Actually, It's An Old Story About Parenting

I suggested recently that perhaps David Brooks was better served by sharing the thoughts of others - a paper or book he's read - penning columns that are really 800 word book reports, due to his propensity to go terribly wrong when sharing a personal analysis. Brooks took enough issue with my suggestion to write a column that demonstrates that he can go terribly wrong, even when penning one of his book reports, or in this case his reaction to a magazine article about a thirteen-year-old whose age-inappropriate online life led to a lot of problems.

People talk about the online “community,” but it’s more accurate to see the response as a guerrilla war. Ostrenga made an aggressive bid for attention. Other people made a bid for attention by savaging her. Most of the viciousness hurled her way can’t be quoted here, but the article in Rolling Stone accurately described the mob-like behavior: death threats, savage sexual appraisals. “I know where you live, and I’m gonna kill” your cat, one person flamed. “Kiki go die you ugly [expletive],” another wrote.

Call it a Scarlet Letter phenomenon, something that could not possibly have occurred in any other era... except, that is, for every other era. There's nothing new in the story except for the role of the Internet, and even in that respect you can find similar stories. Parents have been warned about predators on the Internet pretty much as long as it has existed.

What we really seem to be looking at, though, is a story about parents who did not provide proper supervision for their child, who did not take appropriate corrective action when it was obvious that serious problems were brewing, and who... well, judge for yourself:

She [at age 13] was contacted by an 18-year-old man named Danny Cespedes, who charmed Kiki and her parents and became intertwined with their household. Unbeknownst to them, Danny had tried to seduce a string of young girls, some as young as 12. After her mother discovered that he had forced himself on Kiki one night, the Ostrengas pressed charges. As he was being arrested, he jumped off the second floor of a parking garage and ended up in a coma. He died two months later.

How many parents would allow themselves to be "charmed" by a grown man who was interested in dating their thirteen or fourteen-year-old daughter? One who supposedly gained access to their home the first time he molested their daughter by claiming to be too drunk (or possibly stoned) to go home... what a charmer. Does Brooks sincerely believe that alarm bells should only start going off if they know he has a prior history of predatory behavior? Even if we assume extraordinary naivete, how was it that the man was even in a position to force himself on the child "one night"? I recognize that the PSA's, "It's ten o'clock, do you know where your child is," haven't run since Brooks and I were about the same age as the girl in the story, but again this seems to be "the same old story". It appears that the parents did know where their daughter was, which raises the question of why they allowed a context in which a grown man would have access to her bedroom at night, even if they found him to be charming.

From the original article,

Cathy and Scott suggested to Kiki that it was time to leave MySpace, but Kiki protested: "If you take me off the Internet, the bullies will win."

To which I think an appropriate parental response would be, "Nice try, young lady."

Kiki didn't tell them the other reason she didn't want to leave MySpace. She had finally made a connection that she hoped would last....

As you've guessed, the connection is the aforementioned adult "boyfriend".

Back to Brooks:

Next, she was victimized by the owner of a for-profit, teen-exploitation site called Stickydrama. The site’s owner both organized mass hate sessions against Kiki and invited her to live with him and become one of the site’s exhibitionist playthings. “If I can’t have you, I will destroy you,” he wrote in a Twitter message, according to Rolling Stone.

And her parents were where?

Her parents couldn’t seem to take the reins, even after they saw her online presence was not just a way of being creative.

Is that "couldn't seem to" or "didn't try to"?

She is an extreme case of an enormous uncontrolled experiment that is playing out across the world. Young people’s brains are developing while they are immersed in fast, multitasking technology. No one quite knows what effect this is having.

Even that isn't a new story - just an update. People said pretty much the same thing about radio and television.

The culture of childhood is being compressed. Those things that young people once knew at 18, they now know at 10 or 12. No one quite knows the effect of that either.

Again, this is supposed to be a new phenomenon? I guess Brooks has never heard, for example, of the 70's?

Most important, some young people seem to be growing up without learning the distinction between respectability and attention. I doubt adults can really shelter young people from the things they will find online, but adults can provide the norms and values that will help them put that world in perspective, so it seems like trashy or amusing make-believe and not anything any decent person would want to be part of themselves.

That's the most important lesson from this supposedly new phenomenon - that people, and quite notably young people, can't always differentiate between respectability and attention? And that grown-ups can help kids develop good values?

So it's the age-old story that parenting is hard, setting appropriate boundaries for your kids is hard, adolescents will push their limits, and if appropriate boundaries are not enforced bad things can happen.

Brooks offers the softest of conclusions to his editorial, that the story "is not only about what can happen online, but what doesn’t happen off of it". But in that sense, he's offering the story as a parable. Although Brooks minimizes the role of parenting and speaks of adults, generally, either way this is an extreme case. No meaningful lesson can be drawn from the specifics - if another teen tried to imitate the young girl in Brooks' story, even in the most slavish of fashions, odds are she would remain obscure. Perhaps his conclusion is, in a sense, like the "do you know where your children are" PSA's - both oversimplifying what it means to be a good parent and implying dire consequences if you don't meet a relatively arbitrary test. But no matter how I look at it, Brooks seems to be attempting to present as somehow new an age-old story about which he has no particular insight.

Pull The Other One

Would you believe this if you were a juror?

"I searched for chloroform," said Cindy Anthony, as jurors leaned forward, riveted, in the Orlando courtroom.

"I was searching for 'chlorophyll' because I was worried that it might affect my dogs," Cindy said. "I was worried about them eating bamboo."

I guess it's more plausible than attributing the search on a two-year-old, but really. I guess the thought process is, "My dogs were eating bamboo, I realized that bamboo contains chlorophyll, I wanted to know if chlorophyll is harmful to dogs, so I searched for 'chlorophyll' - but I didn't know how it was spelled so I ended up searching for 'chloroform'."

I suspect that most people searching for information on the possible consequences to their dogs from eating grass search for such terms as "dogs eating bamboo", and that most people who are looking for the effect of chlorophyll on dogs would search for something like "chlorophyll dogs", perhaps ending up with a twisted search term that would be of concern to PETA but not of much relevance in a criminal trial.

Would You Buy a Domain on a New TLD

If you purchase a new TLD (top-level domain) from ICANN, you have the potential to make a lot of money. You also have the potential to lose a lot of money.

Speaking of fees, if you want one of the new domain suffixes and are not a wealthy individual or company, get ready to put a major dent in your bank balance. The Icann application alone will be $185,000, with an annual fee of $25,000. Who sets this fee? Why, Icann, of course. Is it reasonable? Icann says it is. Why is it reasonable? Because Icann says, based on evidence that is less than persuasive, that it needs the money for things like legal costs.

So if you're not able to buy example.com, would you buy example.example? Domain owners have on occasion experienced difficulties when existing registrars have gone out of business, but they've largely been able to get past the problem by virtue of the fact that the TLD's are not owned by the registrar. If you pay somebody $6 for your example.example domain, though, and they decide they're not making enough money to justify the continued registration of the TLD, your domain name vanishes - and even if it's worth it to you to try to acquire the TLD I'm expecting that ICANN wouldn't only want you to increase your annual registration cost by $25,000 to keep your domain going, it would want a new application fee - and would reserve the right to reject your application.

Particularly during the early years of the Internet there were a number of efforts to create alternatives to domain names, usually by allowing people to buy keywords and key phrases that would cause people using the sponsor's service, or perhaps a browser plugin, to navigate to the registrant's (ostensibly relevant) website. None ever acquired the volume of users necessary to succeed.

A partial bypass already exists for end users. It's called Google – though this also applies to Bing and other search engines. Internet users are learning that it's easier, almost always with better results, to type the name of the enterprise they're searching for into the browser's search bar than to guess at a domain name and type that guess into the address bar. Google isn't the DNS, but its method suggests new approaches. To that end, some technologists have suggested creating a DNS overlay, operated in a peer-to-peer way that incorporates modern search techniques and other tools. Making this workable and secure would be far from trivial, but it's worth the effort

If you can come up with a viable, superior alternative to the URL and get a sufficient volume of users to adopt to your system, you will become very rich.

Using ICANN's New Domains to Take on Facebook

Commenting on the new ICANN rules, Nina Gregory comments,¹

What that means is that big brands see big opportunities. He gives an example of what a company like Canon could do. It could acquire dot-Canon, and even the generic dot-camera, and could create photo-sharing Web sites grouped within those domains.

"So not only is Canon now going to be dot-Canon," he says, "but Canon can now issue secondary domains to every one of its camera owners, and what they might very well do is embed a chip in their cameras that link that camera owner to their ID so that as they're taking photos they could just be automatically uploading photos to a photo-sharing site. I mean, that's just one possibility."

I'm inspired. I'm going to obtain a top level domain and create a competitor for Facebook. What do you think - does .pod work, or does the concept of "pod people" need too much explaining. Perhaps .borg?
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1. The article highlights a great quote:

"If I had $185,000, I'd spend it on something else."

- Esther Dyson, former chair, ICANN

Because Laywers Are All Delicate Flowers....

Apparently some lawyers are traumatized by the f-word. My, how impolite the practice of law has become.

I'm reminded of an anecdote about a lawyer who retired long before I started to practice. Back in the 1950's and 60's, when everybody was polite as can be and the practice of law was genteel and collegial, he found that many of the polite letters he received from lawyers merited the same polite response, so he had a rubber stamp made to facilitate his prompt reply. Afterward, when he received a letter proposing something he found disagreeable, he would apply the stamp and promptly return the letter to its sender: "F--- You, Detailed Letter to Follow".

Ah, the good old days.

A Does It Make Sense to be Outraged by Presidents' "Illegal Wars"

The Constitution states, "The Congress shall have Power... To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water...." As everybody reading this is aware, the United States has not entered a declared war since WWII. We didn't declare war in Korea, Vietnam, Grenada, Iraq (either time), Afghanistan, Panama.... it's simply no longer done. Congress doesn't want that responsibility, so it finds ways to grant broad war-making powers that a President can use to justify starting a war (even if Congress later protests that it didn't intend to authorize an actual war), or chooses to sit on its hands when the President acts unilaterally. The War Powers Resolution is not an impressive piece of legislation - it's an attempt to formalize the delegation of Congress's war-making power to the President, while keeping the President at least modestly accountable. It says something that Congress has never attempted to enforce that law against a President, and has not amended the law in response to past abuses.

So the President involves the U.S. in a war in Libya and comes up with a tortured rationale for why he doesn't have to go before Congress under the War Powers Resolution if he wishes to continue that war? Par for the course (and you know how presidents like golf). The Democrats seem content to let the President take the heat if things go wrong, and fear looking weak if they oppose war, while the Republicans seem to fear looking weak and fearful if things go right. The Republican majority in the House would love to hurt or embarrass the President over a violation of the War Powers Resolution, but... not if it means being depicted as weak on terrorism, pro-dictator, anti-democracy, or any of the other accusations they so recently hurled at anybody who dared question the wisdom of the wars in Iran and Afghanistan.

A worst case scenario for the Republicans is to successfully end the war in Libya and have Gadafi remain in power. Meanwhile the Democrats want to be able to ride Obama's coattails in the event of a victory, but don't want to be accountable if they approve military action and it does not succeed. It looks like I could count on my fingers, perhaps on one hand, the number of Members of Congress who would vote on this war without first checking how the various outcomes might affect their reelection bids. So as it stands neither side will take any meaningful action.

I suspect that when Robert Gates was angrily complaining that Europe wasn't able to do its part in the war in Libya, it was in no small part due to the fact that the war isn't over. I expect that President Obama entered the conflict with the assurance that France and Britain were up to the task, and that the bombing campaign would succeed within a month, two at the outside. Now he has to explain why he's not going before Congress - a Congress that could take action on its own, and which by all appearances doesn't want the President to seek approval for the war - for a war that's supposed to already be over.

Do you expect that Congress will act? That it will defund the war in Libya? That it will amend the War Powers Resolution to impose real consequences if a President ignores its terms - such as automatically defunding the dubious military action? If not, do you truly perceive the war in Libya as inconsistent with the intent and wishes of Congress? Not so much in terms of, "Congress would have voted for the war," but "Congress doesn't want this, or any, responsibility for war"? If you want to be angry at somebody over an "illegal war", it seems that the most suitable target for that anger is Congress.

Update: Ilya Somin observes,

Regardless, for the foreseeable future, the main constraints on unconstitutional presidential activity must come from outside executive branch — that is, from Congress, the courts, and public opinion. These constraints are highly imperfect. But they do impose genuine costs on presidents who cross the line. Ackerman cites the Watergate scandal, Iran-Contra and the “torture memo” as examples of the sorts of abuses of executive power that need to be restricted. True enough. But it’s worth remembering that Nixon was forced to resign over Watergate, Reagan paid a high political price for Iran-Contra, and the torture memo was a public relations disaster for Bush, whose administration eventually ended up withdrawing it (thanks in large part to the efforts of Jack Goldsmith). On the other side of the ledger, Bill Clinton paid little price for waging an illegal war in Kosovo, though he avoided it in part by keeping that conflict short and limited. It remains to be seen whether President Obama will suffer any political damage over Libya.

The greatest damage President Obama could suffer in Libya would be if he were to end the conflict while leaving Gadafi in power. That's not going to happen. If Congress acts, I expect it will be to authorize the President's action (even if he doesn't ask them to do so).

Update II: Digby quotes Matt Taibi and shares some thoughts on the Repubiblican candidates' "sudden change of heart" on war.

A Domain Name Free-For-All

With ICANN announcing that, with the cost of application starting at a mere $185,000.00, you can purchase your own top-level domain (TLD), we will soon experience a dizzying array of alternatives to the traditional TLD's (principally .com, .net, .org, .gov, .edu, .mil, and country domain names). I heard an ICANN representative declaring that soon we'll have .pizza and .movie TLD's, and I suspect he's correct, but... to what end? For example, will a single pizza company acquire the .pizza TLD, or will a third party acquire it and try to convince all of the world's pizza shops that listing their store as .pizza is a business necessity? Companies that presently attempt to manage trademark and reputation issues by purchasing domain names on the most common TLD's will... realistically speaking, have to throw up their hands in despair.

ICANN is promising to police new TLD's for name confusion, and promises also to try to keep past domain squatters and typosquatters from obtaining TLD's. Beyond obvious typos, good luck with that. If I want a TLD for nefarious purposes and fear that ICANN is going to deny my application due to my identity, I'll obtain it through a proxy. Some TLD's will be worth millions from day one - abuse is inevitable.

I do suspect that the new rules will have an impact on domainers who sit on single or double keyword domain names, as I expect that the changes will accelerate the use of "OneBox"-style navigation on browsers. Unless you type in an exact domain name the text you enter will be treated as a search instead of defaulting to (keywords . com) as was once the case. But beyond that, I expect that it will improve the value of established sites on .com domain names - because with few exceptions I think that a proliferation of TLD's will serve primarily to confuse consumers and that, just as they did when .com, .net, .org, .info and the like became competitors to .com, they'll either default toward .com or defer to a search engine. (When was the last time you intentionally browsed to, or even notices that you were using, a ".info" domain? How about ".aero"? Did you even know those TLD's exist?)

Why, you ask, wouldn't it make sense for people to type in a new TLD associated with a particular business or profession? Let's say a new ".law" TLD is created - why wouldn't people looking for lawyers or legal information gravitate to that TLD? Well, what if there's also ".legal", ".lawyer", ".attorney", ".lex", ".atty", ".lawhelp", ".lawinfo", etc.? What if the owner of .law charges an exorbitant rate for registrations, to recover the six to seven figures invested in acquiring that TLD? (Similarly, I'm not sure if ICANN's rules would deem ".car" and ".cars" too similar, but what about ".auto", ".vehicle," ".suv", ".truck", ".automobile", ".wheels", ".motorcar", etc. - the "non-confusing" variations quickly become overwhelming.)

The biggest winners here, I suspect, will be ICANN and the search engines. ICANN will take in millions in fees to review applications, and each approval will make ordinary people more dependent upon search engines to guide them to valuable online information. Second, unless the OneBox solutions are implemented across the major browsers, typosquatters will likely fare well. Third, people who have not been able to get memorable domain names should be able to obtain better names, but subject to TLD confusion - they will get better domains, but may lose some traffic to the ".com" variation. (Sites that used TLD's in a clever way, such as del.icio.us, still typically found it beneficial to acquire the .com variant once funds were available to do so.)

The biggest losers, I expect, will be people who have been sitting on "high value" domain names without developing them, in anticipation that their value will only rise with time. People who rely upon generic keyword traffic based upon their domain name as opposed to their site content will likely see that traffic siphoned away by an increased number of low-content sites competing for the same keywords. And the average person hoping to make some sense of the web behind, "if the business I'm looking for is truly important it probably owns the .com".

Douthat Misrepresents Krugman on Deficits

Last night on Real Time, Bill Maher pointed out the fact that Republicans talk big about the deficit when they don't control the White House, but run up huge deficits when they do - that Republican deficit hawkery is not sincere, but is a tool they used to attack a Democratic President's agenda. Of Maher's three guests, two attempted to defend the Republican Party. Gretchen Hamel took the "who are you going to believe, me or your lying eyes approach and argued, in essence, "this time is different" - that the Republicans have learned their lesson and now sincerely want to balance the budget. Ross Douthat argued that G.W. Bush had been attacked for his deficits at the start of his Presidency, I guess to suggest that the Republican antics represent "politics as usual" and thus should be excused despite their harm to the nation?

Had Douthat stopped there, it might be appropriate to point out to him that an accusation of hypocrisy in general, let alone when you're pointing to actions taken a decade apart, does nothing to tell us which approach is correct. Even if you assume all else is equal, it could be that the Democrats learned from experience that the threat from the out-of-control deficits ushered in by Bush were overstated. That assumption, of course, would require you to be ignorant of the fact that at the time G.W. took office there was a budget surplus and an opportunity to pay down the national debt, and when he left office he had run up a gargantuan deficit and that we were in the midst of a serious financial crisis. Surely Douthat is not that ignorant.

But then, what to make of his reference to his New York Times colleague, Paul Krugman, as the sole example of left-wing hypocrisy on the issue. He alleged that at the start of the G.W. Bush presidency Krugman argued that deficits were bad, and that now that a Democrat was in office he was arguing that deficits were good. That leaves us with one of several possibilities, none of which are flattering to Douthat:

1. He has not read Krugman's columns and other writings, and is accusing Krugman of hypocrisy based upon his own ignorance of and suppositions about what Krugman has written;

2. He has read Krugman's columns and other writings, but doesn't have the intellectual capacity to understand those writings; or

3. He's lying in order to score a political point at the expense of his colleague.

It's also fair to observe that Douthat's implicit suggestion that the nation's economic situation is analogous then and now, such that the issues involved in the determination of whether the nation should have a deficit were essentially the same, is false - similarly suggesting ignorance by Douthat or his deliberate intent to deceive his audience. To assume that Douthat is both informed and sincere would require that you regard him as seeing the following two scenarios as equivalent:

1. A family spends more than it earns for a decade, such that it has six figures of debt. Due to some lucky windfalls, a small lottery win, an inheritance, a modest raise at work, the family is finally able to balance its budget - $2,000 left at the end of the year. Given the choice of applying that amount to its debt, or of spending the money, the family chooses the a third path, taking a $5,000 vacation - increasing its total debt load and making its situation less sustainable.

2. A family struggles to make ends meet, and faces significant debt. It's worried about the impact of that debt on its short-term, and especially upon its long-term, financial well-being. But catastrophe strikes, mom is diagnosed with cancer, and the family needs to spend $100,000 in uninsured medical costs to keep her alive and thus goes deeper into debt.

Is Douthat truly unable to understand the difference between choosing to spend yourself deeper into debt when your financial picture is good and you have the option of reducing your debt load, and going deeper into debt in response to catastrophe? Or of the policy choices and economic consequences involved in choosing between spending that benefits the masses and tax cuts directed at the rich? If he has read Krugman, he shouldn't be. When the Bush tax cuts were initially proposed, for example, Krugman wrote,

His argument went as follows: given its projected surpluses over the next decade, the federal government may not only pay off its debt, but actually find itself using surplus cash to buy private assets. This could cause problems, he suggested, because it would be "difficult to insulate the government's investment decisions from political pressures." So we should engage in "pre-emptive smoothing of the glide path," which turns out to mean cutting taxes enough so that the federal government never does pay off its debt, after all.

Now I would quarrel with those surplus projections. I would also point out that in declaring "it is far better . . . that the surpluses be lowered by tax reductions than by spending increases," Mr. Greenspan was out of bounds. Since when is it the Fed's business to say that we should have a tax cut rather than, say, a new prescription drug benefit -- or for that matter a missile defense system? (Neither program is factored into those surplus projections.)

When the economy was souring, Krugman didn't oppose tax cuts as a stimulus measure, but instead wrote why Bush's plan would not be effective as stimulus:

Now Mr. Bush could have tried to sell his plan in terms of the ideology that the plan actually reflects. But he has never done so. Instead, he has engaged in an elaborate disinformation campaign. Part of this effort involves an attempt to deny the plain fact that the tax cuts will mainly go to the very, very well off. But the campaign's most striking feature has been the attempt to sell the tax cut as a short-run stimulus to spending -- as the answer to an economic slowdown that Mr. Bush has done his best to play up, and which his doomsday rhetoric may have worsened.

What's ironic is that the timing of the Bush tax plan makes it just about completely useless as a short-run stimulus package. In order to keep the headline numbers down, the plan delays the really big tax cuts far into the future, putting hardly any money into the hands of consumers this year and not much next year. And recently administration officials have begun to admit that if they are really serious about doing something for the economy now, they need to add an immediate tax cut onto the plan.

But then the question arises: why not adopt the add-on and forget about the original plan? Or better yet, why not implement one of the short-run stimulus plans proposed by Democratic senators, and discuss those huge long-term tax cuts for the rich at our leisure?

Douthat should also know that, as far as Krugman is concerned, he's asking the wrong question:

How did a huge surplus turn into a huge deficit? The recession, the tax cut and terrorism -- in that order -- all played a role. Also, it now seems clear that the big surplus in 2000, almost twice as large as the surplus in the previous year, was an aberration -- that tax receipts were inflated by the technology bubble. In retrospect it's hard to believe that we locked in large, long-term tax cuts based on exactly one year in which the non-Social-Security budget was in significant surplus. (Thanks, Mr. Greenspan.)

But anyway, ''Who lost the surplus?'' is the wrong question. The right question is whether the Bush administration has any plan to return to a balanced budget, let alone to honor George W. Bush's promise to use the Social Security surplus to pay down debt. And the answer is no.

That is, it should be obvious to anybody who reads Krugman that he is not particularly concerned with any particular year's budget deficit or surplus, but is instead focused on the long-term.

And if Douthat needs to be spoon fed, well how about that - Krugman has even penned a piece in response to those who "want to know why I’m blaming Obama’s deficits on Bush, and why I think Obama deficits are good, while Bush deficits weren’t." The criticism is of debt, not deficits; deficits can result from a prior administration's policies; and when it comes to stimulus spending the "zero bound" makes an enormous difference. But Douthat knows all of this, doesn't he?

Seriously, was Douthat's attack on Krugman a confession of incompetence, of willful ignorance, or of mendacity?

Patterns of Behavior and Why Rep. Weiner Had to Go

For some who focus exclusively on the "sex scandal" aspect of Rep. Anthony Weiner's behavior, they see inconsistency between the Democratic Party's insistence that he resign and the political survival of other politicians who have engaged in dubious sexual behavior, some of which was illegal. And it is fair to argue that, when the behavior does not involve minors or non-consenting adults, scandalous behaviors are usually survivable.

One of the more absurd comparisons I've heard is to the behavior of past presidents, such as Jefferson, Roosevelt and Kennedy, whose antics weren't known to the public. That's not a distinction - before Weiner's antics were known to the public he, also, avoided any consequence. One of the least coherent comparisons is Michael Medved's factually challenged¹ rant about how unjust the world is because Weiner was pressured to resign but Clinton was not.² I've heard comparisons to Rep. David Vitter ("it's illegal to hire prostitutes but not to twitter suggestive photos to other adults", Sen. Larry Craig ("he was convicted of disorderly conduct, but was allowed to complete his term"), and others.

I've also heard a variety of theories as to why Weiner was singled out - theories that his public persona, his alleged abrasiveness with his colleagues, his status as an up-and-coming leader for the party, etc., made it somehow more critical that he be removed. I don't agree - he could have been marginalized within the party and, as a spokesperson, once the scandal becomes "old news" needs not be any less effective than Elliot Spitzer.

Here's the thing: When you have a politician who cheats on his wife with other women, you can generally expect that if you dig you will learn of other affairs. If the cheating is with men in restrooms, sure, you can expect that digging will probably reveal that's not a one-time behavior, either. If the politician likes to hire prostitutes, again, a thorough investigation will likely turn up a lot more prostitutes with whom he's consorted. None of which changes the essential nature of the story.

Do you believe that somebody who engages in narcissistic, casual exhibitionist behaviors "kept it in his pants", so to speak, before the invention of Twitter? Andrew Breitbart apparently has a small dossier of photos, including an x-rated photo "accidentally" shared with the world. Even had Weiner survived the initial scandal with his implausible denials of responsibility, his scandal is a gift that keeps on giving - with an increasing number of increasingly explicit photos, and an increasing number of women reporting his conduct. For the Republican Party, Weiner had become a gift that keeps on giving.

Am I wrong in my inferences? If I were, I somehow doubt that Weiner would have followed his mea culpa by announcing that he was checking into some form of "rehab", inpatient mental health treatment. I suspect that he could have held on at least as well as Larry Craig, and perhaps as well as Barney Frank. But instead, I think the party legitimately feared that continued investigation would reveal a history of similar conduct dating back to Weiner's youth, and that given how casual he was about his online contacts that it was only a matter of time before he was discovered to have send explicit pictures to a minor. (I understand he's already under investigation for pictures he sent to a 17-year-old, and his antics were known to a sufficient degree among right-wing muck hounds that they were actively trying to solicit pictures from him with fake online identities.)

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1. Medved writes, "Clinton abused his authority with and used government resources in sex-capades with a White House intern" - if you don't care enough about the facts to know after this much time that Lewinsky was not an intern, or if you know and choose to lie, why should you be regarded as anything but a low-wattage intellect and a partisan hack.

2. Is he complaining that Weiner should have stayed because Clinton stayed, that if you excuse behavior of one sort you must forever excuse behavior that's arguably similar, that a President and a Member of Congress are equivalent players in our political system... Nah, he's just ranting about Democrats.

Tying Student Loans to Graduates' Employment Records

Sam Petula suggests that if you explicitly tie student loans to how college graduates do in the employment market, you can put pressure on colleges to scale back or even eliminate certain academic programs:

Last week’s announcement of new rules to bear down on career colleges like the University of Phoenix, which offer degrees in programs like Health Administration and Criminal Justice Administration, weren’t designed to force those questions. These programs come under a different section in the Higher Education Act, excluding them from regulations for how much money their graduates make. But the new rules—the gainful employment rules, as they’re called—could push federal regulators to start peering under the hood of more traditional colleges majors, according to reporting by Inside Higher Ed.

I'm reminded of recent reports about the college degrees that pay the least, with the psychology major being held out as a prime example of a popular but low-paying major. I majored in psychology (although principally because I wanted to graduate - I could have graduated a semester later with a major in chemistry, general science or political science), so I can attest both that you won't find job ads seeking candidates with bachelor's degrees in psychology and that it doesn't matter, because a bachelor's degree in psychology is not designed to be a terminal degree. If you want to be a psychologist, you continue toward a Ph.D., and if you don't you get a graduate degree in whatever field you intend to pursue. The knowledge you gain from the study of psychology can be helpful in other fields, but does not qualify you to be a mental health professional.

To the extent that students entering college believe that "Chinese literature", "religious studies" or "women's studies" are terminal degrees, colleges should be educating them to the contrary. If a traditional college is being anywhere near as misleading toward people majoring in those fields as the for-profits often are in relation to the job opportunities and incomes they suggest can be achieved through their programs, those colleges deserve a similar consequence.

There's a degree of difficulty in comparing a two year certificate program from a private university, that does little to nothing for a graduate's job prospects, with a four year degree that is meant to be followed by a graduate education. The better comparison is to community colleges which typically offer similar degree or certification programs at a significantly lower cost, and without the false promises or exploitation of the federal student loans. It would have made no sense to tell me that I would not qualify for student loans based upon my major... well, first because I went to a then-inexpensive state college, worked a ridiculous number of hours, lived on a shoestring, and graduated from my undergraduate program with no student loan debt, but ignoring that for a moment... because I could have simply and very plausibly declared a different major in order to qualify for loans, and also because my plan was to continue to graduate school such that my nominal major didn't matter.

To the extent that the government's hand appears too heavy, it's not because the government is cracking down on private colleges to the extent truly necessary to correct abuses - most of the teeth have been pulled from the final regulations. I would rather the concept of colleges acquiring insurance for the student loan moneys that they distribute, such that they could do what they wanted but in the event that their graduates didn't find jobs would find the insurance coverage for their students' loans to become unavailable (or, if you prefer, increasingly expensive and, with no corrections, ultimately unaffordable). The "lack of value" in a particular non-terminal four-year degree would be mitigated by the fact that the majority of recipients would continue through graduate school, and thus should not play a significant role in a college's insurance premiums.

Ten Men, Taxes and Free Beer

Ian Cowie, "personal finance editor" of London's Telegraph newspaper, laments that the vote isn't tied to income.

Why don’t we restrict votes to people who actually pay something into the system? No, I am not suggesting a return to property-based eligibility; although that system worked quite well when Parliament administered not just Britain but most of the world. Today, income would be a much better test, setting the bar as low as possible; perhaps including everyone who pays at least £100 of income tax each year.

That minimal requirement would include everyone who gets out of bed in the morning to go to work and could easily be extended to include, on grounds of fairness, several other groups. For example, all pensioners – because of the fiscal contributions to society they are likely to have paid earlier – and mothers – because of their contribution to defusing the ‘demographic time-bomb’ of an ageing population.

The two examples are interesting. The first does not look at contribution - it looks only at age and makes assumptions about contribution. Why? Presumably because Cowie sees the elderly as having interests sufficienlty aligned with his own political goals that he doesn't mind their voting. Excusing mothers... across the board... because they had children? That's just plain odd. For a man who purports to want to improve the quality of the vote, he would hand lifetime voting privileges to unmarried mothers, including teenage drop-outs, but not to fathers - even if mom disappears before junior is even discharged from the birthing center and dad is the child's sole caregiver? And... I see that Cowie's concern is a "demographic time-bomb" - so how about giving men the vote if they have children, the more the better, without regard to whether the children are born within a stable household or marital relationship? Better to have idiocracy, after all, then to have an inadequate number of young wage earners to support an aging population.

To support what he describes as a "modest proposal",¹ Cowie quotes what he purports to be the clever words of others:

For example, it is sometimes said – and uncertainly attributed to Alexander Tytler – that: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury.

“From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy.”

Hard to believe? The credit crisis afflicting democracies around the world demonstrates the truth of this observation. So does the fact that our less democratic competitors in the emerging markets suffer no such crisis.

So Cowie is supporting his case by arguing that bankers, having successfully persuaded governments to scale back regulations and having engaged in high-risk bets, have since successfully lobbied for and received massive bailouts courtesy of the taxpayers of the western world, should not get the vote? Consistency, it seems, isn't his strong point.

It is true, of course, that nations in the developing world didn't directly suffer from the near-collapse of the global financial industry. It's fair to observe that Canada, having maintained adequate regulation of its financial sector, also emerged largely unscathed. It also seems fair to note that the relative wealth of nations was a huge factor - the financial industry appears to have pumped up the housing bubble in every nation in which it was possible to pump up housing values. Does Cowie see Bahrain as part of the developing world or as part of the developed world?

There's also something odd about being wistful for the financial governance of dictators and kleptocrats. If Cowie would prefer to live under the enlightened financial governance of Nigeria or Zimbabwe, I am confident that he could obtain an appropriate visa to support his relocation - and that he would get a closer look at how the wealthy of those nations siphon resources away from their countries and people. That's supposed to be enviable? I understand the concept of the philosopher king, but Cowie's looking for good governance in all the wrong places.

Cowie's sense of financial fairness reminds me of the joke about G.W. Bush, a man who "was born on third base who thought he hit a homer." Or the joke about nine ordinary people and a billionaire banker going into a cafeteria, getting a pizza cut into ten equal pieces, and having the banker grab the first nine slices - then complain about having to share the tenth slice of "his pizza". About that last joke, surely you have heard the one about "how taxes work" - a simplistic, often misattributed email forward about how the rich (and only the rich) deserve the benefits of tax cuts?

Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men - the poorest — would pay nothing; the fifth would pay $1, the sixth would pay $3, the seventh $7, the eighth $12, the ninth $18, and the tenth man - the richest — would pay $59.

Well, apparently it was new to Cowie.

Suppose that once a month, ten men go out for beer² and the bill for all of them comes to £100. If they paid their bill the way we pay our taxes and claim State benefits, it would go something like this;

The first four men (the poorest) would pay nothing. The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59.

Remarkable, how a supposedly insightful joke about the U.S tax system translates, dollar for pound, into a joke about the U.K. tax system. You might have thought that the numbers were picked to exaggerate the point of the joke, or that different nations and tax systems might result in a different distribution of the tax burden, but as it turns out... no! In any event, the punch line is the same. The wealthy guy decides that he has the right to stop paying taxes, the remaining nine people want to again be served their dinner (or free beer, or whatever), and discover that "they didn’t have enough money between all of them to pay for even half the bill". Cowie lectures,

That’s how non-contributory democracy led to the credit crisis in a nutshell. Or a joke, on the basis that you don’t need to be solemn to make a serious point. It’s time to restore the link between paying something into society and voting on decisions about how it is run.

Right - the problem in our society is that the wealthy and powerful don't have enough say in how things are run.

Seriously, as an explanation for why tax cuts might disproportionately benefit the rich yet still be fair, the shared dinner or beer joke is a good starting point for discussion. It's reasonable to say that a 3% tax cut should benefit people who pay taxes, and should not also require that tax credits be increased by 3%. The obvious retort, even there, is that wealth and income are not equally distributed, and that even the flat-taxers don't propose capitation - even if everybody were to pay the same percentage of their income as taxes the rich would pay more... to a degree. Fortunately for the rich, despite all the barriers Cowie apparently perceives as existing between them and their elected representatives, they have successfully managed to achieve tax rates for capital gains that are substantially lower than taxes on wages.

Speaking of capital gains, would Cowie extend his £100 standard to the idle rich? Or would you have to actually earn enough wages to have to pay income taxes in order to vote? After all, he's apparently excluding sales taxes, payroll taxes, and the like from his equation. What if you took a year's sabbatical, paying no taxes, to rest up after years of contributing massive amounts of money to the tax rolls - you're disenfranchised that year? What if you spend thirty years helping a company build value, but are laid off following a merger or unexpected catastrophic event? No voting until you either get a new job or retire? It shouldn't need to be said, but income and taxes aren't static over a lifetime. Most people earn more over time, some earn less, many experience setbacks. Even if we exclude the income of trust fund babies who never work a day in their lives, income can be a poor measure of contribution.

Cowie's example also presupposes that although contribution to taxes is unequal, the benefits of taxes are equal across the board. Perhaps he should compare the state of his local streets and schools to those of an inner city area. Perhaps he should compare how much influence a billionaire has, seeking zoning variances to put up a mansion or some other "monument to me", as opposed to an ordinary person who wants to erect so much as a fence. Or how that billionaire does when asking for hundreds of millions of dollars to subsidize his new, private, for-profit sports arena, as compared to the residents of a poor community who want the government to do a better job maintaining playground equipment in a local park. It may be that everybody is served beer, but some get pints and some get barrels.

At the end of the joke I'm still left scratching my head - what does Cowie's attempt at humor have to do with qualification to vote? For example, while I will concede that he's qualified to head a major political party and even to be a nominee for President, and that he probably paid lots of income tax even during the times his various ventures were in bankruptcy, I am not convinced that Donald Trump is actually qualified to vote. And if Cowie's exceptions encompass pensioners - a demographic among the most apt to vote to preserve or expand their benefits without regard to the state of their nation's finances - and mothers, without regard to income, education or aptitude merely because they give birth to potential future taxpayers, Cowie defenestrates whatever association income might have with the responsible exercise of the right to vote.

In the event that there's a billionaire banker reading this and he still thinks Cowie's example is fair and that he's unduly burdened by his tax bill, I have a proposal. And it's not a harsh one - I earn a good income, and as a result have a comfortable lifestyle. I will trade you all of my income and assets for all of yours, from this point forward. I will then pay your entire income tax bill in addition to my own for the rest of your life.³ Deal?

-------

1. "A Modest Proposal" is a label most often given to ideas that are anything but modest, usually also by authors who are unfamiliar with Swift or unclear on the concept of satire.

2. It's a shame here that Cowie didn't use the traditional version of the joke that centered on dinner, as then the ultimate punch line for his "modest proposal" could be, "Well, we may not be able to afford a restaurant, but at least we can eat our babies."

3. This offer is also open to Darrell Issa, Sarah Palin, Mitt Romney, Rush Limbaugh, and similarly situated political leaders and television personalities.

Off by an Order of Magnitude....

Or two?

On The O'Reilly Factor, Gretchen Carlson falsely claimed that "about 35 percent of the in-state tuition people or students" at University of California schools "were illegals." In fact, only 0.34 percent of undergraduates in the University of California system in the fall of 2008 were "potentially undocumented" students who received the in-state tuition rate.*

To be fair, perhaps it was not intended to be a factual statement.

(College) Kids These Days

Scott Kaufman shares a few recent experiences with his students. (But then is it a surprise that students don't "get" the concept of attending class, completing their actual assignments and studying, given that "More than 36 percent of first-year students at two-year and four-year colleges took at least one remedial class in 2007-08" and alarming numbers of "B" high school students from certain districts require remedial classes in reading and math. And, like Kaufman, some professors simply won't tell you "what's on the test.")

Going back to the lighter side, I was reminded of an interaction between a teacher and student at a graduation reception:

Professor: Congratulations, Ms. Jones.

Student: You remember me?

Professor: Yes.

Student: But I was only in one of your classes. How did you remember me?

Professor: You sat in the front row and asked questions every class until about two weeks into the course, when you came up to me after class and asked, "Does attendance count." I answered "No" and never saw you again.

Europe vs. The Washington Post's War Agenda

Fred Hiatt and his crew have published an unsigned editorial, chastising NATO countries for failing to spend enough money on their military forces. I'll outsource in part to Dan Larison's preemptive strike:

It may be obvious, but Gates’ two examples of non-U.S. NATO failings have nothing to do with European defense. Certainly, the limitations of European military power show that their governments remain dependent on the U.S. for security, but there are few worse ways to persuade European governments and publics that they have the wrong priorities than to lecture them on their insufficient support for Afghanistan and Libya....

As for Libya, it is important to remember that the governments that have contributed nothing to the war never wanted to attack Libya, and they wanted to keep NATO out of it all together. Gates directed his ire at several of these governments the other day, as if Germany, Poland, and Turkey should be expected to pitch in to support a military campaign they explicitly opposed. These are not the governments that wanted the U.S. to engage in combat missions in Libya, because they didn’t want any outside government taking military action in Libya. What Gates should have acknowledged when faced with the refusal of German, Polish, and Turkish governments to participate in bombing Libya is that Libya is not properly a matter for NATO and should never have been a NATO mission.

Hiatt's crew complains,

As [Gates] made clear, this country can no longer afford to do a disproportionate share of NATO’s fighting and pay a disproportionate share of its bills while Europe slashes its defense budgets and free-rides on the collective security benefits.

And Gates has different priorities than the nations of Europe, who see significant benefit in "free riding". For that matter, I don't recall Hiatt and his crew coming out against austerity measures in Europe. Even if we ignore how popular it would be for European nations to announce tens of billions in new military spending as they slash domestic programs, the question arises: how is increasing military spending consistent with austerity? As Hiatt knows from his own paper, Britain's austerity measures include significant cuts in military spending.

Hiatt's crew complains that Europe places too many restrictions on the rules of engagement when it commits troops to NATO ventures, and that Libya should be more important to Europe than it is to the U.S., presumably because it's closer? They also complain that the nations involved in the bombing of Libya don't have the resources to carry out a perpetual campaign:

Even fully participating members have failed to train enough targeting specialists to keep all of their planes flying sorties or to buy enough munitions to sustain a bombing campaign much beyond the present 11 weeks.

That should frighten every defense ministry in Europe. What if they had to fight a more formidable enemy than Col. Muammar el-Qaddafi’s fractured dictatorship?

Can we be honest for a moment? The fact that the European nations who wanted to participate in the Libyan adventure cannot sustain a 12 week bombing campaign against a nation in North Africa does not mean that they cannot defend themselves. The fact that they impose strict rules of engagement on their troops when deployed for NATO missions in Africa or Asia does not mean that, if faced with military invasion, they would apply those same rules. The fact that nobody is talking about using nuclear weapons in Libya does not mean that, when Europe faced an actual and potentially imminent existential threat, the probable use of nuclear weapons in its defense was not taken for granted.

I also expect that if the nations of Europe did perceive a growing, potentially existential threat, they would buy some additional planes and bombs in response. One reason not to do so is that, used or not, the ongoing cost of training, support and maintenance is significant. Another reason not to do so is out of recognition that when you have greater military capacity there's always somebody, within the state or on the outside, who wants you to use it. When President McCain says, "It's time to invade... Iran", it's easier to respond, "We can't" than "We won't."

In specific relation to Libya, the priorities here have less to do with Europe's ability to defend itself from proximate or imminent threats, and more to do with its unwillingness to pour huge amounts of money into overseas adventurism. Yes, sometimes threats do arise in other continents, and under some circumstances it may make sense to take military action in those nations as a matter of self-defense. But humanitarian missions, as the Libyan adventure was initially described, are not a matter of self-defense. And as should be obvious to anybody who has paid even slight attention to world history, past or present, military interventions often do not go as planned and often carry serious repurcussions. George W. Bush and Tony Blair presented Gadafi as proof positive of the success of the "War on Terror", and now he's a poster child for the evil despots of the world who must be removed at any cost... which in a sense takes us back to Reagan's time, except that Reagan put a pretty low ceiling on the cost he was willing to incur to depose Gadafi. How is this mission vital to Europe's interests?

Racism? I Don't See No Stinkin' Racism!

How could you possibly imagine that there's any racism here?

Bolling began the segment itself by saying, in part, "So what's with all the hoods in the hizzy? A month after the White House hosted the rapper Common, who glorifies violence on cops, the president opened his doors to one of Africa's most evil dictators. Here's Ali Bongo, the Gabonese president, who's been accused of human rights violations and plundering billions of his country's dollars."

Let's do a quick Google search for "Hoods in the hizzy". Okay... here we go:

Oops - Daddy Bongo, granted - you know those banana republics, in which power passes from father to son - but with the wrong hizzy host? With a dash of Jack Abramoff, to boot? Nothing to see there, folks....

Zero Tolerance Idiocy

It's not just for public schools, it would seem.

Perhaps the Word "Sexual" Doesn't Belong In The Question

I asked, "Do Sexual Ethics Matter in Politics" but, despite the tawdry details, when we're talking consensual acts between adults the voters seem to be pretty forgiving. Chase staffers around the office, solicit underage pages, pay for sex with minors, that sort of stuff? Often career-ending. The "I've made mistakes in my marriage"-level of misconduct? Despite the media interest in (presumably responding to a public appetite for) the tawdry details, on the whole voters seem to excuse it and move on.

Had Clinton said "I've made more mistakes in my marriage, am sorry for the pain I've caused, and the rest is between me and my wife," instead of "I did not have sexual relations with that woman", he would have saved himself and the country a great deal of turmoil. Had Mark Sanford announced that he was leaving his wife, instead of taking off with her to Argentina while having his aides cover up with a lie about his hiking the Appalachian trail, perhaps he would have survived his scandal. When you think about it, that makes sense: Your political career suffers the greatest harm when you lose your supporters, and the best way to do that is to lie to them, put them in the position of defending you, and having those who do come to your defense end up looking at best naive. And really, why should your supporters be expected to shrug off that treatment based upon the subject matter of your lie.

Newt Gingrich's Intelligence - Hidden in Plain Sight?

I keep finding assertions that Newt Gingrich is a brilliant man. Brimming with insights and ideas. Except... I have yet to read an editorial, hear a speech, or see any other actual evidence of that brilliance. I'm not arguing that he's stupid - not at all - but what I see seems like a pretty run-of-the-mill intellect for a successful Washington politician. Above average, but nothing to write home about.

I'm fully prepared to buy into Newt as the intellectual giant of the GOP, but only if somebody shows me the evidence. I won't even ask that you explain away his many mistakes - smart people make mistakes, and sometimes can think their way into trouble. Arguably a stupid man would have an easier time staying on message in today's Republican Party, as I expect it's easier to stay on the right side of litmus tests if you don't have the aptitude to think about whether the positions you're supposed to take are in fact what's best for the nation.

I come across smart people all of the time, including people whose political philosophies vary from my own. Am I missing something? Or is it that I am to be awed by his ability to promote himself and rake in huge amounts of cash by serving as the Ed McMahon of right-wing political causes, and conclude that anybody so good at enriching himself has to be smart?

Hands Off Our Slums?

A recent editorial in the Times complains about a competition "asking students, architects and businesses to compete to design the best prototype for a $300 house". The authors complain that the concept is too simple:

To start with, space is scarce. There is almost no room for new construction or ready-made houses. Most residents are renters, paying $20 to $100 a month for small apartments.

Those who own houses have far more equity in them than $300 — a typical home is worth at least $3,000. Many families have owned their houses for two or three generations, upgrading them as their incomes increase. With additions, these homes become what we call “tool houses,” acting as workshops, manufacturing units, warehouses and shops. They facilitate trade and production, and allow homeowners to improve their living standards over time.

None of this would be possible with a $300 house, which would have to be as standardized as possible to keep costs low. No number of add-ons would be able to match the flexibility of need-based construction.

If the $300 house is comparable to the $20 to $100 per month rental, even if you include the cost of a small plot of land it seems like a pretty good deal. And as for homewners, it's pretty easy to see how a $300 house could be conceived as a modular structure, subject to having additions. I'll grant, that's not a requirement of the contest, but it would be easy enough for somebody entering the contest to design a modular structure.

Whatever the faults of a thought experiment such as this, that's all it is. The winner's idea is not going to replace all alternatives for the slum dwellers of the world, and even less so if it would not meet their needs. But the winning idea may provide a framework for providing even better value for the residents of "slum" housing - how to improve hygiene without breaking the bank, or how to implement solar heating or cooking and save money on fuel.

The authors also express concern that if, in fact, the contest results in the broad availability of cheap, attractive, quality housing, it will hurt the local construction industry. And yes, at that price point we probably would be talking about pre-fabricated housing, reducing the need for local workers and probably reducing the need for continued repair and maintenance. But... what in life is not a trade-off? Is it better that some people have to seek other lines of work, or that other people who would prefer the relative quality and sanitation offered by the winning design continue to live in less suitable housing in order to preserve that status quo?

The authors also appear to presuppose that the winning design would have to be implemented on a wholesale basis, rather than replacing individual housing units within the existing community:

The $300 house responds to our misconceptions more than to real needs. Of course problems do exist in urban India. Many people live without toilets or running water. Hot and unhealthy asbestos-cement sheets cover millions of roofs. Makeshift homes often flood during monsoons. But replacing individual, incrementally built houses with a ready-made solution would do more harm than good.

Even if we assume that every entry in the contest would require the bulldozing of neighborhoods, and I doubt that such an assumption is well-grounded in the facts of the competition, the authors are free to make their competing proposal. For that matter, they can start their own contest with their own preconditions and price point, including that the proposals be for homes that, with appropriate assistance, local residents could build for themselves.

"I Didn't See This Coming, Either"

In the past couple of months I've seen the documentary, Inside Job, a competent explanation of how the financial industry crisis arose, and of the ensuing collapse and bail-out. There are no big surprises for those who followed the crisis, but it's a good refresher course - and probably a good primer for those who are still wondering how the crisis occurred. I also saw the star-studded HBO dramatization of Andrew Ross Sorkin's novel, "I Love You, Hank Paulson" Too Big to Fail. That production offers a frenzied account of how the crisis was handled, but (in my opinion deliberately) omits mention of how the crisis arose or what has happened since Paulson "forced" the nation's biggest banks to accept billions of taxpayer dollars, no strings attached.

Two things struck me about the HBO production. First, if Sorkin's account is accurate, perhaps Henry Paulson's epitaph should be, "I didn't see this coming, either." Perhaps in order to maintain him as a sympathetic character, there's next to no mention of Paulson's background in Goldman Sachs, and what mention there is comes in the form of telling us how unfair it is that the government is viewed as being unduly influenced by the former Goldman Sachs employees who manage the treasury, or how hard Paulson worked to save Lehman Brothers (merely, we are told, the seventh largest investment banking firm in the country - why would Goldman Sachs care about such a minor player) and how it was that bank's intransigence and not Paulson's policy that resulted in its bankruptcy. There may be truth to that, but it's still very interesting how much effort Sorkin applies to salvaging Paulson's reputation as opposed to explaining how Paulson managed to avoid recognizing the perilous condition of the financial sector before we reached the crisis point. Seriously - thanks to Sorkin I now know Paulson's religion and that he has to be arm-twisted to take a sleeping pill (which he may or may not have actually taken), than I do about his history with Goldman Sachs.

The film ends with Paulson expressing a hopeful but concerned expectation that the banks would follow through on their implied promise to lend out the billions of "no strings attached" dollars to boost the economy, but unlike the rest of the film in which Sorkin's interpretations and conclusions are spoon-fed to the audience, you only "get" the ending if you already know that the banks did no such thing - but you're expected to believe that Paulson didn't see that coming. From Sorkin, you get no sense of any of the inside dealing and willful blindness that was behind the bubble or AIG's failure. This is stuff that just happened - a perfect storm, it would seem, of industry actions for for which nobody should be held accountable. You get no sense of regulatory capture - but as I've commented, Sorkin's coverage of the financial industry seems to me to be the journalistic equivalent of regulatory capture. The dramatization of his book reinforces that perception, and then some.

Some of the explanations for policy choices are left with the not-so-credible statements we've previously received. For example, we have no choice but to give the nation's biggest banks all those billions of dollars because if only the failing banks are given money everybody will know which banks are failing. The competing explanation, that it would not be fair to the non-failing banks if their incompetent competitors get that kind of boost and they do not, is omitted. But by the time of that cash infusion, everybody who was following the crisis knew or could easily determine which banks needed the money and which did not. The "we need to maintain a level playing field" argument would have been more credible; although I suppose that would have undermined Sorkin's explanation for why no strings could be attached to the money. You could achieve that level playing field by offering the money, strings attached, on equal terms to every bank. And not so much as a whisper about how your word is your bond in the financial and insurance sectors - maybe that's a rule only for insurance companies?

Timothy Geithner, on the other hand, gets no similar amount of love. When he's on screen the goal seems primarily to be to attribute to him some of the worst and least popular aspects of the bail-out - blank checks for the banks, "cash for trash".... That may be entirely fair. Whatever I can make of defenses of his intentions and integrity, I can't recall the last time I've heard a defense of his competence in relation to the management of this crisis. But really, given how a simple measure such as some form of bankruptcy cram-down for homeowners' first mortgages could have helped over the past two years, simplifying the process of getting people out of their upside-down homes without foreclosures or short sales, keeping struggling people in their homes, and in stabilizing housing prices, who could muster an energetic defense for a guy whose only concern was in shoveling as much taxpayer cash as possible, no strings attached, into the institutions most responsible for the nation's problems.

No, We Won't

Tom Friedman, having noted that the world's population is consuming resources at a faster rate than the world can replenish them, closes his column by quoting Paul Gilding,

“We are heading for a crisis-driven choice,” he says. “We either allow collapse to overtake us or develop a new sustainable economic model. We will choose the latter. We may be slow, but we’re not stupid.”

Is there anything in human history that would suggest that, when faced wit economic or environmental catastrophe, a major nation will reverse course and avoid that catastrophe? Is there anything in present economic or environmental policy that would suggest a present willingness to reverse course - to consume less, pollute less, limit population growth in cities and countries with inadequate supplies of food and water.... Seriously, I understand wanting to close on an optimistic note, but what I tend to see is complacency (it won't be so bad), denial (the problem doesn't exist), selfishness (it may be bad for others, but it won't be bad for me - and I may even turn a profit), wishful thinking (we'll produce a magic new technology that will fix everything), laziness (it's too hard).... Where does Gilding find a basis for optimism that this time will be different - not another Mayan Empire, Easter Island, Haiti....

History teaches us that to the extent that the world eventually does "choose" a new, sustainable economic model it will be a choice forced by imminent collapse, or it will be a forced choice that follows the collapse. I would love to be proved wrong, and we're certainly capable of better, but I'm not seeing much evidence that supports optimism that "this time will be different". (But perhaps things look different to Friedman, as he pulls his Lexus SUV into the driveway of his lavish mansion, a lifestyle he appears to view as completely sustainable and consistent with what he preaches in his columns. Let me guess... his pool is now solar heated?)

Do Sexual Ethics Matter in Politics

I often hear it argued that a politician's private life should remain private, and that infidelity should be considered irrelevant to a politician's public life. This is true to a point - if you know that a particular politician is inclined to have extramarital affairs and you elect him anyway (cough Clinton cough) then you shouldn't pretend its a huge shock or somehow an indictment of his character when he continues to act in character. If you care that Rudy Giuliani occasionally dresses in drag don't vote for him - but it's public information and the voters elected him knowing that he likes to play dress-up (and I have no reason to believe that, in his case, it's anything but a lark).

I heard it argued that the breaking of the story in relation to John Edwards was a public service, as he was hiding a scandal from his supporters and donors that would have devastated his chances of election had he been nominated for the Presidency, and similarly that the disclosure of Anthony Weiner's exploits on Twitter was a public service to the voters of New York who might have supported him in a run for mayor. The implication of that argument is that, absent an election, the behavior of both men is irrelevant to their public lives. I've also heard it argued that if you take Newt Gingrich's infidelity while married to a cancer-stricken wife and combine it with Arnold Schwarzenegger's love child you have John Edwards - but Gingrich is deemed a serious presidential candidate and Schwarzenegger's image is at worst a bit tarnished. Is that fair?

Well... yes. It isn't so much that Edwards suffered a collapse of his public persona because he had an affair that resulted in a child, so much as it is that he was revealed to have a private life completely at odds with the persona he was selling to the public. And when it looked like he was going to be caught, the cover-up was pretty outrageous.

But I think there's something else that the "It's their private lives" crowd is missing. The question of whether you can neatly compartmentalize fidelity - "He cheats on his wife and fakes his religious fervor, but I trust him to be faithful to his oath to uphold and defend the Constitution." Perhaps some compartmentalization is possible. Perhaps Bernie Madoff would never have dreamed of stealing from the collection at his synagogue, even as he happily ripped off his investors.

Perhaps with some relationships the flexibility of the marital vows is part of an explicit understanding between the partners (although that was pretty clearly not the case with Edwards - although that brings us back to the issue of lying to voters and supporters over something that could blow up during an election. Perhaps you can rationalize the deception in those cases - it's society that's being unreasonable in holding that a perfectly qualified individual is "unelectable" if he has an open marriage or is an atheist, and thus he's justified in pretending otherwise in order to obtain and hold office. But it seems to me that most people act pretty consistently across their lives - if they don't steal at work, they don't steal at church. If somebody like Madoff doesn't steal at church it's probably because it's too little money to be bothered with - but if that church were to have a considerable endowment and were to invest with him, "game on".

I personally believe that somebody who is dishonest in relation to the most central personal relationship of their lives is likely to display the same level of dishonesty in other contexts. Liars lie, cheaters cheat, and thieves steal. Some dubious behavior may hint at personality traits that could be beneficial to a political leader - if we're honest, there are times when a psychopath's sang froid, ability to fake emotion, lack of conscience, and ability to lie without the usual outward signs of deception could be useful to a President. That's not to say we want a psychopath in office, but maybe we do want a guy who can have a huge scandal break just before his State of the Union Address, and who will nonetheless proceed to present that speech as if nothing untoward has happened. Both the human psyche and the world are complicated. But if you're electing a thief, liar or cheater, you should have the opportunity to know what you're doing.

Update: In the New Yorker, Hendrik Hertzberg argues that

[Weinergate] confirms a pet theory of mine: the Clinton Rule, which states that when a married politician appears before cameras and microphones and starts babbling absurd lies about some sexual something, the person he is really trying to lie to is his spouse. The lies that get told to the public and the press are side effects.

and

By itself, the fact that a person has lied about sex tells you nothing about that person’s general propensity to lie.... If the politician is a habitual or characterological liar, the public record will show it and the lying-about-sex is redundant. If the politician is not a habitual or characterological liar, his lying-about-sex is misleading—is itself a lie, in a way.

Hertzberg assumes that the public record will be both available and clear. It may be that it's the lies about infidelity that lead people to look more closely at the rest of a politician's record. But he's also compartmentalizing behaviors, as if you believe that a person's essential character is consistent across the board, somebody who cheats on his spouse is in fact likely to display similar conduct in other contexts. Even if we limit it to "He'll only lie to me if it's necessary to save his political career," and even if I think that a public reaction to his infidelity would be exaggerated and thus sympathize with his desire to keep it secret, I don't see why lying to save his career in this context would not suggest that he will lie to save his career in other contexts. Frankly, if the argument is that the public needs to shift its opinion on infidelity and be less judgmental of politicians' affairs, even if there is an individual price to pay before cultural perceptions shift, politicians would do themselves and their peers a much greater service by being honest.

Groupon Deal: Buy Early Shares for $10 and Get $50 Worth of Investor Money

That's not intended to be a literal expression of Groupon's business model or IPO, but as Frank Reed notes, early investors have been doing very well on their Groupon shares:

And remember when Groupon raised $950 million not so long ago? Guess what that did? It simply paid out the early investors in handsome sums. It did little to build the business. You can get the details in the All Things Digital post.

If history should teach us anything, it's that the financial industry loves bubbles. It loved the profits it made during the first Internet bubble. It was ecstatic over its profits during the housing bubble. And now, having been bailed out, pampered, and guaranteed immense profits and compensation at taxpayer expense on the ground that they're "too big to fail", why not do it again? Besides, a few IPO's that result in pumped up valuation, enormous, easy profits for early investors, insiders and investment banks, and... well, quite possibly not much for ordinary investors in the longer term, if that counts for anything... don't make for a bubble, do they? It's just a few hundred billion, maybe a trillion. Chump change.

I am of the impression that Groupon's founders want to build a sound, dominant business. But that doesn't mean they don't want to cash in. Is that the new economy? Build a $billion business, a $5 billion business, a $10 billion business, a remarkable accomplishment in itself, take it public at a ridiculously inflated valuation, the bankers, and investors and founders get rich beyond fabulously rich. As for the ordinary people left holding the stock? Sure, they may have paid $50 for $10 worth of company, but they got the exact number of shares that they paid for. Whose fault is that?

"Conventional Valuation Models Don't Apply to Us"

I recall, back in the days of the first Internet bubble, how the popular wisdom was that there was incredible value in "eyeballs" - the volume of traffic to your site, and information you might glean from your users, was far more important than turning a profit... or even generating revenue. As it turns out, although there have been innovations in how traffic and information can be monetized, it is important to generate that revenue.

I commented recently (and cynically) on the LinkedIn IPO, taking the position that the argument that the bankers put one over on LinkedIn's owners was a stretch. It seemed, and still seems, more symbiotic. LinkedIn, its owners and the investment bankers who handled the IPO made tons of money. Whether or not LinkedIn ever generates enough revenue to justify a tenth of its present valuation, its owners and early investors will walk away with truck loads of money. Meanwhile, the businesses of the nation's proverbial "Main Streets" have difficulty obtaining financing. Wow. There's less risk in floating a multi-billion dollar IPO for a business that has no clear plan or path to justify its valuation, than in investing in traditional brick and mortar businesses. There must be, because you can see for yourself what banks are doing.

Groupon plans to be the next business to clean up through an IPO:

The IPO, which could value Groupon at $15 billion to $20 billion, prompted Richard Brenner, president and CEO of financial-advisory firm The Brenner Group, to say that he would tell would-be investors to “sit out” the IPO because Groupon “doesn’t appear to have a sustainable business model yet.”

“Why would the public support a company that can’t figure out how to be profitable?” Brenner said.

But Mark Lehmann, a Wilmette native who heads up JMP Securities in San Francisco, said investors are clamoring for a long-awaited IPO by a company that shows such terrific growth.

“Groupon has the brand and the first-mover advantage, and it is extremely well-regarded,” Lehmann said.

Groupon came into business with a simple but clever idea, and its latest efforts suggest that it is capable of innovation. But this type of thing makes me nervous:

We don’t measure ourselves in conventional ways.

There are three main financial metrics that we track closely. First, we track gross profit, which we believe is the best proxy for the value we’re creating. Second, we measure free cash flow—there is no better metric for long-term financial stability. Finally, we use a third metric to measure our financial performance—Adjusted Consolidated Segment Operating Income, or Adjusted CSOI. This metric is our consolidated segment operating income before our new subscriber acquisition costs and certain non-cash charges; we think of it as our operating profitability before marketing costs incurred for long-term growth.

A more sophisticated explanation, certainly, but why does the phrase, "We make it up on volume" come to mind?

Substance vs. Grandstanding

The Republican Party (a/k/a "The Grand[standing] Old Party) is taking time out from its game of chicken with the economy to possibly team up with Dennis Kucinich to pass a resolution against the continued military involvement of the U.S. in Libya. Dan Larison writes,

If the Kucinich resolution passed, that would be great news, but I have to wonder if it would change anything in the near term. The administration would have a problem if it just ignored it and flouted it, but it is already ignoring and flouting the law, so why wouldn’t they do the same to the Kucinich resolution? The resolution directs Obama to withdraw U.S. forces from the war within a specified period of time, but the administration clearly pays no heed to deadlines set by Congress.

That's the thing about meaningless gestures - they're meaningless. Congress has the power to set hard deadlines, to cut off funding. Instead, we're talking about a deliberately toothless resolution. Members of Congress can pander to one group or another, or set themselves up for a campaign commercial, while doing nothing. And let's not forget, the reason we're in this situation in the first place is that for decades Congress has been unwilling to fulfill its constitutional role in relation to the declaration of war and has happily delegated that responsibility to the President. Even as the GOP ponders following or imitating Kucinich, look at what John Boehner has to say:

Boehner, though, says Obama is “technically” in compliance with the war powers requirements.

Wow - what a ringing endorsement of Larison's position that the Obama Administration is "flouting the law". Or, for that matter, Glenn Greenwald's.

And note the individuals on whom Obama is now relying to protect him from this bipartisan effort to put an end to his illegal war: "GOP House leaders" -- John Boehner and Eric Cantor, who refused to allow the bill to come up for a vote despite ample support among conservative members of their caucus as well as numerous liberal House members. Can we hear more now about how the two parties are so radically different that bipartisan cooperation is impossible? The Emperor has decreed that we will fight this war, and thus we will -- that seems to be the prevailing mindset.

Let's be honest for a moment - this is not a bipartisan deference to "the Emperor" - it's about "How will this look in a TV commercial (either mine or my opponent's)?" Cantor and Boehner fear commercials about how they "let Gadafi win", or about how "They didn't stand behind the troops," or describing how the President had to "stand up to them" in order to prevail in the toppling of a "terrorist dictator". You want them to vote against the intervention in Libya? Find a way for them to spin the vote against the President in the next election and they'll be all over your bill.

Maybe There's a Different Reason

A few days ago, Paul Krugman wrote,

Since some time in the fall of 2009, Obama’s rhetorical stance has been basically that he’s like the GOP, but less so; can you even remember him offering a full-throated defense of Keynesian policies?

I admit, I've never met the President and have certainly not had the chance to discuss economic policy with him or his advisers. Perhaps President Obama gave that full-throated defense in private and I'm dead wrong. But... one thing I have noticed about President Obama is that you can generally take his statements at face value. Perhaps the reason that the President appeared to take the position that "the [stimulus] half-measures it was actually able to get were exactly right, not a penny too small" and doesn't speak forcefully in the defense of Keynesian policies is that he was convinced that the stimulus package was adequate and wasn't convinced at the time by Keynesian policies.

To the extent that he might now be more convinced by Keynesian economics, we're back to political constraints - whether or not it should be, between the efforts of the Tea Party, Republican Party and the bulk of the mainstream media, we're not in a political climate in which we can have a sensible discussion about budget deficits and stimulus spending.

Time to Change or Eliminate Software Patents

Fred Wilson on patent trolls:

The whole thing is nuts. I can't understand why our goverment allows this shit to go on. It's wrong and its bad for society to have this cancer growing inside our economy. Every time I get a meeting with a legislator or goverment employee working in and around the innovation sector, I bring up the patent system and in particular software patents. We need to change the laws. We need to eliminate software patents. This ridiculous Lodsys situation is the perfect example of why. We need to say "enough is enough."

I've commented on this issue before; it's one that affects most people but few know about and fewer care about, hence the status quo. Once big companies build a portfolio of patents and have sufficient revenue to pay off trolls as necessary, they mostly seem to become complacent about the current system as it serves as a barrier to entry for potential competitors.