Kevin Drum

Talking to Iran

| Mon Oct. 19, 2009 7:58 PM EDT

Time's Massimo Calabresi describes the Obama administration's recent efforts to do a deal with Iran that would nearly eliminate their stockpile of low-enriched uranium:

The backroom talks began in June, when Iranian officials told the International Atomic Energy Agency their country was running out of fuel for an aging research reactor built for the Shah in 1967 by American technicians...."We very quickly saw an opening here," says a senior Administration official involved in the multiparty negotiations that ensued.

....In early July, Obama traveled to Moscow, where his top nonproliferation aide, Gary Samore, floated a proposal to the Russians: If Iran would agree to export a supply of LEU to Moscow, the Russians could enrich it to the level needed to power the research reactor, and then the French, who had been brought into the discussions, could turn it into the specialized plates that are used to produce the isotopes.

....The Americans wanted to make sure the Iranians weren't going to pull a fast one and persuade the Russians to get the material for the research-reactor fuel from a source other than Iran's own stockpile. When President Obama met with Russian President Dmitri Medvedev in New York City at the U.N. General Assembly in late September, he pressed the Russian to "confirm at the level of the President that this whole deal hinged on it being Iran providing the fuel," says the senior Administration official. The official says Medvedev agreed.

Further talks were scheduled for today.  So how are they going?

In recent days the Iranians have repeatedly suggested that they may not ship the fuel out of the country at all, and would demand that the West sell it new fuel for its research reactor in Tehran, which is used largely for medical purposes. That would leave the existing fuel in the country, a situation that the United States, Europe and Israel has said is too dangerous, given Iran’s history of hiding nuclear activity from international inspectors.

I guess we'll know by this time tomorrow whether this is a negotiating ploy or a genuine effort to back out of the deal.  IAEA head Mohamed ElBaradei produced only the anodyne statement that today's session was "quite a constructive meeting," and that's all about all the news there was.  Stay tuned.

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Geoengineering Freakiness

| Mon Oct. 19, 2009 2:47 PM EDT

Steven Levitt and Stephen Dubner have a sequel out to Freakonomics called (natch) Superfreakonomics.  This time, however, instead of investigating interesting trivia like the possible fixing of sumo wrestling matches, they decided to take on actual important topics like global warming.  If the blogospheric freakout over the past few days is any indication, they appear to have made a considerable hash out of it.

I haven't written about this before now because I don't have a copy of the book.  (It used to be searchable on Amazon, and Joe Romm used to have a photocopy of the chapter in question on his blog, but the publisher took both of them down.)  However, you can find copious takedowns of Levitt and Dubner's work from Romm, Brad DeLong, Paul Krugman, RealClimate, and others all over the intertubes.  Dubner and Levitt respond on their blog.

Without a copy of the offending chapter in hand I'm reluctant to say very much about this, but I will say one thing.  L&D's writeup centers on geoengineering, the study of gigantic projects to reduce global warming.  In particular, they're fans of the idea of pumping huge amounts of sulfates into the stratosphere in order to reflect a little bit of sunlight back into space and away from earth.  The theory is simple: Less sunlight = less heat energy = less global warming even if CO2 levels keep rising.

There's actually nothing wrong with studying stuff like this.  I happen to agree that, politically speaking, the odds of getting tough global agreements in place to limit greenhouse gas emissions don't look good.  And if CO2 levels keep rising despite the best efforts of climate scientists and environmentalists, we might want to have some alternatives available even if the alternatives have a lot of risk associated with them.

Still, if you talk about this stuff, you have two serious obligations.  The first is to make it very, very clear that reducing CO2 really is the first best solution and we should do everything in our power to figure out ways to make that happen.  It's not technically impossible, it won't wreck the economy, and we can do it if we manage to muster up the political will.  It's reckless and wrong to even hint at anything different.

Second, you need to make clear what the risks of your favored geoengineering projects are.  What's more, if political intertia is the problem with greenhouse gas reductions, you need to think just as seriously about the political problems with geoengineering.  Ryan Avent:

Begin with the fact that politicians are extremely risk averse. Who wants to be the guy in charge of the effort to build the who-knows-how-many-billions-of-dollars 18-mile long sulphur dioxide tube? The downside risks are enormous relative to the potential upside benefits.

....But the real failing is the inability to consider the way that various interest groups are likely to act. In the best case scenario for geoengineering, costs are likely to be focused on certain groups and certain locations, and those groups may respond to the proposed solution by doing anything from demanding compensation to threatening war, depending on their severity. If risk models indicate that certain particularly bad outcomes might result from the project with certain probabilities, and they will, the potential for those outcomes will be negotation flashpoints, potentially leading to intractable divisions between countries.

Geoengineering seems like the easy approach now, because it’s not on the table. There is no hysterical battle between proponents and opponents, no op-ed bickering between scientists and faux scientists, no global debate on who would and should bear which costs associated with whatever solution is agreed upon. But as soon as it became a real possibility, a fierce debate would rage. And, if one major geoengineering solution were tried and it failed, it is difficult to see how another attempt could win support, and at that point, of course, we’d have lost the ability to address climate change by reducing emissions when it would have helped.

Italics mine.  Everything seems easier when it's just an academic exercise.  But geoengineering isn't something that a single country can pull off.  It's a global problem, after all.  That means treaties and conferences and endless debate over costs and benefits and what the target temperatures ought to be and who's responsible for side effects.  There just aren't any easy answers here.

It's also worth noting that even if we eventually resort to geoengineering, our job will be a lot easier if we've already made some progress on reducing greenhouse gases.  Trying to solve a 7°C temperature rise entirely with atmospheric sulfates would require a lot of sulfates and produce a lot of side effects.  But if we manage to solve half the problem with greenhouse gas reductions, we're still way ahead of the game even if we can't manage the other half.  It means that we only have to address a 3°C problem with sulfates, and while this might still be dangerous and unpredictable, it's a lot less dangerous and unpredictable.

Anyway, this is a long post for someone who was reluctant to say anything until he'd actually read the book chapter that's causing all the fuss.  But it's a point worth making no matter what Levitt and Dubner actually said.  We may be forced into some kind of geoengineering project eventually, but we shouldn't let a bunch of obsessive Microsoft refugees convince us that it's a super neato solution to all our woes.  It's not.  It's a last ditch solution that we should think about implementing only if we completely screw up every better opportunity.

Bye Bye, Benefits

| Mon Oct. 19, 2009 1:52 PM EDT

The Wall Street Journal reports on the future of employee benefits in America.  Or, rather, their lack of a future:

Since the downturn began, thousands of employers have cut pay, increased workers' share of health-care costs or reduced the employer contribution to retirement plans.

Two-thirds of big companies that cut health-care benefits don't plan to restore them to pre-recession levels, they recently told consulting firm Watson Wyatt. When the firm asked companies that have trimmed retirement benefits when they expect to restore them, fewer than half said they would do so within a year, and 8% said they didn't expect to ever.

...."I think we've entered into a fundamentally new era," says David Lewin, of the Anderson School of Management at the University of California, Los Angeles. He describes employers as "leery of long-term commitments," including both benefits and pay increases.

Now, obviously this has to be taken with a grain of salt.  In the same survey, for example, 22% of employers say they never intend to reinstate the salary reductions they made during the recession.  That may well be their intent, but these folks all have to pay market wages, and if market wages go up then they'll have to follow suit whether they like it or not.

Still, intent isn't nothing, and a long jobless recovery certainly makes it easier for employers to make good on promises like this — and maintaining cuts to benefit levels is even easier.  Outside of Wall Street, things are looking grim.

The Federal Teat Revisited

| Mon Oct. 19, 2009 12:06 PM EDT

Jim Henley sends me a birthday card:

Happy Mutual Birthday to Kevin Drum, elder statesman of the October-19th cohort of bloggers. To make this one special, I’ll attack him from the left. It isn’t possible to get the banksters “off the federal teat immediately” or otherwise. There is simply no guarantee we make today that can bind the politicians of tomorrow. That’s not even necessarily a nebulous “tomorrow” either.

Nor can we guarantee that, when the time comes, it would even make sense for tomorrow’s politicians to honor today’s future refusal. We have to figure out how to organize a political economy predicated on massive if implicit subsidies to the finance industry and its owners and executives so as to minimize the harm they can do and so it works tolerably for the rest of us. Am I optimistic that we can do this? Not so much. But since we can’t cut ‘em off, all we can hope to do is keep ‘em in line.

Hold on a second there, pardner.  I didn't say we should get bankers off the federal teat forever, I just said we should get them off the federal teat immediately.  And even at that, I was only talking about the rock jawed capitalists who have paid back their TARP funds and therefore want us all to believe that they are off the federal teat.

Bollocks.  If Goldman Sachs is in good enough shape to pay back their TARP funds and earn billions in highly leveraged trading profits, they're in good enough shape to give up their financial holding company status, their FDIC guarantees, and the $12 billion in taxpayer dough that got funneled their way via AIG.  This seems like a subject that can unite everyone from Rush Limbaugh to Michael Moore.

But I agree with all the other stuff.  And it is our mutual birthday, #51 for me.  To celebrate, here's a photo of #5.  That's my sister on the right.  I don't remember the whole Indian costume thing, but pictures don't lie, do they?  Not in 1963, anyway.  I'd like to see Jim post something similar to prove he's not actually a killer robot from the Andromeda galaxy who's merely posing as a mild-mannered blogger until the time is ripe to enslave us all.  Because that's a real possibility, you know.  I think I heard it on the Glenn Beck show.

UPDATE: And for a birthday present, I'd like someone to explain why it is that every year the BCS computers hate USC so much.  I mean, we play pretty good nonconference teams and haven't lost to one in the last eight years.  (Yeah, yeah, except for that one.)  What's the deal with silicon hatred of the Trojans?

Common Sense on Medical Pot

| Mon Oct. 19, 2009 11:40 AM EDT

I'm sort of constitutionally inclined not to make too big a deal out of things like this, but it's still welcome news:

The Obama administration will not seek to arrest medical marijuana users and suppliers as long as they conform to state laws, under new policy guidelines to be sent to federal prosecutors today....The policy is a significant departure from the Bush administration, which insisted it would continue to enforce federal anti-pot laws regardless of state codes. Fourteen states allow some use of marijuana for medical purposes: Alaska, California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington.

Of course, here in California this comes hot on the heels of the announcment by LA's district attorney announcing that he was planning to crack down on pot dispensaries, so it's not as if our medical (wink wink) marijuana community is out of the woods yet.  Still and all, it's always nice to see federal resources being used non-insanely, and choosing not to bust medical marijuana users is distinctly non-insane.

Paying the Piper

| Sun Oct. 18, 2009 11:05 PM EDT

Robert Reich writes today about the deals that have been cut to get healthcare reform legislation passed:

Big Pharma is on the road to getting its deal: not only 25 to 30 million more paying customers, but also a continued ban on Medicare using its bargaining clout to reduce drug prices, a bar on genetic drug manufacturers introducing similar biologic drugs until the originals have been on the market at least twelve years, and no public insurance option to negotiate low drug prices.

....Big insurance is well on the way to getting what it wants: 25 to 30 million more paying customers (many of them young and healthy), a requirement that almost all businesses "pay or play," and no competition from a public option.

....Doctors (that is, the American Medical Association) are on the way to getting what they want: Instead of a temporary patch on scheduled decreases in Medicare reimbursements to them, a permanent fix that would change the reimbursement formula altogether and reward them $240 billion over the next ten years.

Think that's bad?  Consider this: even with all these giveaways in place, healthcare reform still might not pass.  And if it does, it will pass only barely.  Are you feeling better yet?

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Paying for the Bailout

| Sun Oct. 18, 2009 1:47 AM EDT

Here's the reaction over in Britain to news about the banking sector's recent return to outsize profitability:

Ministers are drawing up plans for a tax raid on Britain’s banks worth hundreds of millions of pounds, The Sunday Telegraph has learned.

The radical move, being considered as a way of forcing banks to pay a price for the taxpayer-funded bail-out of the financial system, could include a one-off “windfall” tax on profits.

....Last night, in his weekly podcast , Gordon Brown, the Prime Minister, said his government would be “taking extensive action to reform the whole culture of the financial sector”. Any action is likely to hit all UK banks — even those which have not been part-nationalised, or given access to hundreds of billions of pounds worth of taxpayer-funded collateral.

There is understood to be “considerable anger”, both inside No 10 and among Cabinet ministers, over recent signs that banks are once again ready to unveil huge profits and bonus payments.

I don't know if a one-off windfall profits tax is the right approach to this, and I don't think it should be motivated by anger in any case.  The rescue plan put in place last year was bound to make the banking sector pretty profitable in the short run, so it's hardly a surprise that that's what happened.  Nonetheless, there's no reason the industry as a whole shouldn't be expected to help pay for its own rescue one way or another.  There's certainly no reason the taxpayers should do it all.

Autofocus Blues

| Sat Oct. 17, 2009 3:02 PM EDT

The world's digital camera manufacturers are driving me crazy.  As longtime readers may recall, I'm an obsessive fan of the articulated LCD viewfinder.  I use mine constantly.  I use it when I want to shoot from waist level or ground level.  I use it when I want to shoot over a crowd.  I use it when I have to hold the camera at a weird angle to get the shot I want.  I use it when I have to steady the camera on some handy rock (or whatnot) and can't crane my neck to look through the viewfinder.  I use it when I'm photographing documents and have to point the camera downward while steadying myself on my elbows.  I use it when the sun is washing out the screen and tilting it a bit helps me see better.

Given all that, I find it odd that articulating LCDs aren't really all that popular.  To me, they're really, really useful, not just some dumb gadget that only a hopeless newbie would seriously think of using.  But apparently the world's serious photographers aren't buying this, and as a result there aren't very many cameras that have them.  I bought a Canon S5 (shown above) a couple of years ago because it was the best I could find with an articulating LCD, but overall it's only so-so.  I'd love to get something better.

So then: why aren't there any DSLRs with articulating LCDs?  Well, there are.  Over the past year three or four have been introduced.  They tend to have weird ideas about how exactly the LCD should move around, but obviously they're getting the idea.  The Nikon D5000 is one of the latest entrants.

But it turns out there's a weird problem with these cameras that I can't find an explanation for.  Maybe someone can help me out.  There are two ways of implementing autofocus on a digital camera: phase detection, which is very fast and is used on high-end cameras, and contrast detection, which is used on everything else.  As I understand it, phase detection requires a mirror, which is why it's available only on SLRs.

Unfortunately, it's apparently hard (impossible?) to implement phase detection in a camera that also has a live-view LCD — that is, one in which the LCD displays the scene continuously.  Needless to say, that's something I want.  But I don't understand why live-view is incompatible with high-performance phase detection autofocus.  Is it a cost issue?  A technical problem?  Or what?

Every time I read about this, things get very fuzzy (no pun intended) when the subject comes up, and I've never really found a good explanation of what's going on.  But the D5000, for example, which has excellent shutter lag and AF acquisition specs when live-view is off, apparently turns into a horrible focusing slug when live-view is activated.  It not only uses contrast detection, but evidently uses a really slow, crappy version of contrast detection that makes the camera almost useless.

This is obviously annoying personally, since I'd love to hand over vast sums of money to Nikon to buy one of their cameras if it actually worked decently.  But at this point, it's mostly technical curiosity on my part.  Anyone know what the deal is here?

Fixed Income Madness

| Sat Oct. 17, 2009 12:52 PM EDT

Anyone who's been paying attention for the past year shouldn't be surprised by this, but it's something that's always worth re-emphasizing: the federal bailout of the banking industry last year has allowed banks to rebound and make enormous amounts of money this year.  Without the bailout, many of them wouldn't even be around today, and they certainly wouldn't be making vast sums of money:

Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth.

....With interest rates so low, banks can borrow money cheaply and put those funds to work in lucrative ways, whether using the money to make loans to companies at higher rates, or to speculate in the markets. Fixed-income trading — an area that includes bonds and currencies — has been particularly profitable.

....Goldman Sachs and its perennial rival Morgan Stanley were allowed to transform themselves into old-fashioned bank holding companies. That switch gave them access to cheap funding from the Federal Reserve, which had been unavailable to them.

Those two banks and others like JPMorgan were also allowed to issue tens of billions of dollars of bonds that are guaranteed by the Federal Deposit Insurance Corporation, which insures bank deposits. With the F.D.I.C. standing behind them, the banks could borrow the money on highly advantageous terms. While some have since issued bonds on their own, they nonetheless enjoy the benefits of their cheap financing.

As the piece points out, banks aren't using all this cheap money to increase lending.  They're using it to fund bigger and bigger bets in the fixed-income sector — the same sector that brought us junk bonds, credit default swaps, subprime loan securitization, interest rate carries, collateralized debt obligations, and all the rest of Warren Buffett's "financial weapons of mass destruction."  Fixed income was a sleepy backwater until about 30 years ago, and if we had any brains we'd apply a massive dose of regulatory narcotics to make it that way again.  Instead, we're actually egging it on.  It's like giving Nero a new barbecue lighter for Christmas because his last one got burned up in that big fire.

Anyway, in the absence of any will to seriously regulate these guys, at the very least we should demand that they get themselves off the federal teat immediately.  They're all fond of the fiction that they're rugged individualists now that they've paid back their TARP money, but it ain't so.  Taxpayers saved them last year, and taxpayers are underwriting their profits this year.  I can think of better things for taxpayers to be doing.

Today's Mystery Guest Cat: Shinobi

| Fri Oct. 16, 2009 7:10 PM EDT

It's Laura, dropping off Kevin and David's Friday Week-in-Review podcast, the latest mystery guest cat pic, and a public service announcement on marriage from MoJo blogger Kate Sheppard.

First, the podcast: Where is the GOP hiding all the other Olympia Snowes? What made Kevin decide (thus far) not to get a flu shot this year? And why does David think Glenn Beck still has his work cut out for him in Laura's home state of Tennessee? Listen to the latest Week-In-Review here.

PSA: If you're planning a wedding in Louisiana, here a few things to remember about the state marriage laws: Marriage at age 16? Ok! Interracial marriage to first cousin once removed? Maybe!

And congrats to Guest Cat #3, appearing balloon boy-free in Kevin's Drum Beat newsletter today and below. [For Kevin's newsletter-exclusive weekly bonus post and mystery cat news, sign up here.]

Reader MNPundit: Meet Shinobi, 6, and a total moron. He loves to run up to people and rub them or play fetch with bottle caps and hair ties. He also is addicted to licking plastic bags until he throws up, then running back to lick them again until we have to hide them. I did win the chess match against him though.

Laura McClure hosts weekly podcasts and is a writer, editor, and sometime geek for Mother Jones. Read her recent investigative feature on lifehacking gurus here.