A Second Look at WikiLeaks

The most common reaction to the WikiLeaks release of 92,000 classified cables and other documents from Afghanistan has been a collective yawn: they don't really tell us anything new, so it's not much of a story. Glenn Greenwald, among others, has been pushing back against this. Here's a sampling of his recent Twitter posts:

So this is all boring old news that tells us nothing - or WikiLeaks has Endangered Us All & the source should be killed. Can someone choose

These are the kinds of stories the WikiLeaks documents enable - decide for yourself if they're worthwhile: http://is.gd/dLcp5

James Fallows on the "nothing-new-here" dismissals of WikiLeaks from war supporters: http://is.gd/dMn1I

Old news - nothing new - boring, yawn, move along: http://is.gd/dMHIt

When I first read the Guardian and New York Times writeups about the WikiLeaks release, I mostly yawned too. But I pretty quickly felt kind of guilty about that. Not because I was wrong in a technical sense — most of the WikiLeaks stuff really has been common knowledge for a long time — but because everyone was saying it. And as my colleague David Corn points out, that really doesn't seem right. Even if the news is old, the leaked documents do provide a different look at familiar events and are likely to capture public attention in a way that the original news reports didn't. That's pretty worthwhile. Plus, as Glenn points out in the fourth tweet above, some of the leaked documents really do seem to be newsworthy in their own right:

Buried among the 92,000 classified documents released Sunday by WikiLeaks is some intriguing evidence that the U.S. military in Afghanistan has adopted a PR strategy that got it into trouble in Iraq: paying local media outlets to run friendly stories.

....In one of the WikiLeaks documents, a PRT [provincial reconstruction team] member reports delivering "12 hours of PSYOP Radio Content Programming" to two radio stations in the province of Ghazni in 2008, and paying one of them "$3,900 for Radio Content Programming air time for the month of October"....Two other messages seem to show U.S. soldiers referring to local Afghan media as extensions of their own units rather than independent reporters.

I don't have a lot more to add to this. I guess this is just sort of a weasely semi-apology for semi-dismissing the WikiLeaks documents. I really hate the idea of enabling a conventional wisdom that suggests there's nothing to worry our little heads over here. The WikiLeaks dump isn't Pentagon Papers II because it doesn't show the same level of official lying that the original Pentagon Papers did, but it's still important because it helps focus our attention on something worth focusing on. And God knows that after two weeks of the New Black Panthers and Shirley Sherrod and the Ground Zero mosque, we could stand to shift our attention to something a wee bit more worthwhile.

Are the Bankers Winning Again?

Here is Barbara Matthews, managing director of BCM International Regulatory Analytics LLC in Washington, on the latest draft of the Basel III accords for bank safety:

Even though we see a lot of concessions, there are also limits to the concessions. So this isn’t fully caving in.

Whew! I was worried there for a minute. But at least we're not fully caving in.

Early reports suggest that the final draft accord — agreed to by everyone except Germany so far — largely caved in on its definition of capital, which will allow banks a lot more leeway to skirt the new rules. It also, as expected, allows a long transition period before the new rules take effect. In return, it mandates a minimum leverage ratio. This would be great news except that the new minimum is 3%, or 33:1, and as the New York Times reports, "the requirement is expected to have little effect on U.S. institutions, which already meet the 3 percent standard easily." And remember that this was Tim Geithner's reason for opposing leverage ratios in the financial reform bill: he thought it was better handled by the Basel process. That's not looking like such a great bet right now.

And how about the "net stable funding ratio," which you recall has to do with preventing bank runs in the shadow sector. Basically, it would require financial institutions to rely less on overnight and other short-term funding, which can dry up quickly when markets panic, and more on longer term funding. It's a great idea, but the draft agreement punts: "The Committee remains committed to the introduction of the NSFR as a longer term structural complement to the LCR. Nevertheless, the initial NSFR calibration as set out in the December 2009 proposal needs to be modified....A number of adjustments are under consideration." I think we can safely expect this entire subject to be slowly forgotten.

Basel III appears to be better than Basel II and better than the status quo. But not by much. Here's most of what you need to know: Bloomberg reports that Frederick Cannon, chief equity strategist at New York-based Keefe, Bruyette & Woods, thinks the latest changes should please banks. And the New York Times confirms this: "The announcement helped banking shares move higher in Europe on Tuesday. Analysts said there was relief that the measures were not as punishing as they might have been." And if banks are happy, that's really not good news.

Would the ADA Pass Today?

A few days ago I expressed some doubts that the Truth in Lending Act, which passed easily in 1968, could pass today. Sure, it was the right thing to do, but it also imposed a bunch of regulations on businesses that cost them money. Today, that cost would probably be viewed as far more important than the benefits to consumers, and a bill like TLA would either be watered down into mush or never seriously taken up in the first place. We just don't believe in regulating businesses any longer solely because we think we have the right to tell them how consumers ought to be treated. Even lots of liberals — including me, some of the time — have succumbed to this attitude.

Paul Tomasky, on the 20th anniversary of the passage of the Americans with Disabilities Act, listens to Rand Paul fulminating against the ADA because it's not "fair to the business owner" and wonders if the ADA could pass either:

Paul is more extreme than your average Republican, but it does make one wonder whether today's Republican Party would have supported the ADA. In 1990, it passed the Senate 76-8 and passed the House by unanimous voice vote. I think we can say with great confidence that those particular outcomes would never have happened today, and we'd have seen far more caterwauling about the impositions placed on business and so on.

I will grant that the ADA has cost businesses some money, and that there surely have been some nuisance lawsuits. But it's made the US a better place. In 1990, the GOP saw this. Today's GOP would never accept such regulatory "impositions" on the private sector. You might get eight or 10 of them to vote for such a bill, because they would make the decision as a party that overall they didn't want to be seen as picking on people in wheelchairs, but the distance from only a handful of Republicans opposing that bill to Rand Paul's comments in May is one marker of how extreme the GOP has become.

Has this change in priorities over the past few decades made America a better place? For some, yes. For most, no. Jon Cohn has more.

Watching the Economy

Stuart Staniford takes a look at global oil production figures as a proxy for economic growth and comes away unhappy:

In the short term, global oil production is a sensitive indicator of the state of the global economy, and I'm not aware of any other publicly available proxies for the overall state of the world's economy that are as timely.

In this case, given that prices are falling rather than rising, and that OPEC undoubtedly has some spare capacity, the question becomes one not about whether supply is struggling to rise, but rather about whether demand is faltering or even declining.

Whether this presages a renewed contraction in the global economy, a stagnation, or just a transient hiccup in the ongoing recovery, I'm not certain of yet. But certainly each passing month of lower oil production will add to the concern.

Are there any economic indicators that look healthy right now? Not that I can think of. Corporate profits are up, of course, as are Wall Street salaries, but that's small comfort to those of us in the non-millionaire class. Most core indicators are, at best, stagnant, while others are downright gloomy. This one is in the latter category.

The Great Interchange Fee Scam

Adam Ozimek is obviously trying to make my head explode this morning. Today he points to a new paper from the Boston Fed that investigates the consequences of credit card interchange fees. The basic background is this: (1) card companies charge merchants a 1-2% interchange fee on all credit card purchases, (2) merchants raise the prices of all their products slightly in order to cover this cost, and (3) because most merchants charge everyone the same price, regardless of whether they use cash or credit, cash users end up paying a little more than they should while card users pay a bit less than the actual cost of the interchange fee they incur. So what does it all mean?

On average, each cash-using household pays $151 to card-using households and each card-using household receives $1,482 from cash users every year. Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general. On average, and after accounting for rewards paid to households by banks, the lowest-income household ($20,000 or less annually) pays $23 and the highest-income household ($150,000 or more annually) receives $756 every year.

Isn't that peachy? This is the result of allowing an effective monopoly in the card business, thus giving network providers the power to force merchants to keep interchange fees hidden instead of charging them directly to card users. Vast masses of poor and middle income families end up paying a few dollars into the system every year while a small number of upper income families reap the benefits.

This is why I don't like hidden fees: there's rarely much point in keeping something hidden if it's fair and equitable. You only do that if someone is getting screwed. And guess who gets the shaft more often than not?

From Sen. Kay Hagan (D–NC), bemoaning the Judiciary Committee's inaction on a measure congratulating Jimmie Johnson for winning the 2009 NASCAR Sprint Cup:

I hope we can overcome the stalemate on sports resolutions, so that we can again congratulate great athletes in North Carolina and across the country.

Preach it, senator. You speak for millions of patriotic Americans who are furious at Congress's refusal to honor the University of South Carolina baseball team, the University of Alabama football team, the LSU baseball team, Duke University's basketball team, and U.S. Open golf champion Lucas Glover. Maybe if you ask the White House, Obama will honor these fine athletic heroes via a recess proclamation.
 

Did You Like Inception?

Do I really have to put a post about Inception below the fold even though it's been out for over a week? I guess so. So it's below the fold.

Steve Gibson is Coming After You

Threat Level reports that a guy named Steve Gibson has hit on a semi-new way to make money:

Borrowing a page from patent trolls, the CEO of fledgling Las Vegas-based Righthaven has begun buying out the copyrights to newspaper content for the sole purpose of suing blogs and websites that re-post those articles without permission. And he says he’s making money.

....Gibson’s vision is to monetize news content on the backend, by scouring the internet for infringing copies of his client’s articles, then suing and relying on the harsh penalties in the Copyright Act — up to $150,000 for a single infringement — to compel quick settlements. Since Righthaven’s formation in March, the company has filed at least 80 federal lawsuits against website operators and individual bloggers who’ve re-posted articles from the Las Vegas Review-Journal, his first client.

....Gibson claims Righthaven has already settled several lawsuits, the bulk of which are being chronicled by the Las Vegas Sun, for undisclosed sums.

Full disclosure: last year I received a surprise windfall of $75 because, apparently, some newspaper somewhere reprinted one of my blog posts. Mother Jones collected the licensing fee and sent it along to me. Marian and I had a nice dinner with the proceeds, and this has naturally made me permanently beholden to Big Licensing.

That said, I'm surprisingly ambivalent about this. I feel like my immediate reaction ought to be outrage over The Man using a stable of high-priced lawyers to extort settlements out of little guys who are hardly more than the e-equivalent of old style xeroxed newsletters sent to a fan base of a few hundred. Doesn't corporate America have better things to do?

On the other hand, reposting entire news articles is such a plain copyright infringement that it's hard to feel that copyright owners shouldn't have any redress. I mean, come on: everyone knows you aren't allowed to reprint entire articles.

On the third hand, threatening to sue? Seriously?

On the fourth hand, I wonder if some of the early settlements are just warmups for going after aggregation sites that repost huge quantities of material? I don't have much sympathy for these sites, the same way I didn't have much sympathy for Napster. Having RIAA take high school kids to court for sharing songs is nasty stuff, but taking down an entire site devoted to massive copyright infringement? Well, why not?

On the fifth hand, isn't this a self-extinguishing business model? If Gibson starts winning some big settlements, then people will figure out the danger and stop infringing. Or else they'll take it offshore, or hide their ownership somehow. In either case, Gibson's revenue stream dries up. RIAA was trying to get people to stop sharing songs, so their cyber-terror campaign could be judged successful if it reduced the traffic in music and video sharing regardless of whether it was a net money maker.1 But making money is all Gibson wants to do. How can he do that in the long run?

So....I dunno. On balance, it all seems pretty scummy to me unless Gibson starts going after some big guns instead of random dudes who run fan sites. Pick on someone your own size, Steve.

1I'm curious: was it successful? I'm guessing it probably wasn't, but I don't keep up enough with this stuff to know. Did song and video sharing go down at all during RIAA's five-year reign of lawsuit hell?

UPDATE: An anonymous commenter says: "Heard on the radio the other day that the RIAA has spent $57 million on lawyers and has recovered $3 million or so. Meanwhile downloads have increased 40X since they started. I haven't seen that level of incompetence since Cheney was president."

"Heard on the radio the other day" doesn't exactly scream reliability, but we'll go with it for now. Apparently the whole effort was not only incredibly dickish, it was a massive fiasco too.

Pakistan and the Taliban

This is pretty rich. Here is Pakistan's reaction to the WikiLeaks documents showing that the ISI has long supported the Taliban in Afghanistan:

Diplomats and intelligence officials dismissed the reports as false and warned that they could have damaging consequences for Pakistan's relations with the United States, particularly whether the Americans could be trusted with sensitive information.

Yeah, that's the real problem: Pakistan might no longer be able to trust Americans with sensitive information. Points for chutzpah.

Taxing the Rich

I may be more sympathetic to certain kinds of regulations than Matt Yglesias is, but I'm certainly open to higher taxes on the rich as well. Via Matt, then, here's a Wall Street Journal chart showing exactly who would be affected by Obama's tax plan (which allows Bush's tax cuts on high earners to expire) vs. the Republican plan of extending the entire Bush package. Call me crazy, but after a decade of living large in ever more sumptuous beach houses and promoting policies that almost wrecked the economy, I think the folks earning a million bucks a year can probably afford to pay an extra 5% in taxes. Seemed to work OK in the 90s, anyway.