Later On

What a feckless agency the SEC has become. Only now are they turning to the meltdown. Jake Bernstein and Jesse Eisinger of ProPublica:

Almost three years since banks started taking losses that led to the worst financial crisis since the Great Depression, the Securities and Exchange Commission is still asking basic questions about what happened.

The SEC is conducting an information-gathering sweep of the key players in the market for collateralized debt obligations, the bundles of mortgage securities whose sudden collapse in price was at the center of the meltdown of the global banking system.

In a letter dated Oct. 22, the SEC sent what amounts to a questionnaire to a number of collateral managers, the middlemen between the investment banks that created the complex financial products and the investors who bought them.

Collateralized debt obligations are made up of dozens if not hundreds of securities, which in turn are backed by underlying loans, such as mortgages. Investment banks underwrite the structures and recruit their investors. Collateral managers, brought in by the investment banks but paid by fees from the assets, select the securities and manage the structures on behalf of the investors. CDO managers have a fiduciary duty to manage the investments fairly for investors.

Since 2005, $1.3 trillion worth of CDOs have been issued, with a record $521 billion in 2006, according to the securities industry lobbying group SIFMA. The collapse in value of mortgage CDOs triggered the 2008 financial collapse.

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Excellent Glenn Greenwald column:

This might be one of the most self-contradictory episodes in the annals of American punditry:

Tom Friedman, The New York Times, yesterday:

A corrosive mind-set has taken hold since 9/11. It says that Arabs and Muslims are only objects, never responsible for anything in their world, and we are the only subjects, responsible for everything that happens in their world. We infantilize them.

Tom Friedman, over and over and over, for the last two weeks, on Afghanistan:

I feel like we’re like an unemployed couple who just went out and decided to adopt a special needs baby.

The person who has spent weeks depicting Afghanistan as a "special needs baby" is now lecturing us about the "corrosive mind-set" of "infantilizing" Muslims.  And the person who is now inveighing against seeing ourselves as "subjects" and Muslims as "objects" was one of the most vocal cheerleaders for the attack on Iraq on the ground that our invasion would "put Iraq on a more progressive path and stimulate some real change in an Arab world."

The "point" of Friedman’s column yesterday is to call for a "civil war" in the Muslim world.  Calling for wars is what Tom Friedman does most frequently.  Today’s not one of those days when I’m willing to wallow in the muck of his "argument," but Daniel Larison’s superb response makes that unnecessary.  Suffice to say:  if I had to identify one fact that would illustrate for historians the rot and destructiveness of American political and media culture in this era, I would point to the fact that the trite,sociopathic, and grotesquely muddled mind of Tom Friedman is widely considered by political and media elites to be deeply Serious, profound and oozing great wisdom.

UPDATE: 

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Not actually used this morning, but pictured anyway to start the day. I slept late, the ladies are coming, the place is a mess, and no shave today—along with no Nordic Track, but probably good to take a day off now and then.

I’ll do this shave tomorrow. The post is here simply to mark the beginning of the day.

James Fallows in his blog:

For experimental purposes I’m sticking with Bing this week, but a friend said I really had to see the Google home page before December 15 had passed.  Indeed! I look at it just now and see an unusual green and white flag over the logo. And not just any flag:  Estas la Esperanto flago! 150 years ago today, in the town of Bialystock (then in Russia, now in Poland), L.L. Zamenhof was born — the idealist and linguist who invented the language of Esperanto and preached it as a means to fraternity and harmony all around the world.

My wife and I and our small sons cram-learned Esperanto in several weeks in 1986, as a way of getting a visa into China to attend the World Esperanto Congress in Beijing and then travel around the country. We had many adventures, including when kids played with a young girl with English-speaking parents who had decided to raise her as one of the world’s few native speakers of Esperanto. “Vi volas ludi pupojn kun mi?” she would ask our sons, only to hear “Mi volas jeti pilkon.”  (“Do you want to play dolls with me?” “No, let’s throw a ball.”) If you want to read more seriously about Zamenhof’s achievement, you can start here and with some quizzical views here and here. For myself and my family I simply say, Felica Naskotago Dro. Zamenhof!

I should note for those who think that Zamenhof was irrationally naïve, he never believed that having a common second language—an interlanguage—was sufficient for peace and harmony. Rather, he thought it was necessary.

This is weird, but the headline seems to be correct based on the statement from the RNC. Zachary Roth at TPM Muckraker:

Something that jumped out at us in that story about Brett Mecum, the Arizona GOP executive director charged with using the party’s voter registration database to stalk a woman: the bizarre response from Mecum’s boss.

Here’s what party chair Randy Pullen, who is also the treasurer of the Republican National Committee, told an Arizona political site about the claim that Mecum had used Voter Vault to find the woman’s address:

The Republican National Committee owns Voter Vault … It’s a private list. We own the list. We can do what we want with the list, quite frankly.

It’s a felony to use a voter registration database for anything other than official purposes. In Arizona, it can get you a couple years of prison time, according to The Huffington Post.

Pullen appears to have backed off that stance. Matt Roberts, a spokesman for the Arizona GOP told TPMmuckraker: "The chairman has the utmost respect for that data, and we would never ever use it for anything other than what it was intended to be used for." Roberts claimed, implausibly, that in the earlier quote, Pullen meant that the RNC could do what it wanted with the data in using it to turn people out for elections.

But HuffPo also reports that, according to several Arizona GOP women, Pullen refused even to meet with them to discuss their allegations of sexual harassment against Mecum.

But perhaps it’s not surprising that Pullen would be reluctant to hold Mecum — who has a history of run-ins with the law — accountable for his behavior. Pullen has been instrumental in Mecum’s career, bringing him to Arizona and promoting him to be the party’s executive director. Indeed, so protective has the party chair been of Mecum that as Mecum was being arrested for driving 109 mph earlier this year, he was heard to shout "Get the chairman!," according to the Arizona Republic.

According to news reports, in February 2007, a month after being elected state party chair, Pullen hired the 28 year old Mecum, a New York native who had founded an Albany-based political consulting firm, as communications director. Pullen praised Mecum’s "wealth of communication and political experience." Later that year, Mecum was made political director, and in February 2009, he was named executive director.

Pullen sang Mecum’s praises at the time:

Brett has proven time and again that he has the abilities and talents to do the job of executive director effectively. He’s earned the confidence of party activists and Republican elected officials throughout the state. I think he is the right person to help move the Republican Party forward through the 2010 election cycle and I look forward to working with him over the next two years.

Pullen appears to have stuck by his protégé when the speeding arrest occurred in May. "Brett has done a good job for the AZGOP and the chairman believes it’ll be the same going forward," a spokesman for the state party said at the time (via Nexis).

It’s not unusual, of course, for a state party chair and his executive director to have a close relationship. But in this case, it looks like the ties between the two men may have played a key role in enabling Mecum’s misbehavior.

The RNC did not immediately respond to a request for comment.

Justin Elliott in TPMMuckraker:

In a case drawing criticism from outside lawyers, an Iranian engineer sentenced to prison Monday for violating arms control laws was lured to the nation of Georgia by American authorities for a fake arms deal, arrested, extradited to the U.S., and held in prison for two years — including months in solitary confinement before his guilty plea last year — all totally in secret, according to the Justice Department and media reports.

Export control lawyers told Politico‘s Laura Rozen the politically-charged case of Amir Hossein Ardebili — which was under seal until this month — is troubling for two reasons: first, he was an Iranian who never left Iran, nonetheless lured out of the country and targeted by U.S. law enforcement; and, second, that he was sentenced after two years of secret imprisonment.

The Justice Department says the case was kept under seal for so long to protect ongoing investigations based on information obtained in the Ardebili probe.

Here’s the Cliffs Notes version of the Ardebili story, based on reports in the Los Angeles Times and the Philadelphia Inquirer, and the DOJ’s release on the case:

Contact was first made with Ardebili in 2004 after U.S. authorities, acting on a tip, set up dummy companies in the Philadelphia area. A former government procurement officer who lived with his parents in Sharaz, Iran, Ardebili had never left Iran until he traveled to Georgia. There, in October 2007, American agents taped a meeting in a hotel room where he requested parts for various military uses.

In January 2008 he was extradited to the United States and landed in federal prison in Philadelphia. He was held in solitary confinement for four months and he plead guilty to trying to acquire radar and aircraft parts, including a computer for F-4 fighter jets, in May 2008.

Besides his extended secret confinement, one export control attorney told Rozen that there are jurisdictional issues in the case:

"What’s most interesting here is the U.S. effort to expand, seemingly without limit, claims of U.S. jurisdiction over activities by foreign citizens which are performed in their own countries and which are legal in those countries," Clif Burns, an export control attorney with Bryan Cave said.

Americans would be "apoplectic" if the reverse scenario occurred, Burns posited.

"What would be the response if Iranian agents abducted the CEO of Twitter while he was in, say, the UAE, dumped him into solitary confinement in an Iranian prison, and secretly indicted him with aiding and abetting sedition by Iranian dissenters?" he said.

No radical, Ardebili, is said to be a businessman in a "cottage industry" of procurement encouraged — but not directly controlled — by the Iranian government.

Tehran has criticized the treatment of Ardebili, and has reportedly linked the case to three American hikers being held in Iran. And Iranian press account of Ardebili’s sentencing carries the headline, "US court sentences abducted Iranian to prison."

Steve Benen at Political Animal:

It seems as if we keep getting stuck in the same leverage loop on health care reform — a handful of center-right Democrats and Republicans will kill health care reform if it includes a public option or Medicare expansion; progressive Democrats will kill health care reform if it doesn’t include a public option or Medicare expansion.

To save this necessary legislation, the left is supposed to give in. Again. And why is it incumbent on liberals to concede? It’s not because they’re weak; it’s because they care.

Can’t liberals be just as stiff-necked as Lieberman? Sure, they could. But liberals members do have an incentive to compromise — the tens of thousands of people who die every year for lack of health insurance. The leverage that Lieberman and other "centrists" have obtained on this issue (and on climate change) stems from a demonstrated willingness to embrace sociopathic indifference to the human cost of their actions.

It’s the leverage trump-card dynamic that’s been apparent throughout the debate — the left doesn’t want reform to fail; the right doesn’t care. The left knows that if reform falls apart, thousands will die and millions will struggle. The right knows the same thing, but is indifferent to preventing such a scenario.

For the left, failure is not an option, because the human, political, economic, and fiscal consequences are too severe. For the right, failure is entirely acceptable, if not preferable. Both sides know what the other side is thinking.

The result is less of a negotiation and more of a hostage standoff, with Joe Lieberman playing the role of the proverbial gunman who isn’t bluffing. If progressive Dems refuse to pay the ransom, Lieberman pulls the trigger and we get to spend the next decade arguing over who’s to blame for what happened, while the systemic problems get worse, the human suffering expands, and the status quo bankrupts businesses, states, and the federal government.

There was a thought, early on in the process, that Lieberman was blowing a lot of smoke, but when push came to shove, he didn’t want to be known forever as the man who killed health care reform. That thought was wrong.

Take a look.

No. Paul Krugman explains in his blog:

It seems that more and more Serious People (and Fox News) are rallying around the idea that if Obama really wants to create jobs, he should cut the minimum wage.

So let me repeat a point I made a number of times back when the usual suspects were declaring that FDR prolonged the Depression by raising wages: the belief that lower wages would raise overall employment rests on a fallacy of composition. In reality, reducing wages would at best do nothing for employment; more likely it would actually be contractionary.

Here’s how the fallacy works: if some subset of the work force accepts lower wages, it can gain jobs. If workers in the widget industry take a pay cut, this will lead to lower prices of widgets relative to other things, so people will buy more widgets, hence more employment.

But if everyone takes a pay cut, that logic no longer applies. The only way a general cut in wages can increase employment is if it leads people to buy more across the board. And why should it do that?

Well, the textbook argument — illustrated in this little write-up — runs like this: lower wages lead to a lower overall price level. This increases the real money supply, and therefore liquidity. As people try to make use of their excess liquidity, interest rates go down, leading to an overall rise in demand.

Even in this case, it’s hard to see the point of cutting wages: you could achieve the same effect, much more easily, simply by having the Fed increase the money supply.

But what if we’re in a liquidity trap, with short-run interest rates at zero? Then the Fed can’t achieve anything by increasing the money supply; but by the same token, wage cuts do nothing to increase demand.*

Wait, it gets worse.

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Good column by Krugman:

After Ned Lamont’s victory in Connecticut, I saw a number of commentaries describing Joe Lieberman not just as a “centrist” — a word that has come to mean “someone who makes excuses for the Bush administration” — but as “sensible.” But on what planet would Mr. Lieberman be considered sensible?

Take a look at Thomas Ricks’s “Fiasco,” the best account yet of how the U.S. occupation of Iraq was mismanaged. The prime villain in that book is Donald Rumsfeld, whose delusional thinking and penchant for power games undermined whatever chances for success the United States might have had. Then read Mr. Lieberman’s May 2004 op-ed article in The Wall Street Journal, “Let Us Have Faith,” in which he urged Mr. Rumsfeld not to resign over the Abu Ghraib scandal, because his removal “would delight foreign and domestic opponents of America’s presence in Iraq.”

And that’s just one example of Mr. Lieberman’s bad judgment. He has been wrong at every step of the march into the Iraq quagmire — all the while accusing anyone who disagreed with him of endangering national security. Again, on what planet would Mr. Lieberman be considered “sensible”? But I know the answer: on Planet Beltway.

Many of those lamenting Mr. Lieberman’s defeat claim that they fear a takeover of our political parties by extremists. But if political polarization were really their main concern, they’d be as exercised about the primary challenge from the right facing Lincoln Chafee as they are about Mr. Lieberman’s woes. In fact, however, the sound of national commentary on the Rhode Island race is that of crickets chirping.

So what’s really behind claims that Mr. Lieberman is sensible — and that those who voted against him aren’t? It’s the fact that many Washington insiders suffer from the same character flaw that caused Mr. Lieberman to lose Tuesday’s primary: …

Continue reading.

Two good Glenn Greenwald posts, one on how Obama is getting what he actually wanted on healthcare reform (he seems never to have wanted the public option and was able to kill it with inattention) and on how transferring the Guantánamo prisoners to the Illinois prison doesn’t solve a damn thing in terms of human rights—rights that the US is supposed to respect by treaty. His posts:

White House as helpless victim on healthcare [This one you REALLY should read. It makes the case solidly, IMHO. - LG]

Welcome to Gitmo North

Obama has been very good on some things, but in the area of human rights and making war (specifically by seeming okay with civilian deaths from drone attacks) and covering up war crimes his behavior has been, IMHO, disgraceful.

Weird, eh? Dan Colman at Open Culture:

Here’s the intellectual upside of the Tiger Woods kerfuffle: A copy of John Gribbin’s Get a Grip on Physics was spotted in Woods’ wrecked Cadillac. (Photo here.) And, ever since, the book has been in high demand. The Wall Street Journal reports that the book’s Amazon sales rank has jumped from 396,224 to 2,268. But, from what I can tell, the book actually seems to be out of print, and you’ll need to pay a minimum of $42 to buy a used copy online. (Here’s an instance where Google’s book digitization initiative would benefit an author.) If you’re looking to bone up on your physics, let me save you a few bucks. With Learning Physics Through Free Online Courses, we have pulled together free courses from MIT, Stanford, UC Berkeley, and Yale, plus a series of famous lectures by Richard Feynman that Bill Gates has put online. These and many other physics courses can also be found in our larger collection of Free Courses Online and on our Free iPhone App. Enjoy and remember to wear your seatbelt.

Related posts:

1. Learning Physics Through Free Online Courses
2. MIT’s (Free) Introduction to Physics
3. Modern Physics: The Theoretical Minimum
4. MIT Brings Science & Technology Courses to Your Home
5. Understanding Modern Physics: Download Leonard Susskind Video Lectures

If you have insurance through Blue Cross Blue Shield of California, that is—but probably many health insurance companies will take this tack, especially with the public option out of the way.

Luckily, California still has a reasonable good set of consumer protection laws, and one of those ensures a minimum grace period of 4 weeks. Zaid Jilani at ThinkProgress:

One of the worst abuses of the private insurance industry is known as recission, where insurers decide to revoke the coverage of their customers for frivolous reasons. The Los Angeles Times reports today that one of the nation’s largest insurers, Blue Cross of California, has “notified [its] policyholders” that their coverage could be “immediately dropped” if they miss even a single payment:

Amid a national debate on how to make the healthcare system friendlier and more accessible, and as millions of people grapple with the loss of jobs and homes, what does insurance heavyweight Blue Shield of California do? It decides to take a key benefit away.

The company has notified individual policyholders that their coverage could be immediately dropped if they miss a single payment — or so it seems. Blue Shield says in a letter to customers that they can reapply for insurance, but with potentially higher premiums and stricter conditions.

Thankfully, a California law that mandates minimum grace periods and a decision by the company that will allow for a 28-day grace period will keep Blue Cross from immediately dropping people from coverage, as their letter threatens. The LA Times goes on to note that the the company’s pronouncement comes “after last year’s announcement that Blue Shield and Anthem Blue Cross agreed to pay a total of $13 million in fines after cancelling the policies of more than 2,000 Californians after they became ill.”

From CQ Politics:

Senate Republicans appear to be launching all-out procedural warfare in an attempt to keep Democrats from passing a health care bill before Christmas.

Sen. Tom Coburn , R-Okla., objected Wednesday morning to a routine request to waive the reading of a 767-page amendment by Bernard Sanders , I-Vt., that would create a single-payer health care system. Sanders’ amendment is highly unlikely to be adopted, but its reading out loud gobbles up several hours increasingly scarce floor time. One GOP leadership aide said he expected the reading to take “a long time,” while another noted that just the amendment’s table of contents, which is six pages in length, took a clerk 17 minutes to read.

Coburn’s move may foreshadow a GOP move to further delay floor action by forcing clerks to read aloud the yet-to-be unveiled manager’s amendment that Majority Leader Harry Reid , D-Nev., and his staff have been working to craft behind closed doors. That amendment is expected to incorporate all remaining changes to the bill before Senate passage.

Sen. Judd Gregg , R-N.H., complaining that the “essence of the bill” was being crafted in secret, responded, “I would certainly think so” when asked if Republicans would force the reading of the Reid package, which is expected to be as many as 300 pages long.

“I mean nobody got to see it,” Gregg said.

Before he can get to a final passage vote, Reid will probably have to invoke cloture — or limit debate — three times, a process that Majority Whip Richard J. Durbin , D-Ill., has estimated would take “six or seven days” to complete. Democrats will have to muster 60 votes each time — either by holding every member of their caucus in line, or by winning over one or more Republicans.

Reid remained coy about when he would unveil his manager’s package, saying only that he was “pretty close” to finalizing the measure.

When asked if he had 60 votes locked down to advance the package, Reid responded, “We’ll find out, won’t we.”

The Senate seems to be where irresponsibility finds a happy home. From CQ Politics:

House Democrats pointedly criticized the Senate on Wednesday for failing to take further steps to create jobs, seeking to distinguish themselves from the other chamber as the 2010 election season approaches amid stubbornly high jobless rates.

“This is truly a tale of two chambers,” Xavier Becerra of California, vice chairman of the House Democratic Caucus, said as the House prepared to pass legislation that would increase highway and other infrastructure spending and expand benefits for the unemployed, at a cost of $150 billion. “Jobs are the No. 1 priority for the House of Representatives.”

The Senate, consumed by the health care debate, is not expected to take up any jobs-focused legislation until early next year. Moreover, Senate politics have helped short-circuit House Democratic plans to pass a long-term debt limit increase and an extension of the estate tax, which is scheduled to expire on Jan. 1, increasing House lawmakers’ frustration with the Senate.

Sen. Byron L. Dorgan , D-N.D., said he expects jobs legislation “will be a priority in January” for the Senate.

“We’ve had a lot of back and forth about ideas, there have been some differences on the amounts that can be put in. We can only do that which we can get through the Senate. The Senate is a different challenge than the House, as you know,” Dorgan said.

House Democrats were careful not to criticize Senate Democratic leaders, instead highlighting the procedures of the Senate, which allow the minority party far greater opportunities to delay legislation and routinely force Democrats to garner 60 votes to act on anything.

But the comments underscored fear among many House Democrats that voters will blame them unless the economy improves and jobless workers find employment.

Ezra Klein in the Washington Post:

I appreciate Chuck Lane’s response to my post yesterday, though I’m confused by his decision to ignore the entirety of its contents.

It seems, at this point, that our dispute comes down to tone. Lane wonders whether "it will be easier to achieve reform in an atmosphere where accusations of mass murder whizz about freely." I wonder whether reform is even possible to achieve in an atmosphere where statements about consequences are ruled out of order.

At no point in our discussion has Lane disputed the contention that insurance reduces mortality, and for that matter, morbidity and bankruptcy. Similarly, he has agreed that Lieberman is acting partially out of residual anger at liberals, an argument Howard Fineman also made on Hardball last night. That is to say, the two premises on which my argument is built are both relatively non-controversial, even with Lane.

But if those premises are granted, then the rest of the discussion clicks naturally into place. What is left is to simply choose a number. I’m using the methodology developed by the Institute of Medicine and applied to 2006 data by the Urban Institute, which left me with a rough estimate of 150,000 lives saved over the next 10 years. That shouldn’t be so shocking: $900 billion actually buys you something in the market. Harvard’s recent study would actually yield a far higher estimate, as they calculated annual deaths due to insurance status at 45,000. Other studies, no doubt, would yield lower numbers.

To this, there seem to be two rejoinders in Lane’s post.

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Faiz Shakir at ThinkProgress:

At approximately noon today, Sen. Bernie Sanders (I-VT) took to the Senate floor to introduce his single-payer amendment. The amendment is 767 pages long. In an attempt to delay and disrupt the Senate debate, Sen. Tom Coburn (R-OK) demanded that the Senate clerks read the entire bill.

Sanders demanded at least twice that the reading of his bill be dispensed with so that the Senate could proceed to a vote. But Coburn objected both times:

SANDERS: I would ask that the amendment be considered as read. …

PRESIDENT OF THE SENATE: Is there objection?

COBURN: There is objection.

SANDERS: …and may I ask me friend from Oklahoma why he is objecting?

COBURN: Regular order, Mr. President.

PRESIDENT: Regular order is the reading of the amendment.

Watch a compilation of the events:

The Wonk Room estimated that, at the pace it was proceeding, the reading of the bill would take 14.5 hours. On his twitter feed, Sen. Jim DeMint (R-SC) explained the Republican strategy:

The move by Republicans pushed back scheduled votes on other time-sensitive bills,including funding for the military. Sen. Dick Durbin (D-IL) said, “This is a strategy by the Republican leadership which not only endangers the passage of health care reform, it endangers the enactment of the Department of Defense appropriations bill.”

After two and a half hours of obstruction, Sanders relented and withdrew his amendment. Noting the serious crises that confront the nation, Sanders delivered an impassioned address, stating, “The best the Republicans can do is try to bring the United States government to a halt by forcing a reading of a 700 page amendment! That is an outrage! … It is wrong to bring the United States government to a halt.”

Gadi Dechter and Alan Katz writing for Bloomberg:

Paul A. Volcker visited nine cities in five countries in the past eight weeks to warn that bankers and regulators “have not come anywhere close to responding with necessary vigor” to the worst economic crisis in 70 years.

“There is a lot of evidence that financial weaknesses brought us to the brink of a great depression,” Volcker, 82, said Dec. 8. at a conference in West Sussex, England. He told executives there that the changes they’ve proposed are “like a dimple.”

Two years after the start of the deepest recession since the 1930s, no U.S. or European authority has put in force a single measure that would transform the financial system, based on data compiled by Bloomberg. No rule- or law-making body is actively considering the automatic dismantling of banks that Volcker told Congress are sheltered by access to an implicit safety net.

There’s little evidence that policy makers are heeding Volcker, the former chairman of the U.S. Federal Reserve. More than 50 regulatory overhaul proposals have been submitted in the U.S. and Europe, the data compiled by Bloomberg show. Lawmakers and regulators have debated new rules for capitalization and leverage, central clearing for derivatives trading, oversight of hedge funds and ways to monitor systemic risk.

While the U.S. House of Representatives has approved a financial regulation bill, authorities in the U.S. and Europe have sidelined measures that would automatically force changes in the structure of financial companies that Bank of England Governor Mervyn King called “too important to fail.” Volcker is leading a chorus arguing for restricting the size or primary functions of financial institutions.

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Most languages using the Roman alphabet also use diacritics—circumflex, accents (acute and grave), umlauts, and so on. So how do you enter these. You can get some diacritics using Word’s symbol table, but that is by no means complete. A better answer is found here. This little package works like a charm when you need diacritics. Ĉi tiu estas ekzemplo en Esperanto.

From Make My Mood: