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The Great Recession

| Tue Dec. 2, 2008 8:02 AM EST

Who will we be after the economic meltdown? This is something I've been pondering a lot lately.

Maybe I'm overreacting, but if we don't all become our parents and grandparents—the ones who survived the Great Depression and used every tea bag thrice—the Visigoths are on the horizon.

Personally, I'm planning a major downsizing, even though I've been living far from large since having two kids. My parents were sharecroppers born in the 1920s Deep South, so I grew up wearing patched hand-me-downs, saving aluminum foil, and scraping the last dregs from every pot to have for lunch the next day. The amount of food my kids waste has always horrified me (all those bananas and PB&J's they were dying for, then took one bite of); since my oldest's birth, my diet has consisted mostly of scarfing down their leavings. Once upon a time, I knew this was laughable. Now I'm telling the whole world: For dinner last night, I had partially eaten raviolis and pre-gnawed garlic bread scraped from both their plates, plus their leftover apple juice (son) and milk (daughter). Pre-Bush, it was just a habit my schmancy friends chuckled at indulgently. Post-Bush, it's a civic duty, a matter of house and home.

So, I'm waiting, hoping, to find that we all become like my tight-fisted Great Aunt Pearl who grew up five to a bed, downwind of the outhouse, but owned four mortgage-free houses by the time I was born. She made an apple last for three days. If you asked her for a Christmas present, she'd glare and say, "You got the day off didn't you?"

HuffPo has inagurated a new column to suss out how, if, we're all adapting to this brave new world of utter insecurity. Maybe now America will become the place where we brag about how many we fit into how little space and not how big our flat screens are. Or maybe this is just a history we're doomed to keep repeating.

Super Senior

| Tue Dec. 2, 2008 2:03 AM EST

SUPER SENIOR....Looking for more financial geekery? Sure you are! The other day I asked Felix Salmon to explain super senior tranches for us, and today he obliges. It's too complicated to excerpt, but the nickel version is that it became yet another way for banks to increase their exposure to subprime loans by creating a synthetic version of the subprime market that was even bigger than the original. So instead of merely idiotically missing the housing bubble and losing lots of money on supposedly safe subprime-backed CDOs, they idiotically doubled (tripled? quadrupled? who knows) their bet by creating lots of synthetic subprime CDOs and then keeping them on their own books instead of selling them off. When the crash came, then, they lost money on both the real stuff and the synthetic stuff.

The full story is here. Enjoy!

Quantum of Solace

| Mon Dec. 1, 2008 11:47 PM EST

QUANTUM OF SOLACE....Moriarty tells us that he likes the new Daniel Craig version of James Bond:

I don't miss the fetishistic museum piece touches of the series at all. I don't miss Q branch. I don't miss the Moneypenny banter. I don't miss the breezy "let's have a chat" style M briefings. Honestly... there are 20-something Bond films in that style, and like most Bond films, I've seen every film more than once. Some of them, I've seen many times. That adds up. I think it's safe to say if you count individual viewings, I've seen something like 180 James Bond films in my lifetime. All with that same rhythm and style and the same cast sadly growing older while James Bond mysteriously hovers around the same age in one of the weirdest continuity choices in franchise history. Like I said, I don't miss the formula of it all. And frankly, if the Daniel Craig era never quite gets back to that, I'm perfectly happy. I wouldn't mind at all. They made those movies. Lots and lots and lots of those movies.

I get this. I really do. And yet....I have to ask: what is it that makes James Bond James Bond? At a minimum, two things. The first is the background: he works for MI6, his boss is named M, he gets cool gadgets from Q, etc. The second is his personality: he's dashing, debonair, fatally attractive to women, and never has a hair out of place. The problem with the Daniel Craig version of James Bond is that these things are mostly gone. And with those things gone, he's just a guy who works for MI6. His name might be James Bond, but he's not James Bond.

Now, I also happen to think Quantum of Solace wasn't a very good movie. The pace was so frenetic — chase, fight, chase, fight, chase, fight — that there was hardly any story that seemed worth following, and what story there was just wasn't very interesting. (Cornering the water supply of Bolivia? Seriously? And you thought the later Roger Moore movies were ridiculous?) Put that together with the new characterization — brooding, ruthless, intense, hair artistically out of place through half the movie — and I don't think anyone would so much as guess that this was a Bond film if the writers had changed the names around a bit. It would have been seen as just another Bourne Identity wannabe, and not a very good one.

Just my take, of course. But speaking of The Bourne Identity, here's another question: what's the deal with super-agents initialed JB? In a faceoff between James Bond, Jack Bauer, and Jason Bourne, who would win?

Via Ross Douthat.

Charge Your Cellphone By Talking

| Mon Dec. 1, 2008 8:26 PM EST

112px-Cell_phone_icon.svg.png Imagine a self-powered cellphone that charges by the pressure waves formed when you talk or walk. Researchers have found a certain type of piezoelectric material that can covert energy at a 100 percent increase when manufactured at a very small size (specifically 21 nanometers in thickness). This suggests that disturbances in the form of sound waves could be harvested for powering nanodevices and microdevices of the future.

Here's how it works. Piezoelectrics are (usually) crystal or ceramic materials that generate voltage when a form of mechanical stress is applied (think car cigarette lighters). It's an old technology now powering dance floors in Europe. Combine piezoelectrics with the strange, infinitessimally small nanoworld, where many materials change their properties dramatically (gold turns red, toxic, and liquid at room temperature; opaque materials like copper become transparent; insulators like silicon become conductors). Piezoelectric materials at 21-nm thick turn into power-harvesting titans.

The findings could have potentially profound effects for low-powered electronic devices like cell phones and laptops. Many contain nano-sized components (1 nanometer equals one-billionth of a meter). All need a lot of recharging. But pressure-senstitive, self-powered piezoelectrics could harness energy from the sound waves in your speech or your walk. Free of charge takes on a whole new meaning.

The research is published in Physical Review B, the scientific journal of the American Physical Society.

Julia Whitty is Mother Jones' environmental correspondent, lecturer, and 2008 winner of the PEN USA Literary Award, the Kiriyama Prize and the John Burroughs Medal.

Press Conference Follies

| Mon Dec. 1, 2008 7:20 PM EST


Watching the Obama rollout of his national security team from overseas — I'm in Europe, on my way to Afghanistan — I was struck by the inanity of most of the questions from my colleagues.

No kidding. Did any of you guys see it? Obama only took four or five questions, and nearly all of them were just plain dumb. (And yes, there is such a thing as a dumb question.) As usual, when TV cameras are on, reporters were drawn like moths to flame toward a certain Russertesque style of "tough" questioning that's completely content free and, in reality, childishly easy to sidestep for any competent politician. Klein again:

What's the point of raising the nasty things Obama and Clinton said about each other during the primaries? Did the reporter expect Obama to say, "Well, I still believe her resume is overblown, that's why I appointed her...oh, and by the way, she still thinks it's dumb to talk to the Iranians without preconditions."

Needless to say, Obama swatted this question away without raising a sweat. The result, as usual, was a missed opportunity to at least try to get some substantive news out of the announcement. What a bunch of nitwits.

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Just Say No to Drug Czars

| Mon Dec. 1, 2008 7:05 PM EST

Below is a guest blog entry by MoJo author Maia Szalavitz:

The "drug czar" position has never worked as intended. Originally proposed as a cabinet-level coordinator of drug policy by Joe Biden in the early 80's, it was a knee-jerk response to growing hysteria over widespread cocaine use. Ronald Reagan initially vetoed the idea as more bureaucracy, but eventually got on board, signing the relevant legislation in 1988.

The post's creation was part of a package of harmful laws that included the death penalty for "drug kingpins" and the notorious mandatory minimum sentences for crack cocaine that helped make an already racially-biased drug policy (.pdf) into a situation where one in ten young African American men are in prison.

Ever since, the job has been held by political operatives (William Bennett), police officers (Lee Brown) and generals (Barry McCaffrey). Never once has an academic drug policy expert, an MD, PhD, or other addiction researcher who has actually studied the subject served as drug czar. Will that change under Obama?


| Mon Dec. 1, 2008 6:07 PM EST

LEVERAGE....Matt Yglesias approvingly notes something that Hank Paulson said today:

We need to get to the place in this country where no institution is too big or too interconnected to fail.

Hmmm. Is this even possible? Trying to regulate leverage is hard enough, but trying to directly regulate size and "interconnectedness"? Do we really want to do that?

Take AIG, for example. Was the problem that AIG was too big? Not really. The vast bulk of its business, after all, was in ordinary state-regulated insurance lines that weren't causing any problems. Their famous CDS losses were concentrated exclusively in the AIG Financial Products division in London, which employed a grand total of 377 people. The problem wasn't so much that AIG itself was too big, but that they allowed a small division to run amok.

(It's true that there's an indirect sense in which AIG's size allowed them to get into so much trouble: namely that CDS buyers trusted AIG's AAA rating so much that they didn't require them to post collateral. But that's pretty indirect.)

Beyond that, there's another problem: the world needs big banks. Large multinational corporations just aren't going to do their banking at a small community credit union, after all. They want to deal with a big money center bank that has plenty of lending capacity, expertise in a wide variety of areas, and branches around the world. You just won't find that in a small bank.

And then there's the interconnectedness problem. Bear Stearns wasn't really all that big (a fraction the size of Citibank, for example), but the Fed rescued them because they were afraid of cascading counterparty risk if they failed. Later they let Lehman Brothers fail, and they discovered that their fears were well founded. But how do you regulate that?

The modern world is a big place, and there's no way to turn back the clock. Big corporations and big banks are here to stay, whether we like it or not. Frankly, Paulson sounds to me like he's trying to mouth some feel-good words that he knows will never be taken seriously but make him look like he's getting tough on Wall Street. I'm not buying it. For my money, I keep coming back to the same thing: leverage, leverage, leverage. The key is to regulate leverage to reasonable levels and to regulate it everywhere. If it walks like a bank and quacks like a bank, then it's a bank and its leverage ratios should be regulated. That's what will keep banks from being too big to fail in the future, and this time around we shouldn't allow Congress or the SEC to toss off a few bland platitudes and then do nothing serious about it. Leverage is where the action is.

Harvey Milk: Local Legend or National Figure?

| Mon Dec. 1, 2008 5:07 PM EST


Harvey Milk, the San Francisco board of supervisors member who was assassinated in 1978, never considered himself to be a local anything. Milk, who was born in New York and has a high school in Manhattan named for him, also lived in California, Florida, and Texas during his life. He held office in San Francisco for a mere 11 months, but he had dreams of becoming a mayor, a congressman, and after that, who knew? So it seems incongruous that California governor Arnold Schwarzenegger would decline to commemorate Harvey Milk's birthday by deeming the first openly gay man in the nation to hold public office a "local" figure.

The Milk bill, sponsored by California assemblyman Mark Leno, sought to make Milk's birthday (May 22) a statewide "day of significance." The bill itself is fairly low-impact: schools and government institutions would remain open for regular business. The bill would only "encourage" educational institutions to "conduct suitable commemorative exercises on that date." In September, Schwarzenegger vetoed the bill saying that Milk's "contributions should continue to be recognized at the local level."

Last week Gus Van Sant's film about Milk opened as a limited release. At the Castro Theatre in San Francisco, the line to enter the movie stretched for almost two blocks. According to the Hollywood Reporter, the movie earned a record-breaking $1.4 million in three-day box office, or $38,375 per location. The film's five-day Thanksgiving Weekend total gross was $1.9 million. Local level, indeed.

—Daniel Luzer

Image by flickr user Sam Spade

Bush Earns Medal for AIDS Efforts

| Mon Dec. 1, 2008 3:58 PM EST

Today, the twentieth anniversary of World AIDS Day, George W. Bush received the first "International Medal of P.E.A.C.E." for his contribution to world peace via HIV/AIDS funding. Starting in 2003, Bush's President's Emergency Plan For AIDS Relief (PEPFAR) gave $15 billion to international programs to fight HIV/AIDS, but the programs were widely panned for their focus on abstinence-before-marriage and be-faithful-to-one-partner education. The medal was awarded by Pastor Rick Warren's new P.E.A.C.E. organization, which honors "ordinary people empowered by God."

According to a 2006 year-long study by the International Consortium of Investigative Journalists, the ideological bent of PEPFAR made the programs ineffective in countries with high HIV rates like Uganda and South Africa. South Africa's HIV prevalence rate among adults has increased from 18.8% in 2005 to 25.5% today. And in Uganda, the infection rate nearly doubled between 2003, just after PEPFAR began implementing programs there, and 2005.