Mr. Ali Jadaan, a local contractor in Scania, Iraq, welcomes members of Alpha Company, 2-162 Infantry, Oregon Army National Guard, into his home for a pre-Ramadan feast. The feast was also an invitation for the Alpha Company, 2-162 new command to sit and have a non-business meeting. The meal consisted of chicken and rice, soups, fresh fruits and vegetables, pickled vegetables and dates. (US Army photo via army.mil.)

The Geithner Plan

Via Felix Salmon, I see that Tim Geithner has unveiled his plan — or, more accurately, his guiding principles — for regulating leverage more effectively in the financial industry.  And it's not bad.  Basically it requires (a) stronger capital requirements across the board; (b) higher capital requirements for bigger firms, which would make larger firms somewhat less profitable; (c) an emphasis on real capital, not shell games; (d) higher capital requirements in good times and lower requirements in bad times; (e) a simple leverage constraint as sort of a backup to the more complex main capital rules; (f) stronger regulation of off-balance-sheet vehicles; (g) some kind of minimum liquidity requirement so that banks can't be wiped out in just a matter of days by a bank run; and (h) extension of all these rules to big non-banking entities (the "shadow banking" system).

All of these are described in general terms, and I note that (h) is described in especially dodgy terms.  So we won't know how serious Geithner is about this stuff until he rolls out the details.  But at least he seems to singing the right songs.

Pulling the Trigger

Let's check out the news on the healthcare front today.  In the New York Times, we have David Brooks suggesting that Obama throw out all the work of the past six months and start completely from scratch on a wonky curve-bending plan that would have approximately zero support in any known galaxy.  Sounds great.  In the Washington Post, we have GOP Senator Bob Corker telling us that if Democrats would just get rid of that mean old public option, Republicans will flock to support healthcare reform.  You betcha.  And in the LA Times, we're told that a public option might be politically acceptable after all as long as it goes into effect only after something "triggers" it.  What that something might be is still unclear, but basically insurance companies would have to reduce costs somehow, and if they don't do it then the public option would be triggered and they'd all have to start competing with the feds.

In other words, things are all over the map.  The trigger idea is sort of interesting, though.  Not because it's new and innovative, but because it's the kind of thing that seems to pop up as a compromise proposal pretty frequently and to no avail.  Alan Greenspan and Paul O'Neill tried to sell the idea of a trigger for the 2001 tax cuts, but nobody bought it.  The Baker Commission basically proposed triggers for withdrawing from Iraq, but that turned out to be DOA.  And here in California, when higher car registration fees got automatically triggered by a growing budget deficit, it caused such hysteria that we ended up tossing out our governor and electing an action star in his place.  Didn't work out so well.

So triggers don't have a really illustrious history.  But maybe it'll work this time.  Anybody know of any examples of successful triggers?  That is, triggers that actually produced a successful compromise at the time of legislation and didn't cause all hell to break loose when they took effect?  We need some data, people.

More than two months after his death, Michael Jackson is finally being buried tonight.  With Neverland evidently a no-go, the family chose to inter him intead in the Great Mausoleum at Forest Lawn cemetery in Glendale:

The cemetery prides itself on a high level of security, with guards shooing away loiterers and restricting mausoleum visits largely to people authorized by the family of the deceased.

Mark Masek, who maintains cemeteryguide.com, which tracks entertainers’ graves, said that a couple of weeks ago guards stopped him from taking pictures outside the mausoleum and forced him to delete the images.

“They are not kidding,” he said, predicting fans would have trouble finding and documenting Mr. Jackson’s crypt. “If they wanted to restrict access and keep people out, they could not have picked a better place,” he said.

Actually, that's not the half of it.  My father's parents are buried in the Great Mausoleum — granddad was apparently great friends with Forest Lawn founder Hubert Eaton — so a few years ago I trekked up there to take a look at their crypt.  The folks in the front office looked up the location for me after I demonstrated that I was indeed named Drum and therefore likely to be a genuine relative of the deceased, and off I went.  But lemme tell you: the place is a maze.  I found the right location and took a few pictures, and then spent the better part of an hour trying to find my way out.  I was afraid I'd end up spending the night there.

Plus the whole place is sort of creepy.  Not a good place to get lost.  So even if you're a Jacko fan, I recommend you skip the whole crypt worship thing.  The guards will hassle you if you're not on their approved list, and even if you do manage to finagle your way in, you might never get out.  You have been warned.

Who Let Lehman Fail?

Hmmm.  Last we heard, the official story about the collapse of Lehman Brothers blamed it on pesky legalities: Barclays was ready to do a deal to acquire Lehman at the last minute, but only if they got government backstopping as part of the acquisition.  Treasury, however, didn't have the legal authority to provide any guarantees, so there was no acquisition and Lehman went into bankruptcy.

Now, this story has always seemed a little fishy, partly because it's changed a bit from time to time, and partly because Treasury had already provided support for the rescue of Bear Stearns, Fannie Mae, and Freddie Mac, and would provide support for AIG just a few days later.  So if they had the legal authority for that, why not Lehman?

In the Guardian today, Larry Elliott and Jill Treanor report that the real reason the deal fell through was entirely different: it was just a cockup.  The Brits thought the Americans would support the deal all along, and the Americans never made it clear they wouldn't:

In London, the Treasury, the Bank of England and the Financial Services Authority all believed that the US government would step in with a financial guarantee for the troubled Wall Street bank. The tripartite authorities insist that they always made it clear to the Americans that a possible bid from Barclays could go ahead only if sweetened by US money.

....The UK tripartite authorities — the FSA, the Bank of England and the Treasury — had expected the US government to stand behind Lehman in the way that it had backed two crucial mortgage lenders the previous week and helped to orchestrate the bailout for Bear Stearns in March.

If the UK authorities were expecting the Americans to bail out Lehman, that means the Americans never brought up any legal hurdles.  And they surely would have mentioned it if that's what was really standing in the way of a deal.  Right?  So what's the real reason?

Mysteriouser and mysteriouser.  Especially since the Guardian piece has absolutely no sourcing whatsoever aside from the typically dramatic all-purpose British lead, "a Guardian/Observer investigation has revealed."  So take this with a grain of salt — particularly since the most likely British sources have an obvious interest in making sure someone else is to blame for the post-Lehman global financial meltdown.  No one is very eager to take the blame for that, after all

Guilt-Free Meat?

I suppose it's a sign of some kind of progress that people are thinking about ways to produce meat without the guilt. But these ideas give me the creeps.

As New Scientist points out, we eat 300 million tons of meat a year—50 percent more than in the 1960s. Much of it comes from inhumane factory farms.

Enter Adam Shriver's controversial paper in Neuroethics arguing that we are close to, if not already at, the point of genetically engineering factory-farmed livestock who cannot suffer.

Wow. Pain-free cows. You know, that doesn't work for me. It's right up there with the Cheney method of torture. I mean, what does hurting an animal who can't (or can) feel pain do to the miserable souls stuck with (or desiring) those jobs? Post-traumatic meat disorder.

Why not genetically engineer people to abhor meat?

Meat is more bad than good for us, bad for livestock, and bad for the planet. Eating a quality vegetarian diet would benefit every single living person. Here's why and why and why and why and why and why.

Plus, eating meat is bad for cows and sheep and goats and chickens and fish and every other wiggling thing we insist on putting into our mouths. Whether they feel pain or not.

MoJo has covered more than once some of the compelling and ever accumulating reasons that eating meat is bad for the planet.

Now some thinkers are suggesting producing in-vitro meat bioengineered in Petri dishes. Jennifer Jacquet blogging at Seed calls it Frankenmeat.

I'm feeling the need to fight back against the strange bacon fetish sweeping the sweepable world.

Tofu never suffers.
 

Christian Poveda, a prominent French filmmaker and photojournalist who spent years chronicling the lives of El Salvadorian gang members, has been found dead—possibly the victim of his subjects.

Poveda first came to El Salvador in the 1980's, to photograph the country's civil war for Time. He returned in the 1990's to document its gritty gang life, and in 2008 produced the acclaimed documentary La Vida Loca (Crazy Life).

To see Poveda's haunting portraits of El Salvadorian gang members, whom he called "victims of society," click here. For more of his work, click here.

First there was Cash for Clunkers. Now, there's...Cash for Karzai?

According to satirist Mark Fiore, America's love of alliteration doesn't end there. Watch his cartoon after the jump.

University researchers and lab workers receive on average $33,417 per year in payments from the drug and medical device industry; researchers who lead medical trials fare even better, earning more than $110,000 per year, more than a quarter of their total funding. This is according to a survey of more than 3000 life science faculty at 50 leading universities, published yesterday in the Journal of the American Medical Association.

Academics and medical researchers frequently claim that industry ties have no effect on their objectivity or results, but the report tells a different story: Researchers with ties to industry exhibited "a substantially greater portion of documented positive outcomes," the report notes. Other studies have made similar findings.

Basically, researchers backed by industry have little incentive to report negative results that could derail the profitable commercialization of their products. With university-corporate partnerships corrupting the ivory tower, the Center for Science in the Public Interest has called for the government to step in. Since the Vioxx scandal of 2005, it has pushed the Food and Drug Administration to conduct its own in-depth safety trials before drugs are approved. But that would mean creating a larger government health bureaucracy. And we all know how that's going.

H/T 60-Second Science Blog.

What Went Wrong?

Paul Krugman writes in the New York Times magazine this week about how economists got everything so wrong.  "As I see it," he says, "the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth."  Brad DeLong puts it this way:

The big lesson, I think, is that Wall Street is much less sophisticated than we imagined it was: Goldman Sachs simply did not do any of the due diligence it needed to do to understand the AIG-specific risks it was assuming, Citigroup was unable to manage its own derivatives book to understand what "liquidity put" risks it was assuming, and as for Bear Stearns, Lehman Brothers, Merrill Lynch — hoo boy...

Oh my, yes.  Wall Street bankers are smart, and rich, and experienced, and knowledgable — but they aren't sophisticated.  They are hairless apes a few gene mutations removed from the savannah who only think they're sophisticated.

So what to do?  Krugman thinks the Great Recession will affect macroeconomics about the same way that black body radiation1 affected physics: it will uproot it completely.  Markets are no longer plausibly efficient, neoclasscial economics plainly doesn't work, and market agents are far more irrational than anyone thinks:

So here’s what I think economists have to do. First, they have to face up to the inconvenient reality that financial markets fall far short of perfection, that they are subject to extraordinary delusions and the madness of crowds. Second, they have to admit — and this will be very hard for the people who giggled and whispered over Keynes — that Keynesian economics remains the best framework we have for making sense of recessions and depressions. Third, they’ll have to do their best to incorporate the realities of finance into macroeconomics.

Many economists will find these changes deeply disturbing. It will be a long time, if ever, before the new, more realistic approaches to finance and macroeconomics offer the same kind of clarity, completeness and sheer beauty that characterizes the full neoclassical approach. To some economists that will be a reason to cling to neoclassicism, despite its utter failure to make sense of the greatest economic crisis in three generations. This seems, however, like a good time to recall the words of H. L. Mencken: “There is always an easy solution to every human problem — neat, plausible and wrong.”

Sounds like a good time to become an economist, if you ask me.  There's work to be done.

1Sorry for the obscure reference, non-science folks.  Max Planck's solution to the black body radiation problem in 1900 was the starting point of quantum mechanics, which uprooted all of classical physics.  See here for more.