Kevin Drum

Quantum of Solace

| Tue Dec. 2, 2008 12:47 AM 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.

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Press Conference Follies

| Mon Dec. 1, 2008 8:20 PM EST

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 7:07 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.

Blowback

| Mon Dec. 1, 2008 2:57 PM EST

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.

Recession Dating

| Mon Dec. 1, 2008 2:13 PM EST

RECESSION DATING....Me, back in February:

When NBER eventually gets around to dating the 2008 recession, when will they decide it started? My money is on December 2007. And when will they date the end? I'd guess March 2009.

NBER, today:

The nation's economy peaked, and the recession began, in December 2007, the National Bureau of Economic Research announced today.

....The committee concluded that the start of the recession was December 2007 — due in large part, it said in a statement, to the decline in jobs that began that month. But it noted that many other data points confirm the diagnosis.

"The committee determined that the decline in economic activity in 2008 met the standard for a recession," the group said in its statement. "Evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion. Many of these indicators, including monthly data on the largest component of GDP, consumption, have declined sharply in recent months."

Advantage: blogosphere!

Afghanistan

| Mon Dec. 1, 2008 2:03 PM EST

AFGHANISTAN....Nir Rosen is not optimistic about Afghanistan's future:

There are too many symptoms of Afghanistan's decline to inventory, but the roads are an easy place to start, a clear sign of the shrinking zone of order that now barely reaches beyond the outskirts of Kabul.

....In Kabul I met with western diplomats, security experts, former Mujahideen commanders, former Taliban officials, NGO representatives, and senior officials at the UN; many of the westerners have been in the country since the US invasion, some for more than a decade. They are committed, in various ways, to supporting the government led by Hamid Karzai, the efforts at development and reconstruction, and the coalition campaign against the resurgent Taliban — and none would speak candidly without remaining anonymous, since their private assessments are, to a person, "incredibly bleak," as one said.

....As I saw on the road to Ghazni, the Taliban have succeeded in essentially cutting off Kabul from the rest of the country. The road southwest to Kandahar was lethal. "The Kabul to Ghazni road is gone," a British intelligence officer told me, "the Ghazni to Gardez road is exceedingly bad, the Wardak road is sh***, the Jalalabad road is sliding. The ambushes have become routine."

Via Andrew Sullivan.

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The Greening of America

| Mon Dec. 1, 2008 1:23 PM EST

THE GREENING OF AMERICA....Over at Gristmill, Gar Lipow explains how we can reduce carbon emissions in the United States by 95%. Answer: it will take both regulation and carbon pricing:

Making the unrealistic assumption of zero technical breakthroughs in efficiency or renewable technology, the total cost of a complete transition to 95 percent (or better) emissions-free energy in the U.S. would be about $1.7 trillion annually....From a social standpoint, total paybacks would be $600 billion a year more than this, meaning in the 20th year, the economy would grow $600 billion more per year net than without such investments.

....The particular subsidies I projected start at around $275 billion annually, average to $365 billion a year for the first 20 years, and peak at $475 billion annually in the 20th year. They drop back to $275 billion a year in the 21st year, as the renewable industries mature and can get by without further subsidy.

....Because this post is about public investment and regulation, I concentrated mainly on this topic. But putting a price on emissions is not optional. To the extent public investment is more palatable than such pricing, it does allow it to be delayed. We can, if we have to, completely eliminate emissions in the building and power generation sectors without such pricing, eliminate most emissions in transportation, and a significant percent even in industry. But there is no way, except via an emissions price, to capture most possible savings in industry. There are just too many efficiency means we don't know about in advance. Similarly, even in transport it is really hard to see how to reduce emissions in shipping and air travel without an auctioned permit system.

Without commenting on Lipow's exact figures, I think this is exactly right. The scale of the task ahead is so huge that there's no single approach that will do the job all by itself. Straightforward regulation and investment are often the most efficient way of getting things done if we already know what to do, while carbon pricing via cap-and-trade provides both an additional broad push in all these areas while also providing incentives to find new ways of doing things. Properly designed, it also provides a revenue stream to help pay for green improvements and to keep the cost of those improvements from hitting the poor at a disproportionate rate.

I haven't gone through this myself, but if you're curious about Lipow's methodology, he's posted all the details here in an Excel spreadsheet and invited comments. Head on over if you want to dive more deeply into the numbers.

How to Break a Terrorist

| Mon Dec. 1, 2008 12:25 PM EST

HOW TO BREAK A TERRORIST...."Matthew Alexander," an interrogator who rejected torture in favor of "showing cultural understanding and using good old-fashioned brainpower to tease out information," and managed to bag the leader of al-Qaeda in Iraq, Abu Musab al-Zarqawi, in the process, writes about his experience:

I learned in Iraq that the No. 1 reason foreign fighters flocked there to fight were the abuses carried out at Abu Ghraib and Guantanamo. Our policy of torture was directly and swiftly recruiting fighters for al-Qaeda in Iraq....How anyone can say that torture keeps Americans safe is beyond me — unless you don't count American soldiers as Americans.

After my return from Iraq, I began to write about my experiences because I felt obliged, as a military officer, not only to point out the broken wheel but to try to fix it. When I submitted the manuscript of my book about my Iraq experiences to the Defense Department for a standard review to ensure that it did not contain classified information, I got a nasty shock. Pentagon officials delayed the review past the first printing date and then redacted an extraordinary amount of unclassified material — including passages copied verbatim from the Army's unclassified Field Manual on interrogations and material vibrantly displayed on the Army's own Web site. I sued, first to get the review completed and later to appeal the redactions. Apparently, some members of the military command are not only unconvinced by the arguments against torture; they don't even want the public to hear them.

Alexander's book, How to Break a Terrorist, hits bookstores tomorrow. Sounds like a good read.

In Which I Eat My Hat

| Mon Dec. 1, 2008 2:20 AM EST

IN WHICH I EAT MY HAT....Barack Obama will be announcing his foreign policy team on Monday. David Sanger reports on their mission:

All three of his choices — Senator Hillary Rodham Clinton as the rival turned secretary of state; Gen. James L. Jones, the former NATO commander, as national security adviser, and Robert M. Gates, the current and future defense secretary — have embraced a sweeping shift of priorities and resources in the national security arena.

The shift would create a greatly expanded corps of diplomats and aid workers that, in the vision of the incoming Obama administration, would be engaged in projects around the world aimed at preventing conflicts and rebuilding failed states.

....Whether they can make the change — one that Mr. Obama started talking about in the summer of 2007, when his candidacy was a long shot at best — "will be the great foreign policy experiment of the Obama presidency," one of his senior advisers said recently.

The adviser, who spoke on the condition of anonymity because he was not authorized to speak publicly, said the three have all embraced "a rebalancing of America's national security portfolio" after a huge investment in new combat capabilities during the Bush years.

That's good to hear. If they're successful, it would be a triumph of common sense in an era that's seen precious little of it in the national security arena.

On another note, you may recall that I promised to eat my hat if Hillary Clinton agreed to be Obama's Secretary of State, and let no one say I'm not a man of my word. Marian made me a chocolate cake in the shape of a baseball cap, I decorated it with M&Ms, and then this afternoon I chowed down on it. Promise made, promise kept.

Holiday Shopping

| Mon Dec. 1, 2008 12:33 AM EST

HOLIDAY SHOPPING....The National Retail Federation passes along some holiday cheer today:

More than 172 million shoppers visited stores and websites over Black Friday weekend, up from 147 million shoppers last year.

Shoppers spent an average of $372.57 this weekend, up 7.2 percent over last year's $347.55. Total spending reached an estimated $41.0 billion.

We seem to have an arithmetic breakdown here. My calculator says this weekend's numbers come to $64 billion, compared to $51 billion last year. That's a 25% increase.

That seems implausible to me. On the other hand, it also seems implausible that 172 million times $372.57 equals $41 billion. So what's going on?

POSTSCRIPT: For what it's worth, the NRF's methodology is to survey a bunch of people in an online poll and ask them how much they've spent this weekend. Every news outlet in the country reports the NRF numbers as gospel, but frankly, this approach strikes me as so dubious that I wonder if their numbers would mean anything even if they could get their arithmetic straight. It sure doesn't jibe with the report of Wachovia analyst John Morris, who told the New York Times that "there was definitely more elbow room" in stores this year; or with ShopperTrak, which told them that sales increased only 3 percent on Friday; or with the numbers provided by Marshal Cohen of the NPD Group, who told them that Friday foot traffic was down 11 percent and the "shopping bag count" (whatever that is) was down 24 percent compared with last year. Very fishy, no? I blame the War on Christmas.

UPDATE: In comments, big truck notes that in the fine print NRF says that their 172 million number "includes same consumer shopping multiple days." So maybe there were 110 million actual human beings spending $372 each, which would net out to $41 billion. However, applying the same logic to last year's numbers still produces a 20% increase in total dollars spent this year ($41 billion vs. $34 billion), which seems wildly implausible. Why on earth does anyone take these figures seriously?