Judgment

I'm in absolute, complete, unequivocal agreement with Riverdaughter in her post "failure to discriminate", especially this:

I’ve never seen so much denial in my life. The right was happy as all get out to stomp all over us before this shooting. If it really had nothing to do with it, and I’m not saying it did, why not just admit that it was fun while it lasted? Sarah and Glenn aren’t apologizing. Take credit for the poison. You deserve it!

But if you’re tired of it, like I am, turn off the TV and the radio. Step away from the fight. If you are an FDR type Democrat in Exile like me, this doesn’t have anything to do with you anyway. It’s just two anachronistic, legacy parties going at each other. It has very little to do with how people are living today. It won’t get more people employed, fix our crumbling infrastructure, punish the bankers or end a war. It is a major distraction.

Enough.

It's called judgment. It exists in its exercise. It is what my class has consistently, persistently failed to do since it decided the last Democratic president was too white, too hick, too Southern, and too transactional for them to deign to support. It's what my political opponents, the Movement Conservatives, refuse to do in their single minded pursuit of power, demonizing anyone who fails to fall in behind their hateful, anti-democratic message.

I've been avoiding the news for the most part this last week because of the opportunistic appropriation of the shooting by the usual political suspects. It's why I've avoided most American political news for the last two years. I think I stopped paying attention to most of the Media Kabuki when the loudest voices of Left and Right decided that whatever was wrong with the country, no matter the specific wrong being mentioned, it was the fault of "liberals". Those damn extremists. Those damn partisans. Those damn centrists. Those damn moderates. Those damn transactional, practical folks who give a little here and take a little there, aren't much in the mood for conspiracies, don't agree with any exterminationist sentiments (left or right), don't like culture wars standing in for political contest, and are getting really, really tired of single-issue, faux-victim politics.

Anglachel

No Such Thing as an Innocent Leak

One of the problems with the hoo-hah surrounding the release of the State Dept. documents is that there has been little attempt from any quarter to distinguish the different effects resulting from the same acts. As long as everything is connected to everything else and thus is declared good/bad as a piece, we won't understand the real impact of this event.

Let's make one thing really clear - the documents have been released. They are not just on wikileaks. Every government with an internet connection has downloaded the complete set (Just in time for the holidays!), there are mirrors, copies, bit torrents, etc., available for anyone with a modicum of computer savvy, and there are now malware emails out there enticing the unwary into clicking on the link to get the documents and actually getting some lovely bit of malicious software instead. That's how you know you've arrived - you're famous enough to be used as spam-bait. No power can reverse this distribution of information. For good or ill, they are now part of the public discourse. What remains is to analyze what has been set in motion.

Foreign and Domestic

As I read various things about the wikileaks document dump, something becomes very clear. Many commenters don't or can't distinguish between domestic law and foreign policy.

First off, the laws that govern US citizens and others within our borders are specific to this geographical location. They may apply to our citizens outside our borders, but that is more complicated and will depend on where that person is - a military base, a consulate, during a diplomatic meeting, on personal vacation, etc. - and what that person is doing. Restrictions and penalties are higher for people serving the nation in an official capacity (military, diplomats, trade representatives, etc.) because they have to varying degrees the authority of the nation behind their actions.

And how

Courtesy of A Softer World.

Anglachel

Demon Bank

Indulge me for a post while I dream about a basic banking system. With the crap coming out of the Catfood Commission and the continued squeezing of lower income (and not so low income) consumers for their financial options, plus a nod towards the continual invasion of our privacy, I whiled away the evening pondering the possibility of the Demon Bank.

The Demon part of it refers to how it would be received by the Very Serious People and all of the monied elite. The premise of the bank is to introduce a baseline offering of banking services to the perpetually under- (and just plain un-) served portion of the citizenry who don't have tens of thousands of dollars just lying around to make them the desired customers of giving-you-the-business-as-usual banksters. The two markets this bank would compete against would be local payday loan outfits and regional and national mega banks with their massive ATM infrastructure. In both cases, the main objective is to reduce or remove charges for ordinary, low-risk transactions. The challenge is to not harm local banks and credit unions who are serving their communities well and who cannot leverage scale to distribute operating costs.

Against Conventional Wisdom Redux

On November 15, 2008, I posted an article Against Conventional Wisdom in which I laid out the reasons why Obama had some very good reasons to make a good faith offer of the Sec. of State position to Hillary. We all know how that turned out. As I re-read it tonight, two predictions stood out:

14%

That's the amount of increase in the Spousal Unit's Blue Shield of California health insurance premiums this time around. His doctor's medical group is no longer in the Blue Shield network. The monthly premium goes up but the amount of coverage goes down. The hospital deduction went from $200 per day to a few dollars short of $800. One week in the hospital jumped from $1400 to $5600 overnight.

Of course, that assumes you get admitted in the first place.

At a time when there is no inflation, when California is suffering massive unemployment, and when businesses of all sizes are struggling to stay open (we'll worry about solvency later), private health insurance is jacking up the prices by 14%. And that's after negotiations.

The Spousal Unit is a healthy guy, aside from his failing eyesight. His only health problem, a bad back, was cleared up years ago by some physical therapy and an ergonomic office chair.

We bought the chair ourselves because the company couldn't afford it. They do pay 100% of health insurance premiums. On the other hand, his last paycheck, which should have been deposited on the 15th, is sitting in his wallet waiting for when there is money in the bank. This is often the case for small businesses, even in the glamorous world of high-tech; the trade off for the smaller environment is a willingness to be flexible about when the paycheck goes in.

Of course, the paycheck would go in a lot sooner if it weren't for the price gouging of the health insurance industry.

As if knowing our personal news of the day, Mark Thoma of The Economist's View links to Robert Reich's latest article, The Health Care Cave-In:

The Health Care Cave-In, by Robert Reich: "Don't make the perfect the enemy of the better" is a favorite slogan in Washington because compromise is necessary to get anything done. But the way things are going with health care, a better admonition would be: "Don't give away the store."

Many experts have long agreed that a so-called "single-payer" plan is the ideal... Not surprisingly, insurance and drug companies have been dead-set against a single payer for years. And they've so frightened the public into thinking that "single payer" means loss of choice of doctor (that's wrong -- many single payer plans in other nations allow choices of medical deliverers) that politicians no longer even mention it.

On the campaign trail, Barack Obama pushed a compromise -- a universal health plan that would include a "public insurance option" resembling Medicare, which individual members of the public and their families could choose if they wished. This Medicare-like option would at least be able to negotiate low rates and impose some discipline on private insurers.

But now the Medicare-like option is being taken off the table. Insurance and drug companies have thrown their weight around the Senate. And, sadly, the White House -- eager to get a bill enacted in 2009 rather than risk it during the mid-term election year of 2010 -- is signaling it's open to other approaches. ...

It's still possible that the House could come up with a real Medicare-like public option and that Senate Dems could pass it under a reconciliation bill needing just 51 votes. But it won't happen without a great deal of pressure from the White House and the public. Big Pharma, Big Insurance, and the rest of Big Med are pushing hard in the opposite direction. And Democrats are now giving away the store. As things are now going, we'll end up with a universal health-care bill this year that politicians, including our President, will claim as a big step forward when it's really a step sideways.

Sideways? I could deal with sideways. How about backwards? I don't yet know what is going to happen to my health insurance premiums this round. I pay part of them and I will pay a larger part this year because of a 6% cut in payroll and benefits imposed on my company.

I wonder if more than 14% of the population is completely secure in their health insurance? Between falling wages, lagging employment and the-sky's-the-limit insurance costs, what portion of the population is not a pink slip - or a slip on the sidewalk - away from health care ruin?

Since he won't be able to keep his doctor anyway, the Spousal Unit is probably going to switch to Kaiser. He's lucky he has that option. I'm lucky I work for a company so short-staffed that they can't afford to let me go if I get sick. I'm also lucky my bout of flu last month didn't turn into pneumonia, something I'm at risk for due to a congenital lung deformity. We're lucky that we could probably cough up the extra cash if one of us became seriously ill.

Basic health care should not be a matter of luck.

Anglachel

PS - If you care about health care, throw some dollars at the indefatigable DC Blogger whose blog on Corrente is a must-read to know the sorry political state of affairs of health care.

Fine Distinctions

One of the second tier econo-bloggers I enjoy reading (second tier only in prominance, not in quality of thought, I hasten to add) is Steve Waldman of Interfluidity. His post from yesterday, "There's no reason for non-recourse" is a must read. He takes on the TALF and calls it for what it is - a lie. Key paragraphs (but please read it all, especially the afterthought), my emphasis throughout:

Does your head spin, acronym upon acronym, non-recourse, warranties, and covenants? Well, unspin it. The New York Fed is telling us, in plain and simple legalese, that it is planning to make a very generous gift to investors that participate in this program (and indirectly to the banks that sell assets to them). A non-recourse loan bundles an ordinary loan with an option to "put" the collateral back to the lender instead of paying off the loan. Sometimes this is not much of a gift: When a pawnbroker lends you half of what your Fender Stratocaster is worth, and the fact that you can surrender the guitar rather than pay off the loan is cold comfort. But if someone fronts you substantially all of what an asset is worth, and the value of that asset is uncertain and volatile, then the put option bundled into the "loan" becomes extraordinarily valuable. If the asset appreciates, you take the profits and "ka-ching!". If the asset falls in value, the lender takes the trash and eats the loss.

A near-the-money option is itself a valuable asset. Offering non-recourse loans to participants in the PPIF would directly contradict the program's goal of "allow[ing] private sector buyers to determine the price for... troubled... assets." Private sector buyers would not be pricing the assets themselves: they would be pricing a portfolio containing a troubled asset and a free, three-year put option, courtesy of the Fed. Depending on how much of the transaction the government is willing to finance, the value of the put option could represent a substantial fraction of the value of the asset being priced. This is a subsidy, that would be incorporated in the sales price of the asset and split by banks and private investors. It amounts to the government bribing investors to certify banks as more solvent than they are, by overvaluing bank assets in subsidized purchases.
***
We are all tired of the lies, Mr. Geithner. By all means, let nationalization be a last resort, and do all you can to offer liquidity to private parties willing to take both the upside and downside of speculating in questionable paper. But if you keep nationalizing the downside and privatizing the upside, it will not be very long at all before the public concludes that stress tests and market prices are just a sleight-of-hand for Davos man while he picks our pockets, again. Act fairly, and you may end up nationalizing the worst few of the larger banks. Keep up the games, and we will insist that you nationalize them all. It is getting hard to believe that there is a banker in the land who has not already robbed us. Eventually we will tire of drawing fine distinctions.

With every day that passes, it becomes more difficult to draw the "fine distinctions" Geithner et. al. want us to pretend exist between saving financial systems, which we need and is our proper concern, and saving their rich buddies' asses for their bad investments, which is not our concern even as their idiocy has become our problem. The dire warnings over the "moral hazard" of simply devaluing home loans made during the bubble no longer sound so convincing when we watch the deliberate moral hazard of protecting the prerogatives of Wall Street in lieu of enacting anything approaching a rational fix to the financial system.

Steve's formulation of nationalizing the downside and privitizing the upside captures the rotten heart of the various attempts to "fix" the financial implosion, from Paulson right through to Little Timmy. The intent is to protect the people who caused the implosion in the first place. This is the distinction that Little Timmy wants us to overlook by believing the lie that we are rescuing a system.

Leaving the details of the financial analysis to the excellent people in the field, what strikes me most in this mess is the lack of political distinctions, or, more to the point, an unwillingness to draw them. What you do not hear from the White House is a political vision, policy or standard that sets the ground rules for the enaction of an economic plan. It is all piecemeal, deal with the uproar of the day, reactive rather than programmatic. This also fits the way taxes, housing, the auto industry, etc., is being treated. The continued fluffing of the Republicans in the name of bipartisanship is another example of the deeper problem, which is a lack of an over arching political goal for the sake of which you act.

This is not so much ideology, though to be most effective it should be grounded in one. Example: The Movement Conservative obsession with killing Social Security (political goal) is grounded in their faith (ideology) that the New Deal was bad for the nation and must be dismantled. The goals of a political actor are what allows that actor to take advantage of political opportunities in creative ways, and acting on those opportunities are what change institutions and systems in fundamental ways. What has become clear in just one month, however, is that the Obama administration's sole political goal was getting him elected and that there is nothing more he really wishes to accomplish.

Thus, we are left with the economic policy (such as it is) being handed over to the crooks and liars who got us into this mess in the first place because there is no reason not to. There's nothing The Precious wants to do with the economy or the financial system (like expand the New Deal), so whatever Little Timmy and Gucci Gang want to do is fine by him. The political opportunity presented by the economic crisis, well documented by people like Krugman and Roubini, is being frittered away for lack of political vision.

Fine distinctions matter when political opportunities are at hand.

Anglachel

Sounding Serious - Updated

Update - And the Guardian says its a done deal. I'm not certain this is so as in the body of the article they don't present anyone on record definitively saying yes, the deal is signed. It reports little more than the NYT article does, but with less asshattery. The reason I'd be inclined to believe this report despite the lack of sources is the Sidney Blumenthal connection.

This NYT article says to me the consideration of Hillary for Secretary of State is serious.

The "worry" about Bill Clinton is such bullshit, of course. It is no more than fear of the Unity Democrats that they will be over shadowed by this person they irrationally hate. The media is only too happy to drool over the maybes and perhaps and some people say and what don't we know, what isn't he telling us rumor mongering. It is no less than the manufacture of scandal. Calling Bob Somerby...

However, I have to admit I'm not sure I'd be happy to have Henry Kissinger praising my abilities.

Ignoring the specious scandal-mongering of the last part of the article, what the report says is that the decision of acceptance is based on conditions being met. That's serious and negotiations can fall apart for politically legitimate reasons. HRC will request a significant degree of power and autonomy to accept the obligations and burdens of the office because that is how she does things. You can approve of this or not, but that is part of her character. Is what she requests reasonable? Whether reasonable or not, will it be acceptable? There are balance of power issues that are not just personality conflicts (the tedious crap The Village and Blogger Boyz roll in like dogs with a rotting carcass) but involve questions of authority and state interests that matter when dealing with other sovereign states.

Pulling on the poli sci cap, this is a fascinating and significant development for the incoming administration. It is a real test of leadership and how the executive branch will be run. Can this administration put the interests of the country first? We have had 8 years of one that would not. And before the Obamacan zombies start screaming how I am not giving The Precious a chance, this is a challenge that any incoming non-incumbent president must face. Traditionally, a new president focuses on domestic issues in a first term because those are the issues you campaign on and that is what matters most to the electorate. Screw it up and you lose power. Really screw it up and you lose office. See Carter, Jimmy and Bush, George H.W. In both of these cases, they had domestic and foreign policy challenges. One had a failed foreign policy while the other had a successful one. They both got chucked out of office (Carter more decisively than Bush) because of the crappy domestic conditions. Two-term presidents tend to focus on foreign affairs in the second term because the domestic policy battle lines are settled. It gives them some stature and gets them out of the daily mud-slinging.

Obama has been signaling that he really didn't care too much about domestic affairs, offering lack-luster domestic policy positions (except for environmental stuff - whomever is writing those papers is the sharpest person he has in the policy shop) and indicating that he wants to be leader of the free world. The collapse of the economy has brought those intentions to a screaming halt. This presidency cannot be conducted through symbol, gesture and a desire to be the good guy who frees the world of the Bush Doctrine. Domestic affairs will dominate, but foreign affairs are as pressing as ever.

Regardless of who ends up in the SOS seat, the administration is going to have to make some hard decisions about the autonomy of that office. Where is policy actually developed? Who are those actors? Will you have integration or oppositional relations by design (which is different than whether individuals like each other)? I agree with the article that the two most significant cabinet choices are SOS and Sec. Treas. How much will these two coordinate and communicate? To what degree will domestic policy and foreign policy need to work in tandem due to the global nature of the financial crisis? Also, what about the VP? We have been seeing a more activist role for this office since Carter. Where will Biden fit in the overall picture?

Putting the conduct of foreign policy into Hillary's hands could be an extremely bold choice that is in the best interests of the country, even if not in the short-term electoral interests of the individuals involved. With reference to a comment in my earlier post asking about Samantha Powers, the answer is simple - if HRC is the SOS, Powers will get on board and do her job to the best of her considerable abilities or she will leave. That says nothing about Powers individually. It's just how the system works. But that points towards the as-yet-unanswered question of where and how power will be balanced in the administration. A confident executive gets the best, puts them in place, defines the ground rules, and tells people to be smarter and better than the boss in their area of expertise. Do not underestimate the dangers of this power model. The wrong mix of "the best", poor ground rules, bad rule following, titanic ego battles, and people with a great deal of autonomy being flat-out wrong in their judgment will wreck it, just to name a few common problems. Actions to limit risks introduce their own risks of missed opportunities, insecurity about and second-guessing of area leaders, negotiation partners not trusting the authority of who they are dealing with (Can you really promise me X?), and a failure to succeed because of risk avoidance, etc. These are not qualities specific to the SOS appointment, but will accompany any of the cabinet positions and major advisory posts.

Oddly enough, this story has little to do with Hillary and everything to do with Obama.

It is time to commit to a course of action.

Anglachel