New Adventures in Book Blurbing

Via Twitter, William Kramer points out something funny. Here's a review of Anat Admati and Martin Hellwig's The Bankers' New Clothes excerpted by Amazon:

Maybe regulators will finally listen to Admati and Hellwig after the next financial crisis. (Kevin Drum

I'm perfectly happy for this snippet to be memorialized, since I know what Admati and Hellwig said and I happen to agree with them. Still, that sentence was written based solely on various internet conversations that were making the rounds a few weeks ago. As my post about their book said, "I haven't read it." Generally speaking, it's probably best for publishers' blurbs to be restricted to people who have at least pretended to read the work in question, no?

Greg Sargent reads the latest polls on same-sex marriage:

There is a sharp generational divide among Republicans on the issue. Overall, 56 percent of Republicans oppose legal gay marriage. But I asked the CBS polling team for a breakdown by age, and the result was that among Republicans under 50, a plurality of 49 percent supports legalizing gay marriage, versus only 46 percent who oppose it.

Republican leaders are painfully aware of this, I'm sure. They know they're losing the gay marriage battle, even among their own partisans. The only question is how to make a passably graceful U-turn without pissing off their base of angry old tea partiers too badly. It's going to be a challenge.

Sorry for the brief radio silence over the past couple of hours. I've been in a state of minor meltdown.

Here's the story. About a month ago I went looking for a draft of a magazine article I was writing and discovered it was gone. In fact, my entire folder of Word documents was gone. I blamed it on Windows, restored from backup, and forgot about it.

Today, I went looking for an image, and eventually discovered that several thousand files were missing from my folder of images. After a bit of sleuthing, I discovered that other files and folders were gone too. The culprit, it turned out, was SugarSync, a program I use to keep all my files synced between computers. Last Friday, after a long period of nonuse, I opened up my notebook computer and apparently SugarSync went nuts. At 4:45 it began deleting a seemingly random bunch of folders. At 4:55 it went to work on my images folder and deleted 4,661 images. At 5:55 it stopped.

I've restored them all. However, after a bit more looking around I discovered a couple of old folders missing. Apparently they were deleted so long ago that they're no longer on any of my backups. I just didn't notice it. And since all of my computers are synced, they've been deleted everywhere.

As you can imagine, there was minor panic involved in all of this, and I've been frantically looking around, trying to figure what other stuff might be missing. I also turned off SugarSync, but just discovered that it had turned itself back on while I was out of the house getting a blood test.

No permanent harm has been done. The old folders have stuff I don't need, and the newer ones were all backed up. But obviously I need to find a new syncing program. I certainly don't trust SugarSync anymore. Anyone have any suggestions? Does Dropbox allow you to sync existing folders, or does it still require you to put everything in its special Dropbox folder?

Prop 8 Case May Be Tossed Out on a Technicality

TPM's Sahil Kapur tweets about today's Supreme Court hearings over Proposition 8, the California initiative that bans gay marriage:

Just left Prop 8 case. Justices were very skeptical that the case even has standing. Flirted with throwing it out....There was a spirited debate on the merits as well. If they rule, it's too close to call. Kennedy divided, Roberts leaning for Prop 8....Roberts, Alito seemed especially eager to throw out Prop 8 case. Kennedy, Breyer, Sotomayor, Ginsburg also skeptical. Scalia wanted to rule.

I hate this. Technically, there's an argument to be made that backers of Prop 8 don't have proper standing to sue in this case. And it's easy to say that this would be a fine example of conservatives being hoist by their own petard, since, as Erwin Chemerinsky has pointed out, they're the ones who have been so eager in the past to deny standing in cases involving civil rights, environmental protection, and the separation of church and state.

But this is a case in which lack of standing is purely artificial. The state of California, which would normally be on the hook to defend its own laws, has declined to do so. This decision means that a properly enacted constitutional amendment literally can't be defended in court, and that's just wrong. Like it or not, half the state voted for Prop 8, and one way or another, their interests deserve their day in court.

This is hardly the first case like this. National security cases get tossed out all the time on Catch-22-like grounds. But that doesn't mean I have to like it. Someone should have standing to defend Prop 8, and the case should be decided on its merits. The law may be an ass, but it should at least try not to be a coward.

Brad Plumer points out today that nothing bad seems to have happened after the payroll tax holiday ended on January 1. Why not?

One possibility is that many workers aren't even aware that their taxes have risen yet. A new survey from finds that just 30 percent of Americans have cut back on spending as a result of the payroll tax hike. A full 48 percent of Americans didn't notice the change at all.

I'm skeptical. If economics means anything at all, it shouldn't really matter if consumers "notice" any specific aspect of their financial lives. All that should matter is the size and distribution of aggregate income. If that goes down, it should affect the economy.

At the same time, I don't think a fall in income is necessarily supposed to affect the economy instantly. Maybe we just need to give this a few months to kick in. There might be no need to invent a mystery here.

Also, I'd point out that people are notoriously bad at answering survey questions like this. I'd really like to see this question asked in a non-leading way, such as: "Did anything happen, good or bad, to your finances at the beginning of the year? If yes, what?" Then see how many people fail to mention that their payroll taxes went up. I'll bet it would be a lot higher than 48 percent.

Last week, Cyprus begged Russia for help with its banking failure. They got nothing. Dan Drezner is intrigued:

This is not the first time a weak Western ally has sought out either China or Russia as a way of avoiding onerous financial strictures. Iceland begged Russia for financial assistance during the depths of the 2008 financial crisis. At one point, the Icelandic President allegedly offered Russia the use of Keflavík Air Base. This possibility caused some mild consternation in Foggy Bottom. In the end, the Russians said they didn't need the base and proffered only a fraction of what Iceland wanted, leaving Reykjavik little choice but to cut a deal with the IMF.

One can tell a similar story with Pakistan and China. During the fall of 2008 Islamabad was facing a balance of payments crisis and sought out China as a benefactor. In the end, China was unwilling to offer Pakistan enough money to substitute for IMF support, forcing the Pakistani government to take out an IMF loan.

Why are Russia and China apparently so uninterested in building an empire? Dan offers three possibilities, and I'd pick Door #3:

Outside their own neighborhood, neither Russia nor China is really revisionist. As great powers, Moscow and Beijing will do what they gotta do in their near abroads. Globally, however, they have neither the ambition nor the interest in altering the current system of "good enough" global governance. After all, the current rules of the global game have benefited both of them pretty well over the past decade or so.

In the postwar era, this has pretty much been true all along. The Soviet Union picked up a few nonlocal client states during the Cold War, but mostly did so only because of its competition with America. Historically, it's always been more interested in controlling a buffer zone around its own territory than in truly becoming a global influence. Ditto for China.

Now, it's also true that neither country has ever really had the capacity to project power abroad in any great amount. In China's case, that could change. Still, they've got plenty of internal problems, plenty of regional problems, and the ability to see that a worldwide string of client states hasn't really helped the United States much. Dan is right: the current rules have worked out pretty well for them. Why fix something that isn't broken?

David Brooks writes today that violent crime has dropped tremendously over the past couple of decades despite the fact that it's gotten easier and easier to buy a gun. So maybe we should focus on something other than guns:

Now we are in the middle of another debate about violence. If we lived in a purely rational society, this debate would have started with a series of questions: What explains the tremendous drop in violence? How can we build on recent efforts to bring the murder rate even lower? These general questions would have led to a series of more specific questions about police procedures, probably the most direct way to prevent shootings.

Call on me! I know the answer! Please, please, please.....

For a longer and more comprehensive take on this, I recommend Mark Kleiman's piece on crime and punishment in the current issue of Democracy. It's well worth a few minutes of your time.

Ezra Klein writes about a small implant that monitors your bloodstream and automatically alerts paramedics when you're about to have a heart attack:

This particular device might prove, for one reason or another, to be bunk. Many seemingly magical inventions do. But it's not alone....And every major health device company knows there's billions and billions to be made here.

Consider how dramatically these devices will change medicine. Right now, the medical industry is fundamentally reactive. Something goes wrong, and we go to them to fix it. This will make medicine fundamentally proactive. They will see something going wrong, and they will intervene to stop it. It's like "Minority Report" for health care.

This is why I don't put much stock in projections of health-care spending that run 30 or 50 or 75 years into the future. Will biometric devices in constant communication with the cloud make medicine more or less expensive? Will driverless cars prolong life in a way that saves money or costs it? Will the advances in preventive technology make medicine so effective that we're glad to devote 40 percent of gross domestic product to it? Who knows?

I agree, and something similar to this needles me periodically whenever my mind drifts into dorm room bull session mode.1 You see, I believe that we're only a few decades away from true artificial intelligence. I might be wrong about this, but put that aside for the moment. The point is that I believe it. And needless to say, that will literally change everything. If AI is ubiquitous by 2040 or so, nearly every long-term problem we face right now—medical inflation, declining employment, Social Security financing, returns to education, global warming, etc. etc.—either goes away or is radically transformed in ways we can't even imagine.

So if I believe in medium-term AI, why do I spend any of my time worrying about this long-term stuff? The only things really worth worrying about are (a) how to adapt the economy equitably to an AI world, and (b) issues that are important but might not be affected much by AI—global thermonuclear war, for example. Everything else is just noise.

And yet—I do believe in AI, but I still worry about long-term economic issues like healthcare costs and banking stability as well. Maybe this is just an insurance policy: I believe we should keep working on the other stuff just in case the whole AI thing doesn't pan out. Or it could be pure empathy for the near term: we should keep working on the other stuff because it affects people over the next few years, and that's important even if ultimately it won't change anything.

Both of those are part of the answer, but they don't feel like all of it. There's more to it. In reality, I suspect a lot of it is just pure habit. I worry about the stuff I worry about because that's what I've always worried about. Besides, there's really nothing much I can do one way or another about artificial intelligence, so I might as well occupy myself with other things. Anyone got a problem with that?

1This is a hint not to take this post too seriously.

Now that big depositors in Cyprus's banks have been told they're going to lose a huge chunk of their money, what's next? Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of eurozone finance ministers, says this might be the right template for dealing with future bank failures:

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he said

...."If we want to have a healthy, sound financial sector, the only way is to say, 'Look, there where you take on the risks, you must deal with them, and if you can't deal with them, then you shouldn't have taken them on,'" he said.

In one sense, Dijsselbloem is just saying the obvious: uninsured deposits are uninsured deposits. If a bank fails, you might lose some or all of the money you've deposited there.

In a way, this is a laudable reminder that you should be careful about where you put your money. On the other hand, telling everyone that, hey, what happened in Cyprus might happen again in Spain, or Portugal, or Greece, seems almost deliberately designed to create a huge bank run. At least, that's how everyone took it. As a result, Dijsselbloem quickly released a very brief statement: "Macro-economic adjustment programmes are tailor-made to the situation of the country concerned and no models or templates are used."

We'll see if that helps. The problem is that Dijsselbloem pretty obviously meant what he said, and no one has rushed out to say otherwise. What's more, as we all know, banking crises and sovereign debt crises are inextricably connected. Bank runs from big depositors would almost certainly lead to further sovereign debt crises, which obviously couldn't be solved by going after big bank deposits. At its heart, then, this is just a reminder that Europe's problems are far from over because it has so far refused to deal with its core issues of capital flows in a fixed exchange rate area. There's no telling which trouble spot will erupt next—there are too many to choose from—but erupt it will. One of these days, Angela Merkel is going to have to level with her constituents about exactly what this means.

Dave Weigel points out this morning an interesting change in public opinion. A year ago, 65 percent of the public approved of drone strikes against American citizens overseas. Today, it's 41 percent.

Some of this might be due to a difference in question wording, but that can't account for all of it. It's too big a shift. The obvious conclusion is that public support has dwindled thanks to Rand Paul's filibuster and related questions over John Brennan's nomination to head the CIA.

If that's the case, then you'd expect support to have dropped much more dramatically among Republicans than Democrats. Unfortunately, no internals are available for last year's poll, so we can't tell. Maybe I should ask the Washington Post's polling director if they can make those numbers available. I'd be curious to see how this has really played out.

UPDATE: I misread the Post poll from a year ago. The net result is that 65 percent of the public approved of drone strikes on American citizens, not 79 percent. I've corrected the text. I'll post another update if I get hold of poll internals showing how opinion has shifted among Democrats and Republicans.

UPDATE 2: Peyton Craighill of the Post has kindly sent along the internals of last year's poll. Here's how the net approval for drone strikes against American citizens has changed:

                2012    Today    Net Change
Democrats       58%      41%        -17
Republicans     76%      50%        -26
Independents    65%      35%        -30

There's less of a difference here than I would have guessed. Republican support did indeed drop more than Democratic support, but not by a huge amount. And Independent support dropped by more than either.

At a guess, I'd say this suggests that maybe half the drop is based on a genuine reduction in support over the past year for drone strikes on U.S. citizens, while the other half is a semi-partisan reaction to Rand Paul. But that's just a wild guess.