Kevin Drum - December 2008

Fairness Doctrine Update

| Tue Dec. 2, 2008 12:17 PM PST

FAIRNESS DOCTRINE UPDATE....The conservative Media Research Center, not content with the current state of the art in wacko conspiracy theorizing about the imminent return of the Fairness Doctrine, has decided to create a whole movement to oppose it. The newly created Free Speech Alliance is, they say, "a gathering of a multitude of organizations and hundreds of thousands of individual citizens" designed to prevent the revival of something that no one is working to revive. Alex Knapp explains what's up:

Given the current political climate, conservative wins in the next two years are going to be few and far between. So conservative lobbying organizations are going to need a lot of funds to get anything accomplished. But it's hard to raise money when it looks like you're losing all the time. The solution? Raise money by fighting a policy that nobody supports! The continued lack of a Fairness Doctrine is the MRC's ticket to "proving" that their being effective with their donations. All they have to do is harp in their fundraising letters that they're being "successful" in fighting the Fairness Doctrine, and voila! Instant comparative advantage!

That's pretty much the NRA strategy these days too, and it seems to work pretty well. Maybe it'll work out for the MRC too.

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Democrats at the Pentagon

| Tue Dec. 2, 2008 10:53 AM PST

DEMOCRATS AT THE PENTAGON....With Republican Bob Gates staying on as Secretary of Defense, does that mean that all his Republican deputies will be staying on too? Matt Yglesias says no:

To provide some background and context, you need to understand that a lot of these guys were never Gates' people anyway. Gates and Donald Rumsfeld had some pretty different ideas about a lot of stuff, but when Gates joined the Bush administration he wasn't given the opportunity to clean house, fire everyone, and bring his own people on board. Since he's been in office for a couple of years there's been some turnover since that time, but still a guy like [Eric] Edelman has always been a Cheney/Rumsfeld guy who happens to be serving as one of Gates' top deputies, not a Gates guy who Gates is desperate to hang on to. In fact, I think we can be fairly certain that Gates' views are closer to those of a moderate Democrat like [Michèle] Flournoy than to Edelman. So whether or not to get rid of people probably wasn't a bone of contention between Gates and the transition. What needs to be negotiated isn't whether or not some of these folks need to go, it's who to replace them with.

I doubt that Obama has asked for a complete purge of the upper ranks of the Pentagon, but at the same time it's almost inconceivable that his conversations with Gates didn't make clear that a whole bunch of Democrats ought to move into senior positions pretty quickly. Gates, not being an idiot, surely understands this as the way the world works, and is OK with it.

Counterinsurgency

| Tue Dec. 2, 2008 10:37 AM PST

COUNTERINSURGENCY....Over at the Washington Independent, Spencer Ackerman referees an argument between Jason Brownlee and Andrew Exum about whether the Army's new focus on counterinsurgency is inherently imperialistic. Long story short, Brownlee says it is, Exum says COIN is just a tool and it's only imperialistic if Congress and the president use it for imperialistic ends, and Ackerman agrees with Exum. It's worth a quick read if you're interested in this kind of thing.

But as long as we're on the subject, I'll bring up a different concern, one that I'm just going to throw on the table since I don't really have the chops to write anything definitive about it. It's this: even now, after years of hearing from experts about how hard counterinsurgency is, do we really understand how hard it is? Imperialistic or not, my fear is that the success of the surge in Iraq, which was in large part coincidental, and the growing influence of David Petraeus and his proteges, has convinced policymakers that counterinsurgency is rapidly becoming a standard part of our military kit bag, one that we can count on in the future.

But I doubt that. It's still the case that in the entire history of the world since WWII, big power counterinsurgency has virtually no success stories. Malaysia is the famous exception, but the circumstances there were unusual, it took a very long time anyway, and it's almost certainly not repeatable. Likewise, although Petraeus's success in Iraq is unquestionably due partly to his adoption of superior tactics during the surge, that was only one of the Five S's that allowed his counterinsurgency doctrine to work. Without taking anything away from him, this just isn't an indication that COIN is any easier to pull off than it ever has been. It certainly doesn't seem to be making much headway in Afghanistan.

So that's that. Maybe some milbloggers want to weigh in on this. Are we becoming a little too excited about the future possibilities of counterinsurgency? Even if we take it seriously and get a lot better at it than we are now, is it ever something that's likely to be successful more than very, very occasionally? Comments?

Eric Holder

| Tue Dec. 2, 2008 9:57 AM PST

ERIC HOLDER...Richard Cohen is unhappy with Eric Holder's role in the Marc Rich pardon, and Ezra Klein agrees with him:

This stuff was no great secret. The Obama camp weighed these qualms and dismissed them. Which suggests that Holder's tendency to be a company man was not considered a negative. I'm not one who thinks the attorney general should be some sort of lone renegade within the administration, but he should feel empowered to aggressively push back against abuses of presidential power. Holder's history offers little evidence of that sort of temperament.

I don't have any special brief for Holder one way or the other, but I guess I'd look at this differently. Holder's role in the Rich pardon is obviously disturbing, as he himself has admitted, and there's no doubt it will get raised in his confirmation hearings. But the real question is whether this was an isolated mistake or evidence of a pattern, and so far I've seen no evidence to suggest the latter. If you think his error in the Rich case was so egregious that it ought to disqualify him forever from government service, I guess that's defensible, but it's hard for me to read things that way. If we barred from high office every person who failed even once to stand up to his boss, we'd have a pretty small pool of candidates to choose from.

In fact, not to get too contrarian here, but if Holder learned a lesson from the Rich pardon — and his own response to it suggests he did — it might push him in the direction of being more independent than he otherwise might be. It could end up being a blessing in disguise.

Mumbai Update

| Tue Dec. 2, 2008 9:04 AM PST

MUMBAI UPDATE....India ups the ante in its relationship with Pakistan:

With tensions high between Islamabad and New Delhi after the terrorist attacks in Mumbai, the Indian foreign minister said Tuesday his country had demanded that Pakistan arrest and hand over about 20 people wanted under Indian law as fugitives.

....The demand was made when India summoned Pakistan's ambassador on Monday evening and told him that Pakistanis were responsible for the terrorist attacks here last week and must be punished.

This isn't surprising, I guess, since (so far) the evidence suggests that Pakistani terrorists were indeed behind the Mumbai attacks. Offhand, though, I'd say it's unlikely that Pakistan agrees to India's demands, which means tensions over Kashmir will continue to mount. However, considering that both nations are now nuclear powers and that the United States has obvious interests in terrorism in the region, perhaps that means they might both be a little more amenable to some outside diplomacy? Time reports on Hillary Clinton's transition into the State Department:

A key player to watch in the transition is Richard Holbrooke, one of Clinton's closest foreign policy advisers during the primaries and a potential top player in Obama's diplomacy now that Clinton is headed for State. Holbrooke is a career diplomat, known for being smart and effective but also hard to control and outspoken, qualities that haven't always endeared him to certain peers in the party....Holbrooke has been talked about for top troubleshooting jobs like special envoy to the Middle East or South Asia.

This is just a flyer, but it's hard not to wonder if Holbrooke might be able to do some good here. Stay tuned.

Super Senior

| Tue Dec. 2, 2008 12:03 AM PST

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!

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Quantum of Solace

| Mon Dec. 1, 2008 9:47 PM PST

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.

Press Conference Follies

| Mon Dec. 1, 2008 5:20 PM PST

PRESS CONFERENCE FOLLIES....Joe Klein:

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.

Leverage

| Mon Dec. 1, 2008 4:07 PM PST

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.

Blowback

| Mon Dec. 1, 2008 11:57 AM PST

BLOWBACK....Juan Cole speculates about who was behind the Mumbai terrorist attacks:

When the Soviets withdrew in 1988-1989 from Afghanistan and the Mujahideen took over, the Pakistani military lost control of its northern neighbor. It therefore funded and promoted the Taliban (expatriate Afghan young men who had been through Deobandi seminaries in northern Pakistan) from 1994, enabling them to take over Afghanistan. The Taliban ran terrorist training camps, at which the Sipah-e Sahaba and the Lashkar-e Tayiba trained for missions in Kashmir.

....The cell that hit Mumbai was probably a rogue splinter group. They completely disregarded the old Lashkar-e Tayiba concentration on hitting only Indian troops in Kashmir, targeting civilians instead. It is very unlikely that anyone in the Pakistani military put them up specifically to this Mumbai operation. This attack was much more likely to be blowback, when a covert operation produces unexpected consequences or agents that were previously reliable go rogue.

....If the Pakistani government does not give up this covert terrorist campaign in Kashmir and does not stop coddling the radical vigilantes who go off to fight there, South Asian terrorism will grow as a problem and very possibly provoke the world's first nuclear war (possible death toll: 20 million).

Read the whole thing for more background and history.