2009 - %3, April

Are Canadian Banks the Answer?

| Wed Apr. 29, 2009 7:27 PM EDT

David Leonhardt's interview with President Obama includes a fair amount of conversation about the economy, including a question about whether big banks need to be split up:

THE PRESIDENT: You know, I’ve looked at the evidence so far that indicates that other countries that have not seen some of the problems in their financial markets that we have nevertheless don’t separate between investment banks and commercial banks, for example. They have a “supermarket” model that they’ve got strong regulation of.

Like Canada?

THE PRESIDENT: Canada being a good example....So — that doesn’t mean that, for example, an insurance company like A.I.G. grafting a hedge fund on top of it is something that is optimal....And in that sense I think you can make an argument that there may be a breaking point in which functions are so different that you don’t want a single company doing everything.

But when it comes to something like investment banking versus commercial banking, the experience in a country like Canada would indicate that good, strong regulation that focuses less on the legal form of the institution and more on the functions that they’re carrying out is probably the right approach to take.

I'm sort of waffly on the whole question of limiting bank size, but this isn't an especially persuasive answer.  The experience of Canada is, I suppose, an existence proof that big banks can be regulated effectively, but when Obama says "other countries" he sure seems to be suggesting more than just Canada.  And frankly, I think he'd run out of examples pretty quickly.  After all, big banks Europe are in pretty bad shape.  Ditto for big banks in Japan following their property crash.  And big banks in Russia.  And big banks in Asia following their 1997 meltdown.

In some sense, I guess this comes down to a belt and suspenders issue.  I suspect Obama is basically right: regulating leverage is more crucial than regulating bank size.  A big bank with reasonable gearing is pretty safe.  But if you really want to be safe, you'll have a fallback: not only will you regulate leverage, but you'll limit bank size and complexity as well, so that even if a bank manages to evade the leverage rules it still can't do too much damage.  It can only do that if it manages to evade two separate sets of rules.

More to the point, though, I wish Leonhardt hadn't let Obama off the hook by feeding him the Canada example.  I would have have been curious to hear what Obama had to say without prompting.  Does he really think the banking system in the rest of the world is doing well because it's better regulated than ours?  I'm not sure the evidence supports that.

Advertise on MotherJones.com

Swine Flu Deja Vu--and SNAFU

| Wed Apr. 29, 2009 5:47 PM EDT

The more we learn about the current swine flu outbreak, the more it all begins to sound like what happened in 2005, when the world faced a possible pandemic of avian flu. But with the exception of stocking up on Tamiflu, most governments seem to have taken little meaningful action in response to the bird flu scare, and learned few lessons.

In certain ways, the world’s experience with Avian flu may actually have rendered it less, rather than more prepared for a new outbreak. The Daily Telegraph (UK) reported earlier this week on a meeting of scientists held in Austria back in February, before the swine flu had surfaced. There, Harvard professor Thomas Monath warned that because so much attention had been focused on bird flu, if another strain popped up, “we would be screwed.” The Telegraph’s medical editor writes:

He warned vaccine manufacturing capacity is insufficient, meaning that if a pandemic strain of flu emerged now it would be impossible to make enough for the world’s population in time.

The scientific community had become “complacent” about a new flu pandemic because the avian influenza strain H5N1 has been around for 13 years without spreading around the world.

Prof Monath said: “If it’s a new strain of flu it will be nine months to a year before we have got really good geared up vaccine production. We will rely on antiviral drugs first and then it is a crash effort to make a vaccine. In the meantime there will be clearly an emerging uncontained problem,” he said.

A second unlearned lesson has to do with the way we treat our livestock. Here, again, explicit warnings have been ignored. In an excellent piece on Huffington Post, David Kirby outlines the links among the virulent new flu strains and “confined animal feeding operations” (CAFOs), otherwise known as factory farms, where tens of thousands of animals live packed together in poorly ventilated sheds, standing (and breathing) in their own excrement.

I Would Like to Introduce Our Federal Government to Photoshop

| Wed Apr. 29, 2009 5:42 PM EDT

By now, the profound idiocy of the White House Military Office's decision to stage a terrifying photo op for an Air Force One jet over New York City on Monday has been widely, and rightly, condemned. However, I haven't heard anyone offer any proactive, money-saving solutions... until now! Esteemed employees of our federal government, please allow me, your comically named Mother Jones contributor, to acquaint you with a magical, spell-casting piece of computer wizardry called Photoshop. With Photoshop, anything can be anywhere, at any time! Skeptical? Well, just take a look at some examples after the jump!

Creation Museum Science Fair 2010

| Wed Apr. 29, 2009 5:40 PM EDT

Let there be a science fair!

Next February, Cincinnati's Creation Museum will hold a science fair for budding creationists. All students in grades 7-12 are encouraged to apply, provided they agree with Answers in Genesis' Statement of Faith, which includes the following items:

2. The account of origins presented in Genesis is a simple but factual presentation of actual events and therefore provides a reliable framework for scientific research into the question of the origin and history of life, mankind, the Earth and the universe.

3. The various original life-forms (kinds), including mankind, were made by direct creative acts of God. The living descendants of any of the original kinds (apart from man) may represent more than one species today, reflecting the genetic potential within the original kind. Only limited biological changes (including mutational deterioration) have occurred naturally within each kind since Creation.

4. The great Flood of Genesis was an actual historic event, worldwide (global) in its extent and effect.

Thanks J-Walk Blog. After the jump: a sampling of other upcoming events at the Creation Museum, including a screening of a DVD about "the rampant misinformation propagated by ecological alarmists" and a lecture called, intriguingly, "God Didn't Make Any Apemen:"

Wind Power Gets Stimulus Windfall

| Wed Apr. 29, 2009 4:09 PM EDT

The Department of Energy will devote $93 million of stimulus money to wind power technology. Not terribly surprising, considering that wind is all the rage at the moment. To wit: The wind industry now employs more people than the coal industry.

Most of the money will be spent on turbine-related projects (allocation breakdown after the jump). But Cleantech Blog points out that the biggest obstacle facing wind power is actually pipeline problems:

Look at the study “20% Wind Energy by 2030” released in 2008 by the U.S. Department of Energy to envision the implications of supplying 20% of the nation’s electricity needs by 2030 from wind. Oh, there’s plenty of wind to actually supply the electricity, no problem. It’s just that tons of new transmission capacity would be needed.


And there’s the rub. It’s only marginally easier to site and build a new transmission line than a new nuclear powerplant. Transmission lines take many years and sometimes even decades to get done, due to a variety of NIMBY forces and overlapping regulatory regimes at the local, state and federal levels. And, they cost a fortune, easily a million dollars a mile, often considerably more.

So, that “pipeline” from Dakota to Chicago is on the order of a billion dollars of merely enabling infrastructure – and since there are many pinchpoints in the national power grid, that wind power probably couldn’t go much further than the terminating point anyway.

And that NIMBY thing? Still a problem—and one that stimulus money probably won't solve.

According to the DOE, here's where the money will go:

Hundred Days Summary

| Wed Apr. 29, 2009 3:09 PM EDT

According to CBS News White House correspondent Mark Knoller — who's apparently an obsessive record keeper — in his first hundred days Barack Obama has held 16 news conferences, given 115 speeches, held one cabinet meeting, signed 12 bills, visited the capitol 8 times, gone on 3 overseas trips, visited Camp David 4 times, flown on Air Force One 34 times, issued 17 proclamations, gone on one golf outing, and attended at least 10 sporting events.  More here.

Advertise on MotherJones.com

Tray-Free Campus Dining Halls?

| Wed Apr. 29, 2009 2:40 PM EDT

Bad news for those dudes you remember from your college dining hall who drank eight glasses of milk with every meal: Some college cafeterias are getting rid of trays.

Why abandon this collegiate tradition? According to the NY Times, reasons to hate on trays abound: Washing them requires a lot of water (Williams college has saved 14,000 gallons of water ever year since they shelved trays); they encourage food waste (Rochester Institute of Technology spent 10 percent less on food without trays); and they're ugly.

Some have also speculated that sans trays, students might be too lazy to make multiple trips to the pasta bar (Penne Station, anyone?). But that's really giving college kids the short shrift:

“I like not having to carry a tray around,” said Peter McInerney, a freshman here at Skidmore College, as he grabbed a midafternoon snack of an egg sandwich, pancakes and apple juice.

Glad to see the freshman fifteen thriving in these trayless times.

Swine Flu

| Wed Apr. 29, 2009 1:46 PM EDT

Ezra Klein passes along the news that Israel's ultra-orthodox deputy health minister has some taxonomic concerns about our flu epidemic:

Yakov Litzman said the reference to pigs is offensive to both religions and "we should call this Mexican flu and not swine flu," he told a news conference at a hospital in central Israel.

Both Judaism and Islam consider pigs unclean and forbid the eating of pork products.

I don't get it.  Even taking this craziness on its own terms, what's the problem?  Pigs are unclean, flu is unclean, it makes perfect sense that a bad thing like a flu pandemic would come from a bad thing like herds of swine.  What's the deal here?

UPDATE: There's also this from Dr. Sanne Magnan, Minnesota's health commissioner: “We’re trying to get away from the term ‘swine flu,’” Magnan said at a press conference today....A possible reason for the name change: The “swine flu” label has the nation’s pork industry squealing, as hog prices plummet in apparent worry over public misperceptions that pork is unsafe to eat.

Yeesh.  But at least the motivation is pretty obvious here.

Carrie Prejean Makes 'No Offense' Ad for NOM

| Wed Apr. 29, 2009 1:45 PM EDT

So far this week, I've been trying to ignore all the Miss California, Perez Hilton hoo-ha. But now there's news that Miss California Carrie Prejean, of "opposite marriage" fame, is going to star in a new ad by the National Organization for Marriage. The ad will be titled "No Offense." Which is ironic, really, because almost anytime someone prefaces a statement with "I'm not a racist, but..." or "No offense to anyone out there, but..." you can be sure they're about to say something racist or offensive.

Thus far, Prejean has depicted herself as a victim; a brave, strong, surgically enhanced victim persecuted for her religious views. NOM's breathy press release says that despite Prejean being "attacked viciously," the Miss USA contestant has "inspired a whole nation" by having the "courage" to speak up about her conservative Christian values. This victim stance is perfectly consistent with NOM's previous ad, "A Gathering Storm," in which Christians are threatened by cloudy gay skies and flashes of gay marriage lightening. I can't wait for the parodies of "No Offense." Giant Gay-Repellent Umbrella, anyone?

CNN and Jim DeMint

| Wed Apr. 29, 2009 1:42 PM EDT

This is annoying.  Here is CNN's Political Ticker today describing an interview with South Carolina senator Jim DeMint:

DeMint says he isn't worried. He denied that the GOP has become a southern party, attributing Republican losses in the northeast to some northern voters who have left the region and moved south hoping to avoid labor unions and "forced unionization."

I was all ready to bring the snark to the idea that people were moving south to avoid being press ganged into unions, but first I wanted to look up the actual transcript.  Here it is:

SANCHEZ: Why does it seem like the Republican Party is only going to the South, the Southern states, and the Democratic Party is starting to stay in the Northeast and then maybe branching out into some of the other areas, like Pennsylvania, where Arlen Specter is leaving?  I mean, does that worry?

DEMINT: Well, it's not just politically. People are moving from the northeast and from the northern part of the country to the south for a lot of reasons. And I think you see heavy unionization and forced unionization in Pennsylvania and Michigan, these other states. And obviously they're very much for the Democrat big-government approach. But we see that falling apart with American auto companies. We see it falling apart all across the country.

Come on.  DeMint may not be doing himself any favors with this kind of head-in-the-sand stuff, and in any case it's not really true that there's any serious regional migration between north and south.  Still, he didn't say people were moving south because of unionization.  He said people were doing it "for a lot of reasons" and then, responding to Sanchez's question about why Dems were branching out into Pennsylvania, suggested that places like Pennsylvania and Michigan are friendly to the "Democrat big-government approach" because of their high unionization.  And he believes in his heart of hearts that this is falling apart and conservatism will prevail.  This is probably wrong too, but it's not nearly as risible as the notion that factory workers are fleeing south to avoid closed shops.  CNN's own summary got it wrong.  DeMint is a troglodyte, but this is fairly ordinary political blather, not the high-octane idiocy they made it out to be.