2013 - %3, January

JPMorgan Chase Gambles Away $6B, Gets "Slap on the Wrist"

| Tue Jan. 15, 2013 6:33 PM EST

Federal banking regulators have decided it's a bad thing that JPMorgan Chase lost $6 billion on a risky bet last year and failed to close money-laundering loopholes. But that's pretty much all they've decided.

The Office of the Comptroller of the Currency and the Federal Reserve ordered the bank Monday to fix risk-management failures that led to the massive loss on a trade out of its London office in May 2012, as well as tighten up monitoring of cash transactions that may have allowed suspected terrorists and drug dealers to launder money. But there will be no fines or hard penalties levied for the bank's failures.

Advertise on MotherJones.com

Atomic Scientists: Humans Still Pretty Close to Self-Annihilation. Drink!

| Tue Jan. 15, 2013 4:51 PM EST

Last year, the Bulletin of Atomic Scientists moved the minute hand on its "Doomsday Clock" one minute closer to midnight. This year, the group of scientists decided to keep the symbolic timepiece at 11:55, signaling that its members don't believe things are getting any better when it comes to global annihilation.

The clock, which has been around since 1947, was created to symbolize the threat of nuclear power, but now also represents other man-made threats to humanity.

Back in 2010, the group was optimistic, as it elected to set the clock back by one minute. But this year the group says that the world has been consumed by economic threats, to the detriment of other pressing issues like nuclear proliferation and climate change. Members of the BAS wrote a letter to President Barack Obama citing those concerns, and asking him to "partner with other world leaders to forge the comprehensive global response that the climate threat demands, based on equity and cooperation across countries." They wrote:

2012 was the hottest year on record in the contiguous United States, marked by devastating drought and brutal storms. These extreme events are exactly what climate models predict for an atmosphere laden with greenhouse gases. 2012 was a year of unrealized opportunity to reduce nuclear stockpiles, to lower the immediacy of destruction from weapons on alert, and to control the spread of fissile materials and keep nuclear terrorism at bay. 2012 was a year in which—one year after the partial meltdown at the Fukushima Daiichi Nuclear Power Station—the Japanese nation continued to be at the earliest stages of what will be a costly and long recovery.

The group also noted that Obama's next term provides another opportunity to address these issues:

"We have as much hope for Obama's second term in office as we did in 2010, when we moved back the hand of the Clock after his first year in office," said Robert Socolow, chair of the Science and Security Board at BAS. "This is the year for U.S. leadership in slowing climate change and setting a path toward a world without nuclear weapons."

Lead and Crime: A Linkfest

| Tue Jan. 15, 2013 3:56 PM EST

For the past couple of weeks I've been writing updates of various kinds to my article about the link between gasoline lead and violent crime. A reader suggested that I should collect everything in one place for ease of reference, and I thought that sounded like a good idea. So here it is.

Criminal Element. This is the original piece spelling out the detailed evidence that the rise and fall of gasoline lead in the post-World War II era was responsible for the rise of violent crime starting in the 60s and its subsequent decline starting in the 90s.

The story in a nutshell. Provides a brief version of the lead-crime story as an introduction to the full article.

It's not just lead. Emphasizes that lead is a major part of the crime story, but not the only part. Also: audio of my appearance on the Leonard Lopate show explaining the lead-crime connection.

The prison population is dropping. Declining exposure to lead starting in the mid-70s reduced the rate of violent crime 20 years later. Twenty years after that, as members of Generation Lead are being released from prison and aren't being replaced, the prison population has started to drop too.

Lead and murder. We have fairly good data on murder rates going back for a century, and it turns out the United States has had two epidemics of murder, the first in the 20s and 30s and the second in the 70s and 80s. When you account for both lead paint and gasoline lead, it turns out that lead can explain them both.

Crime in Chicago. Violent crime is up in certain parts of Chicago. Is lead responsible?

A response to Deborah Blum. A small correction, and another post emphasizing that although lead is an important part of the crime story, it's not the whole story.

International crime trends. Violent crime began to drop in the United States in the early 90s, about 20 years after we began reducing the lead content of gasoline. But how about other countries? Where can we expect to see crime drops in the future?

The Melissa Harris-Perry show. Video of me talking about lead and crime with Melissa Harris-Perry. Howard Mielke, a longtime lead researcher from Tulane University, is also on the show.

How did lead get into our gasoline in the first place? The whole fascinating story is right here, along with lessons for the future.

George Monbiot and Scott Firestone. Monbiot endorses the lead-crime theory and Firestone criticizes it. I respond, along with a brief summary of the multiple threads of research that support the lead-crime hypothesis. Followup here.

Baselines vs. crime waves. Lots of things contribute to baseline levels of crime. But lead is uniquely able to explain why there was such a huge rise of crime above the baseline during the 60s, 70s, and 80s, followed by an equally huge reduction back to the baseline in the 90s and aughts.

Big cities vs. small cities. Surprisingly, it turns out that once you reduce exposure to gasoline lead, big cities aren't really all that much more dangerous than small ones after all.

A response to Jim Manzi. This is a wonky post responding to Manzi's generic critique of econometric analysis of complex social issues.

Crime and race. In the postwar era, black children were exposed to much more lead than white children. This explains some of the racial differences in both crime rates and incarceration rates.

The Voting Wars Continue

| Tue Jan. 15, 2013 2:26 PM EST

Voter ID laws were a bit of a bust last year, but that was mostly because they came too late and ran into problems in the courts. Needless to say, that doesn't mean the Republican Party has given up on them. Nor have they given up on the idea of gaming the Electoral College to give themselves an artificial advantage in the 2016 election. Steve Benen rounds up the latest news here. This particular war didn't end in 2012. It was just getting started.

The Opportunity Cost of Playing Nice

| Tue Jan. 15, 2013 1:31 PM EST

I got an email this morning from a friend who, while agreeing that Obama's low schmoozability isn't really keeping anything from getting done in Washington DC, is still a bit concerned that Obama might be taking things too far. After all, if he's given up completely on having a decent relationship with the opposition, that might still have an effect on the margin.

At a first pass, that sounds unarguable. Other things being equal, friendly relationships certainly can't hurt, can they?

Actually, they can. The problem, I think, is in the opportunity cost. In the past, it was possible (according to legend, at least) for politicians to rip each other bloody in public and then head out for a beer afterward to laugh about it. But even if that's true, it's an era that's long gone—and not just in the White House. For better or worse, politicians of opposing parties just don't socialize much anymore.

So here's Obama's problem. He can continue to try to make nice with Republicans, figuring that even if it does no good, it probably does no harm either. But if he does that, he has to be reasonably friendly in public too. And that might carry a cost. It means he's given up one possible way of moving public opinion in his direction.

So in his second term, he seems to be making a different calculation. If trying to compromise gets you nowhere, maybe a more direct appeal to the American public will. And that means attacking Republican intransigence more directly. It's no sure thing this will work, of course, but it's worth a try given his utter failure to move Republicans even a smidgen during his first term. And guess what? He seems to have gotten a decent fiscal cliff deal out of it. He's starting to generate a bit of Republican nervousness toward using the debt ceiling as an opportunity for hostage taking. And his favorability ratings continue to creep upward. Being the bad cop doesn't seem to be doing any harm.

Political scientists will tell you this can't work because presidents don't really have much power to move public opinion. Maybe. But Obama seems to think it's worth a try, and I find it hard to disagree. One way or another, the tea party faction of the Republican Party has to be held accountable for its zealotry. Maybe a little plain talk is the best way to do that. And maybe Beltway sensibilities need to toughen up a bit.

Military Suicides in 2012 Hit Yet Another Record High

| Tue Jan. 15, 2013 1:15 PM EST

Surely, one of the more depressing ledes to run this week:

Suicides in the U.S. military surged to a record 349 last year, far exceeding American combat deaths in Afghanistan, and some private experts are predicting the dark trend will worsen this year.

The figures are tentative, pending the completion of full reports on each case later this year. The number of US military suicides surpassed the number of combat deaths for the third time in four years. (For 2012, the Associated Press recorded 295 American combat deaths in Afghanistan.) The previous record high was 310 suicides in 2009, after the rate began a disturbing upward trend starting in 2006.

A breakdown of the suicides among active-duty troops last year by service:

  • Army: 182
  • Marine Corps: 48
  • Air Force: 59
  • Navy: 60

According to the numbers released by the Pentagon, the suicide rate among active-duty military is still below that of the civilian population.

Here's the AP rundown of the Pentagon's analysis of military suicides in 2011:

Each year the Pentagon performs an in-depth study of the circumstances of each suicide. The most recent year for which that analysis is available is 2011, and among the findings was that those who took their own lives tended to be white men under the age of 25, in the junior enlisted ranks, with less than a college education.

The analysis of 2011's 301 military suicides also found that the suicide rate for divorced service members was 55 percent higher than for those who were married. It determined that 60 percent of military suicides were committed with the use of firearms - and in most cases the guns were personal weapons, not military-issued.

In 2009, the Army began developing required surveys for all new and current soldiers. The goal of the survey was to determine causes of the uptick in military suicides, and to learn how best to prevent suicides. The panel that developed the survey also launched the largest study of its kind: a $50 million, five-year study run by Army and the National Institutes of Mental Health. Professors from Harvard, the University of Michigan, and Columbia also sat on the panel of experts. A whole host of other studies—both private and backed by the government—are examining causes and prevention for military suicides. For instance, late last year, the Department of Defense announced a three-year, $10 million study, conducted at the Medical University of South Carolina, that tests whether fatty acids in fish oils can help cure the anxiety suffered by combat veterans, thus hopefully reducing the rising suicide rate.

The Department of Defense's toll-free military crisis number is 800-273-8255.

Advertise on MotherJones.com

Europe Has Apparently Given Up On Recovery

| Tue Jan. 15, 2013 12:46 PM EST

Matt Yglesias makes the point today that although the eurozone crisis appears to be over for the moment, the European economy is in shambles:

Worst of all, as Ambrose Evans-Pierce writes the European Central Bank seems to have entirely washed its hands of the situation, deciding that as long as there's no acute banking crisis they don't need to care about anything else. This is, among other things, exactly the attitude from the Trichet-Weber years that let the acute banking crisis develop. Over the long-term, it's all tied together. Banks and sovereigns can't be solvent if citizens don't have incomes, Germany can't export if Spain can't import.

It is remarkable how little we seem to have learned anything from the events of the past decade. On topic after topic, from war to climate change to the economy, it's as if we're frozen in amber. No matter what happens, we just keep on believing the same things. More here from Ryan Avent.

We're Still at War: Photo of the Day for January 15, 2013

Tue Jan. 15, 2013 12:42 PM EST
Marines and their instructor brace against the blast of a door charge, January 10.
U.S. Marine Corps photo by Lance Cpl. Austin Long.

Debt Hawks Wrong Yet Again

| Tue Jan. 15, 2013 11:55 AM EST

Dan Drezner passes along yet another prediction from the VSPs that Paul Krugman can throw onto his bonfire of contempt for the Fox News interpretation of the economy. It turns out that all those warnings about China getting tired of propping up U.S. bond purchases because of our profligate ways were just so much hot air. Seeking Alpha explains:

China has actually decreased its short term U.S. bond holdings by 5.1%. China holds $US 3.7 billion short term U.S. paper. On June 2011 China held $US 4.9 billion of short term U.S. paper. So basically all the debt that China holds are long term treasuries now. Interesting to know, China had $US 200 billion in short term U.S. debt in May 2009. So they divested all short term paper to long term paper.

Drezner comments:

In other words, contrary to the fears of debt hawks in 2009 — including, it should be noted, Hillary Clinton — China has not exercised an iota of influence over the United States via its debt holdings. Indeed, the shifting pattern of their debt purchases strongly suggests that the Chinese have recognized the futility of such an approach.

While Beijing has recognized this truth, certain Very Serious People who write Very Serious Columns persist in being afraid of China's mythical debt leverage. So, on occasion, as a public service, this blog will continue to remind its readers that U.S. remains clothed in immense financial power.

Rising U.S. debt hasn't caused inflation. It hasn't sent interest rates skyrocketing. It hasn't reduced Chinese demand for American bonds. It hasn't reduced demand for long-dated bonds. Really, it hasn't done any of the things that conservatives have been predicting with apocalyptic fervor for the past four years.

And yet, we continue to take them seriously.

Gun Lovers Freaking Out Over Price Gouging

| Tue Jan. 15, 2013 10:09 AM EST

Since the elementary-school shooting in Newtown, Connecticut, gun sales have soared as elected officials around the country contemplate new restrictions on gun ownership. Paranoid gun owners have rushed to stock up on guns they think will be banned. They've spread (unfounded) rumors that Walmart, the nation's largest gun retailer, is going to stop selling ammo. All of the panic has prompted something of a run on gun supplies.

The frenzy has been lucrative for the people who make and sell small arms and ammo, but those poor schmucks who just need more shells for the assault weapons they already own are suddenly discovering the dark side of capitalism. In a strange bit of irony, gun owners who helped fuel the post-Newtown surge in sales are now shocked to discover that they're being overcharged. Gun blogs and message boards are full of posts like "i got price gouged," wherein Blue Cow at the Indiana Gun Owners forum writes:

i went to Lens ammo shop on Michigan street in South Bend today. Three days ago a brick of 22LR (500 rounds) of blazer was $20. Today I go to Lens after work and said I would like a brick of 22LR, he went and got it, rang me up and said "That will be $35." I said "What? It was $20 three days ago!!!" Len said "That was last weeks prices, everybody else is gouging so I should make a buck doing it to." 

A California gun owner kvetched at Calguns.net that price gouging for ammo should be illegal:

The day I received my CheaperThanDirt catalog I called to place an order. I was interested in the loose 1,000 round case of Eagle .223 for $399.95. The sales rep answers with a price of $999.95. I let her know I'm looking at the catalog with the price of $399.95. With a very snooty and unsympathetic voice, she refers me to the right margin of page 57 which says they can change the price based on "market." If a hardware store charges $100 for a sheet of plywood in advance of a storm, they can be fined and/or jailed. Why is there not something to stop price gouging on ammo?

The complaints about price gouging, though, aren't getting an especially sympathetic response, especially from other gun owners. Many seem to take a dim view of anyone who actually pays such inflated prices. One person responding to Blue Cow in Indiana retorted, "All the whining about prices is getting old." The California poster got several economics lectures about supply and demand. "This is the United States, not the old Soviet Union. Price controls do not belong here," one poster replied. 

The price-gouging may have an upside, though not for the gun lovers: It might help keep sales in check—at least temporarily—while Congress gets around to thinking about thinking about considering an assault-weapon ban.