2009 - %3, May

Friday Cat Blogging - 29 May 2009

| Fri May 29, 2009 2:09 PM EDT

I don't know how well it shows up in the photo, but when they write the definition of "smug" in the next edition of Webster's, they're going to use this picture of Inkblot.  He was so pleased with himself he could hardly stand it.  On the right, we have an action shot of Domino darting out from behind the quilts to protect the house from an invasion of cat toys.

And here's our latest experiment in feline pyschology.  Last weekend Marian brought home a blue blanket and tossed it down in the entryway.  Inkblot made an immediate beeline for it and claimed it as his new favorite thing.  The next day we put the blanket up on the couch.  He wouldn't go near it.  We put it on the carpet.  Ditto.  We put it on the carpet right next to the sofa, and he not only wouldn't go near it, he actually circled way around it as if it were going to bite him.  So then, out of curiosity, I picked it up and put it back on the hardwood floor in the entryway.  He made an immediate beeline for it and curled right up.  Now what the hell is going on with that?

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Report Calls for Cybersecurity Czar, Privacy Protections

| Fri May 29, 2009 1:52 PM EDT

In its comprehensive review (PDF) of cybersecurity released Friday, the White House calls for the president to appoint of a cybersecurity czar whose main duty would be "to coordinate the Nation’s cybersecurity-related policies and activities." The report also calls for the appointment of a privacy and civil liberties official to act as a check on the bureaucracy's power to access sensitive online data.

That recommendation seems to indicate the White House is not interested in having the authority to access any relevant data without regard to privacy laws, or the power to shut down the internet in a cyber emergency—broad powers outlined in The Cybersecurity Act of 2009, released last month and sponsored by senators Jay Rockefeller (D-W. Va.) and Olympia Snowe (R-Maine).

Some civil libertarians had expressed concern that the cybersecurity czar—a position also proposed in the Rockefeller-Snowe legislation—would report to the National Security Agency. But Friday's proposal from the White House calls for that official to work dually under the National Security Council and the National Economic Council, Executive Branch offices under whose umbrella transparency is much easier to achieve than at the NSA.

"It's clear that the White House review team was committed to building privacy into these cybersecurity policy recommendations from the beginning of the process," says Leslie Harris, head of the Center for Democracy and Technology.

The Senate commerce committee, which has been holding the Rockefeller-Snowe bill in anticipation of Friday's White House report, seems to agree with the privacy guidelines. In a statement, Rockefeller and Snow said the president's cybersecurity advisor must be required "to put civil liberties protections front and center. Our aim is to improve the nation’s security—and by this we mean, the security of American lives, property, and civil liberties."

Yet More on Tough Talk

| Fri May 29, 2009 1:51 PM EDT

Hillary Clinton says the Israeli settlements in the West Bank need to stop.  No outposts, no "natural growth," no nothing.  But even if that's the line coming from the Obama administration, surely Bibi Netanyahu can count on congressional pressure to show Obama who's really boss?  Right?

According to many observers in Washington and Israel, the Israeli prime minister, looking for loopholes and hidden agreements that have often existed in the past with Washington, has been flummoxed by an unusually united line that has come not just from Obama White House and the secretary of state, but also from pro-Israel congressmen and women who have come through Israel for meetings with him over Memorial Day recess. To Netanyahu's dismay, Obama doesn't appear to have a hidden policy. It is what he said it was.

....Whereas in the past Israeli leaders have sometimes eased pressure from Washington on the settlements issue by going to members of Congress, this time, observers in Washington and Israel say, key pro-Israel allies in Congress have been largely reinforcing the Obama team's message to Netanyahu. What changed? "Members of Congress have more willing to follow the leadership of the administration ... because [they] believe it is in our national security interest to move toward ending the conflict and that it is not a zero sum for Israel," the former senior Clinton administration official said.

That's Laura Rozen over at Foreign Policy. Congress has always been a key part of Israel's ability to fight off pressure from American presidents.  If that's changing, it's a big deal.

Could Deforestation in Brazil Wreak Havoc in the US?

| Fri May 29, 2009 1:20 PM EDT

The weather in the Amazon is going crazy—and the sudden climate changes could affect not only Brazil and its neighboring countries, but areas as far from the rainforest as the Mexican gulf and maybe even the southern US. That’s what Paulo Moutinho, research coordinator for the Amazon Environmental Research Institute (IPAM), warns might happen if the world doesn’t cut its carbon emissions significantly over the next two years.

After two severe drought periods in 1998 and 2005, the Amazon is now in the midst of heavy flooding—the river has reached a record water level of 28 feet. The drought hurt the economy and caused healthcare costs to skyrocket, but Moutinho believes an overflow could cause equal damage by ruining plantations and causing outbreaks of sewage-related diseases.

 

Obama's "New Capitalism"?

| Fri May 29, 2009 1:14 PM EDT

Once again, a major American car company is headed for bankruptcy, and once again, the Obama administration is stepping in with buckets of cash. Last time it was Chrysler. Now it's General Motors. But the debate's the same. The Obama team is forcing bondholders to accept a much worse deal than the United Auto Workers is getting, and the bondholders are (predictably) howling. Marc Ambinder says Obama is "rewriting the rules of capitalism." Really? When hedge fund manager Clifford Asness complained about the Chrysler deal, I argued that Chrysler investors should have known that any deal to save the company was likely to involve government money and all the strings that come with it. Those strings, as anyone who had been watching the bank bailouts would have known, mean that political considerations come into play.

The White Man's Burden

| Fri May 29, 2009 12:34 PM EDT

Michelle Cottle is a racist, sexist hatemonger:

Not to state the obvious, but an upper-middle class white guy reared in the suburbs is shaped by his experiences, carries certain assumptions, and views the world through a particular prism as much as a working-glass Puerto Rican gal from Queens, or, for that matter, the half-black son of a single mom raised in Hawaii. The person belonging to the cultural/ethnic/religious/gender/racial demographic that has traditionally dominated a field (and thus whose perspective has long been the default) may not have given as much thought to his prism as a member of a non-dominant group. But that does not make his prism a neutral one. It simply allows him to more freely indulge his delusions of pure rationality and objectivity.

This is ridiculous.  It's just a coincidence that opposition to affirmative action comes almost exclusively from white men.  Nothing to do with background at all.  Right, Rush?

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Libel Law Expert: Liz Cheney is Still Wrong About Libel

| Fri May 29, 2009 12:20 PM EDT

Liz Cheney has already gotten some flak from this blog for claiming on live television that calling waterboarding and other "enhanced interrogation techniques" torture is "frankly libelous." Now Mother Jones' own legal adviser, James Chadwick, has decided to drop some knowledge. Here's what he says:

Liz Cheney's been reading too much George Orwell and not enough first amendment. You can't libel the government, and statements of opinion can't be libelous. I think Liz Cheney would be particularly interested in defending the idea that what constitutes torture is a matter of opinion because if not, her father might be in a lot of trouble. She's not talking about specific allegations about specific people. She's talking about people saying what the US government did... was torture.

One of the reasons the founding fathers established the first amendment was to do away with the idea of seditious libel - libeling the king. You cannot be sued for saying bad things about the government, period.

If you do talk about specific individuals sanctioning torture, then all those individuals are unquestionably public figures, which requires the highest standard of proof that there is in civil law. "Clear and convincing evidence of actual knowledge of falsity, a reckless disregard of the truth." I don't think anyone can say it's actionable to call waterboarding torture.

Bottom line: Liz Cheney doesn't know what the heck she's talking about.

Children's Health: Trusting God Over Doctor

| Fri May 29, 2009 12:18 PM EDT

The following is a guest blog entry by Deena Guzder.

On May 20, 2009 a Wisconsin mother who followed an apocalyptic religious website said in a videotaped interview played at her trial that she did not call a doctor when her 11-year-old daughter was dying of untreated diabetes, but instead prayed for divine healing. “I just believed the Lord is going to heal her,” said Neumann. “I just felt that, you know, my faith was being tested.” During the trial, one of Neumann's surviving teenage children defended her parents’ decision to eschew medical intervention. “Because God created everyone, and how can we be more powerful than God?” the teenager said. “Why should we diss him and think a doctor would be more powerful than God or trust a doctor more than God?"

Even after her daughter was pronounced dead, Neumann told a detective, “I'm not crying and wailing right now because I know she's, I know she's, she's gonna come, she's gonna come back.” Unfortunately, there was no resurrection.

More Effective Than Waterboarding: Cookies?

| Fri May 29, 2009 11:55 AM EDT

In the week after 9/11, unleashed deep within a Yemeni prison was what might have been the most effective interrogation tool ever devised by the U.S. Government. It could be more powerful than waterboarding, sleep deprivation, naked photos, or barking dogs. It is a monster that resides within almost all of us, a shaggy, blue-haired beast with an uncontrollable urge to devour oven-baked sweets while growling, "Coooookie!"

From Time comes this account of FBI interrogator Ali Soufan's successful attempt to win over  Al-Qaeda operative Abu Jandal, who had been closer to Osama bin Laden than any other terrorist ever captured:

He had no intention of cooperating with the Americans; at their first meetings, he refused even to look at them and ranted about the evils of the West. Far from confirming al-Qaeda's involvement in 9/11, he insisted the attacks had been orchestrated by Israel's Mossad. While Abu Jandal was venting his spleen, Soufan noticed that he didn't touch any of the cookies that had been served with tea: "He was a diabetic and couldn't eat anything with sugar in it." At their next meeting, the Americans brought him some sugar-free cookies, a gesture that took the edge off Abu Jandal's angry demeanor. "We had showed him respect, and we had done this nice thing for him," Soufan recalls. "So he started talking to us instead of giving us lectures."

All hail the Cookie Monster!  Seriously, his brand of monstrousness might be the the only kind we need:

Soufan, now an international-security consultant, has emerged as a powerful critic of the George W. Bush — era interrogation techniques; he has testified against them in congressional hearings and is an expert witness in cases against detainees. He has described the techniques as "borderline torture" and "un-American." His larger argument is that methods like waterboarding are wholly unnecessary — traditional interrogation methods, a combination of guile and graft, are the best way to break down even the most stubborn subjects.

Risk

| Fri May 29, 2009 11:55 AM EDT

Economist Gary Gorton has written a 20,000 word paper on the subject of "informationally-insensitive debt" — i.e., ultra-safe investments like federally insured bank deposits.  Ezra Klein boils this down to a thousand words.  I boldly push the boundaries even further:

The morons who inhabit Wall Street thought they had removed all risk from inherently risky investments.  They were wrong.

There!  Twenty words.  That's a compression ratio even greater than Ezra's.  Felix Salmon comments:

Gorton's solution to this problem is to involve the government in all manner of regulation — and insurance — of the securitization market, thereby making [asset back commerical paper] behave much like federally-insured bank deposits. I don't like this solution at all, since it would send the contingent liabilities of the government into the stratosphere, and more importantly would ratify the demand for informationally-insensitive assets by creating trillions of dollars of new ones.

In my view of the crisis, it's precisely the demand for informationally-insensitive assets which is the problem. And we need to get individuals, companies, and institutional investors out of the mindset that they can do an elegant little two-step around the inescapable fact that anybody with money to invest perforce must take a certain amount of risk. If you have a world where people are all looking for risk-free assets, you end up shunting all that risk into the tails. And the way to reduce tail risk is to get everybody to accept a small amount of risk on an everyday basis. We don't need more informationally-insensitive assets, we need less of them.

I agree.  There's a common view that investors in the period up until 2006 were practically drunk on risk, pricing it nearly at zero — but now, after the crash, they've become more risk averse than your grandmother.  They're almost completely unwilling to accept any risk at any price.

I think this view is fundamentally wrong.  What really happened is that in the early part of the decade investors became convinced that they could avoid risk entirely via financial engineering.  They were, in fact, immensely risk averse, but this wasn't obvious because they were buying up every security in sight.  The post-crash flight to quality, it turns out, wasn't really a flight at all.  Modern investors have been afraid of risk all along.

So Felix is right.  The last thing we need is for the government to perpetuate the delusion that financial markets are risk free.  For small retail bank depositors, that's fine.  For the big boys it's not.  They need to relearn the art of genuinely analyzing risk and taking it on knowingly, rather than pretending they can hedge it away under all circumstances.  After all, accurate analysis of risk is essential to the efficient allocation of capital, and efficient allocation of capital is one of the keys to economic growth.  It's time for Wall Street to get back to basics.