In an interview with Peter Baker, Bill Clinton says that although he regrets not regulating derivatives more strictly, he doesn't think that repealing the Glass-Steagall Act and allowing commercial banks to merge with investment banks was a big cause of our financial meltdown:

On the Glass-Steagall, I’ve really thought about that because No. 1, nonbank banking was already a major part of American life at that time. Letting banks take investment positions I don’t think had much to do with this meltdown. And the more diversified institutions in general were better able to handle what happened....I believe if you look at the blurring of the lines which already existed before that bill was signed — the bill arguably gave us a framework, at least, for which this process, which was happening anyway, could be regulated. So I don’t think that’s such a good criticism.

I think actually, if you want to make a criticism on that, it would be an indirect one; you could say that the signing of that legislation sped up what was happening anyway and maybe led some of these institutions to be bigger than they otherwise would have been and the very bigness of some of these groups caused some of this problem because the bigger something is and the newer it is the harder it is to manage.

I think this is roughly right.  And frankly, even the "indirect" criticism that repeal of Glass-Steagall produced a glut of banks too big to fail seems a little hard to swallow.  After all, even if Citi and Bank of America had remained purely commercial banks they still would have been too big to fail.  Hell, Bear Stearns, a modest sized investment bank, was too big to fail.  In the event, I doubt very much that Glass-Steagall had much if anything to do with our banking disaster.

On the other hand, I've also been thinking a lot about the financial meltdown of the past two years and wondering how much of what we think we know is really true anyway.  Structured finance, for example, has gotten a lot of blame for the crisis, but Dean Baker argues persuasively that derivatives and financial engineering didn't really have much to do with it.  It was purely and simply the result of a housing bubble, and the size of the collapse and the ensuing recession are pretty much what years of academic research predicts given the size of the price runup.  You just don't need anything more to explain it.

In a similar vein, Jim Hamilton has suggested that if you model the 2007-08 runup in oil prices you get pretty much the recession that we got.  And James Surowiecki points out that the IMF's estimate of capital shortages in the American banking system isn't actually as large as a lot of us have been thinking — and the market seems to agree.  Bank stocks have been rising since early March, and after the stress test results were announced banks started raising startling amounts of private capital almost immediately.

What else?  John Hempton has argued that the FDIC's takeover of Washington Mutual, which was responsible for at least part of the flight of private capital from the banking sector, was an act of unwarranted panic.  Recent events suggest he was right.  Likewise, it turns out in retrospect that the collapse of Lehman Brothers wasn't quite the catastrophe we thought it was at the time.  Rather, it was panic in the wholesale funding markets caused by Reserve Prime breaking the buck — an event related to the Lehman collapse but by no means the same thing.

None of this is to downplay what happened.  Fannie and Freddie and Bear and Lehman and AIG really did all collapse.  The Fed really was forced to intervene in financial markets in unprecedented ways.  The banking system really did require a lot of recapitalization.  Exports really have dropped like a stone.  The global economy really is shrinking for the first time since the Depression and trade imbalances remain stubbornly high.

But here's the weird thing.  We're at a point where one of two things will happen.  Either we're close to bottoming out, as many people seem to think, which will mean that the pessimists weren't really right.  The biggest asset bubble in the past half century will have caused a bad recession but nothing worse.  Alternatively, the pessimists are right and this is just a short breather.  The worst is yet to come as home loans continue to reset, trade balances stay out of whack, consumption remains sluggish, and the world economy remains sensitive to further disasters — disasters that are almost certain to come sooner or later.

So what's my point?  I'm rambling and I might not even have one.  Except for this: I'm not sure that even the people who have been right about all this stuff have been right.  I'm not sure that anyone has been right.  Something doesn't add up, and I can't quite figure out what it is.  But who knows?  Maybe I'm just doing the equivalent of adding in decimal when I should be adding in octal.  Or something.  All I can say is, things haven't unfolded the way I've expected — or the way a lot of other people have expected — and I'm not sure what that means.  Either the worst has been averted or the worst is yet to come.  You can vote in comments.

In a world where post-grunge bands sell Snuggies, people prance around the beach in Wearable Towels, and mop up battered faces with ShamWows, we have to ask: Where will all these products be when our fickle-consumer preferences take a turn? You don't have to be a Freegan to come up with the answer.

3.5 Floppy Disc

Then: 1998 was the heyday of the cheerfully colored floppy disk. More than 2 billion were sold worldwide.

Now: External drives and CDs have usurped the 3.5. In 2007, PC World stopped selling the disks, and now the only place you can find a 3.5 drive is on Mother Jones intern computers.

Neither Gone Nor Forgotten: Turn boxes of old disks into handbags, pen holders, coasters, or spacey, Cubist artwork.

Pagers

Then: Invented in 1949 for the New York City Jewish Hospital, beepers didn't achieve popularity until 1974 with the release of Motorola's Pageboy. Popularized by doctors, drug dealers, and pimps, 61 million pagers were beeping in the U.S. in 1994.

Now: The cellular telephone killed the pager. In 2008, four billion cell phones were in use worldwide, connecting more than 60% of the world population to American Idol ringtones and creating fodder for the Texts From Last Night.

Neither Gone Nor Forgotten: Beepers still buzz for emergency personnel and doctors . In Britian, pages are popular with "twitchers," who pay for up-to-the-minute tips on where to spot rare birds.

 

 

 

 

Nearly a year ago (June 3, 2008) in Minneapolis Denver, Illinois junior senator Barack Obama captured the Democratic nomination for president of the United States of America. Obama celebrated the event by bumping knuckles with his wife, a brief physical gesture whose public discussion would quickly become overwhelming. Well, it's time to celebrate that gesture again: next Wednesday, June 3, will be National Fist Bump Day. According to organizers of the event:

A group of like-minded people have gotten together to commemorate Obama's grand gesture, but also to take the fist bump to a higher level, one above partisan politics and social divides. For one day we are calling for Americans, and perhaps even all global citizens, to put aside their differences -- be they class, race, religion or values -- and show their respect with a little bump.

 

Recently, Harvard students protested the university's decision to stop offering anonymous HIV testing. According to the Harvard Crimson, the students staged their demonstration with  signs bearing slogans like "My right to privacy includes my right to anonymity."

But the signs were Plan B. Plan A would have been really cool:

Protestors had originally planned to request HIV tests en masse in order to demonstrate the demand for anonymous testing. But a majority of protesters were turned away by UHS because they did not have an appointment or an actual medical ailment, according to Craig B. Colbeck, a Graduate School of Arts and Sciences student.

It's a great idea—and we know today's students activists have plenty more where that one came from. MoJo, Campus Progress, and WireTap would like to hear about all feats of student activism (the more creative the better) from the past school year in time for the Hellraisers, our first annual student activism awards.

Here's how it works: You tell us about your favorite activism antics. Selected nominees will be featured in the September/October 2009 issue of Mother Jones.

Anyone can nominate any current student activists (and we're not just talking college here! High schoolers, grad students, kindergartners—all okay).

Nominating is quick and easy. Do it here.

On October 2, 1998, the full Senate voted on Sonia Sotomayor's nomination to the Second Circuit Court of Appeals and confirmed her nomination 67-29; all of the nay votes came from Republicans. That's not much of a surprise.

But just a few months earlier, in March 1998, the Senate Judiciary Committee voted 16-2 in favor of Sotomayor's nomination, with only Jon Kyl and John Ashcroft, both Republicans, voting against her. The Republican committee members who voted for Sotomayor included Strom Thurmond, Orrin Hatch and Jeff Sessions, but each of whom flipped his vote when Sotomayor's nomination went to the full Senate. (And when President George H.W. Bush nominated her for an open distict court spot in 1992, the Judiciary Committee—then chaired by Joe Biden—and the full Senate unanimously approved her nomination.)

So what happened between March and October 1998?

Republican senators have been blocking Judge Sotomayor's elevation to the appeals court for a highly unusual reason: to make her less likely to be picked by Mr. Clinton for the Supreme Court, senior Republican Congressional aides said in interviews.

[...]

Senate Republican staff aides said Trent Lott of Mississippi, the majority leader, has agreed to hold up a vote on the nomination as part of an elaborate political calculus; if she were easily confirmed to the appeals court, they said, that would put her in a position to be named to the Supreme Court. And Senate Republicans think that they would then have a difficult time opposing a Hispanic woman who had just been confirmed by the full Senate.

In other words, politics happened.

The Financial Times reports environmentalists and other politicos are up in arms over French President Nicolas Sarkozy's desire to appoint geochemist Claude Allegre—a denier of man-made climate change who called Al Gore's Nobel Prize a "political gimmick"—to France's new "super-ministry" of industry and innovation:

Mr Sarkozy wants to bring Mr Allègre, 72, a freethinking, former socialist education minister, into the government in a reshuffle after next month's European parliamentary elections. The president appears to reckon that appointing someone from outside his own centre-right party will help to counter perceptions that he is a polarising, sectarian leader who decides everything himself. Several portfolios are already held by figures from the left and centre.

Alain Juppé, the former centre-right prime minister, said the appointment would send a "terribly bad signal" ahead of international negotiations to secure a successor to the Kyoto treaty on cuts to carbon emissions.

Emphasis mine. I can understand Sarkozy wanting to look like he doesn't eschew a range of viewpoints, but this is a bit like appointing Richard Dawkins to an office of faith-based initiatives. It also doesn't help that Juppé, a member of Sarkozy's own party, thinks it's a stupid way to present yourself as an open-minded leader.

Arthur Dong's documentary on depictions of Chinese people onscreen, “Hollywood Chinese,” will be on PBS tonight as part of the American Masters series. I saw this film last year when it made the festival circuit and enjoyed it, despite having little familiarity with Chinese culture. It had some hilariously outdated film moments, everything from Fu Manchu 'staches to John Wayne in yellowface, plus celebs like Amy Tan and Ang Lee talking about how their heritage has impacted them personally and professionally in Hollywood. Definitely worth a watch, or at least a DVR. You can read my interview with Dong here.

Conservative blogger and columnist Rod Dreher was initially bothered by Supreme Court nominee Sonia Sotomayor's comment that she "would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn't lived that life."

Then he read the context.

Dreher and other conservatives had been aghast at those 30-odd words ever since Stuart Taylor, Jr. pointed to them in a National Journal column over the weekend. At issue is the accusation that Sotomayor is, in Rush Limbaugh's words, "a reverse racist" who thinks that Latina judges have some special insight that they can and should use that makes them better than white male judges.

Sotomayor, who said those words in a speech at the University of California, Berkeley, in 2001, was actually making a very different point. Sotomayor said that, "Whether born from experience or inherent physiological or cultural differences... our gender and national origins may and will make a difference in our judging." She hoped that, in cases about "race and sex discrimination," a wise Latina's background and experiences might help her produce a better result than a white man who "hasn't lived that life." In context, it's clear Sotomayor is simply acknowledging that personal experiences inevitably affect judges' outlooks and hoping that they affect judges' decisions for the better. Having read the whole speech, Dreher explains what the broader point was:

Bob Somerby reads two front-page profiles of Sonia Sotomayor and reports back:

In the Times, Sotomayor is a person who is also Hispanic. In the Post’s formal profile, Sotomayor’s ethnicity is the headlined focus. Perhaps unsurprisingly, Goldstein’s focus on ethnicity features a peculiarly trivial, unflattering selection of anecdotes and recollections.

Meanwhile, via Steve Benen, I see that immigration zealot Mark Krikorian is fighting the good fight against pronouncing her name correctly:

So, are we supposed to use the Spanish pronunciation, so-toe-my-OR, or the natural English pronunciation, SO-tuh-my-er, like Niedermeyer? [Following up the next day:] Deferring to people's own pronunciation of their names should obviously be our first inclination, but there ought to be limits. Putting the emphasis on the final syllable of Sotomayor is unnatural in English [...] and insisting on an unnatural pronunciation is something we shouldn't be giving in to.

You know, I'm lousy at pronoucing non-English words.  If you want a nicely rolled R, look elsewhere.  But so-toe-my-OR?  Give me a break.  A five-year-old can do that.  Just like we all got used to pronouncing the president's name ba-ROCK.

This is going to be a long couple of months.

Alex Berenson is a New York Times reporter by day, bestselling spy novelist by night. Earlier this year, he published his third novel, The Silent Man, featuring his super spy John Wells. I came across the book at the library a couple of weeks ago and discovered that not only is it pretty good, but it's the rare spy novel for media junkies. At one point in the book, Wells assumes the cover of a Lebanese businessman/freedom fighter. To get into character, he tans at Solar Planet, dyes his hair and ODs on fried chicken. Fat and swarthy, Wells procures a fake passport to travel to Moscow to avenge an attack that nearly killed his girlfriend. His alias? Glenn Kramon, which also happens to be the name of Berenson's boss and managing editor of the Times.

I asked the real Kramon whether he knew Berenson had inserted him into the novel. Turns out he's a big fan of Berenson's novels and has read all three. When he first discovered his name in the most recent, Kramon says he "thanked Alex for not making me the villain." Kramon's is not the first name Berenson has appropriated from his Times colleagues. Kramon says his favorite is that of the book's hapless American ambassador to Russia, Walt Purdy, whose name he suspects is a hybrid of investigative reporter Walt Bogdanich and his editor, Matt Purdy. Naturally, the Times names had me wondering who else had popped up in Berenson's novels. Perhaps there's a Maureen Dowd cameo? Alas, Berenson says no. He only poaches names from people he knows, and he's never met Dowd. "I have a hunch that Wells wouldn't like her much, though," he says. "She's not his type."