous debate that I find both meaningless and distracting in an effort to demonstrate how meaningless and distracting it really is), I have decided to harp on the length of a bill.

The Republicans have introduced their alternative to the House healthcare bill. It is 219 pages long. This might seem reasonable, except that, as any college professor knows, the number of pages a document has tells you absolutely nothing about how long a document is. Since most people don't read legislation, most people don't know that a single page of legislative text only holds somewhere between 130-180 words. In single-spaced, consecutive (no paragraph breaks), 12-point Times New Roman Font, this is only about a third of a page in a MicroSoft Word Document.

So, even giving the Republican bill the benefit of the doubt, and assuming that every page contains the maximum number of words (which is clearly not the case), the bill can be estimated at around 39,420 words long. Let's be even more generous and say that it's 40,000, just to make it a round number. That puts the length of the bill somewhere around the low end of the spectrum for a young adult novel. Maybe this is the way to get pre-teens involved in politics...

So, will Tom Swift invent a way to handle electronic medical records that will save millions in costs annually? Will Nancy Drew uncover an alternative to employer-based health benefits? Can the Hardy boys team up with a gruff, but lovable boat captain to discover a way to provide universal coverage?

My guess is they won't.

Update: Including the title, author, info, labels, and this update, this blog post is 335 words long. That’s 335 words longer than the Republican alternative proposal for fighting global warming.