Finance Reform Update

Andy Kroll runs down the remaining problems that Republicans still have with the Senate financial reform bill:

Right now, there look to be three main sticking points between the parties. One is the proposed consumer protection agency....What to do with systemically risky, or "too-big-to-fail," banks is another prickly issue....The third issue where major differences remain is regulating derivatives.

In case you haven't been keeping score at home, those three things are pretty much the heart of the entire bill. Everything else is window dressing. And just to drive the point home, here's Andy describing Sen. Richard Shelby's take on the bill:

Today on the Senate floor, Shelby pretty much eviscerated the measure, while a red-faced and anxious-looking Chris Dodd sat across the aisle from the Alabama senator. "This bill threatens our economy," Shelby said. He added that the bill would leave taxpayers on the hook for future bailouts; the derivatives provisions would impair the economy; a new consumer bureau would stifle consumer lending; and a proposed Office of Financial Research, which would gather financial data used to predict future financial crises, would pry into Americans' lives and violate their civil liberties.

But other than that, Mrs. Lincoln, how did you like the play?

Hopefully this is just showboating, because if it's not it means that Republicans still aren't in a mood to get serious about financial reform. They just want to gut the entire measure. Either way, it's pretty reckless behavior.

(And just to address Shelby's concerns for the record: (a) actually, it would protect taxpayers, (b) no they wouldn't, (c) it might stifle predatory lending, but that's all, and (d) WTF is he talking about?)

Ryan Avent's baby is going to be old enough for a visit to a theme park one of these days, and he's not looking forward to it:

Specifically, I'm dreading the queues. Endless, winding queues, lasting hours, all to ride a roller coaster for two minutes.

There should be an easy solution to this: ride pricing. A long line indicates an underpriced experience. At any given moment, many more people want to ride than the ride can accommodate. By charging for individual rides, demand can be rationed until the queue is winnowed down to something reasonable, like five to ten minutes. The pricing could even vary. Operators could reduce prices for underused rides until more users are attracted, the better to keep activity evenly distributed around the park.

The problem with this is that people would hate it. But you could improve upon the system to make it less unpleasant! Specifically, you could give everyone who comes into the park a bunch of tokens, and then rides could be priced in tokens. You could then sell additional bundles of tokens for the real ride enthusiasts. I seem to recall that the old state fairs I used to visit operated on this system and didn't have long queues.

Ryan's idea sounds suspiciously familiar to this Southern California native. Throughout my childhood we visited Disneyland every year on my sister's birthday, and since Walt Disney was no communist he made sure that if you wanted to get on the more popular rides you had to pay for the privilege. This wasn't done via tokens, however, it was done via ticket books. You could pay for admission by itself, or you could pay a few dollars more for admission plus a book with a limited number of A, B, C, D, and E tickets. A and B tickets were for the junky rides. We always came home with a bunch of unused one. E tickets were for the Matterhorn or the other good rides. If you ran out you could buy more inside the park.

Disneyland ditched the ticket books in the early 80s and went to a simple admission charge that included unlimited access to all rides. The reasons were obvious: they made more money since everyone now paid the higher admission price, and they saved money since they didn't have to print ticket books, hire people for ticket booths, or collect tickets at the rides.

Which is all well and good, but the bigger question is: Did the ticket books cut down on queuing? Answer: Not as far as I can tell. The line for the Matterhorn or Space Mountain was miles long back in the 60s and 70s, just like it is today. In theory, ride pricing should work. In practice, I think theme parks might represent a market failure.

With soy milk sales soaring, the dairy lobby wants to stay top cow. Today, the National Milk Producers Federation (NMPF) petitioned the FDA to ban words like "milk" and "cheese" from any products that aren't made from dairy milk. Now, both the soybean lobby and dairy lobby are powerful presences on the Hill, as the fracas over last year's climate bill showed. But this goes to a whole new level of ridiculous.

Firstly, even though NMPF president Jerry Kozak said that “...many products that use the term [milk] have never seen the inside of a barn,” he could have just as well have been talking about the NMPF's own products. Most of the milk produced in this country doesn't come from a bucolic barn: it comes from factory farms like this one run by Dean Foods, the nation's largest milk producer, where cows are confined in filth-filled pens and have their tails amputated. If that's what a "barn" looks like, I'll take the soy processing plant.

Secondly, the word "milk" has lots of uses and has been used for non-dairy milks like coconut for a long time. Asking the FDA to only allow dairy products to contain the term "milk" is like asking it to make sure only the word "meat" is only used by products with beef in it. Consumers know that Silk soy milk isn't real dairy milk, just like they realize that Boca Burgers aren't real hamburger. Instead, the move to ban "milk" from non-dairy products is a transparent ploy by the NMPF to hurt the soybean industry that, thanks to increasingly health-conscious consumers and ethanol production quotas, is growing stronger every year. It's notable, also, that when not battling soybean farmers the dairy lobby works hard to keep its foot firmly on the throat of its own industry, to the point where they've been sued for being a monopoly and trying to drive small dairy farmers out of business: the same farmers whose milk might actually come from barns rather than football-field sized factories.

And thirdly, even though some products, like Coffee-Mate's powder creamer, are labeled as non-dairy but actually DO contain milk derivatives. So what would be the labeling change there?

Senate Democrats on Thursday evening unveiled an "framework" for immigration reform, calling on Republicans to work with them while at the same time indicating that they are willing to go it alone if they have to. The move comes after a week of bitter back and forth between Majority Leader Harry Reid and Lindsey Graham of South Carolina over whether immigration or climate should be next in line. Graham has so far been the lone Republican working with Democrats on both issues.

Reid yesterday indicated that energy would come next. But Graham has accused Democrats of "playing politics," and warns that moving on immigration at all this year would prompt him to abandon cooperation on both issues.

Reid addressed the Graham situation directly at the press conference, after fielding a question about whether their immigration work might imperil the climate bill. Graham, Reid said, "cannot logically use immigration as an excuse to not help with energy." He also said his calls for bipartisan work on immigration aren't necessarily directed at Graham. "There are 40 other Republicans," Reid said.

Reid also tried to downplay the tension over which issue should be next in line. "There's no one in this Congress in the House or Senate who believes in doing something about our environment more than I do," said Reid. "We need to do comprehensive energy legislation as soon as we can."

But the hurried roll out of their immigration framework seemed to be a clear indicator of where Reid is throwing his support. The planned introduction of draft legislation on climate change and energy has been delayed indefinitely as its co-authors scramble to deal with the Graham situation.

Exiting a meeting in the Republican Whip's office, Graham declined comment to reporters, saying only that a statement from he and Sen. John Kyl (R-Ariz.) would be forthcoming. Here's their statement dismissing the framework as a "conceptual paper" and calling for a bipartisan effort. He did not say anything about where this leaves him on climate and energy.

Via Jonathan Chait — who owes me big time for making me read this — here is Jonah Goldberg arguing that better financial regulation is a fairly non-urgent issue because bankers have all learned their lessons:

Think of it this way. We are just as vulnerable as ever to the threat of Coca-Cola releasing another New Coke. No laws have been passed to prevent it. No new oversight authority has been created to warn of its looming threat. And yet, the odds of Coca-Cola rolling out another debacle like New Coke are severely limited. Why? Because, to paraphrase Roy Scheider in Jaws II, as God is their witness the executives at Coca-Cola don’t want to go through that Hell again.

....This is not to say that the financial crisis doesn’t justify any reforms. But let’s not forget that inherent to capitalism is the capacity for self-correction. Surely the disappearance of Lehman Brothers and the dismantling of AIG is an example that many can learn from. The real danger seems to me that people like Dodd haven’t learned the lesson that government is not the only—or best—corrective to the excesses of capitalism.

Does Jonah really think that American industry's capacity to launch stupid new products was diminished by the New Coke fiasco? Does he remember Or Webvan? Or, restricting ourselves just to the soft drink market, Crystal Pepsi? Or any of the other fine beverages on this list?

As for bankers learning their lesson, I'm at a loss for words. If there's a profession on the entire planet that has aggressively declined to learn any lessons from its periodic collapse over the past several millennia, it's high finance. In This Time It's Different, it takes the authors three columns of text spread over four pages just to list the banking crises since 1800. They tally up 51 of them since 1980 alone.

God knows I'm sympathetic to arguments about regulatory capture and government collusion in blowing up financial bubbles, but even Alan Greenspan has admitted that financial markets can't be trusted to self-regulate. Alan Effin Greenspan. Regulatory capture is a reason to try to build a more robust financial control infrastructure, one that at least tries to address the changes in modern finance, not a reason to shrug our shoulders and pretend, yet again, that next time will be different.

I don't want to fight with YouTube. My relationship with YouTube has been one of the more fulfilling and reliable ones in my life. Hence my deep disappointment that it not only buried (rather than, as originally reported, deleted) MIA's "Born Free" video—in which American-flag-wearing troops embark on the rounding up, detaining, and killing of redheads—but also couldn't come up with some better excuse for doing so than the video's "gratuitous violence."

The clip reminds the Prospect's Silvana Naguib of Arabs being rounded up and caged in The Siege. It reminds me of the scene in Rambo part four where Burmese soldiers toss Claymores into a rice paddy and force ethnic Karen civilians run through it at gunpoint. Of course, it also evokes images of real US military activities that, as pointed out in MTV's rave review, we'd rather "pretend don't happen." YouTube's PR machine could have at least admitted that the censorship was political rather than hiding behind the pretense of how, though Americans have the right to watch stuff like this, YouTube has an obligation to protect the children. Because while it's true that MIA's video is awfully violent, and children deserve protecting, you can watch lots of stuff like this on YouTube, where, for example, Rambo IV is available in its entirety. Is YouTube's gratuitous-violence policy nullified in the event that the clip doesn't question US aggression, or the bad guys are dark and slanty-eyed rather than corn-fed WASPS?

[UPDATED] Last week, Mother Jones gave you the rundown on a Virginia motorist who considered the back of his Ford pickup the best forum to display his anger over Islam, the end of the Confederacy, and all things not Aryan and Hitler-related. Yesterday, that driver, Doug Story, sought out reporters at Washington's paper of record to argue he's not a racist—just a NASCAR fan. The Washington Post dutifully played along, printing Story's explanation with few caveats. But if Story thought he could control his public image, perhaps he should have updated his Facebook profile first to conceal his apparent affinity for organized neo-Nazi groups and white-power theories.

Doug Story, a dump-truck driver for the Virginia Department of Transportation and a resident of the Fairfax area in Northern Virginia, told the Washington Post this is all a big misunderstanding. He said the numbers 14 and 88 on his vanity plate—which line up with well-worn neo-Nazi and white supremacist codes—simply refer to the numbers of his favorite NASCAR drivers, Tony Stewart and Dale Earnhardt Jr. (Which sounds slightly fishy, since fans of one don't generally have much love for the other.)

"There is absolutely no way I'd have anything to do with Hitler or Nazis," Story said Wednesday. He contacted The Washington Post after an article about his plate appeared last week; the state, citing privacy rules, had declined to release the identity of the plate's owner. "My sister-in-law and my niece are Jewish. I went to my niece's bat mitzvah when she turned 13 three years ago. Does that sound like something an anti-Semite would do?"

That's all well and good. However, Story's Facebook profile—which confirms his employment with the state—tells a different story. [UPDATE: The original profile has since been taken offline, but a screenshot is available here.] His bio reads:

100% WHITE MAN, 100% ARYAN, 100% PRO-LIFE (Children are innocent), 100% PRO DEATH PENALTY (Criminal Scum aren't innocent).
Over the past 28 years; I, like David Duke, have had an Awakening.

His musical tastes include "white power metal," his favorite book is David Duke's My Awakening, and he lists among his favorite quotations this maxim: "If you can't beat them, arrange to have them beaten." He's a fan of the controversial Facebook group with the horribly misspelled title "DEAR LORD, THIS YEAR YOU TOOK MY FAVORITE ACTOR, PATRICK SWAYZIE. YOU TOOK MY FAVORITE ACTRESS, FARAH FAWCETT. YOU TOOK MY FAVORITE SINGER, MICHAEL JACKSON. I JUST WANTED TO LET YOU KNOW, MY FAVORITE PRESIDENT IS BARACK OBAMA. AMEN."

Most concerning of all, though, is the link he includes as his personal website: He is known as "Confederado" on the site, which bills itself as "An online community for whites by whites." It also includes banner ads for the National Socialist Movement—that is to say, the Nazis—whose website,, apparently includes a shout-out to Dale Jr. Or, Hitler!

Generally speaking, it's not a standard journalistic practice, for a lot of reasons, to make hay about an individual private citizen and his political activities. But in seeking out a public news forum—and working for the state of Virginia—Story submitted himself to public scrutiny, all the more so because his personal beliefs appear not to square with the persona he sought to project in the Post. And the contents of those beliefs are in the public interest—wishing physical ill on the president, who happens to be multiracial, which happens to offend the sensibilities of David Duke and neo-Nazis, who happen to figure prominently in Story's apparent worldview, which is a worldview widely seen as invalid and threatening to American social and political life.

Story's entitled to any belief; he's also entitled to freedom from harassment. (So please don't go after him.) But in what's been a banner year for nativism, racism, and uncivility in American political life, Story also should be willing to account for those beliefs, and all the baggage that they carry.

On Tuesday, MoJo's Adam Weinstein brought you the heartwarming story of Tim James, the Alabama businessman who, if his newest ad is any indication, is running for governor this year on a platform of dramatic pauses and DMV reform. Since then, James's bizarro, race-baiting campaign ad which was produced by the same guy who made DemonSheep has gone viral and the candidate is reaping benefits from the conservative base.

James's ad is pretty awesome. But it might be only the second most interesting spot out of Alabama this month. That's because one of James's primary opponents, former 10 Commandments judge Roy Moore, just cut this track:


Catchy! As Moore's site explains: "The Judge's love for music steered him to step outside of the proverbial political ads, and be the first person running for office to utilize music as the sole message for his campaign." The message in this video is really about faith, not race, but still, it's not every day that you see a Republican primary candidate pander to black voters. The fact that Moore's opponent seems to be pandering to the xenophobic wing of his party makes the contrast between the two that much sharper.

For the first time in British history, the contenders for Prime Minister are holding debates in the style of US presidential debates. Today is the third and final face-off for Prime Minister Gordon Brown of the Labour Party, Conservative Party leader David Cameron and Liberal Democrat leader Nick Clegg. The debates have riveted the British public—and have generated much interest in the United States. Not just because newcomer Clegg has surged on the basis of his performances, but also because it has been so darn interesting to see a British twist on an American tradition. With Brown on the ropes—partly because he was caught insulting a Labour voter by a microphone he didn't realize was live—and Clegg seemingly on the rise, this last debate has stirred intense interest on both sides of the pond. The British election is May 6. As he did with the previous debate, David Corn is live-tweeting this one and is expecting a jolly good show. (You can follow him on Twitter here.)

The Senate leadership is planning to introduce a summary outline of an immigration bill shortly before 6 p.m. on Thursday, one day after circulating a draft to advocacy groups. The framework—whose existence I reported earlier this week and which is spearheaded by Sen. Charles Schumer (D-NY), Majority Leader Harry Reid (D-Nev.), and Sen. Robert Menendez (D-NJ)—seems to have been written with the intention of attracting support from moderates on both sides of the aisle. But if Dems can't get Republicans to sign on, will they go it alone?

According to Roll Call, "the package would require that a series of new border security benchmarks be met before broader immigration reforms are enacted—including a legalization process for illegal immigrants.” This two-step process seems pitched directly at those Republicans—chief among them Sen. Lindsey Graham (R-SC)—who’ve demanded that the federal government secure the border first before tackling other immigration reforms. (Graham had been working with Schumer on a bipartisan immigration bill, but he turned on the Democrats after news that immigration might move ahead of climate legislation, which he’s also working on.) The rest of the Democrats’ draft outline adheres closely to the basic principles of the Schumer-Graham plan, including stricter rules about hiring illegal immigrants and expanded visa programs for high-tech and low-skilled immigrant workers.

Praising the draft for offering many "very positive developments," Mary Giovagnoli, head of the Immigration Policy Center, said there were "not any surprises" in the proposal. "It's designed so that Graham can have a seat at the table, if he wants to take it." Some Republican proponents of immigration reform were also enthusiastic. "I think conservatives can agree with many of the principles of this proposal," Alfonso Aguilar, a former Bush administration official and a fellow with the Latino Project for Conservative Principles, said in a conference call Thursday afternoon. "We would love to see a bill this year."