2010 - %3, March

Getting Science into the Movies

| Mon Mar. 1, 2010 6:06 PM EST

There's a new science literacy program shaping up between the National Science Foundation and the University of Southern California School of Cinematic Arts (SCA) to bring science and engineering concepts to the public.

The program, called the Creative Science Studio, due to lauch this autumn, will be make use of SCA's professional soundstages, animation facilities, post-production suites, mixing theaters, screening rooms, and all-digital classrooms to more accurately portray the way science works and what science knows.

The basic idea is to exchange tools:

  • To give faculty and students the science and engineering tools (instruments and data visualization methods) to enhance the way science is depicted in the movie industry (and the likes)
  • To give science researchers the creative tools to educate audiences

In the process, the next generation of entertainment producers will be exposed to science themes, be more comfortable with them, and more likely to accurately portray them to audiences of the future. SCA Dean Elizabeth M. Daley tells USC:

"This alliance is a vital and essential one. I'm excited for a symbiosis between these two institutions, which will play a major role in the ongoing evolution of scientific communication for both researchers and storytellers."

The Creative Science Studio's projects will include videos, interactive games, animations, and examples of information visualization, with a larger research project designed to interrogate "information" itself. SCA's Institute for Multimedia Literacy produced a five- minute video describing the Studio:

 

 

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NY's Disabled Adults Win Court Ruling

| Mon Mar. 1, 2010 6:03 PM EST

As Jennifer Gonnerman detailed in "Surf Manor" in the current issue of Mother Jones, New York's poorly maintained adult homes are where the mentally ill and very poor, with no place else to go to, are warehoused by the state. The homes regulate everything for them, from what to eat to when to take medication: "You get stifled—and you regress," one adult home resident told Gonnerman. "You become dependent on these people, and I don't want that." Many residents would rather be in "supported housing," where they can do their own laundry and make their own meals and receive regular visits by a caseworker. Too bad such units are incredibly scarce: only 60 units of supported housing have been opened for New York City's 4,300 adult home residents since 2002. 

But that's going to change: a ruling issued today by Judge Nicholas G. Garaufis of the Federal District Court in Brooklyn ordered the state to develop at least 1,500 units of supported housing a year for three years. This ruling follows a September 2009 decision in which a judge ruled that adult homes were by their nature segregation and thus a violation of the Americans with Disabilities Act. As reported by the New York Times, the state has repeatedly fought new housing, arguing that recent improvements to existing homes were adequate: 

The order by Judge Garaufis offered a stinging rebuke of the much less sweeping proposed remedy offered by the state, which continued to dispute many of the findings of his previous rulings and which sought to cap the number of new supportive housing units at 1,000, to be made available on a more restrictive basis over five years. “The court is disappointed and, frankly, incredulous that defendants sincerely believed this proposal would suffice,” the judge wrote in his ruling Monday.

The state had argued that, particularly in current economic conditions, such a mandate would be too expensive. But the judge wrote last year that evidence showed that supported housing would cost only $40,253 a year per resident, about $7,500 less than it costs to place them in a group home.

"This is a tremendous order," said attorney Cliff Zucker, whose firm Disability Advocates Inc. filed a lawsuit against the state on behalf of adult home residents. "We think that this order will end the disgraceful practice that's been allowed to go on in New York for decades: warehousing people in institutions when they can live in integrated settings in the community." Zucker said the state can appeal the ruling, which could potentially delay implementation. And even if the state does not appeal, monitors will be needed to ensure the state properly implements the ruling. "There's much work ahead of us," said Zucker, but he says the order is "bringing us some relief."

The Climate Change Generation

| Mon Mar. 1, 2010 5:23 PM EST

I will be appearing on the American Forum on the Washington, DC affiliate of National Public Radio, WAMU, tonight as part of their forum on climate change. The Climate Change Generation runs from 7 p.m. to 8 p.m. EST and will also feature Juliet Eilperin, the environmental reporter at the Washington Post, and Matthew Nisbet, a professor in the School of Communication at American University who blogs on framing climate change at Science Blogs.

You can listen to the panel on the WAMU website or watch the webcast. Please tune in!

The Slow Death of Climate Change Legislation

| Mon Mar. 1, 2010 4:42 PM EST

The climate change bill is yet another piece of legislation being watered down almost to nothingness in a vain attempt to gain two or three Republican votes. This weekend's new proposal from the Kerry-Graham-Lieberman team, for example, ditches economy-wide carbon pricing and instead would implement lobbyist-friendly caps on individual sectors. (It's lobbyist friendly because this makes it much easier for lobbyists for specific industries to pick off their little piece of the pie. Before long, the whole thing is gone.) And anyway, Sen. Dick Lugar says it's still no good: he could support carbon pricing "potentially at some point, but not at the moment." Aaron Wiener translates:

Which is Congress-speak for: Sure, I’d consider voting for climate legislation, but not until after the midterm elections, when the Democratic majority will be sufficiently reduced to make passing a comprehensive climate bill impossible. At which point I’ll oppose it because "it simply doesn’t have the votes."

Quote of the Day: The GOP on Healthcare Reform

| Mon Mar. 1, 2010 4:04 PM EST

Steve Benen highlights this excerpt from a Good Morning America segment about healthcare reform today:

Republicans want the bill to pass because of its unpopularity but, at the same time, they can't be complacent on health care overhaul, said Matthew Dowd, ABC News contributor and former adviser to President George W. Bush. [...]

"Republicans would like this bill to pass because they know how unpopular it is," Dowd said on "GMA."

Steve is skeptical. Me too. After all, if Republicans really want the bill to pass, they know what to do: just withdraw their filibuster and allow a vote. Democrats will do the rest.

But don't hold your breath.

Barney Frank to GOP: Man Up on Financial Reform

| Mon Mar. 1, 2010 3:45 PM EST

Rep. Barney Frank (D-Mass.), chair of the powerful House financial services committee, has issued a challenge to Senate Republicans: If GOPers want to kneecap an independent consumer protection agency, they should do it in public, not behind closed doors. "Procedurally, the Senate Republicans are killing this or watering it down," Frank told Mother Jones. "Senate Republicans should stand up publicly and oppose it. At the very least, they have to do that. And there's going to be public reaction against that."

Over the weekend, Sen. Chris Dodd (D-Conn.), the banking committee's chairman and leader on financial reform, circulated a plan to create a watered-down consumer-protection agency within the Treasury Department. Frank, who helped pass a financial-reform bil last year that included an independent Consumer Financial Protection Agency, called Dodd's proposal "weaker than I was hoping." Frank added that the draft's stipulation that certain rule-writing by the proposed consumer agency would require approval from a separate risk-management council "is a terrible idea." He also lamented that the consumer agency wouldn't have full authority over payday lenders and debt collection and settlement companies.

If a watered-down version of a consumer-protection agency does emerge in the Senate's final financial-reform bill, Frank said he will fight to make sure a consumer agency with independence and increased authority for consumer protection makes it onto the president's desk. "I'm gonna do everything I can" to make sure the House's Consumer Financial Protection Agency survives, Frank vowed. "I want [Republicans] to take a public vote at the very least."

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How the Repo Market Ate Wall Street

| Mon Mar. 1, 2010 3:05 PM EST

Several years ago I remember reading about the repo market for the first time. I had never heard of it before not because it didn't exist, but because I'm not a financial guy and I had simply never paid much attention to how Wall Street banks fund themselves. To make a long story short, the repo market is basically a market for short-term loans. Really short term: it's an overnight market, and if you have, say, $100 billion in repo funding, you have to roll over that funding every single day. If you can't, you're in big trouble.

To a layman, that sounds crazy. Investment banks weren't just using the repo market to gain a bit of additional flexibility, they were using it as a significant part of their funding base. They were literally dependent for their continued existence on a line of funding that had to be renewed daily.

I'm reminded of this by a paper from Yale's Gary Gorton that I just got around to reading today. It explains the role of the repo market in our recent economic collapse. Gorton estimates that the total size of the repo market had grown to about $12 trillion by 2007, and as the housing bubble started to burst investors began large-scale bank runs. Except that instead of the run being caused by individuals queuing up at local banks to cash out their savings accounts, it came from repo lenders calling in their loans:

For concreteness, let’s use some names. Suppose the institutional investor is Fidelity, and Fidelity has $500 million in cash that will be used to buy securities, but not right now. Right now Fidelity wants a safe place to earn interest, but such that the money is available in case the opportunity for buying securities arises. Fidelity goes to Bear Stearns and “deposits” the $500 million overnight for interest. What makes this deposit safe? The safety comes from the collateral that Bear Stearns provides. Bear Stearns holds some asset‐backed securities [with] a market value of $500 millions. These bonds are provided to Fidelity as collateral. Fidelity takes physical possession of these bonds. Since the transaction is overnight, Fidelity can get its money back the next morning, or it can agree to “roll” the trade. Fidelity earns, say, 3 percent.

....There’s another aspect to repo that is important: haircuts. In the repo example I gave above, Fidelity deposited $500 million of cash with Bear Stearns and received as collateral $500 million of bonds, valued at market value. Fidelity does not care if Bear Stearns becomes insolvent because Fidelity in that event can unilaterally terminate the transaction and sell the bonds to get the $500 million. That is, repo is not subject to Chapter 11 bankruptcy; it is excluded from this.

Imagine that Fidelity said to Bear: “I will deposit only $400 million and I want $500 million (market value) of bonds as collateral.” This would be a 20 percent haircut. In this case Fidelity is protected against a $100 million decline in the value of the bonds, should Bear become insolvent and Fidelity want to sell the bonds.

....For now, keep in mind that an increase in the haircuts is a withdrawal from the bank. Massive withdrawals are a banking panic. That’s what happened. Like during the pre‐Federal Reserve panics, there was a shock that by itself was not large, house prices fell. But, the distribution of the risks (where the subprime bonds were, in which firms, and how much) was not known. Here is where subprime plays its role. Elsewhere, I have likened subprime to e‐coli (see Gorton (2009a, 2010)). Millions of pounds of beef might be recalled because the location of a small amount of e‐coli is not known for sure. If the government did not know which ground beef possibly contained the e‐coli, there would be a panic: people would stop eating ground beef. If we all stop eating hamburgers for a month, or a year, it would be a big problem for McDonald’s, Burger King, Wendy’s and so on. They would go bankrupt. That’s what happened.

The evidence is in the figure [on the right], which shows the increase in haircuts for securitized bonds (and other structured bonds) starting in August 2007. The figure is a picture of the banking panic. We don’t know how much was withdrawn because we don’t know the actual size of the repo market. But, to get a sense of the magnitudes, suppose the repo market was $12 trillion and that repo haircuts rose from zero to an average of 20 percent. Then the banking system would need to come up with $2 trillion, an impossible task.

There's more in the paper, which is worth reading if you want to learn more about this stuff. In my own mind, I have a tendency to waffle back and forth between blaming the economic meltdown solely on a single fundamental (housing prices crashed, everyone panicked) and blaming it on a variety of other factors as well (mortgage fraud, the growth of credit derivatives, ratings agency conflicts, massive abuse of leverage, wild underestimation of risk, etc.). Overall, I tend toward believing that although the housing crash was clearly both the proximate and primary cause of the collapse, all the other stuff really did matter too, magnifying an asset bust far beyond what it could have done on its own. Without massive leverage, for example, even a huge housing bubble couldn't have caused the scale of the damage we saw.

Gorton has a slightly different take: the housing bubble was primary, but it was the fundamental structure of modern banking that turned it into a catastrophe: "The problem is structural," he says. "This structure, while very important for the economy, is subject to periodic panics if there are shocks that cause concerns about counterparty default....The economy needs banks and banking. But bank liabilities have a vulnerability."

McCain's Reconciliation Flip-Flop

| Mon Mar. 1, 2010 2:59 PM EST

This Sunday on "Meet the Press," Sen. John McCain announced that he plans to introduce an amendment that would prohibit the Democrats from using reconciliation to make changes to Medicare. Entitlement programs "should not be part of a reconciliation process," he declared to David Gregory, referring to the filibuster-proof procedure that requires only 51 votes. "It’s too important."

But just five years ago McCain himself voted to use reconciliation to make spending cuts to an entitlement program—in this case, Medicaid. McCain, along with 30 other current Republican senators, used a simple majority to pass George W. Bush's 2005 Deficit Reduction Act, which, among other things, "reduced Medicaid spending and allowed parents of disabled children to buy into Medicaid," as Greg Sargent notes. (Sargent's list of all the Republicans who have voted for reconciliation over the past 20 years is worth a look.)

McCain's hypocrisy blows a hole in the Republicans' contention that if Democrats use reconciliation to pass health care reform, they'll "end the Senate" as we know it. While the GOP has accused Democrats of "ramming" and "jamming" reform through the Senate, the bill in question already passed the Senate back in December. If that measure manages to clear the House, the Senate will only be passing limited tweaks to its bill via a so-called reconciliation sidecar—not pushing through a massive overhaul of the entire legislation. And although some of those fixes may apply to Medicare and Medicaid, they fall squarely within accepted reconciliation procedure, which is used for legislative tweaks that directly affect the federal budget.

Of course, Republicans themselves have long pushed for much deeper spending cuts to entitlement programs, only to turn around and accuse the Democrats of slashing benefits for vulnerable Americans. All of which makes it clear that McCain's latest flip-flop is just a political maneuver intended to derail reform, not some principled defense of the democratic process.

Budgetary SOS for 2011

| Mon Mar. 1, 2010 2:52 PM EST

If there were a prize for worst headline of the week, even the month, it would surely go to a February 23rd piece in the New York Times headlined online: "Gates Calls European Mood a Danger to Peace." The bellicose "mood," so undermining of global peace that our secretary of defense had to go after it, was (according to Brian Knowlton of the Times) the "public and political opposition to the military" spreading across Europe. Who wouldn't react similarly in the face of such an unnerving phenomenon? After all, should it grow stronger, peace on Earth will surely prove a chimera.

European publics are now, it seems, so totally peaceable that, while the thousandth American died "in and around Afghanistan" in Operation Enduring Freedom last week to next to no notice here, they continued to exhibit extraordinary "weakness." After all, this was also the week in which—speak of the devil—the Dutch coalition government collapsed over a dispute about the public's desire to get Dutch troops out of Afghanistan. What an example of that anti-peace bogeyman run riot! No wonder Gates was warning that the perception of weakness could lead hostile powers (unnamed) to a "temptation to miscalculate and aggression."

Fortunately, one country is still willing to sink its money (and lives) into the armed enhancement of peace globally: the United States. As Jo Comerford of the National Priorities Project points out in her latest post at TomDispatch.com, the latest federal budget opens the American public to yet more pain, while shielding the military and the rest of the national security establishment from the same. Fortunately, that "antiwar mood" seems not to have jumped the wide Atlantic, which means, for the time being, peace is safe in America.

Organizer Jumps Ship From Green Lobby to Oil Lobby

| Mon Mar. 1, 2010 2:14 PM EST

A grassroots organizer has quit the Nature Conservancy to head up grassroots outreach for the oil industry’s biggest trade group, a highly unorthodox career move that has set off nervous ripples in the capital's green community.

The American Petroleum Institute (API) announced on Monday that it has hired Deryck Spooner to serve as their "external mobilization director." Spooner will "coordinate the association's efforts to develop, mobilize and sustain a political infrastructure of individuals, groups, and coalitions to advance priority advocacy issues with elected officials." API President and CEO Jack Gerard called Spooner a "veteran of coalition building and grassroots" in a press release.

Of course, this veteran of coalition building acquired a good deal of his expertise as the climate change campaign manager for a group that's usually on the other side of the fence to API when it comes to environmental issues. In an interview with Greenwire, Spooner tried to make light of his switch from big green to big oil:

"I have worked for vastly different organizations throughout my career," Spooner said. "The bottom line is it's all about advocacy, that's what I'm passionate about. Mobilizing and organizing people to influence the public process and public policy is what I truly love to do."
"At the end of the day, I don't necessarily believe that the views of [the Nature Conservancy] and API are incompatible," Spooner added. API members use technology "to ensure that the places that they drill are not impacted," Spooner said, while the Nature Conservancy uses a scientific approach in deciding where to protect land and water. API members, he said, "don't just want to drill anywhere for drilling's sake. There's a lot of science going into where they drill."

His move comes as API is ramping up its efforts to oppose a climate bill and push for favorable provisions in energy legislation. The group sparked criticism last year for holding "grassroots" rallies against the climate bill last year that were directly coordinated by API lobbyists and attended by many employees, retirees, vendors, and contractors from API member companies.

Spooner brushed off API's role in such activities, pointing out that the US Climate Action Partnership, the business-environmental coalition pushing for a cap-and-trade bill, contains members from the oil industry. (He didn't note that two of the three the oil members left the coalition last month.) "What API wants is a really good climate bill at the end of the day," Spooner claimed.

The Nature Conservancy is among the more conservative of the major green groups—it's not heavily involved with climate bill lobbying and its main focus is working with major nongovernmental and corporate partners on conservation initiatives. Nevertheless, there is plenty of alarm in the environmental community over the oil lobby poaching one of their own. "They play tackle football," John Passacantando, the former executive director of Greenpeace now consulting on environmental issues, tells Mother Jones. "We still use the little flags with velcro."