Kevin Drum

Elena Kagan's (Non) Record

| Sat May 8, 2010 2:27 PM EDT

I'm not much concerned about Elena Kagan's allegedly nefarious ties to Goldman Sachs, which is quickly becoming the attack du jour for anyone you don't like. As a Californian, I've spent the past few weeks watching Steve Poizner in heavy rotation attacking Meg Whitman as a Goldman Sachs stooge and I guess I've gotten a little jaded about the whole thing. Seems like much ado about nothing.

But Kagan's academic record is another thing. Kagan was dean of Harvard Law for most of the past decade, and deans often don't do a lot of scholarly writing. So it's no surprise that her recent law review record is a little light. But this, from Paul Campos, was a surprise:

Yesterday, I read everything Elena Kagan has ever published. It didn't take long: in the nearly 20 years since Kagan became a law professor, she's published very little academic scholarship — three law review articles, along with a couple of shorter essays and two brief book reviews. Somehow, Kagan got tenure at Chicago in 1995 on the basis of a single article in The Supreme Court Review — a scholarly journal edited by Chicago's own faculty — and a short essay in the school's law review. She then worked in the Clinton administration for several years before joining Harvard as a visiting professor of law in 1999. While there she published two articles, but since receiving tenure from Harvard in 2001 (and becoming dean of the law school in 2003) she has published nothing.

The whole piece is worth reading. I think Campos's comparison of Kagan to Harriet Miers probably takes things too far, but I have to say that Kagan's ability over the years to avoid expressing an opinion on almost anything is pretty remarkable. That said, though, she has expressed an opinion on at least one thing, and center-right law professor Jonathan Adler thinks that might be a problem for her:

31 voted against confirming her to be Solicitor General, and Senators are almost always more deferential to Administration picks for the Justice Department than the Courts. So it’s safe to assume that she starts approximately 30 votes in the hole. As with [Diane] Wood, there are some obvious sources of controversy, such as Kagan’s support for barring military recruiters at Harvard Law School because of “don’t ask, don’t tell,” and the subsequent Solomon Amendment litigation.

....SG Kagan’s record could produce additional flashpoints that Judge Wood would not have to worry about — flashpoints that will produce stories long after the “day one” profiles. For example, if Kagan is nominated Senate Republicans will demand access to executive branch records from her time in the White House counsel’s office during the Clinton Administration (much as Senate Democrats demanded such documents for John Roberts and others). There is already speculation about what such a document dump could reveal, and there are almost certain to be surprises of one sort or another.

Diane Wood would get attacked too, of course, but Adler argues that her vulnerabilities — "a handful of opinions concerning abortion and religious liberty, and perhaps a criminal case or two" — are strictly "day one" problems. I agree. Everyone knows that Wood is liberal, and everyone knows that Obama isn't going to nominate someone who isn't a liberal. So although a few liberal rulings will provoke the usual outcry from the usual suspects, it just isn't likely to have much traction. There are no surprises there. With Kagan we can't be sure of that.

Now, I agree with Adler that both Wood and Kagan are likely to be confirmed, so this is hardly a definitive reason to reject either one. But Kagan does strike me as a bit riskier, and it's hard to figure out why you'd nominate someone who's both riskier and has such an aggressively ambiguous record on almost everything of importance. This is one of the main reasons why I think Obama would be better off nominating Diane Wood, who has a clear and invigorating record on a wide variety of progressive issues and boasts a highly respected academic background.

All that said, it's also true that personal recommendations from people you trust are meaningful. The fact that Kagan worked in both the Clinton and Obama White Houses is meaningful, and endorsements from people like Larry Lessig are meaningful. What's more, I've long believed that presidents deserve a substantial amount of deference in their nominations. Kagan is pretty obviously qualified in all the usual ways, so if Obama nominates her I'm not going to go ballistic over it.

And I predict that he will. Why? Because Obama seems to have almost a sixth sense for doing things that annoy me just a little bit. On most issues he's roughly in the same ballpark as me, but in the end he always seems to end up just a notch to my right. Not enough to really piss me off, but enough to keep me perpetually just a little disappointed. A Kagan nomination would fit that pattern perfectly. So I'm bracing myself for yet another mild disappointment.

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Friday Cat Blogging - 7 May 2010

| Fri May 7, 2010 2:59 PM EDT

Back in 2004, Inkblot got his shot at fame when the New York Times decided to write a story about him. Seriously. Here it is. I still use that picture on my Facebook page.

But time marches on, and Twitter has replaced blogs as the hot new social media. And the star of Twitter isn't Inkblot, it's Sockington, profiled this week in People magazine. Inkblot gets a few thousand followers via this blog, but Socks gets 1.5 million followers via Twitter. As you can see below, that makes Inkblot melancholy. Over on the left, he's practically given up at the thought of matching Socks' fan base. It's just too daunting a task what with sunny weather beckoning in the backyard. To make it worse, his amanuensis, unlike Jason Scott, is an aggressively non-clever human who has no chance of creating an Inkblot Twitter feed that would draw even 1.5 thousand followers, let alone millions. Very sad. Domino, on the other hand, thinks Inkblot already gets too much attention and is showing off her bathing abilities this week for your approval. I swear, Domino is the loudest, lickiest cat in the world. She keeps Marian up for at least ten minutes every night by hopping onto her pillow at bedtime and proceeding to give herself an extremely slurpy, extremely thorough bath. It's an experience not to be missed. 

Is Facebook Evil?

| Fri May 7, 2010 1:58 PM EDT

The more I read about Facebook, the more I really don't like Facebook. I'm way behind the curve on this stuff, but the other day I read a post about privacy settings and realized just how little I know about it. I've always been pretty sparse with my Facebook account, so I'm not really worried about my darkest secrets becoming public or anything, but after reading this and then following the links I went in and changed a whole bunch of settings that had made my preferences available to third parties at Facebook's whim. I had no idea these settings even existed. Then today I read this. "There is something seriously wrong with their business ethics," says Thomas Baekdal, "when they even contemplate publishing content that was previously marked private."

Ya think? As near as I can tell, Facebook's business model is to periodically chip away at privacy settings, wait for the inevitable blowup, maybe give up a little bit of what they changed, and then wait for the fuss to blow over. Then six months later do it all over again. Rinse and repeat. Slowly but surely, they'll be able to monetize every last bit of our lives and we'll all be so tired we won't even care. Or even notice.

I know I'm a dinosaur about this stuff, and maybe David Brin is right that privacy is a lost cause and we should all forget about thinking we have any, but I'm not ready to give in yet. I've been careful with Facebook in the past, but I think I'm going to be downright paranoid about it in the future.

The Market Tank: Take Two

| Fri May 7, 2010 1:05 PM EDT

Let's try again: what happened to the stock market yesterday? We still don't know, but it appears that something concrete happened against the background of a market that was already tripwire nervous over Greece and the euro and China and whatnot. Over at Kid Dynamite's site, a guy with experience writing computerized trading algorithms offers this suggestion:

Considering that the giant decline happened on pretty much *no* volume, I think other factors are at work. I believe the core problem here was a real order imbalance with lots of volume (which took us down the original 350), then nyse halts these stocks, the market orders get rereouted (regnms and all) to ECN's where there is much less liquidity, and what liquidity is normally there is mostly provided by the nefarious HF strats who were rightly scaling back risk. So the 10K shares that might have been a downtick on nyse blows throught the BATS book completely.

In English, this means that when trading started to get too hot and heavy, the New York Stock Exchange stepped in to slow things down. In the old days, this would have worked, but not anymore. Most trading of NYSE stocks doesn't actually happen on the NYSE anymore, it happens on electronic communication networks (ECNs) like BATS in Kansas City, which is the third-largest stock exchange in the world. So what the algo guy is saying is that when the NYSE tried to slow things down, the computers responsible for program trading just switched their orders over to ECNs. Unfortunately, ECNs are largely used by high-frequency trading shops, and the HFT guys closed up when the market went kablooey. So the ECNs had no buyers, and even a small sell order could blow the doors off a stock price. Which it did.

Quite aside from the merits of the HFT controversy itself, this is symptomatic of an overall problem that we've all become pretty familiar with lately: the people in charge of financial markets don't really know what they're doing anymore. In the derivatives industry, they created securities so complex that no one understood them and no one understood just how interconnected and dangerous they'd become. In the trading industry, a combination of ECN-based dark pools, HFT algorithms, and God knows what else have created a trading environment that no one truly understands and no one can control. Obviously markets can boom and crash just fine without these innovations, but they can sure boom and crash a lot bigger and a lot faster with them. Felix Salmon comments:

There's a very sensible idea going around that a simple way to deal with nearly all of these problems, at a single stroke, would be to implement a tiny tax on financial transactions. Historically, people have complained that such a tax harms liquidity, which is true. But the fact is that it harms the bad kind of liquidity — the liquidity which dries up to zero just when you need it most. Liquidity, if it's spread across multiple electronic exchanges and can disappear in a microsecond, does very little actual good, and in fact does harm during tail events like this. Let's tax it, and raise some money for the public fisc at the same time as slowing down markets and making them think before doing a trade.

I'm very much in favor of this. Maybe someday we'll understand all this stuff well enough to control it, but right now we don't seem to. Our financial system really needs a little bit of sand in the gears to bring it back down to human speeds. This would be a good way to do it, and would probably have other benefits too (quite aside from the money it raises). Count me as a fan.

Supreme Court Not So Popular These Days

| Fri May 7, 2010 12:09 PM EDT

Greenberg Quinlan Rosner has a new poll out asking people what kind of Supreme Court justice they'd like Obama to nominate. Basically, they seem to want someone who's fair to individuals but not an activist, and independent but supports civil rights. What's more, they oppose the court's decision banning partial birth abortion but don't especially think kindly of judges who support abortion rights. In other words, they really have no clue.

Still, I thought the responses below were sort of interesting. Obviously question wording is everything, so take this with a big shaker of salt, but generally speaking people are not just opposed to the recent Citizens United decision, they're also opposed to a lot of the court's other recent illiberal decisions. I'm not sure what to make of this — if anything — but thought I'd pass it along.

Good Jobs News in April

| Fri May 7, 2010 11:25 AM EDT

I may be generally pessimistic about the economy, but we did get a good jobs report today. It wasn't just census hiring either. It was legitimately strong private sector job growth. The unemployment rate rose at the same time — and as the CBPP chart on the right suggests, this means we're probably in for a long, slow, grueling, recovery — but Eric Lascelles of TD Securities explains why a rising unemployment rate isn't entirely a bad thing:

The household survey argued for an even better 550,000 job gain in April, but the number of people looking for jobs rose by an even larger 805,000. As such, the unemployment rate went up. However, the interpretation can be spun in a positive direction since job applicants must be feeling good to seek entry to the labour force in such large numbers.

Steve Benen's employment chart is below. On the less bright side, long-term unemployment increased and wage growth was flat. The latter is obviously normal during the early stages of a recovery, but still, it needs to change if consumer spending is going to keep fueling growth. Overall, though, the report was good news. I'm still sort of pessimistic, but then again, I'm always sort of pessimistic.

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Why Did the Market Tank?

| Fri May 7, 2010 11:00 AM EDT

Hey, remember how one of the big benefits of high-frequency trading is supposed to be that it deepens market liquidity? And remember how I wrote that, in reality, HFT probably does a great job of providing liquidity when you don't need it and a lousy job when you do need it? Well, yesterday the stock market needed liquidity and guess who didn't provide it?

Tradebot Systems Inc., a large high-frequency firm based in Kansas City, Mo., closed down its computer trading systems when the Dow Jones Industrial Average had dropped about 500 points, said Dave Cummings, founder and chairman of the firm....Mr. Cummings said Tradebot's system is designed to stop trading when the market becomes too volatile, too fast.

....The withdrawal of high-frequency firms from the market didn't necessarily cause the downturn, but could have added to it, some market experts say. A number of high-frequency firms closing down in the midst of a sharp market drop can "widen markets out substantially," said Jamie Selway, managing director of New York broker White Cap Trading.

In other news, the SEC is investigating what happened yesterday: "U.S. regulators plan to examine whether securities professionals triggered yesterday’s stock-market plunge or exploited the turmoil to profit illegally, two people with direct knowledge of the matter said....The SEC and Commodity Futures Trading Commission said in a joint statement after U.S. markets closed that they will examine 'unusual trading' that contributed to the plunge."

Overall, I'm with Atrios. Maybe this whole thing was mostly a glitch, maybe not. "Still, my gut tells me we are heading in a downward direction." Maybe not today and maybe not next week. But the aftermaths of banking crises don't usually play out in just a year or two. Normally it takes three or four. We're still in the middle of the hurricane.

Chart of the Century: Cooking The Planet

| Fri May 7, 2010 1:15 AM EDT

What happens if we do nothing about greenhouse gas emissions and end up in a worst case climate change scenario a century from now?  A new paper in the Proceedings of the National Academy of Sciences takes a look at the likely effects of very high global warming and concludes that large swathes of the world — including the East Coast of the United States — would become pretty much uninhabitable. In the map below, that's all the yellow and light purple areas.

Stuart Staniford has the details. But don't worry. It's only 5% likely that things will ever get this bad. Or the scientists might have miscalculated. It might only be 1% likely. Those are pretty good odds, right?

The Copenhagen Tapes

| Fri May 7, 2010 1:04 AM EDT

Remember that accidental tape recording of the final session of the Copenhagen summit that I wrote about a few days ago? Well, Der Spiegel now has the entire thing translated into English. In their telling, at least, pretty much no one comes out of this looking good.

Can Congress Strip Your Citizenship?

| Fri May 7, 2010 12:41 AM EDT

Joe Lieberman wants Congress to pass a law that would allow the State Department to revoke American citizenship from people suspected of allying themselves with terrorists. Now, the prospects for abuse here are pretty obvious. But set that aside for a moment. Even if it were a good idea, would it actually accomplish anything? Or is it mostly just anti-terror showboating?

According to citizenship law expert Peter Spiro, it's pretty much the latter. No matter what Congress says, the Supreme Court long ago ruled that citizenship can only be stripped from a person who performs an act with the specific intent of relinquishing citizenship:

Intent to relinquish would be pretty hard to establish, Shahzad’s case included....That’s the first way in which [the proposed law] would be ineffective: you just end up with another layer of litigation, about the last thing that anti-terror policies need after almost a decade of up-the-courts, down-the-courts delay.

And all for what, exactly? Citizenship makes a difference only with respect to a small slice of one anti-terror policies. By statute, the use of military commissions can only be used in the prosecution of noncitizens. Under Verdugo, nonresident noncitizens don’t enjoy Fourth Amendment protections. But remember what citizenship doesn’t protect you against: even Obama has authorized the targeted killing of citizens abroad, and Hamdi doesn’t mandate full due process for citizen detainees.

Lieberman and cosponsors try to frame this as a matter of prevention, depriving terrorists of the valuable tool of a US passport. This is nonsense. Anyone visibly affiliated with a terror group is already going to be on all sorts of no-fly and surveillance lists before that affiliation would warrant proceeding with expatriation. A passport isn’t much of a weapon then.

It's true that if Congress changes the law, this might open the door for the Supreme Court to reverse its earlier rulings on this subject. But even in the unlikely event that it did, the effect of the law would be minimal. And the potential for political abuse would obviously remain. So yeah: it's mostly just anti-terror showboating. Not exactly a big surprise coming from Joe Lieberman. (Via Kenneth Anderson.)