Tuesday, December 23, 2008

Don't ever trust your laissez-faire friend to be designated driver

In the midst of the greatest financial catastrophe since the great depression, already we are being bombarded with revisionist accounts of our collapse. The Bush administration will dismiss any notion that they are to bear blame, rather opting for the this has been brewing before I got here defense or shifting the blame to wall street greed--as if these Ayn Rand-ians ever had a problem with greed (see Greenspan's devotion to the ignominious author of pop-fiction spuriously christened as philosophy).

Mr. Bush claims that "wall street got drunk," but Naomi Klien quips that "Mr. Bush was serving the drinks."

Klien might be on to something; the NY Times reports that, at the very least, our laissez-faire protectors knew of the liberal servings of libations and rejected the possibility of our reckoning:

A soft-spoken Texan, Mr. Falcon ran the Office of Federal Housing Enterprise Oversight, a tiny government agency that oversaw Fannie Mae and Freddie Mac, two pillars of the American housing industry. In February 2003, he was finishing a blockbuster report that warned the pillars could crumble.

. . .

Mr. Falcon’s report outlined a worst-case situation in which Fannie and Freddie could default on debt, setting off “contagious illiquidity in the market” — in other words, a financial meltdown. He also raised red flags about the companies’ soaring use of derivatives, the complex financial instruments that economic experts now blame for spreading the housing collapse.

Today, the White House cites that report — and its subsequent effort to better regulate Fannie and Freddie — as evidence that it foresaw the crisis and tried to avert it. Bush officials recently wrote up a talking points memo headlined “G.S.E.’s — We Told You So.”

But the back story is more complicated. To begin with, on the day Mr. Falcon issued his report, the White House tried to fire him.

. . .

His warnings were buried in the next day’s news coverage, trumped by the White House announcement that Mr. Bush would replace Mr. Falcon, a Democrat appointed by Bill Clinton, with Mark C. Brickell, a leader in the derivatives industry that Mr. Falcon’s report had flagged.

Jason Thomas' unheeded warnings (same article):

Typically, as home prices increase, rental costs rise proportionally. But Mr. Thomas sent charts to top White House and Treasury officials showing that the monthly cost of owning far outpaced the cost to rent. To Mr. Thomas, it was a sign that housing prices were wildly inflated and bound to plunge, a condition that could set off a foreclosure crisis as conventional and subprime borrowers with little equity found they owed more than their houses were worth.
People must remember that the neo-conservatives in office are ideologically opposed to financial or housing regulations or any sort of corruption of the precarious free-market. So trapped are these economists in their dogmatic principles, much like the rigid Communists of old, that only if their purity is achieved will their plans work. The concessions made today do not mark an ideological shift, but they are the pathetic last life-lines of unimaginative clowns (it would indeed be a grand comedy if such veritable despair were not the result). There remains still opposition to the idea of moderation, regulations, worker's rights(see the ignoble attacks on blue-collar autoworkers), and what they might besmirch as banal Keynesian economics. The financial bailout is more-or-less a grand swindle with the cursory hope of restoring our confidence in inadequate casino-capitalism and not an attempt at restructuring the very fabric of what makes our economy so precarious, environmentally unsustainable, inequitable and subject to such arduous boom-bust cycles.

The grand swindle is becoming painfully obvious

Part of a letter sent to congress declaring over 100 prominent economists' reasons for disdaining the bailout:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries “systemic risk.” The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private-capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

The AP on a lack of transparency:

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?

None of the banks provided specific answers.

. . .

There has been no accounting of how banks spend that money. Lawmakers summoned bank executives to Capitol Hill last month and implored them to lend the money — not to hoard it or spend it on corporate bonuses, junkets or to buy other banks. But there is no process in place to make sure that's happening and there are no consequences for banks that don't comply.
Naomi Klien draws parallels between the corporatist nature of the bailout and that of Iraqi reconstruction:
Still the original impulse underscores the many worrying parallels between the administration's approach to the financial crisis and its approach to the Iraq War. Under cover of an emergency, Treasury is rapidly turning into an economic Green Zone, overrun with private companies collecting lucrative contracts. Fittingly, one of the first to line up at the new trough was none other than the law firm of Bracewell & Giuliani — yes, that Giuliani. The firm's chairman, Patrick Oxford, could scarcely conceal his glee over the prospect of cashing in on the bailout. "This one," he told reporters, "is very, very big." At least four times bigger, in fact, than the post-9/11 homeland-security bubble, from which Giuliani and his various outfits have profited so extravagantly. Even bigger, potentially, than the price tag for the Iraq War itself.

Shallow anti-intellectualism: media-induced HGH rancor

A trivial note, but a revelation that is emblematic of the media's naive and shallow anti-intellectualism: there is no evidence that human growth hormone affects athletic performance. The consensus among HGH studies is that the illicit substance in question which received a plethora of attention serves little to no performance-enhancing purposes. A little intellectual rigor (less than five minutes of digging for research essays regarding baseball) provided me with ample fodder for an essay I penned.

Highlights include:
Rader and Winkle observe no evidence to suggest steroid consumption is as high as it once was, but contend that HGH (entirely undetectable) has replaced steroids (now detectable and illicit) as the drug of choice and is likely largely responsible for the persistence of high offensive production (Rader and Winkle 91).

Rader and Winkle’s contention is problematic in light of Yarasheski’s conclusion that HGH has no effect on muscle force production (Yarasheski et al. E264). Yarasheski’s analysis documents an extensive double-blind study of young men subject to identically laborious resistance training regimens. One group is administered HGH, the other a placebo. The study reveals that HGH subjects have a marginal advantage in the production of fat-free mass (FFM), but Yarasheski concludes that FFM is “principally water” and that under extensive resistance training the HGH subjects are in no better position than subjects given placeboes to increase “muscle size and strength and the rate of muscle protein synthesis” (Yarasheski et al. E264, E266). Furthermore, Tobin demonstrated through his bat-speed calculations that additional energy is required to propel additional mass (Tobin reduces steroid-induced bat speed estimations from 5% to 4% to account for the increase in mass) (Tobin 20). Since marginal FFM gains as a result of HGH serve no energy production purposes, it follows that HGH-induced mass should be regarded as a hindrance to bat speed rather than a performance enhancement.

In light of the evidence of a reduction in steroid consumption (visibly lower injury rates, lower avg. weight, enacting of steroid tests and penalties, undetectable HGH), and the futility of HGH (no additional energy production), I argued that HGH cannot be held responsible for the persistence of inflated offensive production and it would be prudent to study other factors beyond the scope of this paper.
It puzzles me that amongst the endless news coverage of the Mitchell Report and congressional testimonies of prominent athletes, the vast majority of the mainstream press and sports media couldn't be bothered with whether or not HGH helps in the production of all those contentious home runs.

Theatre in the Red Chamber

Margaret Wente quips about Harper's spurious Senate appointments:

So can't you find a Senate seat for me, too? If Mike Duffy and Pamela Wallin can be senators, then surely there is room for me. Like them, I am a lifelong hack.

Seriously, you can't deny that I have what it takes to be a first-class senator. I am accustomed to being underworked and overpaid, and I am able to emit hot air on any subject on demand. Ask Duff. I've been on his show lots of times. He'll tell you I have glib and superficial opinions about everything, especially things I know nothing about.
This is very much the political reality in Canada. During a time when inventive political leadership could be most beneficial (the sky is indeed falling), theatrics and gamesmanship is the number one priority of our leaders. As long as Harper remains leader, the threat of his insidious attacks on the plurality of Canadian politics will continue to breed hostility, umbrage and vindictiveness on both sides of the aisle.

He started it! No Mr. Speaker, he started it. . .

Stephen Harper, the Canadian Prime Minister whose pathological need to destroy the opposition set in motion an unprecedented parliamentary crisis which resulted in prorogation (dissolving of parliament,) has continued to play his brand of incendiary power-politics. In an about-face, Harper has abandoned his promise of not stacking the Senate and pushing for Senate reform (subjecting Senators to elections) in favor of appointing 18 conservative senators. The new appointments, all party-friendly hacks (fundraisers, old members, even a talk-show host) are said to be a sign of compromise and party-building aimed at assuaging Harper's rather irritated but impotent party of yes-men.

Coral Goar on Harper's Cabinet pre-parliamentary fiasco:
The members of the Conservative caucus know better than to express an independent thought or opinion. Their job is to be compliant cheerleaders.
Bob Plamondon, a Conservative party expert, on Harper's approach after the fiasco that threatened to make the Harper Conservatives Canada's shortest minority government:
Mr. Harper has concluded that rallying the troops is important to his future as party leader. . . There is place for loyalty in politics and with this Prime Minister it's been in short supply.

Brian Lagh, from the same article:
Mr. Harper seems to have realized the need to make friends and appease critics at a
time when his reputation as a parliamentary strategist is in doubt.

As to whether Mr. Harper has offended the Western base of the party - many of whose members support Senate reform - at least one party worker said the disappointment will be balanced by the fact that the PM has finally recognized the party needs nurturing.
This political crisis and the unrepentant aftermath--Harper's lack of mea culpa for derailing our Government during the worst financial times since the great depression (making the economists who beg for swift action cringe)-- is emblematic of how political brinkmanship destroys the possibility of having worthwhile leadership. By initiating a crisis that threatens to destroy the opposition, the opposition was left to fight for their political lives with their pathetic coalition (a rather unholy alliance with separatists and socialists, although Conservative derision was a truly artificially inflated panic). One political pot-shot after another (the reality of contemporary scandal-ridden Canadian politics) consumes leaders into these petty political games rather than imaginative policy making--something we truly need during a time where our traditional definition of how an economy should be governed (or not governed) is very much in question.

Although on second thought, with the apparent tendency for Canadian policy to be rather similar to their Southern counterparts, I can't help but wonder if Canadians aren't just xeroxing Bush bills into Parliament--a task which would leave them much time for their wretched squabbling.

Monday, December 15, 2008

A Shoe for Two

The Iraqi journalist who chucked both his shoes at President Bush after denouncing him as a "dog" was practicing the "worst insult in the Arab world" in attacking Bush. The size-10 heater was not a simple show of anger, but a calculated symbol reflecting much of the disdain for Bush war policy.

The Globe and Mail reports that the insult is a potent symbol of disrespect in the Arab world:

As the lowest part of the body, the foot is the filthiest in Arab culture, sharing space on the ground with animal waste and other refuse. It's farthest from the head, and the farthest from heaven.
Another symbolic shoe-related insult. . .

Not such a lame duck(er)

Bush's legacy, I fear, will be viewed largely as the incompetency of a myopic ideologue who oversaw two failed wars and a momentous financial crisis. The truth is much more nefarious than the caricature; the Bush administration has set a dangerous precedence by assuming ultimate authority of the executive branch and employing quasi-legal trickery in justifying villainous torture policy.

Glenn Greenwald on America's conflicting interpretation of justice:

We have less than five percent of the world's population. And yet 25 percent almost of prisoners worldwide are inside the United States. What you have is a two-tiered system of justice where ordinary Americans are subjected to the most merciless criminal justice system in the world. They break the law. The full weight of the criminal justice system comes crashing down upon them. But our political class, the same elites who have imposed that incredibly harsh framework on ordinary Americans, have essentially exempted themselves and the leaders of that political class from the law.
The recently penned bi-partisan Senate Armed Services Committee report linking Bush top administration officials directly to detainee abuse is evidence that Bush administration failures are very much systemic and intentional and not a failure of foresight.

The approach the main stream media has utilized in addressing the question of his legacy has been incongruous with the somber reality. It seems to me as if "lame duck" is not a fitting title for a man with such shoe-evasion skill. The shoe incident and the resulting support for the shoe thrower remind us just how much animosity remains for this President and his besmirched legacy. However, the Senate report has been largely ignored in favor of the vitriolic stories regarding that joke Blagoyevich. Shallow media-induced rancor captivates us while indisputable evidence of war crimes falls on deaf ears-- it's no wonder people throw shoes at our leaders.

Welcome to Poets and Gutters

My name is Gordon Katic and I would like to welcome you to Poets and Gutters, my new venue for lively intellectual debate and analysis (or perhaps my soapbox for political diatribes!). Poets and Gutters is the namesake of Bob Dylan's A Hard Rain's A-Gonna Fall, in which Dylan prognosticates a rather dire fate for both humanity and "the poet who died in the gutter." Never would I equate my prose with poetry, but I do seek to provide something more than a gutter for the inspired whose minds are free from the shackles of the inane news cycle.

From my niche in Vancouver at the University of British Columbia, I hope I can contribute an academic perspective to the online dialogue. I write this blog for truth and ideas rather than the principles of old-media: complacency and artificial consensus-building. I will use Poets and Gutters as a venue to present my perspective on the day's events and my convictions regarding larger philosophical problems which I feel are emblematic of our current instability.

I hope soon you too will join the discussion. Only if we end our intellectual complacency can we author a greater future and supplant our media's shallow perspectives with a dialogue that can face the gravity of the challenges we face.